G.R. No.
167261 March 2, 2007 In compliance with the MCTC Order, the Lupon rendered an Arbitration
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 Decision1 of the Court of Appeals in CA-G.R.
SP No. 78019, dated 9 February 2005, which reversed and set aside the
Judgment2 of the Regional Trial Court (RTC), Branch 36, Bontoc, Mountain
Province, and reinstated the Resolution3 of the Municipal Circuit Trial Court
(MCTC) of Besao-Sagada, Mountain Province dismissing herein petitioner’s
action for Enforcement of Arbitration Award and Damages.
The instant petition draws its origin from an Action4 for recovery of
possession of real property situated in Sitio Abatan, Barrio Dagdag, Sagada
filed by herein petitioner before the MCTC of Besao-Sagada, Mountain
Province on 9 November 1994, against the spouses Leoncio and Florentina
Manacnes, the predecessors-in-interest of herein respondent.
On 23 February 1995, during the course of the pre-trial, the parties, through
their respective counsels, agreed to refer the matter to the Barangay Lupon
(Lupon) of Dagdag, Sagada for arbitration in accordance with the provisions
of the Katarungang Pambarangay Law.5 Consequently, the proceedings
before the MCTC were suspended, and the case was remanded to the
Lupon for resolution.6
Thereafter, the Lupon issued a Certification to File Action on 26 February
1995 due to the refusal of the Manacnes spouses to enter into an Agreement
for Arbitration and their insistence that the case should go to court. On 8
March 1995, the Certification, as well as the records of the case, were
forwarded to the MCTC.
An Order was issued by the MCTC on 7 April 1995, once more remanding
the matter for conciliation by the Lupon and ordering the Lupon to render an
Arbitration Award thereon. According to the MCTC, based on the records of
the case, an Agreement for Arbitration was executed by the parties
concerned; however, the Lupon failed to issue an Arbitration Award as
provided under the Katarungang Pambarangay Law, so that, the case must
be returned to the Lupon until an Arbitration Award is rendered.
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.
1
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,
2
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
3
the Pangkat, Rule VI, thereof the Punong Barangay and the Pangkat must
proceed to hear the case. However, according to the minutes of the hearing
before the lupon on 9 April 1995, the pangkat Chairman and another pangkat
member were absent for the hearing.
Finally, Section 13 of the same Rule requires that the Punong Barangay or
the Pangkat Chairman should attest that parties freely and voluntarily agreed
to the settlement arrived at. But how can this be possible when the minutes
of the two hearings show that the spouses Manacnes neither freely nor
voluntarily agreed to anything.
While RA 7160 and the Katarungan Pambarangay rules provide for a period
to repudiate the Arbitration Award, the same is neither applicable nor
necessary since the Agreement to Arbitrate or the Arbitration Award were
never freely nor voluntarily entered into by one of the parties to the dispute.
In short, there is no agreement validly concluded that needs to be
repudiated.
With all the foregoing, estoppel may not be applied against petitioners for an
action or defense against a null and void act does not prescribe. With this,
We cannot but agree with the MCTC that the very agreement to arbitrate is
null and void. Similarly, the arbitration award which was but the off shoot of
the agreement is also void.
WHEREFORE, the RTC judgment of 2 June 2003 is REVERSED and SET
ASIDE, the MCTC Resolution DISMISSING the Civil Case No. 118 for
enforcement of Arbitration Award is REINSTATED.11
Vehemently disagreeing with the Decision of the Court of Appeals, petitioner
Pang-et filed the instant petition. Petitioner maintains that the appellate court
overlooked material facts that resulted in reversible errors in the assailed
Decision. According to petitioner, the Court of Appeals overlooked the fact
that the original parties, as represented by their respective counsels in Civil
Case No. 83, mutually agreed to submit the case for arbitration by the Lupon
ng Tagapamayapa of Barangay Dagdag. Petitioner insists that the parties
must be bound by the initial agreement by their counsels during pre-trial to
an amicable settlement as any representation made by the lawyers are
deemed made with the conformity of their clients. Furthermore, petitioner
maintains that if indeed the spouses Manacnes did not want to enter into an
amicable settlement, then they should have raised their opposition at the first
instance, which was at the pre-trial on Civil Case No. 83 when the MCTC
ordered that the case be remanded to the Lupon ng Tagapamayapa for
arbitration.
We do not agree with the petitioner.
First and foremost, in order to resolve the case before us, it is pivotal to
stress that, during the initial hearing before the Lupon ng Tagapamayapa, the
spouses Manacnes declined to sign the Agreement for Arbitration and were
adamant that the proceedings before the MCTC in Civil Case No. 83 must
continue. As reflected in the Minutes12 of the Arbitration Hearing held on 26
February 1995, the legality of the signature of Catherine Manacnes, daughter
of the Manacnes spouses, who signed the Agreement for Arbitration on
behalf of her parents, was assailed on the ground that it should be the
spouses Manacnes themselves who should have signed such agreement. To
resolve the issue, the Pangkat Chairman then asked the spouses Manacnes
that if they wanted the arbitration proceedings to continue, they must signify
their intention in the Agreement for Arbitration form. However, as stated
earlier, the Manacnes spouses did not want to sign such agreement and
instead insisted that the case go to court.
Consequently, the Lupon issued a Certification to File Action on 26 February
1995 due to the refusal of the Manacnes spouses. Indicated in said
Certification are the following: 1) that there was personal confrontation
between the parties before the Punong Barangay but conciliation failed and
2) that the Pangkat ng Tagapagkasundo was constituted but the personal
confrontation before the Pangkat failed likewise because respondents do not
want to submit this case for arbitration and insist that said case will go to
court.13 Nevertheless, upon receipt of said certification and the records of
the case, the MCTC ordered that the case be remanded to the Lupon ng
Tagapamayapa and for the latter to render an arbitration award, explaining
that:
Going over the documents submitted to the court by the office of the Lupon
Tagapamayapa of Dagdag, Sagada, Mountain Province, the court observed
that an "Agreement for Arbitration" was executed by the parties anent the
above-entitled case. However, said Lupon did not make any arbitration
award as mandated by the Katarungang Pambarangay Law but instead
made a finding that the case may now be brought to the court. This is
violative of the KP Law, which cannot be sanctioned by the court.
At this juncture, it must be stressed that the object of the Katarungang
Pambarangay Law is the amicable settlement of disputes through conciliation
proceedings voluntarily and freely entered into by the parties. Through this
mechanism, the parties are encouraged to settle their disputes without
enduring the rigors of court litigation. Nonetheless, the disputing parties are
not compelled to settle their controversy during the barangay proceedings
before the Lupon or the Pangkat, as they are free to instead find recourse in
the courts16 in the event that no true compromise is reached.
4
The key in achieving the objectives of an effective amicable settlement under
the Katarungang Pambarangay Law is the free and voluntary agreement of
the parties to submit the dispute for adjudication either by the Lupon or the
Pangkat, whose award or decision shall be binding upon them with the force
and effect of a final judgment of a court.17 Absent this voluntary submission
by the parties to submit their dispute to arbitration under the Katarungang
Pambarangay Law, there cannot be a binding settlement arrived at
effectively resolving the case. Hence, we fail to see why the MCTC further
remanded the case to the Lupon ng Tagapamayapa and insisted that the
arbitration proceedings continue, despite the clear showing that the spouses
Manacnes refused to submit the controversy for arbitration.
It would seem from the Order of the MCTC, which again remanded the case
for arbitration to the Lupon ng Tagapamayapa, that it is compulsory on the
part of the parties to submit the case for arbitration until an arbitration award
is rendered by the Lupon. This, to our minds, is contrary to the very nature of
the proceedings under the Katarungang Pambarangay Law which espouses
the principle of voluntary acquiescence of the disputing parties to amicable
settlement.
What is compulsory under the Katarungang Pambarangay Law is that there
be a confrontation between the parties before the Lupon Chairman or the
Pangkat and that a certification be issued that no conciliation or settlement
has been reached, as attested to by the Lupon or Pangkat Chairman, before
a case falling within the authority of the Lupon may be instituted in court or
any other government office for adjudication. 18 In other words, the only
necessary pre-condition before any case falling within the authority of the
Lupon or the Pangkat may be filed before a court is that there has been
personal confrontation between the parties but despite earnest efforts to
conciliate, there was a failure to amicably settle the dispute. It should be
emphasized that while the spouses Manacnes appeared before the Lupon
during the initial hearing for the conciliation proceedings, they refused to sign
the Agreement for Arbitration form, which would have signified their consent
to submit the case for arbitration. Therefore, upon certification by the Lupon
ng Tagapamayapa that the confrontation before the Pangkat failed because
the spouses Manacnes refused to submit the case for arbitration and insisted
that the case should go to court, the MCTC should have continued with the
proceedings in the case for recovery of possession which it suspended in
order to give way for the possible amicable resolution of the case through
arbitration before the Lupon ng Tagapamayapa.
Petitioner’s assertion that the parties must be bound by their respective
counsels’ agreement to submit the case for arbitration and thereafter enter
into an amicable settlement is imprecise. What was agreed to by the parties’
respective counsels was the remand of the case to the Lupon ng
Tagapamayapa for conciliation proceedings and not the actual amicable
settlement of the case. As stated earlier, the parties may only be compelled
to appear before the Lupon ng Tagapamayapa for the necessary
confrontation, but not to enter into any amicable settlement, or in the case at
bar, to sign the Agreement for Arbitration. Thus, when the Manacnes
spouses personally appeared during the initial hearing before the Lupon ng
Tagapamayapa, they had already complied with the agreement during the
pre-trial to submit the case for conciliation proceedings. Their presence
during said hearing is already their acquiescence to the order of the MCTC
remanding the case to the Lupon for conciliation proceedings, as there has
been an actual confrontation between the parties despite the fact that no
amicable settlement was reached due to the spouses Manacnes’ refusal to
sign the Agreement for Arbitration.
Furthermore, the MCTC should not have persisted in ordering the Lupon ng
Tagapamayapa to render an arbitration award upon the refusal of the
spouses Manacnes to submit the case for arbitration since such arbitration
award will not bind the spouses. As reflected in Section 413 of the Revised
Katarungang Pambarangay Law, in order that a party may be bound by an
arbitration award, said party must have agreed in writing that they shall abide
by the arbitration award of the Lupon or the Pangkat. Like in any other
contract, parties who have not signed an agreement to arbitrate will not be
bound by said agreement since it is axiomatic that a contract cannot be
binding upon and cannot be enforced against one who is not a party to it.19
In view of the fact that upon verification by the Pangkat Chairman, in order to
settle the issue of whether or not they intend to submit the matter for
arbitration, the spouses Manacnes refused to affix their signature or thumb
mark on the Agreement for Arbitration Form, the Manacnes spouses cannot
be bound by the Agreement for Arbitration and the ensuing arbitration award
since they never became privy to any agreement submitting the case for
arbitration by the Pangkat.
WHEREFORE, premises considered, the instant petition is hereby DENIED.
The Decision of the Court of Appeals in CA-G.R. SP No. 78019 is hereby
AFFIRMED. The Municipal Circuit Trial Court of Besao-Sagada, Mountain
Province, is hereby ORDERED to proceed with the trial of Civil Case No. 83
for Recovery of Possession of Real Property, and the immediate resolution of
the same with deliberate dispatch. No costs.
SO ORDERED.
5
 G.R. No. 169890 March 12, 2007
FELICIANO ESGUERRA, CANUTO ESGUERRA, JUSTA ESGUERRA,
ANGEL ESGUERRA, FIDELA ESGUERRA, CLARA ESGUERRA, and
PEDRO ESGUERRA, Petitioners, vs. VIRGINIA TRINIDAD, PRIMITIVA
TRINIDAD, and THE REGISTER OF DEEDS OF MEYCAUAYAN,
BULACAN, Respondents.
DECISION
CARPIO MORALES, J.:
Involved in the present controversy are two parcels of land located in
Camalig, Meycauayan, Bulacan.
Felipe Esguerra and Praxedes de Vera (Esguerra spouses) were the owners
of several parcels of land in Camalig, Meycauayan, Bulacan – among them a
35,284-square meter parcel of land covered by Tax Declaration No. 10374,
half of which (17,642 square meters) they sold to their grandchildren, herein
petitioners Feliciano, Canuto, Justa, Angel, Fidela, Clara and Pedro, all
surnamed Esguerra; and a 23,989-square meter
parcel of land covered by Tax Declaration No. 12080, 23,489 square meters
of which they also sold to petitioners, and the remaining 500 square meters
they sold to their other grandchildren, the brothers Eulalio and Julian Trinidad
(Trinidad brothers).
Also sold to the Trinidad brothers were a 7,048-square meter parcel of land
covered by Tax Declaration No. 9059, a 4,618-square meter parcel of land
covered by Tax Declaration No. 12081, and a 768-square meter parcel of
land covered by Tax Declaration No. 13989.
The Esguerra spouses executed the necessary Deed of Sale in favor of
petitioners on August 11, 1937,1 and that in favor of the Trinidad brothers on
August 17, 1937.2 Both documents were executed before notary public
Maximo Abaño.
Eulalio Trinidad later sold his share of the land to his daughters-respondents
herein, via a notarized Kasulatan ng Bilihang Tuluyan ng Lupa3 dated
October 13, 1965. A portion of the land consisting of 1,693 square meters
was later assigned Lot No. 3593 during a cadastral survey conducted in the
late 1960s.
On respondents’ application for registration of title, the then Court of First
Instance (CFI) of Bulacan, by Decision4 of February 20, 1967, awarded Lot
No. 3593 in their favor in Land Registration Case No. N-323-V. Pursuant to
the Decision, the Land Registration Commission (LRC, now the Land
Registration Authority [LRA]) issued Decree No. N-114039 by virtue of which
the Register of Deeds of Bulacan issued OCT No. 0-36315 in the name of
respondents.
Meanwhile, under a notarized Bilihan ng Lupa6 dated November 10, 1958,
petitioners sold to respondents’ parents Eulalio Trinidad and Damiana
Rodeadilla (Trinidad spouses) a portion of about 5,000 square meters of the
23,489-square meter of land which they previously acquired from the
Esguerra spouses.7
During the same cadastral survey conducted in the late 1960s, it was
discovered that the about 5,000-square meter portion of petitioners’ parcel of
land sold to the Trinidad spouses which was assigned Lot No. 3591 actually
measured 6,268 square meters.
In a subsequent application for registration of title over Lot No. 3591,
docketed as Land Registration Case No. N-335-V, the CFI, by Decision8 of
August 21, 1972, awarded Lot No. 3591 in favor of Eulalio Trinidad. Pursuant
to the Decision, the LRC issued Decree No. N-149491 by virtue of which the
Register of Deeds of Bulacan issued OCT No. 0-64989 in the name of
Trinidad.
Upon the death of the Trinidad spouses, Lot No. 3591 covered by OCT No.
0-6498 was transmitted to respondents by succession.
Petitioners, alleging that upon verification with the LRA they discovered the
issuance of the above-stated two OCTs, filed on August 29, 1994 before the
Regional Trial Court (RTC) of Malolos, Bulacan two separate complaints for
their nullification on the ground that they were procured through fraud or
misrepresentation.
In the first complaint, docketed as Civil Case No. 737-M-94, petitioners
sought the cancellation of OCT No. 0-3631.
In the other complaint, docketed as Civil Case No. 738-M-94, petitioners
sought the cancellation of OCT No. 0-6498.
Both cases were consolidated and tried before Branch 79 of the RTC which,
after trial, dismissed the cases by Joint Decision10 of May 15, 1997.
Their appeal with the Court of Appeals having been dismissed by Decision of
February 28, 2005, a reconsideration of which was, by Resolution of October
3, 2005,11 denied, petitioners filed the instant petition.
6
Petitioners fault the appellate court
1. . . . in misappreciating the fact that the act of the respondent Eulalio
Trinidad in acquiring the property from Felipe Esguerra constituted fraud.
2. . . . in the [i]nterpretation and application of the provisions of Article 1542
of the New Civil Code.
3. . . . in ruling that there is prescription, res judicata, and violation of the non-
[forum] shopping.12
In their Comment, respondents assailed the petition as lacking verification
and certification against forum shopping and failing to attach to it an affidavit
of service and material portions of the record in support thereof. Petitioners
counter that the procedural deficiencies have been mooted by the filing of a
Compliance.
A check of the rollo shows that attached to the petition are an Affidavit of
Service dated November 21, 2005 and the appellate court’s Decision of
February 28, 2005 and Resolution of October 3, 2005; and that on January
16, 2006 or almost three months following the last day to file the petition,
petitioners submitted, not at their own instance,13 a Verification and Sworn
Certification on Non-Forum Shopping signed by petitioner Pedro Esguerra
who cited honest and excusable mistake behind the omission to submit the
same.
This Court has strictly enforced the requirement of verification and
certification, obedience to which and to other procedural rules is needed if
fair results are to be expected therefrom.14 While exceptional cases have
been considered to correct patent injustice concomitant to a liberal
application of the rules of procedure, there should be an effort on the part of
the party invoking liberality to advance a reasonable or meritorious
explanation for his failure to comply with the rules.15 In petitioners’ case, no
such explanation has been advanced.
With regard to petitioners’ failure to attach material portions of the record in
support of the petition, this requirement is not a mere technicality but an
essential requisite for the determination of prima facie basis for giving due
course to the petition.16 As a rule, a petition which lacks copies of essential
pleadings and portions of the case record may be dismissed. Much discretion
is left to the reviewing court, however, to determine the necessity for such
copies as the exact nature of the pleadings and portions of the case record
which must accompany a petition is not specified.17
At all events, technicality aside, the petition must be denied.
It is settled that fraud is a question of fact and the circumstances constituting
the same must be alleged and proved in the court below.18
In the present cases, as did the trial court, the appellate court found no fraud
in respondents’ acquisition and registration of the land, viz:
. . . Appellant Pedro Esguerra even testified that he does not know how
appellees were able to secure a title over the lot in question and that they
never sold Lot No. 3593 to Virginia Trinidad since it is part of the whole lot of
23,489 square meters. The said testimony is a mere conclusion on the part
of appellants. On the other hand, the evidence shows that appellees
acquired title over the subject property by virtue of a deed of sale executed
by their father Eulalio Trinidad in their favor.
xxxx
[T]hey failed to establish that appellees’ acquisition of the certificate of title is
fraudulent. In fact, in their two complaints, appellants acknowledged that
appellees observed and took the initial procedural steps in the registration of
the land, thus ruling out fraud in the acquisition of the certificate of title. . . .19
Factual findings of the trial court, when affirmed by the Court of Appeals, are
final, conclusive and binding on this Court,20 which is not a trier of facts,21
hence, bereft of function under Rule 45 to examine and weigh the probative
value of the evidence presented,22 its jurisdiction being limited only to the
review and revision of errors of law.23 Albeit there are exceptions24 to this
rule, the cases at bar do not fall thereunder, there being no showing that the
trial and appellate courts overlooked matters which, if considered, would alter
their outcome.
Under the Torrens System, an OCT enjoys a presumption of validity, which
correlatively carries a strong presumption that the provisions of the law
governing the registration of land which led to its issuance have been duly
followed.25 Fraud being a serious charge, it must be supported by clear and
convincing proof.26 Petitioners failed to discharge the burden of proof,
however.
On the questioned interpretation and application by the appellate court of
Article 1542 of the Civil Code reading:
In the sale of real estate, made for a lump sum and not at the rate of a
certain sum for a unit of measure or number, there shall be no increase or
decrease of the price, although there be a greater or less areas or number
than that stated in the contract.
7
The same rule shall be applied when two or more immovables are sold for a
single price; but if, besides mentioning the boundaries, which is
indispensable in every conveyance of real estate, its area or number should
be designated in the contract, the vendor shall be bound to deliver all that is
included within said boundaries, even when it exceeds the area or number
specified in the contract; and, should he not be able to do so, he shall suffer
a reduction in the price, in proportion to what is lacking in the area or
number, unless the contract is rescinded because the vendee does not
accede to the failure to deliver what has been stipulated. (Emphasis and
underscoring supplied),
while petitioners admittedly sold Lot No. 3591 to the Trinidad spouses, they
contend that what they sold were only 5,000 square meters and not 6,268
square meters, and thus claim the excess of 1,268 square meters.
In sales involving real estate, the parties may choose between two types of
pricing agreement: a unit price contract wherein the purchase price is
determined by way of reference to a stated rate per unit area (e.g., ₱1,000
per square meter), or a lump sum contract which states a full purchase price
for an immovable the area of which may be declared based on an estimate
or where both the area and boundaries are stated (e.g., ₱1 million for 1,000
square meters, etc.). In Rudolf Lietz, Inc. v. Court of Appeals,27 the Court
discussed the distinction:
. . . In a unit price contract, the statement of area of immovable is not
conclusive and the price may be reduced or increased depending on the
area actually delivered. If the vendor delivers less than the area agreed
upon, the vendee may oblige the vendor to deliver all that may be stated in
the contract or demand for the proportionate reduction of the purchase price
if delivery is not possible. If the vendor delivers more than the area stated in
the contract, the vendee has the option to accept only the amount agreed
upon or to accept the whole area, provided he pays for the additional area at
the contract rate.
xxxx
In the case where the area of the immovable is stated in the contract based
on an estimate, the actual area delivered may not measure up exactly with
the area stated in the contract. According to Article 1542 of the Civil Code, in
the sale of real estate, made for a lump sum and not at the rate of a certain
sum for a unit of measure or number, there shall be no increase or decrease
of the price, although there be a greater or less areas or number than that
stated in the contract. . . .
xxxx
Where both the area and the boundaries of the immovable are declared, the
area covered within the boundaries of the immovable prevails over the stated
area. In cases of conflict between areas and boundaries, it is the latter which
should prevail. What really defines a piece of ground is not the area,
calculated with more or less certainty, mentioned in its description, but the
boundaries therein laid down, as enclosing the land and indicating its limits.
In a contract of sale of land in a mass, it is well established that the specific
boundaries stated in the contract must control over any statement with
respect to the area contained within its boundaries. It is not of vital
consequence that a deed or contract of sale of land should disclose the area
with mathematical accuracy. It is sufficient if its extent is objectively indicated
with sufficient precision to enable one to identify it. An error as to the
superficial area is immaterial. Thus, the obligation of the vendor is to deliver
everything within the boundaries, inasmuch as it is the entirety thereof that
distinguishes the determinate object.28 (Emphasis and underscoring
supplied)
The courts below correctly characterized the sale of Lot No. 3591 as one
involving a lump sum contract. The Bilihan ng Lupa shows that the parties
agreed on the purchase price of ₱1,000.00 on a predetermined, albeit
unsurveyed, area of 5,000 square meters and not on a particular rate per unit
area. As noted by the Court of Appeals, the identity of the realty was
sufficiently described as riceland:
It is clear from the afore-quoted Bilihan ng Lupa that what appellants sold to
Eulalio was the "bahaging palayan." Though measured as 5,000 square
meters, more or less, such measurement is only an approximation, and not
an exact measurement. Moreover, we take note of the fact that the said deed
of sale mentioned the boundaries covering the whole area of 33,489 square
meters, including the "bahaging palayan." Had appellants intended to sell
only a portion of the "bahaging palayan," they could have stated the specific
area in the deed of sale and not the entire "bahaging palayan" . . . .
In fine, under Article 1542, what is controlling is the entire land included
within the boundaries, regardless of whether the real area should be greater
or smaller than that recited in the deed. This is particularly true since the area
of the land in OCT No. 0-6498 was described in the deed as "humigit
kumulang," that is, more or less.
A caveat is in order, however. The use of "more or less" or similar words in
designating quantity covers only a reasonable excess or deficiency. A
vendee of land sold in gross or with the description "more or less" with
reference to its area does not thereby ipso facto take all risk of quantity in the
land.
8
Numerical data are not of course the sole gauge of unreasonableness of the
excess or deficiency in area. Courts must consider a host of other factors. In
one case,32 the Court found substantial discrepancy in area due to
contemporaneous circumstances. Citing change in the physical nature of the
property, it was therein established that the excess area at the southern
portion was a product of reclamation, which explained why the land’s
technical description in the deed of sale indicated the seashore as its
southern boundary, hence, the inclusion of the reclaimed area was declared
unreasonable.
In OCT No. 0-6498, the increase by a fourth of a fraction of the area
indicated in the deed of sale cannot be considered as an unreasonable
excess. Most importantly, the circumstances attendant to the inclusion of the
excess area bare nothing atypical or significant to hint at unreasonableness.
It must be noted that the land was not yet technically surveyed at the time of
the sale. As vendors who themselves executed the Bilihan ng Lupa,
petitioners may rightly be presumed to have acquired a good estimate of the
value and area of the bahaging palayan.
however, the records reveal that respondents raised their objection in their
Amended Answers37 filed in both cases.
IN FINE, it is a fundamental principle in land registration that a certificate of
title serves as evidence of an indefeasible and incontrovertible title to the
property in favor of the person whose name appears therein. Such
indefeasibility commences after the lapse or expiration of one year from the
date of entry of the decree of registration when all persons are considered to
have a constructive notice of the title to the property. After the lapse of one
year, therefore, title to the property can no longer be contested. This system
was so effected in order to quiet title to land.38
WHEREFORE, the petition is DENIED. The assailed Decision and
Resolution of the Court of Appeals are AFFIRMED.
Costs against petitioners.
SO ORDERED.

As for the last assigned error, the appellate court, in finding that the
complaints were time-barred, noted that when the complaints were filed in
1994, more than 27 years had elapsed from the issuance of OCT No. 0-3631
and more than 20 years from the issuance of OCT No. 0-6498. The
prescriptive period of one (1) year had thus set in.1awphi1.nét

Petitioners’ reliance on Agne v. Director of Lands33 is misplaced since the

cancellation of title was predicated not on the ground of fraud but on want of
jurisdiction. Even assuming that petitioners’ actions are in the nature of a suit
for quieting of title, which is imprescriptible, the actions still necessarily fail
since petitioners failed to establish the existence of fraud.

A word on Republic Act No. 716034 which was raised by petitioners in their
petition. It expressly requires the parties to undergo a conciliation process
under the Katarungang Pambarangay, as a precondition to filing a complaint
in court,35 non-compliance with this condition precedent does not prevent a
court of competent jurisdiction from exercising its power of adjudication over
a case unless the defendants object thereto. The objection should be
seasonably made before the court first taking cognizance of the complaint,
and must be raised in the Answer or in such other pleading allowed under
the Rules of Court.36

While petitioners admittedly failed to comply with the requirement of

barangay conciliation, they assert that respondents waived such objection
when they failed to raise it in their Answer. Contrary to petitioners’ claim,

9
 G.R. No. 146195 November 18, 2004
AVELINA ZAMORA, EMERITA ZAMORA-NICOL, SONNY NICOL,
TERESA ZAMORA-UMALI, CLARENCE UMALI, ROBERTO ZAMORA,
ROLANDO ZAMORA, MARY ANN ZAMORA, MICHELLE ZAMORA and
RODRIGO ZAMORA, petitioners, vs. HEIRS of CARMEN IZQUIERDO,
represented by their attorney-in-fact, ANITA F. PUNZALAN,
respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Before us is a petition for review on certiorari1 assailing the Decision2 of the
Court of Appeals dated September 12, 2000 and its Resolution dated
December 1, 2000 in CA-G.R. SP No. 54541, entitled "Avelina Zamora, et
al., petitioners, versus Heirs of Carmen Izquierdo, represented by the
executrix, Anita F. Punzalan, respondents."
The records show that sometime in 1973, Carmen Izquierdo and Pablo
Zamora entered into a verbal stipulation whereby the former leased to the
latter one of her apartment units located at 117-B General Luna Street,
Caloocan City. They agreed on the following: the rental is P3,000.00 per
month; the leased premises is only for residence; and only a single family is
allowed to occupy it.
After the death of Carmen (lessor) in 1996 her attorney-in-fact, Anita
Punzalan, representing the heirs, herein respondents, prepared a new
contract of lease wherein the rental was increased from P3,000.00 to
P3,600.00 per month.3 However, petitioners refused to sign it.
In January 1997, Pablo (lessee) died. His wife, Avelina Zamora, and their
children (two of whom have their own families), herein petitioners, continued
to reside in the apartment unit. However, they refused to pay the increased
rental and persisted in operating a photocopying business in the same
apartment.
Meanwhile, petitioner Avelina Zamora applied with the Metropolitan
Waterworks & Sewerage System (MWSS) for a water line installation in the
premises. Since a written consent from the owner is required for such
installation, she requested respondents' attorney-in-fact to issue it. However,
the latter declined because petitioners refused to pay the new rental rate and
violated the restrictions on the use of the premises by using a portion thereof
for photocopying business and allowing three families to reside therein.
This prompted petitioner Avelina Zamora to file with the Office of the Punong
Barangay of Barangay 16, Sona 2, District I, Lungsod ng Caloocan, a
complaint against Anita Punzalan (respondents' attorney-in-fact), docketed
as "Usaping Bgy. Blg. 1-27-97, Ukol sa: Hindi Pagbibigay ng Pahintulot sa
Pagpapakabit ng Tubig."
On August 24, 1997, during the barangay conciliation proceedings, petitioner
Avelina Zamora declared that she refused to sign the new lease contract
because she is not agreeable with the conditions specified therein.
The following day, Anita Punzalan sent Avelina a letter4 informing her that
the lease is being terminated and demanding that petitioners vacate the
premises within 30 days from notice.
Despite several barangay conciliation sessions, the parties failed to settle
their dispute amicably. Hence, the Barangay Chairman issued a Certification
to File Action dated September 14, 1997.5
Consequently, on October 2, 1997, respondents, represented by Anita
Punzalan, filed with the Metropolitan Trial Court (MTC), Branch 49, Caloocan
City, a complaint for unlawful detainer and damages against petitioners,
docketed as Civil Case No. 23702.6 Forthwith, petitioners filed a motion to
dismiss7 the complaint on the ground that the controversy was not referred
to the barangay for conciliation. First, they alleged that the barangay
Certification to File Action "is fatally defective" because it pertains to another
dispute, i.e., the refusal by respondents' attorney-in-fact to give her written
consent to petitioners' request for installation of water facilities in the
premises. And, second, when the parties failed to reach an amicable
settlement before the Lupong Tagapamayapa, the Punong Barangay (as
Lupon Chairman), did not constitute the Pangkat ng Tagapagkasundo before
whom mediation or arbitration proceedings should have been conducted, in
violation of Section 410(b), Chapter 7 (Katarungang Pambarangay), Title
One, Book III of Republic Act No. 71608 (otherwise known as the Local
Government Code of 1991), which reads:
"SECTION 410. Procedure for Amicable Settlement.–
(a) x x x
(b) Mediation by lupon chairman – Upon receipt of the complaint, the lupon
chairman9 shall, within the next working day, summon the respondent(s),
with notice to the complainant(s) for them and their witnesses to appear
before him for a mediation of their conflicting interests. If he fails in his
mediation effort within fifteen (15) days from the first meeting of the parties
before him, he shall forthwith set a date for the constitution of the pangkat in
accordance with the provisions of this Chapter." (Underscoring supplied)
10
Respondents opposed the motion to dismiss, the same being prohibited
under Section 19 of the 1991 Revised Rule on Summary Procedure. They
prayed that judgment be rendered as may be warranted by the facts alleged
in the complaint, pursuant to Section 611 of the same Rule.
On July 9, 1998, the MTC issued an Order12 denying petitioners' motion to
dismiss and considering the case submitted for decision in view of their
failure to file their answer to the complaint.
Petitioners filed a motion for reconsideration,13 contending that a motion to
dismiss the complaint on the ground of failure to refer the complaint to the
Lupon for conciliation is allowed under Section 19 of the 1991 Revised Rule
on Summary Procedure, which partly provides:
"SEC. 19. Prohibited pleadings and motions. – The following pleadings,
motions, or petitions shall not be allowed in the cases covered by this Rule:
(a) Motion to dismiss the complaint or to quash the complaint or information
except on the ground of lack of jurisdiction over the subject matter, or failure
to comply with the preceding section [referring to Section 18 on referral of the
complaint to the Lupon for conciliation];
x x x."
On August 26, 1998, the MTC rendered a Judgment14 in favor of
respondents and against petitioners, the dispositive portion of which reads:
"WHEREFORE, Judgment is hereby rendered in favor of the plaintiff and
against the defendants, ordering defendants and all persons claiming right
under them:
1) To vacate the leased premises located at No. 117-B General Luna Street,
Caloocan City and to surrender possession thereof to the plaintiff;
2) To pay the amount of three thousand six hundred (P3,600.00) pesos per
month starting January, 1997 until the premises being occupied by them is
finally vacated and possession thereof is restored to the plaintiff;
3) To pay plaintiff the sum of five thousand (P5,000.00) pesos as and for
attorney's fees; and
4) To pay the costs of this suit.
SO ORDERED."
On appeal, the Regional Trial Court (RTC), Branch 125, Caloocan City,
rendered its Decision15 dated February 15, 1999 affirming the MTC
Judgment. Subsequently, it denied petitioners' motion for reconsideration.16
Petitioners then filed with the Court of Appeals a petition for review, docketed
as CA-G.R. SP No. 54541. On September 12, 2000, it rendered a
Decision17 affirming the RTC Decision.
Thereafter, petitioners filed a motion for reconsideration but was denied by
the Appellate Court in its Resolution dated December 1, 2000.18
Hence, the instant petition.
I
The primordial objective of Presidential Decree No. 1508 (the Katarungang
Pambarangay Law), now included under R.A. No. 7160 (the Local
Government Code of 1991), is to reduce the number of court litigations and
prevent the deterioration of the quality of justice which has been brought
about by the indiscriminate filing of cases in the courts.19 To attain this
objective, Section 412(a) of R.A. No. 7160 requires the parties to undergo a
conciliation process before the Lupon Chairman or the Pangkat as a
precondition to filing a complaint in court, thus:
"SECTION 412. Conciliation. – (a) Pre-condition to Filing of Complaint in
Court.– No complaint, petition, action, or proceeding involving any matter
within the authority of the lupon shall be filed or instituted directly in court or
any other government office for adjudication, unless there has been a
confrontation between the parties before the lupon chairman or the pangkat,
and that no conciliation or settlement has been reached as certified by the
lupon or pangkat secretary and attested to by the lupon or pangkat chairman
x x x." (Underscoring supplied)
In the case at bar, the Punong Barangay, as Chairman of the Lupong
Tagapamayapa, conducted conciliation proceedings to resolve the dispute
between the parties herein. Contrary to petitioners' contention, the complaint
does not only allege, as a cause of action, the refusal of respondents'
attorney-in-fact to give her consent to the installation of water facilities in the
premises, but also petitioners' violation of the terms of the lease, specifically
their use of a portion therein for their photocopying business and their failure
to pay the increased rental. As correctly found by the RTC:
"The records show that confrontations before the barangay chairman were
held on January 26, 1997, February 9, 1997, February 23, 1997, February
28, 1997, July 27, 1997, August 3, 1997, August 10, 1997, August 17, 1997
and August 24, 1997 wherein not only the issue of water installation was
11
discussed but also the terms of the lease and the proposed execution of a
written contract relative thereto. It appears, however, that no settlement was
reached despite a total of nine meetings at the barangay level.
It is of no moment that the complaint was initially made by defendant-
appellant Avelina Zamora because herein plaintiff-appellee was given by the
Sangguniang Barangay the authority to bring her grievance to the Court for
resolution. While it is true that the Sertifikasyon dated September 14, 1997 is
entitled 'Ukol Sa Hindi Pagbibigay Ng Pahintulot Sa Pagpapakabit Ng Tubig',
this title must not prevail over the actual issues discussed in the proceedings.
Hence, to require another confrontation at the barangay level as a sine qua
non for the filing of the instant case would not serve any useful purpose
anymore since no new issues would be raised therein and the parties have
proven so many times in the past that they cannot get to settle their
differences amicably."20
We cannot sustain petitioners' contention that the Lupon conciliation alone,
without the proceeding before the Pangkat ng Tagapagkasundo, contravenes
the law on Katarungang Pambarangay. Section 412(a) of R.A. No. 7160,
quoted earlier, clearly provides that, as a precondition to filing a complaint in
court, the parties shall go through the conciliation process either before the
Lupon Chairman (as what happened in the present case), or the Pangkat.
"SEC. 18. Referral to Lupon. – Cases requiring referral to the Lupon for
conciliation under the provisions of Presidential Decree No. 1508 where
there is no showing of compliance with such requirement, shall be dismissed
without prejudice, and may be revived only after such requirement shall have
been complied with. This provision shall not apply to criminal cases where
the accused was arrested without a warrant." (Underscoring supplied)
As discussed earlier, the case was referred to the Lupon Chairman for
conciliation. Obviously, petitioners' motion to dismiss, even if allowed, is
bereft of merit.
WHEREFORE, the petition is DENIED. The assailed Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 54541 sustaining the
Decision of the RTC which upheld the MTC Judgment is AFFIRMED.
Costs against petitioners.
SO ORDERED.

Moreover, in Diu vs. Court of Appeals,21 we held that "notwithstanding the

mandate in Section 410(b) of R.A. No. 7160 that the Barangay Chairman
shall constitute a Pangkat if he fails in his mediation efforts," the same
"Section 410(b) should be construed together with Section 412(a) of the
same law (quoted earlier), as well as the circumstances obtaining in and
peculiar to the case." Here, while the Pangkat was not constituted, however,
the parties met nine (9) times at the Office of the Barangay Chairman for
conciliation wherein not only the issue of water installation was discussed but
also petitioners' violation of the lease contract. It is thus manifest that there
was substantial compliance with the law which does not require strict
adherence thereto.22

II
We hold that petitioners' motion to dismiss the complaint for unlawful detainer
is proscribed by Section 19(a) of the 1991 Revised Rule on Summary
Procedure, quoted earlier. Section 19(a) permits the filing of such pleading
only when the ground for dismissal of the complaint is anchored on lack of
jurisdiction over the subject matter, or failure by the complainant to refer the
subject matter of his/her complaint "to the Lupon for conciliation" prior to its
filing with the court. This is clear from the provisions of Section 18 of the
same Rule, which reads:

12
 G.R. No. 153567 February 18, 2008
LIBRADA M. AQUINO, petitioner, 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 Sale8 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.
On appeal, the RTC affirmed the dismissal of the Complaint on the same
ground that the dispute was not brought before the 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.
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
13
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.
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.
14
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.
As enunciated in the landmark case of Royales v. Intermediate Appellate
Court:
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.
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
15
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
16
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.
As extensively discussed by the eminent jurist Florenz D. Regalado in
Refugia v. Court of Appeals:
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.
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.
SO ORDERED.
17
 G.R. No. 159411. March 18, 2005
TEODORO I. CHAVEZ, Petitioners, vs. HON. COURT OF APPEALS and
JACINTO S. TRILLANA, Respondents.
DECISION
PUNO, J.:
Assailed in this petition for review is the Decision dated April 2, 20031 of the
Court of Appeals in CA-G.R. CV No. 590232 which modified the Decision
dated December 15, 1997 of the Regional Trial Court (RTC) of Valenzuela
City, Branch 172, in Civil Case No. 5139-V-97, as well as its Resolution
dated August 8, 20033 which denied petitioner’s motion for reconsideration.
The antecedent facts are as follows:
In October 1994, petitioner Teodoro Chavez and respondent Jacinto Trillana
entered into a contract of lease4 whereby the former leased to the latter his
fishpond at Sitio Pariahan, Taliptip, Bulacan, Bulacan, for a term of six (6)
years commencing from October 23, 1994 to October 23, 2000. The rental
for the whole term was two million two hundred forty thousand
(₱2,240,000.00) pesos, of which one million (₱1,000,000.00) pesos was to
be paid upon signing of the contract. The balance was payable as follows:
b. That, after six (6) months and/or, on or before one (1) year from the date
of signing this contract, the amount of THREE HUNDRED FORTY-FOUR
THOUSAND (₱344,000.00) pesos shall be paid on April 23, 1995 and/or, on
or before October 23, 1995 shall be paid by the LESSEE to the LESSOR.
c. That, the LESSEE, shall pay the amount of FOUR HUNDRED FORTY-
EIGHT THOUSAND (₱448,000.00) pesos x x x to the LESSOR on April 23,
1997 and/or, on or before October 23, 1997, and on April 23, 1998 and/or, on
or before October 23, 1998 the amount of FOUR HUNDRED FORTY-EIGHT
THOUSAND (₱448,000.00) pesos x x x.
Paragraph 5 of the contract further provided that respondent shall undertake
all construction and preservation of improvements in the fishpond that may
be destroyed during the period of the lease, at his expense, without
reimbursement from petitioner.
In August 1996, a powerful typhoon hit the country which damaged the
subject fishpond. Respondent did not immediately undertake the necessary
repairs as the water level was still high. Three (3) weeks later, respondent
was informed by a barangay councilor that major repairs were being
undertaken in the fishpond with the use of a crane. Respondent found out
that the repairs were at the instance of petitioner who had grown impatient
with his delay in commencing the work.
In September 1996, respondent filed a complaint before the Office of the
Barangay Captain of Taliptip, Bulacan, Bulacan. He complained about the
unauthorized repairs undertaken by petitioner, the ouster of his personnel
from the leased premises and its unlawful taking by petitioner despite their
valid and subsisting lease contract. After conciliation proceedings, an
agreement was reached, viz.:
KASUNDUAN
Napagkasunduan ngayong araw na ‘to ika-17 ng Setyembre ng nagpabuwis
– Teodoro Chavez at bumubuwis na si G. Jay Trillana na ibabalik ni G.
Chavez ang halagang ₱150,000.00 kay G. Trillana bilang sukli sa natitirang
panahon ng buwisan.
Ngunit kung maibibigay ni G. Chavez ang halagang ₱100,000.00 bago
sumapit o pagsapit ng ika-23 ng Setyembre, taong kasalukuyan, ‘to ay
nangangahulugan ng buong kabayaran at hindi ₱150,000.00.
Kung sakali at hindi maibigay ang ₱100,000.00 ang magiging kabayaran ay
mananatiling ₱150,000.00 na may paraan ng pagbabayad ng sumusunod:
Ang ₱50,000.00 ay ibibigay bago sumapit o pagsapit ng ika-31 ng Oktubre
1996 at ang balanseng ₱100,000.00 ay ibibigay sa loob ng isang taon subalit
magbibigay ng promissory note si G. Chavez at kung mabubuwisang ang
kanyang palaisdaan ay ibibigay lahat ni G. Chavez ang buong ₱150,000.00
sa lalong madaling panahon.
Kung magkakaroon ng sapat at total na kabayaran si G. Chavez kay G.
Trillana ang huli ay lalagda sa kasulatan bilang waiver o walang anumang
paghahabol sa nabanggit na buwisan.
Alleging non-compliance by petitioner with their lease contract and the
foregoing "Kasunduan," respondent filed a complaint on February 7, 1997
against petitioner before the RTC of Valenzuela City, docketed as Civil Case
No. 5139-V-97. Respondent prayed that the following amounts be awarded
him, viz.: (a) ₱300,000.00 as reimbursement for rentals of the leased
premises corresponding to the unexpired portion of the lease contract; (b)
₱500,000.00 as unrealized profits; (c) ₱200,000.00 as moral damages; (d)
₱200,000.00 as exemplary damages; and, (e) ₱100,000.00 as attorney’s
fees plus ₱1,000.00 for each court appearance of respondent’s counsel.
18
Petitioner filed his answer but failed to submit the required pretrial brief and
to attend the pretrial conference. On October 21, 1997, respondent was
allowed to present his evidence ex-parte before the Acting Branch Clerk of
Court.5 On the basis thereof, a decision was rendered on December 15,
19976 in favor of respondent, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered as follows:
(1) Ordering the defendant to reimburse to the plaintiff the sum of
₱300,000.00 representing rental payment of the leased premises for the
unused period of lease;
(2) Ordering the defendant to pay plaintiff the sum of ₱500,000.00
representing unrealized profit as a result of the unlawful deprivation by the
defendant of the possession of the subject premises;
(3) Ordering the defendant to pay plaintiff the sum of ₱200,000.00 as moral
damages;
(4) Ordering the defendant to pay plaintiff the sum of ₱200,000.00 as
exemplary damages; and
(5) Ordering the defendant to pay plaintiff the sum of ₱100,000.00 as and for
attorney’s fees, plus costs of suit.
Petitioner appealed to the Court of Appeals which modified the decision of
the trial court by deleting the award of ₱500,000.00 for unrealized profits for
lack of basis, and by reducing the award for attorney’s fees to ₱50,000.00.7
Petitioner’s motion for reconsideration was denied. Hence, this petition for
review.
Petitioner contends that the Court of Appeals erred in ruling that the RTC of
Valenzuela City had jurisdiction over the action filed by respondent
considering that the subject matter thereof, his alleged violation of the lease
contract with respondent, was already amicably settled before the Office of
the Barangay Captain of Taliptip, Bulacan, Bulacan. Petitioner argued that
respondent should have followed the procedure for enforcement of the
amicable settlement as provided for in the Revised Katarungang
Pambarangay Law. Assuming arguendo that the RTC had jurisdiction, it
cannot award more than the amount stipulated in the "Kasunduan" which is
₱150,000.00. In any event, no factual or legal basis existed for the
reimbursement of alleged advance rentals for the unexpired portion of the
lease contract as well as for moral and exemplary damages, and attorney’s
fees.
Indeed, the Revised Katarungang Pambarangay Law8 provides that an
amicable settlement reached after barangay conciliation proceedings has the
force and effect of a final judgment of a court if not repudiated or a petition to
nullify the same is filed before the proper city or municipal court within ten
(10) days from its date. It further provides that the settlement may be
enforced by execution by the lupong tagapamayapa within six (6) months
from its date, or by action in the appropriate city or municipal court, if beyond
the six-month period.10 This special provision follows the general precept
enunciated in Article 2037 of the Civil Code, viz.:
A compromise has upon the parties the effect and authority of res judicata;
but there shall be no execution except in compliance with a judicial
compromise.
Thus, we have held that a compromise agreement which is not contrary to
law, public order, public policy, morals or good customs is a valid contract
which is the law between the parties themselves. It has upon them the effect
and authority of res judicata even if not judicially approved, and cannot be
lightly set aside or disturbed except for vices of consent and forgery.
However, in Heirs of Zari, et al. v. Santos, we clarified that the broad precept
enunciated in Art. 2037 is qualified by Art. 2041 of the same Code, which
provides:
If one of the parties fails or refuses to abide by the compromise, the other
party may either enforce the compromise or regard it as rescinded and insist
upon his original demand.
We explained, viz:
[B]efore the onset of the new Civil Code, there was no right to rescind
compromise agreements. Where a party violated the terms of a compromise
agreement, the only recourse open to the other party was to enforce the
terms thereof.
When the new Civil Code came into being, its Article 2041 x x x created for
the first time the right of rescission. That provision gives to the aggrieved
party the right to "either enforce the compromise or regard it as rescinded
and insist upon his original demand." Article 2041 should obviously be
deemed to qualify the broad precept enunciated in Article 2037 that "[a]
compromise has upon the parties the effect and authority of res judicata.
(underscoring ours)
In exercising the second option under Art. 2041, the aggrieved party may, if
he chooses, bring the suit contemplated or involved in his original demand,
as if there had never been any compromise agreement, without bringing an
action for rescission. This is because he may regard the compromise as
already rescinded by the breach thereof of the other party.
Thus, in Morales v. National Labor Relations Commission we upheld the
National Labor Relations Commission when it heeded the original demand of
four (4) workers for reinstatement upon their employer’s failure to comply
19
with its obligation to pay their monetary benefits within the period prescribed
under the amicable settlement. We reiterated the rule that the aggrieved
party may either (1) enforce the compromise by a writ of execution, or (2)
regard it as rescinded and so insist upon his original demand upon the other
party’s failure or refusal to abide by the compromise. We also recognized the
options in Mabale v. Apalisok, Canonizado v. Benitez, and Ramnani v. Court
of Appeals, to name a few cases.
In the case at bar, the Revised Katarungang Pambarangay Law provides for
a two-tiered mode of enforcement of an amicable settlement, to wit: (a) by
execution by the Punong Barangay which is quasi-judicial and summary in
nature on mere motion of the party entitled thereto; and (b) an action in
regular form, which remedy is judicial. However, the mode of enforcement
does not rule out the right of rescission under Art. 2041 of the Civil Code.
The availability of the right of rescission is apparent from the wording of Sec.
41722 itself which provides that the amicable settlement "may" be enforced
by execution by the lupon within six (6) months from its date or by action in
the appropriate city or municipal court, if beyond that period. The use of the
word "may" clearly makes the procedure provided in the Revised
Katarungang Pambarangay Law directory or merely optional in nature.
Thus, although the "Kasunduan" executed by petitioner and respondent
before the Office of the Barangay Captain had the force and effect of a final
judgment of a court, petitioner’s non-compliance paved the way for the
application of Art. 2041 under which respondent may either enforce the
compromise, following the procedure laid out in the Revised Katarungang
Pambarangay Law, or regard it as rescinded and insist upon his original
demand. Respondent chose the latter option when he instituted Civil Case
No. 5139-V-97 for recovery of unrealized profits and reimbursement of
advance rentals, moral and exemplary damages, and attorney’s fees.
Respondent was not limited to claiming ₱150,000.00 because although he
agreed to the amount in the "Kasunduan," it is axiomatic that a compromise
settlement is not an admission of liability but merely a recognition that there
is a dispute and an impending litigation which the parties hope to prevent by
making reciprocal concessions, adjusting their respective positions in the
hope of gaining balanced by the danger of losing. Under the "Kasunduan,"
respondent was only required to execute a waiver of all possible claims
arising from the lease contract if petitioner fully complies with his obligations
thereunder. It is undisputed that herein petitioner did not.
Having affirmed the RTC’s jurisdiction over the action filed by respondent, we
now resolve petitioner’s remaining contention. Petitioner contends that no
factual or legal basis exists for the reimbursement of alleged advance
rentals, moral and exemplary damages, and attorney’s fees awarded by the
court a quo and the Court of Appeals.
The rule is that actual damages cannot be presumed, but must be proved
with a reasonable degree of certainty. In the case at bar, we agree with
petitioner that no competent proof was presented to prove that respondent
had paid ₱300,000.00 as advance rentals for the unexpired period of the
lease contract. On the contrary, the lease contract itself provided that the
remaining rentals of ₱448,000.00 shall be paid "on April 23, 1997 and/or, on
or before October 23, 1997, and on April 23, 1998 and/or, on or before
October 23, 1998 the amount ₱448,000.00." Respondent filed his complaint
on February 7, 1997. No receipt or other competent proof, aside from
respondent’s self-serving assertion, was presented to prove that respondent
paid the rentals which were not yet due. No proof was even presented by
respondent to show that he had already paid ₱1,000,000.00 upon signing of
the lease contract, as stipulated therein. Petitioner, in paragraphs 2 and 7 of
his answer, specifically denied that respondent did so. Courts must base
actual damages suffered upon competent proof and on the best obtainable
evidence of the actual amount thereof.
As to moral damages, Art. 2220 of the Civil Code provides that same may be
awarded in breaches of contract where the defendant acted fraudulently or in
bad faith. In the case at bar, respondent alleged that petitioner made
unauthorized repairs in the leased premises and ousted his personnel
therefrom despite their valid and subsisting lease agreement. Petitioner
alleged, by way of defense, that he undertook the repairs because
respondent abandoned the leased premises and left it in a state of disrepair.
However, petitioner presented no evidence to prove his allegation, as he did
not attend the pretrial conference and was consequently declared in default.
What remains undisputed therefore is that petitioner had a valid and
subsisting lease contract with respondent which he refused to honor by
giving back possession of the leased premises to respondent. We therefore
sustain the conclusion of both the trial court and the Court of Appeals that an
award of moral damages is justified under the circumstances. We likewise
sustain the award for exemplary damages considering petitioner’s propensity
not to honor his contractual obligations, first under the lease contract and
second, under the amicable settlement executed before the Office of the
Barangay Captain. Since respondent was compelled to litigate and incur
expenses to protect his interest on account of petitioner’s refusal to comply
with his contractual obligations, the award of attorney’s fees has to be
sustained.
IN VIEW WHEREOF, the petition is PARTIALLY GRANTED. The assailed
Decision dated April 2, 2003 of the Court of Appeals in CA-G.R. CV No.
59023 is modified by deleting the award of ₱300,000.00 as reimbursement of
advance rentals. The assailed Decision is AFFIRMED in all other respects.
SO ORDERED.
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 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 Decision1 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 lot2 owned 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.
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. Thus, a certification to file action 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. . . .
21
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 P75,000.0010 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.
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.
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.
22
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. On the other hand,
Aliba’s principal defense is anchored on the alleged existence and validity of
the said amicable settlement.
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."
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. Camerino 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."
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.
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."
Furthermore, to rule against the validity of the cited amicable settlement
herein would militate against the spirit and purpose of the Katarungang
Pambarangay Law, 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.
23