G.R. No.

167261 March 2, 2007 In compliance with the MCTC Order, the Lupon rendered an Arbitration
Award on 10 May 1995 ordering herein petitioner to retrieve the land upon
ROSARIA LUPITAN PANG-ET, Petitioner,vs. CATHERINE MANACNES- payment to the spouses Manacnes of the amount of ₱8,000.00 for the
DAO-AS, Heir of LEONCIO MANACNES and FLORENTINA MANACNES, improvements on the land. Aggrieved, Leoncio’s widow,7 Florentina
Respondent. Manacnes, repudiated the Arbitration Award but her repudiation was rejected
by the Lupon. Thereafter, the MCTC was furnished with copies of the
DECISION Arbitration Award.

CHICO-NAZARIO, J.: 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
Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Motion with the MCTC for the resumption of the proceedings in the original
Civil Procedure, assailing the Decision1 of the Court of Appeals in CA-G.R. case for recovery of possession and praying that the MCTC consider her
SP No. 78019, dated 9 February 2005, which reversed and set aside the repudiation of the Arbitration Award issued by the Lupon.
Judgment2 of the Regional Trial Court (RTC), Branch 36, Bontoc, Mountain
Province, and reinstated the Resolution3 of the Municipal Circuit Trial Court Subsequently, the MCTC heard the Motion of Florentina Manacnes
(MCTC) of Besao-Sagada, Mountain Province dismissing herein petitioner’s notwithstanding the latter’s failure to appear before the court despite notice.
action for Enforcement of Arbitration Award and Damages. The MCTC denied Florentina Manacnes’ Motion to repudiate the Arbitration
Award elucidating that since the movant failed to take any action within the
The instant petition draws its origin from an Action4 for recovery of 10-day reglementary period provided for under the Katarungang
possession of real property situated in Sitio Abatan, Barrio Dagdag, Sagada Pambarangay Law, the arbitration award has become final and executory.
filed by herein petitioner before the MCTC of Besao-Sagada, Mountain Furthermore, upon motion of herein petitioner Pang-et, the MCTC issued an
Province on 9 November 1994, against the spouses Leoncio and Florentina Order remanding the records of the case to the Lupon for the execution of
Manacnes, the predecessors-in-interest of herein respondent. the Arbitration Award. On 31 August 1995, the then incumbent Punong
Barangay of Dagdag issued a Notice of Execution of the Award.
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 Said Notice of Execution was never implemented. Thus, on 16 October 2001,
(Lupon) of Dagdag, Sagada for arbitration in accordance with the provisions herein petitioner Pang-et filed with the MCTC an action for enforcement of
of the Katarungang Pambarangay Law.5 Consequently, the proceedings the Arbitration Award which was sought to be dismissed by the heir of the
before the MCTC were suspended, and the case was remanded to the Manacnes spouses.8 The heir of the Manacnes spouses argues that the
Lupon for resolution.6 Agreement for Arbitration and the Arbitration Award are void, the Agreement
for Arbitration not having been personally signed by the spouses Manacnes,
Thereafter, the Lupon issued a Certification to File Action on 26 February and the Arbitration Award having been written in English – a language not
1995 due to the refusal of the Manacnes spouses to enter into an Agreement understood by the parties.
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 In its Resolution dated 20 August 2002, the MCTC dismissed the Petition for
forwarded to the MCTC. Enforcement of Arbitration Award in this wise:

An Order was issued by the MCTC on 7 April 1995, once more remanding x x x Are defendants estopped from questioning the proceedings before the
the matter for conciliation by the Lupon and ordering the Lupon to render an Lupon Tagapamayapa concerned?
Arbitration Award thereon. According to the MCTC, based on the records of
the case, an Agreement for Arbitration was executed by the parties The defendants having put in issue the validity of the proceedings before the
concerned; however, the Lupon failed to issue an Arbitration Award as lupon concerned and the products thereof, they are not estopped. It is a
provided under the Katarungang Pambarangay Law, so that, the case must hornbook rule that a null and void act could always be questioned at any time
be returned to the Lupon until an Arbitration Award is rendered. 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 third issue: Is the Arbitration Award now sought to be enforced effective?
the pertinent law dealing on this matter which is Section 413 of the Local Much to be desired, the natural flow of events must follow as a consequence.
Government Code of 1991 (RA 7160), to wit: Considering that the agreement to arbitrate is inefficacious as earlier
declared, it follows that the arbitration award which emanated from it is also
"Section 413 – (a) The parties may, at any stage of the proceedings, agree in inefficacious. Further, the Arbitration Award by itself, granting arguendo that
writing that they shall abide by the arbitration award of the lupon chairman or the agreement to arbitrate is valid, will readily show that it does not also
the pangkat. x x x" conform with the mandate of the Katarungang Pambarangay Law particularly
Section 411 thereto which provides:
The foregoing should be taken together with Section 415 of the same code
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
"Section 415. Appearance of parties in person. In all katarungang dispute do not use the same language or dialect, the settlement shall be
pambarangay proceedings, the parties must appear in person without the written in the language known to them."
assistance of counsel or representative, except for minors and incompetents
who may be assisted by their next-of-kin who are not lawyers." Likewise, the implementing rules thereof, particularly Section 13 provides:

It is very clear from the foregoing that personal appearance of the parties in "Sec. 13 – Form of Settlement and Award. – All settlements, whether by
conciliation proceedings before a Lupon Tagapamayapa is mandatory. mediation, conciliation or arbitration, shall be in writing, in a language or
Likewise, the execution of the agreement to arbitrate must be done dialect known to the parties. x x x"
personally by the parties themselves so that they themselves are mandated
to sign the agreement. 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
Unfortunately, in this case, it was not respondents-spouses [Manacnis] who Kankanaey language. Thus, the Arbitration Award should have been written
signed the agreement to arbitrate as plaintiff herself admitted but another in the Kankanaey language. However, as shown by the Arbitration Award, it
person. Thus, it is very clear that the mandatory provisos of Section 413 and is written in English language which the parties do not speak and therefore a
415 of RA 7160 are violated. Granting arguendo that it was Catherine who further violation of the Katarungang Pambarangay Law.
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 IN THE LIGHT of all the foregoing considerations, the above-entitled case is
provisos of RA 7160, if ever a party is entitled to an assistance, it shall be hereby dismissed.9
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 Petitioner Pang-et’s Motion for Reconsideration having been denied, she
but not incompetent. Likewise, what the law provides is assistance, not filed an Appeal before the RTC which reversed and set aside the Resolution
signing of agreements or settlements. of the MCTC and remanded the case to the MCTC for further proceedings.
According to the RTC:
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 As it appears on its face, the Agreement for Arbitration in point found on
agreement to arbitrate? The more that it is proscribed by the Katarungang page 51 of the expediente, dated Feb. 6, 1995, and attested by the Pangkat
Pambarangay Law specifically Section 415 of RA 7160 which mandates the Chairman of the Office of the Barangay Lupon of Dagdag, Sagada was
personal appearance of the parties before the lupon and likewise prohibits signed by the respondents/defendants spouses Manacnis. The
the appearance of representatives. representative of the Appellee in the instant case assails such Agreement
claiming that the signatures of her aforesaid predecessors-in-interest therein
In view of the foregoing, it could now be safely concluded that the questioned were not personally affixed by the latter or are falsified-which in effect is an
agreement to arbitrate is inefficacious for being violative of the mandatory attack on the validity of the document on the ground that the consent of the
provisions of RA 7160 particularly sections 413 and 415 thereof as it was not defendants spouses Manacnis is vitiated by fraud. Indulging the Appellee
the respondents-spouses [Manacnis] who signed it. 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 "inefficacious"; without which pronouncements, said court would not have
original defendants nor did any of such heirs effectively repudiate the dismissed the case at bar.
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. Wherefore, Judgment is hereby rendered Reversing and Setting Aside the
413 (a), 418, RA 7160; Secs. 7, 13, KP Law; Sec. 12, Rule IV, KP Rules). As Resolution appealed from, and ordering the record of the case subject
mandated, such failure is deemed a waiver on the part of the defendants thereof remanded to the court of origin for further proceedings.10
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, Aggrieved by the reversal of the RTC, herein respondent filed a petition
KP Rules). Corollarily, the Appellee Heirs being privy to the now deceased before the Court of Appeals seeking to set aside the RTC Judgment. On 9
original defendants should have not been permitted by the court a quo under February 2005, the appellate court rendered the herein assailed Decision, to
the equitable principle of estoppel, to raise the matter in issue for the first wit:
time in the present case (Lopez vs. Ochoa, 103 Phil. 94).
After thoroughly reviewing through the record, We find nothing that would
The Arbitration Award relative to Civil Case 83 (B.C. No. 07) dated May 10, show that the spouses Manacnes were ever amenable to any compromise
1995, written in English, attested by the Punong Barangay of Dagdag and with respondent Pang-et. Thus, We are at a loss as to the basis of the
found on page 4 of the record is likewise assailed by the Appellee as void on Arbitration Award sought to be enforced by respondent Pang-et’s subsequent
the ground that the English language is not known by the defendants action before the MCTC.
spouses Manacnis who are Igorots. Said Appellee contends that the
document should have been written in Kankana-ey, the dialect known to the There is no dispute that the proceeding in Civil Case No. 83 was suspended
party (Sec. 413 (b), RA 7160; Sec. 7, Par. 2, KP law, Sec. 11, KP Rules). On and the same remanded to the Lupon on account of the Agreement to
this score, the court a quo presumptuously concluded on the basis of the Arbitrate which was allegedly not signed by the parties but agreed upon by
self-serving mere say-so of the representative of the Appellee that her their respective counsels during the pre-trial conference. In the meeting
predecessors did not speak or understand English. As a matter of judicial before the Lupon, it would seem that the agreement to arbitrate was not
notice, American Episcopalian Missionaries had been in Sagada, Mountain signed by the spouses Manacnes. More importantly, when the pangkat
Province as early as 1902 and continuously stayed in the place by turns, co- chairman asked the spouses Manacnes to sign or affix their thumbmarks in
mingling with the indigenous people thereat, instructing and educating them, the agreement, they refused and insisted that the case should instead go to
and converting most to the Christian faith, among other things, until the court. Thus, the Lupon had no other recourse but to issue a certificate to file
former left about twenty years ago. By constant association with the white action. Unfortunately, the case was again remanded to the Lupon to "render
folks, the natives too old to go to school somehow learned the King’s English an arbitration award". This time, the Lupon heard the voice tape of the late
by ear and can effectively speak and communicate in that language. Any Beket Padonay affirming respondent Pang-et’s right to the disputed property.
which way, even granting arguendo that the defendants spouses Manacnis While Pang-et offered to pay ₱8,000.00 for the improvements made by the
were the exceptions and indeed totally ignorant of English, no petition to spouses Manacnes, the latter refused to accept the same and insisted on
nullify the Arbitration award in issue on such ground as advanced was filed their right to the subject property. Despite this, the Lupon on May 10, 1995
by the party or any of the Appellee Heirs with the MCTC of Besao-Sagada, issued an Arbitration award which favored respondent Pang-et.
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 From the time the case was first referred to the Lupon to the time the same
effect of a final judgment of a court (Sec. 416, RA 7160; Sec. 11, KP Law; was again remanded to it, the Spouses Manacnes remained firm in not
Sec. 13, KP Rules); conclusive upon the original defendants in Civil Case 83 entering into any compromise with respondent Pang-et. This was made clear
(B.C. No. 07) and the Appellee Heirs herein privy to said defendants. 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
In the light thereof, the collateral attack of the Appellee on the Agreement for never intended to submit the case for arbitration.
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 Moreover, the award itself is riddled with flaws. First of all there is no showing
case, it would not have in the logical flow of things declared both documents 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 First and foremost, in order to resolve the case before us, it is pivotal to
proceed to hear the case. However, according to the minutes of the hearing stress that, during the initial hearing before the Lupon ng Tagapamayapa, the
before the lupon on 9 April 1995, the pangkat Chairman and another pangkat spouses Manacnes declined to sign the Agreement for Arbitration and were
member were absent for the hearing. 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
Finally, Section 13 of the same Rule requires that the Punong Barangay or February 1995, the legality of the signature of Catherine Manacnes, daughter
the Pangkat Chairman should attest that parties freely and voluntarily agreed of the Manacnes spouses, who signed the Agreement for Arbitration on
to the settlement arrived at. But how can this be possible when the minutes behalf of her parents, was assailed on the ground that it should be the
of the two hearings show that the spouses Manacnes neither freely nor spouses Manacnes themselves who should have signed such agreement. To
voluntarily agreed to anything. resolve the issue, the Pangkat Chairman then asked the spouses Manacnes
that if they wanted the arbitration proceedings to continue, they must signify
While RA 7160 and the Katarungan Pambarangay rules provide for a period their intention in the Agreement for Arbitration form. However, as stated
to repudiate the Arbitration Award, the same is neither applicable nor earlier, the Manacnes spouses did not want to sign such agreement and
necessary since the Agreement to Arbitrate or the Arbitration Award were instead insisted that the case go to court.
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 Consequently, the Lupon issued a Certification to File Action on 26 February
repudiated. 1995 due to the refusal of the Manacnes spouses. Indicated in said
Certification are the following: 1) that there was personal confrontation
With all the foregoing, estoppel may not be applied against petitioners for an between the parties before the Punong Barangay but conciliation failed and
action or defense against a null and void act does not prescribe. With this, 2) that the Pangkat ng Tagapagkasundo was constituted but the personal
We cannot but agree with the MCTC that the very agreement to arbitrate is confrontation before the Pangkat failed likewise because respondents do not
null and void. Similarly, the arbitration award which was but the off shoot of want to submit this case for arbitration and insist that said case will go to
the agreement is also void. 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
WHEREFORE, the RTC judgment of 2 June 2003 is REVERSED and SET Tagapamayapa and for the latter to render an arbitration award, explaining
ASIDE, the MCTC Resolution DISMISSING the Civil Case No. 118 for that:
enforcement of Arbitration Award is REINSTATED.11
Going over the documents submitted to the court by the office of the Lupon
Vehemently disagreeing with the Decision of the Court of Appeals, petitioner Tagapamayapa of Dagdag, Sagada, Mountain Province, the court observed
Pang-et filed the instant petition. Petitioner maintains that the appellate court that an "Agreement for Arbitration" was executed by the parties anent the
overlooked material facts that resulted in reversible errors in the assailed above-entitled case. However, said Lupon did not make any arbitration
Decision. According to petitioner, the Court of Appeals overlooked the fact award as mandated by the Katarungang Pambarangay Law but instead
that the original parties, as represented by their respective counsels in Civil made a finding that the case may now be brought to the court. This is
Case No. 83, mutually agreed to submit the case for arbitration by the Lupon violative of the KP Law, which cannot be sanctioned by the court.
ng Tagapamayapa of Barangay Dagdag. Petitioner insists that the parties
must be bound by the initial agreement by their counsels during pre-trial to At this juncture, it must be stressed that the object of the Katarungang
an amicable settlement as any representation made by the lawyers are Pambarangay Law is the amicable settlement of disputes through conciliation
deemed made with the conformity of their clients. Furthermore, petitioner proceedings voluntarily and freely entered into by the parties. Through this
maintains that if indeed the spouses Manacnes did not want to enter into an mechanism, the parties are encouraged to settle their disputes without
amicable settlement, then they should have raised their opposition at the first enduring the rigors of court litigation. Nonetheless, the disputing parties are
instance, which was at the pre-trial on Civil Case No. 83 when the MCTC not compelled to settle their controversy during the barangay proceedings
ordered that the case be remanded to the Lupon ng Tagapamayapa for before the Lupon or the Pangkat, as they are free to instead find recourse in
arbitration. the courts16 in the event that no true compromise is reached.

We do not agree with the petitioner.

4
The key in achieving the objectives of an effective amicable settlement under Tagapamayapa for conciliation proceedings and not the actual amicable
the Katarungang Pambarangay Law is the free and voluntary agreement of settlement of the case. As stated earlier, the parties may only be compelled
the parties to submit the dispute for adjudication either by the Lupon or the to appear before the Lupon ng Tagapamayapa for the necessary
Pangkat, whose award or decision shall be binding upon them with the force confrontation, but not to enter into any amicable settlement, or in the case at
and effect of a final judgment of a court.17 Absent this voluntary submission bar, to sign the Agreement for Arbitration. Thus, when the Manacnes
by the parties to submit their dispute to arbitration under the Katarungang spouses personally appeared during the initial hearing before the Lupon ng
Pambarangay Law, there cannot be a binding settlement arrived at Tagapamayapa, they had already complied with the agreement during the
effectively resolving the case. Hence, we fail to see why the MCTC further pre-trial to submit the case for conciliation proceedings. Their presence
remanded the case to the Lupon ng Tagapamayapa and insisted that the during said hearing is already their acquiescence to the order of the MCTC
arbitration proceedings continue, despite the clear showing that the spouses remanding the case to the Lupon for conciliation proceedings, as there has
Manacnes refused to submit the controversy for arbitration. been an actual confrontation between the parties despite the fact that no
amicable settlement was reached due to the spouses Manacnes’ refusal to
It would seem from the Order of the MCTC, which again remanded the case sign the Agreement for Arbitration.
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 Furthermore, the MCTC should not have persisted in ordering the Lupon ng
is rendered by the Lupon. This, to our minds, is contrary to the very nature of Tagapamayapa to render an arbitration award upon the refusal of the
the proceedings under the Katarungang Pambarangay Law which espouses spouses Manacnes to submit the case for arbitration since such arbitration
the principle of voluntary acquiescence of the disputing parties to amicable award will not bind the spouses. As reflected in Section 413 of the Revised
settlement. 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
What is compulsory under the Katarungang Pambarangay Law is that there by the arbitration award of the Lupon or the Pangkat. Like in any other
be a confrontation between the parties before the Lupon Chairman or the contract, parties who have not signed an agreement to arbitrate will not be
Pangkat and that a certification be issued that no conciliation or settlement bound by said agreement since it is axiomatic that a contract cannot be
has been reached, as attested to by the Lupon or Pangkat Chairman, before binding upon and cannot be enforced against one who is not a party to it.19
a case falling within the authority of the Lupon may be instituted in court or In view of the fact that upon verification by the Pangkat Chairman, in order to
any other government office for adjudication. 18 In other words, the only settle the issue of whether or not they intend to submit the matter for
necessary pre-condition before any case falling within the authority of the arbitration, the spouses Manacnes refused to affix their signature or thumb
Lupon or the Pangkat may be filed before a court is that there has been mark on the Agreement for Arbitration Form, the Manacnes spouses cannot
personal confrontation between the parties but despite earnest efforts to be bound by the Agreement for Arbitration and the ensuing arbitration award
conciliate, there was a failure to amicably settle the dispute. It should be since they never became privy to any agreement submitting the case for
emphasized that while the spouses Manacnes appeared before the Lupon arbitration by the Pangkat.
during the initial hearing for the conciliation proceedings, they refused to sign
the Agreement for Arbitration form, which would have signified their consent WHEREFORE, premises considered, the instant petition is hereby DENIED.
to submit the case for arbitration. Therefore, upon certification by the Lupon The Decision of the Court of Appeals in CA-G.R. SP No. 78019 is hereby
ng Tagapamayapa that the confrontation before the Pangkat failed because AFFIRMED. The Municipal Circuit Trial Court of Besao-Sagada, Mountain
the spouses Manacnes refused to submit the case for arbitration and insisted Province, is hereby ORDERED to proceed with the trial of Civil Case No. 83
that the case should go to court, the MCTC should have continued with the for Recovery of Possession of Real Property, and the immediate resolution of
proceedings in the case for recovery of possession which it suspended in the same with deliberate dispatch. No costs.
order to give way for the possible amicable resolution of the case through
arbitration before the Lupon ng Tagapamayapa. SO ORDERED.

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

5
 G.R. No. 169890 March 12, 2007 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
FELICIANO ESGUERRA, CANUTO ESGUERRA, JUSTA ESGUERRA, Registration Authority [LRA]) issued Decree No. N-114039 by virtue of which
ANGEL ESGUERRA, FIDELA ESGUERRA, CLARA ESGUERRA, and the Register of Deeds of Bulacan issued OCT No. 0-36315 in the name of
PEDRO ESGUERRA, Petitioners, vs. VIRGINIA TRINIDAD, PRIMITIVA respondents.
TRINIDAD, and THE REGISTER OF DEEDS OF MEYCAUAYAN,
BULACAN, Respondents. Meanwhile, under a notarized Bilihan ng Lupa6 dated November 10, 1958,
petitioners sold to respondents’ parents Eulalio Trinidad and Damiana
DECISION 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
CARPIO MORALES, J.: Esguerra spouses.7

Involved in the present controversy are two parcels of land located in During the same cadastral survey conducted in the late 1960s, it was
Camalig, Meycauayan, Bulacan. 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
Felipe Esguerra and Praxedes de Vera (Esguerra spouses) were the owners measured 6,268 square meters.
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, In a subsequent application for registration of title over Lot No. 3591,
half of which (17,642 square meters) they sold to their grandchildren, herein docketed as Land Registration Case No. N-335-V, the CFI, by Decision8 of
petitioners Feliciano, Canuto, Justa, Angel, Fidela, Clara and Pedro, all August 21, 1972, awarded Lot No. 3591 in favor of Eulalio Trinidad. Pursuant
surnamed Esguerra; and a 23,989-square meter 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
parcel of land covered by Tax Declaration No. 12080, 23,489 square meters Trinidad.
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 Upon the death of the Trinidad spouses, Lot No. 3591 covered by OCT No.
(Trinidad brothers). 0-6498 was transmitted to respondents by succession.

Also sold to the Trinidad brothers were a 7,048-square meter parcel of land Petitioners, alleging that upon verification with the LRA they discovered the
covered by Tax Declaration No. 9059, a 4,618-square meter parcel of land issuance of the above-stated two OCTs, filed on August 29, 1994 before the
covered by Tax Declaration No. 12081, and a 768-square meter parcel of Regional Trial Court (RTC) of Malolos, Bulacan two separate complaints for
land covered by Tax Declaration No. 13989. their nullification on the ground that they were procured through fraud or
misrepresentation.
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 In the first complaint, docketed as Civil Case No. 737-M-94, petitioners
August 17, 1937.2 Both documents were executed before notary public sought the cancellation of OCT No. 0-3631.
Maximo Abaño.
In the other complaint, docketed as Civil Case No. 738-M-94, petitioners
Eulalio Trinidad later sold his share of the land to his daughters-respondents sought the cancellation of OCT No. 0-6498.
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 Both cases were consolidated and tried before Branch 79 of the RTC which,
was later assigned Lot No. 3593 during a cadastral survey conducted in the after trial, dismissed the cases by Joint Decision10 of May 15, 1997.
late 1960s.
Their appeal with the Court of Appeals having been dismissed by Decision of
On respondents’ application for registration of title, the then Court of First February 28, 2005, a reconsideration of which was, by Resolution of October
Instance (CFI) of Bulacan, by Decision4 of February 20, 1967, awarded Lot 3, 2005,11 denied, petitioners filed the instant petition.

6
Petitioners fault the appellate court 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
1. . . . in misappreciating the fact that the act of the respondent Eulalio
Trinidad in acquiring the property from Felipe Esguerra constituted fraud. In the present cases, as did the trial court, the appellate court found no fraud
in respondents’ acquisition and registration of the land, viz:
2. . . . in the [i]nterpretation and application of the provisions of Article 1542
of the New Civil Code. . . . 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
3. . . . in ruling that there is prescription, res judicata, and violation of the non- never sold Lot No. 3593 to Virginia Trinidad since it is part of the whole lot of
[forum] shopping.12 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
In their Comment, respondents assailed the petition as lacking verification acquired title over the subject property by virtue of a deed of sale executed
and certification against forum shopping and failing to attach to it an affidavit by their father Eulalio Trinidad in their favor.
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 xxxx
Compliance. [T]hey failed to establish that appellees’ acquisition of the certificate of title is
fraudulent. In fact, in their two complaints, appellants acknowledged that
A check of the rollo shows that attached to the petition are an Affidavit of appellees observed and took the initial procedural steps in the registration of
Service dated November 21, 2005 and the appellate court’s Decision of the land, thus ruling out fraud in the acquisition of the certificate of title. . . .19
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, Factual findings of the trial court, when affirmed by the Court of Appeals, are
petitioners submitted, not at their own instance,13 a Verification and Sworn final, conclusive and binding on this Court,20 which is not a trier of facts,21
Certification on Non-Forum Shopping signed by petitioner Pedro Esguerra hence, bereft of function under Rule 45 to examine and weigh the probative
who cited honest and excusable mistake behind the omission to submit the value of the evidence presented,22 its jurisdiction being limited only to the
same. 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
This Court has strictly enforced the requirement of verification and trial and appellate courts overlooked matters which, if considered, would alter
certification, obedience to which and to other procedural rules is needed if their outcome.
fair results are to be expected therefrom.14 While exceptional cases have
been considered to correct patent injustice concomitant to a liberal Under the Torrens System, an OCT enjoys a presumption of validity, which
application of the rules of procedure, there should be an effort on the part of correlatively carries a strong presumption that the provisions of the law
the party invoking liberality to advance a reasonable or meritorious governing the registration of land which led to its issuance have been duly
explanation for his failure to comply with the rules.15 In petitioners’ case, no followed.25 Fraud being a serious charge, it must be supported by clear and
such explanation has been advanced. convincing proof.26 Petitioners failed to discharge the burden of proof,
however.
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 On the questioned interpretation and application by the appellate court of
essential requisite for the determination of prima facie basis for giving due Article 1542 of the Civil Code reading:
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 In the sale of real estate, made for a lump sum and not at the rate of a
is left to the reviewing court, however, to determine the necessity for such certain sum for a unit of measure or number, there shall be no increase or
copies as the exact nature of the pleadings and portions of the case record decrease of the price, although there be a greater or less areas or number
which must accompany a petition is not specified.17 than that stated in the contract.

At all events, technicality aside, the petition must be denied.

7
The same rule shall be applied when two or more immovables are sold for a Where both the area and the boundaries of the immovable are declared, the
single price; but if, besides mentioning the boundaries, which is area covered within the boundaries of the immovable prevails over the stated
indispensable in every conveyance of real estate, its area or number should area. In cases of conflict between areas and boundaries, it is the latter which
be designated in the contract, the vendor shall be bound to deliver all that is should prevail. What really defines a piece of ground is not the area,
included within said boundaries, even when it exceeds the area or number calculated with more or less certainty, mentioned in its description, but the
specified in the contract; and, should he not be able to do so, he shall suffer boundaries therein laid down, as enclosing the land and indicating its limits.
a reduction in the price, in proportion to what is lacking in the area or In a contract of sale of land in a mass, it is well established that the specific
number, unless the contract is rescinded because the vendee does not boundaries stated in the contract must control over any statement with
accede to the failure to deliver what has been stipulated. (Emphasis and respect to the area contained within its boundaries. It is not of vital
underscoring supplied), 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
while petitioners admittedly sold Lot No. 3591 to the Trinidad spouses, they with sufficient precision to enable one to identify it. An error as to the
contend that what they sold were only 5,000 square meters and not 6,268 superficial area is immaterial. Thus, the obligation of the vendor is to deliver
square meters, and thus claim the excess of 1,268 square meters. everything within the boundaries, inasmuch as it is the entirety thereof that
distinguishes the determinate object.28 (Emphasis and underscoring
In sales involving real estate, the parties may choose between two types of supplied)
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 The courts below correctly characterized the sale of Lot No. 3591 as one
per square meter), or a lump sum contract which states a full purchase price involving a lump sum contract. The Bilihan ng Lupa shows that the parties
for an immovable the area of which may be declared based on an estimate agreed on the purchase price of ₱1,000.00 on a predetermined, albeit
or where both the area and boundaries are stated (e.g., ₱1 million for 1,000 unsurveyed, area of 5,000 square meters and not on a particular rate per unit
square meters, etc.). In Rudolf Lietz, Inc. v. Court of Appeals,27 the Court area. As noted by the Court of Appeals, the identity of the realty was
discussed the distinction: sufficiently described as riceland:

. . . In a unit price contract, the statement of area of immovable is not It is clear from the afore-quoted Bilihan ng Lupa that what appellants sold to
conclusive and the price may be reduced or increased depending on the Eulalio was the "bahaging palayan." Though measured as 5,000 square
area actually delivered. If the vendor delivers less than the area agreed meters, more or less, such measurement is only an approximation, and not
upon, the vendee may oblige the vendor to deliver all that may be stated in an exact measurement. Moreover, we take note of the fact that the said deed
the contract or demand for the proportionate reduction of the purchase price of sale mentioned the boundaries covering the whole area of 33,489 square
if delivery is not possible. If the vendor delivers more than the area stated in meters, including the "bahaging palayan." Had appellants intended to sell
the contract, the vendee has the option to accept only the amount agreed only a portion of the "bahaging palayan," they could have stated the specific
upon or to accept the whole area, provided he pays for the additional area at area in the deed of sale and not the entire "bahaging palayan" . . . .
the contract rate.
In fine, under Article 1542, what is controlling is the entire land included
xxxx within the boundaries, regardless of whether the real area should be greater
In the case where the area of the immovable is stated in the contract based or smaller than that recited in the deed. This is particularly true since the area
on an estimate, the actual area delivered may not measure up exactly with of the land in OCT No. 0-6498 was described in the deed as "humigit
the area stated in the contract. According to Article 1542 of the Civil Code, in kumulang," that is, more or less.
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 A caveat is in order, however. The use of "more or less" or similar words in
of the price, although there be a greater or less areas or number than that designating quantity covers only a reasonable excess or deficiency. A
stated in the contract. . . . 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
xxxx land.

8
Numerical data are not of course the sole gauge of unreasonableness of the however, the records reveal that respondents raised their objection in their
excess or deficiency in area. Courts must consider a host of other factors. In Amended Answers37 filed in both cases.
one case,32 the Court found substantial discrepancy in area due to
contemporaneous circumstances. Citing change in the physical nature of the IN FINE, it is a fundamental principle in land registration that a certificate of
property, it was therein established that the excess area at the southern title serves as evidence of an indefeasible and incontrovertible title to the
portion was a product of reclamation, which explained why the land’s property in favor of the person whose name appears therein. Such
technical description in the deed of sale indicated the seashore as its indefeasibility commences after the lapse or expiration of one year from the
southern boundary, hence, the inclusion of the reclaimed area was declared date of entry of the decree of registration when all persons are considered to
unreasonable. 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
In OCT No. 0-6498, the increase by a fourth of a fraction of the area was so effected in order to quiet title to land.38
indicated in the deed of sale cannot be considered as an unreasonable
excess. Most importantly, the circumstances attendant to the inclusion of the WHEREFORE, the petition is DENIED. The assailed Decision and
excess area bare nothing atypical or significant to hint at unreasonableness. Resolution of the Court of Appeals are AFFIRMED.
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, Costs against petitioners.
petitioners may rightly be presumed to have acquired a good estimate of the
value and area of the bahaging palayan. 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 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
AVELINA ZAMORA, EMERITA ZAMORA-NICOL, SONNY NICOL, complaint against Anita Punzalan (respondents' attorney-in-fact), docketed
TERESA ZAMORA-UMALI, CLARENCE UMALI, ROBERTO ZAMORA, as "Usaping Bgy. Blg. 1-27-97, Ukol sa: Hindi Pagbibigay ng Pahintulot sa
ROLANDO ZAMORA, MARY ANN ZAMORA, MICHELLE ZAMORA and Pagpapakabit ng Tubig."
RODRIGO ZAMORA, petitioners, vs. HEIRS of CARMEN IZQUIERDO,
represented by their attorney-in-fact, ANITA F. PUNZALAN, On August 24, 1997, during the barangay conciliation proceedings, petitioner
respondents. Avelina Zamora declared that she refused to sign the new lease contract
because she is not agreeable with the conditions specified therein.
DECISION
The following day, Anita Punzalan sent Avelina a letter4 informing her that
SANDOVAL-GUTIERREZ, J.: the lease is being terminated and demanding that petitioners vacate the
premises within 30 days from notice.
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 Despite several barangay conciliation sessions, the parties failed to settle
December 1, 2000 in CA-G.R. SP No. 54541, entitled "Avelina Zamora, et their dispute amicably. Hence, the Barangay Chairman issued a Certification
al., petitioners, versus Heirs of Carmen Izquierdo, represented by the to File Action dated September 14, 1997.5
executrix, Anita F. Punzalan, respondents."
Consequently, on October 2, 1997, respondents, represented by Anita
The records show that sometime in 1973, Carmen Izquierdo and Pablo Punzalan, filed with the Metropolitan Trial Court (MTC), Branch 49, Caloocan
Zamora entered into a verbal stipulation whereby the former leased to the City, a complaint for unlawful detainer and damages against petitioners,
latter one of her apartment units located at 117-B General Luna Street, docketed as Civil Case No. 23702.6 Forthwith, petitioners filed a motion to
Caloocan City. They agreed on the following: the rental is P3,000.00 per dismiss7 the complaint on the ground that the controversy was not referred
month; the leased premises is only for residence; and only a single family is to the barangay for conciliation. First, they alleged that the barangay
allowed to occupy it. 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
After the death of Carmen (lessor) in 1996 her attorney-in-fact, Anita consent to petitioners' request for installation of water facilities in the
Punzalan, representing the heirs, herein respondents, prepared a new premises. And, second, when the parties failed to reach an amicable
contract of lease wherein the rental was increased from P3,000.00 to settlement before the Lupong Tagapamayapa, the Punong Barangay (as
P3,600.00 per month.3 However, petitioners refused to sign it. Lupon Chairman), did not constitute the Pangkat ng Tagapagkasundo before
whom mediation or arbitration proceedings should have been conducted, in
In January 1997, Pablo (lessee) died. His wife, Avelina Zamora, and their violation of Section 410(b), Chapter 7 (Katarungang Pambarangay), Title
children (two of whom have their own families), herein petitioners, continued One, Book III of Republic Act No. 71608 (otherwise known as the Local
to reside in the apartment unit. However, they refused to pay the increased Government Code of 1991), which reads:
rental and persisted in operating a photocopying business in the same
apartment. "SECTION 410. Procedure for Amicable Settlement.–

Meanwhile, petitioner Avelina Zamora applied with the Metropolitan (a) x x x

Waterworks & Sewerage System (MWSS) for a water line installation in the (b) Mediation by lupon chairman – Upon receipt of the complaint, the lupon
premises. Since a written consent from the owner is required for such chairman9 shall, within the next working day, summon the respondent(s),
installation, she requested respondents' attorney-in-fact to issue it. However, with notice to the complainant(s) for them and their witnesses to appear
the latter declined because petitioners refused to pay the new rental rate and before him for a mediation of their conflicting interests. If he fails in his
violated the restrictions on the use of the premises by using a portion thereof mediation effort within fifteen (15) days from the first meeting of the parties
for photocopying business and allowing three families to reside therein. 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 On appeal, the Regional Trial Court (RTC), Branch 125, Caloocan City,
under Section 19 of the 1991 Revised Rule on Summary Procedure. They rendered its Decision15 dated February 15, 1999 affirming the MTC
prayed that judgment be rendered as may be warranted by the facts alleged Judgment. Subsequently, it denied petitioners' motion for reconsideration.16
in the complaint, pursuant to Section 611 of the same Rule.
Petitioners then filed with the Court of Appeals a petition for review, docketed
On July 9, 1998, the MTC issued an Order12 denying petitioners' motion to as CA-G.R. SP No. 54541. On September 12, 2000, it rendered a
dismiss and considering the case submitted for decision in view of their Decision17 affirming the RTC Decision.
failure to file their answer to the complaint.
Thereafter, petitioners filed a motion for reconsideration but was denied by
Petitioners filed a motion for reconsideration,13 contending that a motion to the Appellate Court in its Resolution dated December 1, 2000.18
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 Hence, the instant petition.
on Summary Procedure, which partly provides:
I
"SEC. 19. Prohibited pleadings and motions. – The following pleadings, The primordial objective of Presidential Decree No. 1508 (the Katarungang
motions, or petitions shall not be allowed in the cases covered by this Rule: Pambarangay Law), now included under R.A. No. 7160 (the Local
Government Code of 1991), is to reduce the number of court litigations and
(a) Motion to dismiss the complaint or to quash the complaint or information prevent the deterioration of the quality of justice which has been brought
except on the ground of lack of jurisdiction over the subject matter, or failure about by the indiscriminate filing of cases in the courts.19 To attain this
to comply with the preceding section [referring to Section 18 on referral of the objective, Section 412(a) of R.A. No. 7160 requires the parties to undergo a
complaint to the Lupon for conciliation]; conciliation process before the Lupon Chairman or the Pangkat as a
precondition to filing a complaint in court, thus:
x x x."
On August 26, 1998, the MTC rendered a Judgment14 in favor of "SECTION 412. Conciliation. – (a) Pre-condition to Filing of Complaint in
respondents and against petitioners, the dispositive portion of which reads: 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
"WHEREFORE, Judgment is hereby rendered in favor of the plaintiff and any other government office for adjudication, unless there has been a
against the defendants, ordering defendants and all persons claiming right confrontation between the parties before the lupon chairman or the pangkat,
under them: 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
1) To vacate the leased premises located at No. 117-B General Luna Street, x x x." (Underscoring supplied)
Caloocan City and to surrender possession thereof to the plaintiff;
In the case at bar, the Punong Barangay, as Chairman of the Lupong
2) To pay the amount of three thousand six hundred (P3,600.00) pesos per Tagapamayapa, conducted conciliation proceedings to resolve the dispute
month starting January, 1997 until the premises being occupied by them is between the parties herein. Contrary to petitioners' contention, the complaint
finally vacated and possession thereof is restored to the plaintiff; 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
3) To pay plaintiff the sum of five thousand (P5,000.00) pesos as and for premises, but also petitioners' violation of the terms of the lease, specifically
attorney's fees; and their use of a portion therein for their photocopying business and their failure
to pay the increased rental. As correctly found by the RTC:
4) To pay the costs of this suit.
"The records show that confrontations before the barangay chairman were
SO ORDERED." 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 "SEC. 18. Referral to Lupon. – Cases requiring referral to the Lupon for
reached despite a total of nine meetings at the barangay level. conciliation under the provisions of Presidential Decree No. 1508 where
there is no showing of compliance with such requirement, shall be dismissed
It is of no moment that the complaint was initially made by defendant- without prejudice, and may be revived only after such requirement shall have
appellant Avelina Zamora because herein plaintiff-appellee was given by the been complied with. This provision shall not apply to criminal cases where
Sangguniang Barangay the authority to bring her grievance to the Court for the accused was arrested without a warrant." (Underscoring supplied)
resolution. While it is true that the Sertifikasyon dated September 14, 1997 is
entitled 'Ukol Sa Hindi Pagbibigay Ng Pahintulot Sa Pagpapakabit Ng Tubig', As discussed earlier, the case was referred to the Lupon Chairman for
this title must not prevail over the actual issues discussed in the proceedings. conciliation. Obviously, petitioners' motion to dismiss, even if allowed, is
bereft of merit.
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 WHEREFORE, the petition is DENIED. The assailed Decision and
anymore since no new issues would be raised therein and the parties have Resolution of the Court of Appeals in CA-G.R. SP No. 54541 sustaining the
proven so many times in the past that they cannot get to settle their Decision of the RTC which upheld the MTC Judgment is AFFIRMED.
differences amicably."20
Costs against petitioners.
We cannot sustain petitioners' contention that the Lupon conciliation alone,
without the proceeding before the Pangkat ng Tagapagkasundo, contravenes SO ORDERED.
the law on Katarungang Pambarangay. Section 412(a) of R.A. No. 7160,
quoted earlier, clearly provides that, as a precondition to filing a complaint in
court, the parties shall go through the conciliation process either before the
Lupon Chairman (as what happened in the present case), or the Pangkat.

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

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

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

12
 G.R. No. 153567 February 18, 2008 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
LIBRADA M. AQUINO, petitioner, vs. ERNEST S. AURE1, respondent. 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.
DECISION 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
CHICO-NAZARIO, J.: was converted from a mere detainer suit to one "incapable of pecuniary
estimation" which properly rests within the original exclusive jurisdiction of
Before this Court is a Petition for Review on Certiorari2 under Rule 45 of the the RTC. The dispositive portion of the MeTC Decision reads:
Revised Rules of Court filed by petitioner Librada M. Aquino (Aquino),
seeking the reversal and the setting aside of the Decision3 dated 17 October WHEREFORE, premises considered, let this case be, as it is, hereby
2001 and the Resolution4 dated 8 May 2002 of the Court of Appeals in CA- ordered DISMISSED. [Aquino’s] counterclaim is likewise dismissed.
G.R. SP No. 63733. The appellate court, in its assailed Decision and
Resolution, reversed the Decision5 of the Regional Trial Court (RTC) of On appeal, the RTC affirmed the dismissal of the Complaint on the same
Quezon City, Branch 88, affirming the Decision6 of the Metropolitan Trial ground that the dispute was not brought before the Barangay Council for
Court (MeTC) of Quezon City, Branch 32, which dismissed respondent conciliation before it was filed in court. In a Decision dated 14 December
Ernesto Aure’s (Aure) complaint for ejectment on the ground, inter alia, of 2000, the RTC stressed that the barangay conciliation process is a conditio
failure to comply with barangay conciliation proceedings. sine qua non for the filing of an ejectment complaint involving residents of the
same barangay, and failure to comply therewith constitutes sufficient cause
The subject of the present controversy is a parcel of land situated in Roxas for the dismissal of the action. The RTC likewise validated the ruling of the
District, Quezon City, with an area of 449 square meters and covered by MeTC that the main issue involved in Civil Case No. 17450 is incapable of
Transfer Certificate of Title (TCT) No. 205447 registered with the Registry of pecuniary estimation and cognizable by the RTC. Hence, the RTC ruled:
Deeds of Quezon City (subject property).7
WHEREFORE, finding no reversible error in the appealed judgment, it is
Aure and E.S. Aure Lending Investors, Inc. (Aure Lending) filed a Complaint hereby affirmed in its entirety.
for ejectment against Aquino before the MeTC docketed as Civil Case No.
17450. In their Complaint, Aure and Aure Lending alleged that they acquired Aure’s Motion for Reconsideration was denied by the RTC in an Order14
the subject property from Aquino and her husband Manuel (spouses Aquino) dated 27 February 2001.
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 Undaunted, Aure appealed the adverse RTC Decision with the Court of
the subject property, they refused to vacate the same.9 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
In her Answer,10 Aquino countered that the Complaint in Civil Case No. proper ground for dismissal of his Complaint and that the MeTC should have
17450 lacks cause of action for Aure and Aure Lending do not have any legal only ordered the exclusion of Aure Lending as plaintiff without prejudice to
right over the subject property. Aquino admitted that there was a sale but the continuation of the proceedings in Civil Case No. 17450 until the final
such was governed by the Memorandum of Agreement11 (MOA) signed by determination thereof. Aure further asseverated that mere allegation of
Aure. As stated in the MOA, Aure shall secure a loan from a bank or financial ownership should not divest the MeTC of jurisdiction over the ejectment suit
institution in his own name using the subject property as collateral and turn since jurisdiction over the subject matter is conferred by law and should not
over the proceeds thereof to the spouses Aquino. However, even after Aure depend on the defenses and objections raised by the parties. Finally, Aure
successfully secured a loan, the spouses Aquino did not receive the contended that the MeTC erred in dismissing his Complaint with prejudice on
proceeds thereon or benefited therefrom. the ground of non-compliance with barangay conciliation process. He was
not given the opportunity to rectify the procedural defect by going through the
On 20 April 1999, the MeTC rendered a Decision in Civil Case No. 17450 in barangay mediation proceedings and, thereafter, refile the Complaint.15
favor of Aquino and dismissed the Complaint for ejectment of Aure and Aure
Lending for non-compliance with the barangay conciliation process, among

13
On 17 October 2001, the Court of Appeals rendered a Decision, reversing Pambarangay Law, and the policy behind it would be better served if an out-
the MeTC and RTC Decisions and remanding the case to the MeTC for of-court settlement of the case is reached voluntarily by the parties.
further proceedings and final determination of the substantive rights of the
parties. The appellate court declared that the failure of Aure to subject the The primordial objective of Presidential Decree No. 1508 is to reduce the
matter to barangay conciliation is not a jurisdictional flaw and it will not affect number of court litigations and prevent the deterioration of the quality of
the sufficiency of Aure’s Complaint since Aquino failed to seasonably raise justice which has been brought by the indiscriminate filing of cases in the
such issue in her Answer. The Court of Appeals further ruled that mere courts.18 To ensure this objective, Section 6 of Presidential Decree No.
allegation of ownership does not deprive the MeTC of jurisdiction over the 150819 requires the parties to undergo a conciliation process before the
ejectment case for jurisdiction over the subject matter is conferred by law and Lupon Chairman or the Pangkat ng Tagapagkasundo as a precondition to
is determined by the allegations advanced by the plaintiff in his complaint. filing a complaint in court subject to certain exceptions20 which are
Hence, mere assertion of ownership by the defendant in an ejectment case inapplicable to this case. The said section has been declared compulsory in
will not oust the MeTC of its summary jurisdiction over the same. The nature.21
decretal part of the Court of Appeals Decision reads:
Presidential Decree No. 1508 is now incorporated in Republic Act No. 7160,
WHEREFORE, premises considered, the petition is hereby GRANTED - and otherwise known as The Local Government Code, which took effect on 1
the decisions of the trial courts below REVERSED and SET ASIDE. Let the January 1992.
records be remanded back to the court a quo for further proceedings – for an
eventual decision of the substantive rights of the disputants.16 The pertinent provisions of the Local Government Code making conciliation a
precondition to filing of complaints in court, read:
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 SEC. 412. Conciliation.- (a) Pre-condition to filing of complaint in court. – No
arguments set forth in her previous pleadings which were already considered complaint, petition, action, or proceeding involving any matter within the
and passed upon by the appellate court in its assailed Decision. 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
Aquino is now before this Court via the Petition at bar raising the following between the parties before the lupon chairman or the pangkat, and that no
issues: conciliation or settlement has been reached as certified by the lupon
secretary or pangkat secretary as attested to by the lupon chairman or
I. pangkat chairman or unless the settlement has been repudiated by the
WHETHER OR NOT NON-COMPLIANCE WITH THE BARANGAY parties thereto.
CONCILIATION PROCEEDINGS IS A JURISDICTIONAL DEFECT THAT
WARRANTS THE DISMISSAL OF THE COMPLAINT. (b) Where parties may go directly to court. – The parties may go directly to
court in the following instances:
II.
WHETHER OR NOT ALLEGATION OF OWNERSHIP OUSTS THE MeTC (1) Where the accused is under detention;
OF ITS JURISDICTION OVER AN EJECTMENT CASE. (2) Where a person has otherwise been deprived of personal liberty calling
for habeas corpus proceedings;
The barangay justice system was established primarily as a means of easing (3) Where actions are coupled with provisional remedies such as preliminary
up the congestion of cases in the judicial courts. This could be accomplished injunction, attachment, delivery of personal property, and support pendente
through a proceeding before the barangay courts which, according to the lite; and
conceptor of the system, the late Chief Justice Fred Ruiz Castro, is (4) Where the action may otherwise be barred by the statute of limitations.
essentially arbitration in character, and to make it truly effective, it should
also be compulsory. With this primary objective of the barangay justice (c) Conciliation among members of indigenous cultural communities. – The
system in mind, it would be wholly in keeping with the underlying philosophy customs and traditions of indigenous cultural communities shall be applied in
of Presidential Decree No. 1508, otherwise known as the Katarungang settling disputes between members of the cultural communities.

14
SEC. 408. Subject Matter for Amicable Settlement; Exception Therein. – The compliance therewith cannot affect the jurisdiction which the court has
lupon of each barangay shall have authority to bring together the parties otherwise acquired over the subject matter or over the person of the
actually residing in the same city or municipality for amicable settlement of all defendant.
disputes except:
As enunciated in the landmark case of Royales v. Intermediate Appellate
(a) Where one party is the government or any subdivision or instrumentality Court:
thereof;
(b) Where one party is a public officer or employee, and the dispute relates to Ordinarily, non-compliance with the condition precedent prescribed by P.D.
the performance of his official functions; 1508 could affect the sufficiency of the plaintiff's cause of action and make
(c) Offenses punishable by imprisonment exceeding one (1) year or a fine his complaint vulnerable to dismissal on ground of lack of cause of action or
exceeding Five thousand pesos (P5,000.00); prematurity; but the same would not prevent a court of competent jurisdiction
(d) Offenses where there is no private offended party; from exercising its power of adjudication over the case before it, where the
(e) Where the dispute involves real properties located in different cities or defendants, as in this case, failed to object to such exercise of jurisdiction in
municipalities unless the parties thereto agree to submit their differences to their answer and even during the entire proceedings a quo.
amicable settlement by an appropriate lupon;
(f) Disputes involving parties who actually reside in barangays of different While petitioners could have prevented the trial court from exercising
cities or municipalities, except where such barangay units adjoin each other jurisdiction over the case by seasonably taking exception thereto, they
and the parties thereto agree to submit their differences to amicable instead invoked the very same jurisdiction by filing an answer and seeking
settlement by an appropriate lupon; affirmative relief from it. What is more, they participated in the trial of the
(g) Such other classes of disputes which the President may determine in the case by cross-examining respondent Planas. Upon this premise, petitioners
interest of justice or upon the recommendation of the Secretary of Justice. cannot now be allowed belatedly to adopt an inconsistent posture by
attacking the jurisdiction of the court to which they had submitted themselves
There is no dispute herein that the present case was never referred to the voluntarily. x x x (Emphasis supplied.)
Barangay Lupon for conciliation before Aure and Aure Lending instituted Civil
Case No. 17450. In fact, no allegation of such barangay conciliation In the case at bar, we similarly find that Aquino cannot be allowed to attack
proceedings was made in Aure and Aure Lending’s Complaint before the the jurisdiction of the MeTC over Civil Case No. 17450 after having submitted
MeTC. The only issue to be resolved is whether non-recourse to the herself voluntarily thereto. We have scrupulously examined Aquino’s Answer
barangay conciliation process is a jurisdictional flaw that warrants the before the MeTC in Civil Case No. 17450 and there is utter lack of any
dismissal of the ejectment suit filed with the MeTC. objection on her part to any deficiency in the complaint which could oust the
MeTC of its jurisdcition.
Aquino posits that failure to resort to barangay conciliation makes the action
for ejectment premature and, hence, dismissible. She likewise avers that this We thus quote with approval the disquisition of the Court of Appeals:
objection was timely raised during the pre-trial and even subsequently in her
Position Paper submitted to the MeTC. Moreover, the Court takes note that the defendant [Aquino] herself did not
raise in defense the aforesaid lack of conciliation proceedings in her answer,
We do not agree. which raises the exclusive affirmative defense of simulation. By this
acquiescence, defendant [Aquino] is deemed to have waived such objection.
It is true that the precise technical effect of failure to comply with the As held in a case of similar circumstances, the failure of a defendant [Aquino]
requirement of Section 412 of the Local Government Code on barangay in an ejectment suit to specifically allege the fact that there was no
conciliation (previously contained in Section 5 of Presidential Decree No. compliance with the barangay conciliation procedure constitutes a waiver of
1508) is much the same effect produced by non-exhaustion of administrative that defense. x x x.
remedies -- the complaint becomes afflicted with the vice of pre-maturity; and
the controversy there alleged is not ripe for judicial determination. The By Aquino’s failure to seasonably object to the deficiency in the Complaint,
complaint becomes vulnerable to a motion to dismiss.22 Nevertheless, the she is deemed to have already acquiesced or waived any defect attendant
conciliation process is not a jurisdictional requirement, so that non- 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 same parties for the same cause; or (3) where the action is barred by a prior
barangay conciliation process, since she is already precluded from doing so. judgment or by a statute of limitations. Thus, it is clear that a court may not
The fact that Aquino raised such objection during the pre-trial and in her motu proprio dismiss a case on the ground of failure to comply with the
Position Paper is of no moment, for the issue of non-recourse to barangay requirement for barangay conciliation, this ground not being among those
mediation proceedings should be impleaded in her Answer. mentioned for the dismissal by the trial court of a case on its own initiative.

As provided under Section 1, Rule 9 of the 1997 Rules of Civil Procedure: 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,
Sec. 1. Defenses and objections not pleaded. – Defenses and objections not since the Deed of Sale vesting Aure with the legal right over the subject
pleaded either in a motion to dismiss or in the answer are deemed waived. property is simulated.
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 Again, we do not agree. Jurisdiction in ejectment cases is determined by the
action pending between the same parties for the same cause, or that the allegations pleaded in the complaint. As long as these allegations
action is barred by a prior judgment or by statute of limitations, the court shall demonstrate a cause of action either for forcible entry or for unlawful
dismiss the claim. (Emphasis supplied.) 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
While the aforequoted provision applies to a pleading (specifically, an action thus alleged, in which instance the court -- after acquiring jurisdiction --
Answer) or a motion to dismiss, a similar or identical rule is provided for all may resolve to dismiss the action for insufficiency of evidence.
other motions in Section 8 of Rule 15 of the same Rule which states:
The necessary allegations in a Complaint for ejectment are set forth in
Sec. 8. Omnibus Motion. - Subject to the provisions of Section 1 of Rule 9, a Section 1, Rule 70 of the Rules of Court, which reads:
motion attacking a pleading, order, judgment, or proceeding shall include all
objections then available, and all objections not so included shall be deemed SECTION 1. Who may institute proceedings, and when. – Subject to the
waived. provisions of the next succeeding section, a person deprived of the
possession of any land or building by force, intimidation, threat, strategy, or
The spirit that surrounds the foregoing statutory norm is to require the party stealth, or a lessor, vendor, vendee, or other person against whom the
filing a pleading or motion to raise all available exceptions for relief during the possession of any land or building is unlawfully withheld after the expiration
single opportunity so that single or multiple objections may be avoided.26 It or termination of the right to hold possession, by virtue of any contract,
is clear and categorical in Section 1, Rule 9 of the Revised Rules of Court express or implied, or the legal representatives or assigns of any such lessor,
that failure to raise defenses and objections in a motion to dismiss or in an vendor, vendee, or other person may at any time within one (1) year after
answer is deemed a waiver thereof; and basic is the rule in statutory such unlawful deprivation or withholding of possession, bring an action in the
construction that when the law is clear and free from any doubt or ambiguity, proper Municipal Trial Court against the person or persons unlawfully
there is no room for construction or interpretation.27 As has been our withholding or depriving of possession, or any person or persons claiming
consistent ruling, where the law speaks in clear and categorical language, under them, for the restitution of such possession, together with damages
there is no occasion for interpretation; there is only room for application.28 and costs.
Thus, although Aquino’s defense of non-compliance with Presidential Decree
No. 1508 is meritorious, procedurally, such defense is no longer available for In the case at bar, the Complaint filed by Aure and Aure Lending on 2 April
failure to plead the same in the Answer as required by the omnibus motion 1997, alleged as follows:
rule.
2. [Aure and Aure Lending] became the owners of a house and lot located at
Neither could the MeTC dismiss Civil Case No. 17450 motu proprio. The No. 37 Salazar Street corner Encarnacion Street, B.F. Homes, Quezon City
1997 Rules of Civil Procedure provide only three instances when the court by virtue of a deed of absolute sale executed by [the spouses Aquino] in
may motu proprio dismiss the claim, and that is when the pleadings or favor of [Aure and Aure Lending] although registered in the name of x x x
evidence on the record show that (1) the court has no jurisdiction over the Ernesto S. Aure; title to the said property had already been issued in the
subject matter; (2) there is another cause of action pending between the

16
name of [Aure] as shown by a transfer Certificate of Title , a copy of which is At the outset, it must here be stressed that the resolution of this particular
hereto attached and made an integral part hereof as Annex A; issue concerns and applies only to forcible entry and unlawful detainer cases
where the issue of possession is intimately intertwined with the issue of
3. However, despite the sale thus transferring ownership of the subject ownership. It finds no proper application where it is otherwise, that is, where
premises to [Aure and Aure Lending] as above-stated and consequently ownership is not in issue, or where the principal and main issue raised in the
terminating [Aquino’s] right of possession over the subject property, [Aquino] allegations of the complaint as well as the relief prayed for make out not a
together with her family, is continuously occupying the subject premises case for ejectment but one for recovery of ownership.
notwithstanding several demands made by [Aure and Aure Lending] against
[Aquino] and all persons claiming right under her to vacate the subject Apropos thereto, this Court ruled in Hilario v. Court of Appeals32:
premises and surrender possession thereof to [Aure and Aure Lending]
causing damage and prejudice to [Aure and Aure Lending] and making Thus, an adjudication made therein regarding the issue of ownership should
[Aquino’s] occupancy together with those actually occupying the subject be regarded as merely provisional and, therefore, would not bar or prejudice
premises claiming right under her, illegal.29 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
It can be inferred from the foregoing that Aure, together with Aure Lending, unlawful detainer cases where the only issue to be settled is the physical or
sought the possession of the subject property which was never surrendered material possession over the real property, that is, possession de facto and
by Aquino after the perfection of the Deed of Sale, which gives rise to a not possession de jure."
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 In other words, inferior courts are now "conditionally vested with adjudicatory
thereof as evidenced by TCT No. 156802 bearing his name. That Aquino power over the issue of title or ownership raised by the parties in an
impugned the validity of Aure’s title over the subject property and claimed ejectment suit." These courts shall resolve the question of ownership raised
that the Deed of Sale was simulated should not divest the MeTC of as an incident in an ejectment case where a determination thereof is
jurisdiction over the ejectment case. necessary for a proper and complete adjudication of the issue of possession.

As extensively discussed by the eminent jurist Florenz D. Regalado in WHEREFORE, premises considered, the instant Petition is DENIED. The
Refugia v. Court of Appeals: 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
As the law on forcible entry and unlawful detainer cases now stands, even the petitioner.
where the defendant raises the question of ownership in his pleadings and
the question of possession cannot be resolved without deciding the issue of SO ORDERED.
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.

17
 G.R. No. 159411. March 18, 2005 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
TEODORO I. CHAVEZ, Petitioners, vs. HON. COURT OF APPEALS and with his delay in commencing the work.
JACINTO S. TRILLANA, Respondents.
In September 1996, respondent filed a complaint before the Office of the
DECISION Barangay Captain of Taliptip, Bulacan, Bulacan. He complained about the
unauthorized repairs undertaken by petitioner, the ouster of his personnel
PUNO, J.: from the leased premises and its unlawful taking by petitioner despite their
valid and subsisting lease contract. After conciliation proceedings, an
Assailed in this petition for review is the Decision dated April 2, 20031 of the agreement was reached, viz.:
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 KASUNDUAN
City, Branch 172, in Civil Case No. 5139-V-97, as well as its Resolution Napagkasunduan ngayong araw na ‘to ika-17 ng Setyembre ng nagpabuwis
dated August 8, 20033 which denied petitioner’s motion for reconsideration. – 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
The antecedent facts are as follows: panahon ng buwisan.

In October 1994, petitioner Teodoro Chavez and respondent Jacinto Trillana Ngunit kung maibibigay ni G. Chavez ang halagang ₱100,000.00 bago
entered into a contract of lease4 whereby the former leased to the latter his sumapit o pagsapit ng ika-23 ng Setyembre, taong kasalukuyan, ‘to ay
fishpond at Sitio Pariahan, Taliptip, Bulacan, Bulacan, for a term of six (6) nangangahulugan ng buong kabayaran at hindi ₱150,000.00.
years commencing from October 23, 1994 to October 23, 2000. The rental
for the whole term was two million two hundred forty thousand Kung sakali at hindi maibigay ang ₱100,000.00 ang magiging kabayaran ay
(₱2,240,000.00) pesos, of which one million (₱1,000,000.00) pesos was to mananatiling ₱150,000.00 na may paraan ng pagbabayad ng sumusunod:
be paid upon signing of the contract. The balance was payable as follows:
Ang ₱50,000.00 ay ibibigay bago sumapit o pagsapit ng ika-31 ng Oktubre
b. That, after six (6) months and/or, on or before one (1) year from the date 1996 at ang balanseng ₱100,000.00 ay ibibigay sa loob ng isang taon subalit
of signing this contract, the amount of THREE HUNDRED FORTY-FOUR magbibigay ng promissory note si G. Chavez at kung mabubuwisang ang
THOUSAND (₱344,000.00) pesos shall be paid on April 23, 1995 and/or, on kanyang palaisdaan ay ibibigay lahat ni G. Chavez ang buong ₱150,000.00
or before October 23, 1995 shall be paid by the LESSEE to the LESSOR. sa lalong madaling panahon.

c. That, the LESSEE, shall pay the amount of FOUR HUNDRED FORTY- Kung magkakaroon ng sapat at total na kabayaran si G. Chavez kay G.
EIGHT THOUSAND (₱448,000.00) pesos x x x to the LESSOR on April 23, Trillana ang huli ay lalagda sa kasulatan bilang waiver o walang anumang
1997 and/or, on or before October 23, 1997, and on April 23, 1998 and/or, on paghahabol sa nabanggit na buwisan.
or before October 23, 1998 the amount of FOUR HUNDRED FORTY-EIGHT
THOUSAND (₱448,000.00) pesos x x x. Alleging non-compliance by petitioner with their lease contract and the
foregoing "Kasunduan," respondent filed a complaint on February 7, 1997
Paragraph 5 of the contract further provided that respondent shall undertake against petitioner before the RTC of Valenzuela City, docketed as Civil Case
all construction and preservation of improvements in the fishpond that may No. 5139-V-97. Respondent prayed that the following amounts be awarded
be destroyed during the period of the lease, at his expense, without him, viz.: (a) ₱300,000.00 as reimbursement for rentals of the leased
reimbursement from petitioner. 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)
In August 1996, a powerful typhoon hit the country which damaged the ₱200,000.00 as exemplary damages; and, (e) ₱100,000.00 as attorney’s
subject fishpond. Respondent did not immediately undertake the necessary fees plus ₱1,000.00 for each court appearance of respondent’s counsel.
repairs as the water level was still high. Three (3) weeks later, respondent
was informed by a barangay councilor that major repairs were being

18
Petitioner filed his answer but failed to submit the required pretrial brief and enforced by execution by the lupong tagapamayapa within six (6) months
to attend the pretrial conference. On October 21, 1997, respondent was from its date, or by action in the appropriate city or municipal court, if beyond
allowed to present his evidence ex-parte before the Acting Branch Clerk of the six-month period.10 This special provision follows the general precept
Court.5 On the basis thereof, a decision was rendered on December 15, enunciated in Article 2037 of the Civil Code, viz.:
19976 in favor of respondent, the dispositive portion of which reads:
A compromise has upon the parties the effect and authority of res judicata;
WHEREFORE, judgment is hereby rendered as follows: but there shall be no execution except in compliance with a judicial
(1) Ordering the defendant to reimburse to the plaintiff the sum of compromise.
₱300,000.00 representing rental payment of the leased premises for the
unused period of lease; Thus, we have held that a compromise agreement which is not contrary to
(2) Ordering the defendant to pay plaintiff the sum of ₱500,000.00 law, public order, public policy, morals or good customs is a valid contract
representing unrealized profit as a result of the unlawful deprivation by the which is the law between the parties themselves. It has upon them the effect
defendant of the possession of the subject premises; and authority of res judicata even if not judicially approved, and cannot be
(3) Ordering the defendant to pay plaintiff the sum of ₱200,000.00 as moral lightly set aside or disturbed except for vices of consent and forgery.
damages;
(4) Ordering the defendant to pay plaintiff the sum of ₱200,000.00 as However, in Heirs of Zari, et al. v. Santos, we clarified that the broad precept
exemplary damages; and enunciated in Art. 2037 is qualified by Art. 2041 of the same Code, which
(5) Ordering the defendant to pay plaintiff the sum of ₱100,000.00 as and for provides:
attorney’s fees, plus costs of suit. 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
Petitioner appealed to the Court of Appeals which modified the decision of upon his original demand.
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 We explained, viz:
Petitioner’s motion for reconsideration was denied. Hence, this petition for [B]efore the onset of the new Civil Code, there was no right to rescind
review. compromise agreements. Where a party violated the terms of a compromise
agreement, the only recourse open to the other party was to enforce the
Petitioner contends that the Court of Appeals erred in ruling that the RTC of terms thereof.
Valenzuela City had jurisdiction over the action filed by respondent
considering that the subject matter thereof, his alleged violation of the lease When the new Civil Code came into being, its Article 2041 x x x created for
contract with respondent, was already amicably settled before the Office of the first time the right of rescission. That provision gives to the aggrieved
the Barangay Captain of Taliptip, Bulacan, Bulacan. Petitioner argued that party the right to "either enforce the compromise or regard it as rescinded
respondent should have followed the procedure for enforcement of the and insist upon his original demand." Article 2041 should obviously be
amicable settlement as provided for in the Revised Katarungang deemed to qualify the broad precept enunciated in Article 2037 that "[a]
Pambarangay Law. Assuming arguendo that the RTC had jurisdiction, it compromise has upon the parties the effect and authority of res judicata.
cannot award more than the amount stipulated in the "Kasunduan" which is (underscoring ours)
₱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 In exercising the second option under Art. 2041, the aggrieved party may, if
lease contract as well as for moral and exemplary damages, and attorney’s he chooses, bring the suit contemplated or involved in his original demand,
fees. as if there had never been any compromise agreement, without bringing an
action for rescission. This is because he may regard the compromise as
Indeed, the Revised Katarungang Pambarangay Law8 provides that an already rescinded by the breach thereof of the other party.
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 Thus, in Morales v. National Labor Relations Commission we upheld the
nullify the same is filed before the proper city or municipal court within ten National Labor Relations Commission when it heeded the original demand of
(10) days from its date. It further provides that the settlement may be 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 The rule is that actual damages cannot be presumed, but must be proved
under the amicable settlement. We reiterated the rule that the aggrieved with a reasonable degree of certainty. In the case at bar, we agree with
party may either (1) enforce the compromise by a writ of execution, or (2) petitioner that no competent proof was presented to prove that respondent
regard it as rescinded and so insist upon his original demand upon the other had paid ₱300,000.00 as advance rentals for the unexpired period of the
party’s failure or refusal to abide by the compromise. We also recognized the lease contract. On the contrary, the lease contract itself provided that the
options in Mabale v. Apalisok, Canonizado v. Benitez, and Ramnani v. Court remaining rentals of ₱448,000.00 shall be paid "on April 23, 1997 and/or, on
of Appeals, to name a few cases. 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
In the case at bar, the Revised Katarungang Pambarangay Law provides for on February 7, 1997. No receipt or other competent proof, aside from
a two-tiered mode of enforcement of an amicable settlement, to wit: (a) by respondent’s self-serving assertion, was presented to prove that respondent
execution by the Punong Barangay which is quasi-judicial and summary in paid the rentals which were not yet due. No proof was even presented by
nature on mere motion of the party entitled thereto; and (b) an action in respondent to show that he had already paid ₱1,000,000.00 upon signing of
regular form, which remedy is judicial. However, the mode of enforcement the lease contract, as stipulated therein. Petitioner, in paragraphs 2 and 7 of
does not rule out the right of rescission under Art. 2041 of the Civil Code. his answer, specifically denied that respondent did so. Courts must base
The availability of the right of rescission is apparent from the wording of Sec. actual damages suffered upon competent proof and on the best obtainable
41722 itself which provides that the amicable settlement "may" be enforced evidence of the actual amount thereof.
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 As to moral damages, Art. 2220 of the Civil Code provides that same may be
word "may" clearly makes the procedure provided in the Revised awarded in breaches of contract where the defendant acted fraudulently or in
Katarungang Pambarangay Law directory or merely optional in nature. bad faith. In the case at bar, respondent alleged that petitioner made
unauthorized repairs in the leased premises and ousted his personnel
Thus, although the "Kasunduan" executed by petitioner and respondent therefrom despite their valid and subsisting lease agreement. Petitioner
before the Office of the Barangay Captain had the force and effect of a final alleged, by way of defense, that he undertook the repairs because
judgment of a court, petitioner’s non-compliance paved the way for the respondent abandoned the leased premises and left it in a state of disrepair.
application of Art. 2041 under which respondent may either enforce the However, petitioner presented no evidence to prove his allegation, as he did
compromise, following the procedure laid out in the Revised Katarungang not attend the pretrial conference and was consequently declared in default.
Pambarangay Law, or regard it as rescinded and insist upon his original What remains undisputed therefore is that petitioner had a valid and
demand. Respondent chose the latter option when he instituted Civil Case subsisting lease contract with respondent which he refused to honor by
No. 5139-V-97 for recovery of unrealized profits and reimbursement of giving back possession of the leased premises to respondent. We therefore
advance rentals, moral and exemplary damages, and attorney’s fees. sustain the conclusion of both the trial court and the Court of Appeals that an
Respondent was not limited to claiming ₱150,000.00 because although he award of moral damages is justified under the circumstances. We likewise
agreed to the amount in the "Kasunduan," it is axiomatic that a compromise sustain the award for exemplary damages considering petitioner’s propensity
settlement is not an admission of liability but merely a recognition that there not to honor his contractual obligations, first under the lease contract and
is a dispute and an impending litigation which the parties hope to prevent by second, under the amicable settlement executed before the Office of the
making reciprocal concessions, adjusting their respective positions in the Barangay Captain. Since respondent was compelled to litigate and incur
hope of gaining balanced by the danger of losing. Under the "Kasunduan," expenses to protect his interest on account of petitioner’s refusal to comply
respondent was only required to execute a waiver of all possible claims with his contractual obligations, the award of attorney’s fees has to be
arising from the lease contract if petitioner fully complies with his obligations sustained.
thereunder. It is undisputed that herein petitioner did not.
IN VIEW WHEREOF, the petition is PARTIALLY GRANTED. The assailed
Having affirmed the RTC’s jurisdiction over the action filed by respondent, we Decision dated April 2, 2003 of the Court of Appeals in CA-G.R. CV No.
now resolve petitioner’s remaining contention. Petitioner contends that no 59023 is modified by deleting the award of ₱300,000.00 as reimbursement of
factual or legal basis exists for the reimbursement of alleged advance advance rentals. The assailed Decision is AFFIRMED in all other respects.
rentals, moral and exemplary damages, and attorney’s fees awarded by the
court a quo and the Court of Appeals. SO ORDERED.

20
 G.R. No. 130864 October 2, 2007 Harold later discovered that Aliba made it appear that she had sold the lot to
MARIA L. HAROLD, petitioner, vs. AGAPITO T. ALIBA, respondent. 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
DECISION that Aliba caused Harold and her husband to sign in January 1994.

QUISUMBING, J.: 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
For review on certiorari is the Decision1 dated September 3, 1997 of the between Harold and Aliba was referred to Punong Barangay Limson Ogas
Court of Appeals in CA-G.R. SP No. 40416, affirming the dismissal of and the Lupong Tagapamayapa. During the June 8, 1994 barangay
petitioner Maria L. Harold’s complaint before the Municipal Trial Court of La conciliation proceedings, the parties herein agreed that Aliba will pay an
Trinidad, Benguet. 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
The pertinent facts are as follows: accepted.4 The receipt of the amount given was evidenced by an
acknowledgment receipt signed by the parties herein, attested to by the
Sometime in January 1993, Harold engaged the services of respondent Lupon chairman, and witnessed by several barangay officials.
Agapito T. Aliba, a geodetic engineer, to conduct a relocation survey and to
execute a consolidation-subdivision of their properties including that of On June 9, 1994, as agreed upon, Aliba tendered the remaining P5,000 to
Harold’s sister, Alice Laruan, located in Pico, La Trinidad, Benguet. After Harold to complete their amicable settlement. Unfortunately, Harold refused
completing his work, Aliba was paid P4,050 for his services, but he failed to to accept the same, saying that P5,000 is not enough and insisted on the
return the certificates of title of the said properties for more than one year, elevation of the case to the court. Thus, a certification to file action was
despite repeated demands to return them. issued by the Office of the Lupong Tagapamayapa on June 29, 1994.
Immediately thereafter, Harold filed a Complaint8 against Aliba before the
It also appears that sometime in January 1994, Aliba prevailed upon Harold Municipal Trial Court (MTC) of La Trinidad, Benguet.
and her husband to sign a document which was supposedly needed to
facilitate the consolidation-subdivision and the issuance of separate transfer In his Answer,9 Aliba prayed for the dismissal of the complaint, considering
certificates of title over the properties. Harold and her husband signed the that he had already been absolutely released from any obligation to Harold
document without reading it. and that what remains to be done is merely the completion of the amicable
settlement of the parties.
Thereafter, on April 18, 1994, a truck loaded with G.I. sheets and
construction materials came to the subject lot2 owned by Harold. Upon On September 4, 1995, the MTC issued an Order dismissing Harold’s
inquiry, Harold and her husband were informed that Aliba had sold the lot to complaint, holding that
a third person.
xxxx
On several occasions, Aliba tried to convince Harold to accept the sum of It is not disputed that on June 8, 1994, both parties met before Barangay
P400,000 which was later on increased to P500,000, as purchase price of Captain Limson Ogas. After a lengthy deliberation, towards mediation, it was
the said lot. It was only after such offers were made that Aliba told Harold agreed by both parties in the presence of Barangay Officials that Mr. Agapito
that he had indeed sold the lot. 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
On May 3, 1994, Harold agreed to accept the P500,000 from Aliba but only P70,000.00 was personally handed by Mr. Aliba to Mrs. Harold, on that day,
as partial payment, considering that the lot has an aggregate value of the remaining balance of P5,000.00 to be paid the following day, June 9,
P1,338,0003 or P6,000 per square meter. On the same date, Harold was 1994. An Acknowledgment Receipt was signed by Mrs. Harold and
made to sign an acknowledgment receipt and other papers which were made witnessed by the barangay officials. . . .
to appear that Harold accepted the sum of P480,000 as full and final
payment for the lot.

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The said minutes further states therein, "continued for the second day", SO ORDERED.
which logically means that the balance be given the following day.
Dissatisfied, Harold filed an appeal before the Regional Trial Court (RTC),
In the afternoon of June 9, 1994, Mr. Aliba returned with the remaining Branch 63, of La Trinidad, Benguet.
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 In an Order dated February 20, 1996, the RTC affirmed in toto the assailed
not enough and instead she started crying and shouting . . . . Order of the MTC.

The last paragraph [of the minutes] states "Mr. Aliba requested then if the Undaunted, Harold further appealed to the Court of Appeals, which however
paid amount of P70,000.00 be returned. Mrs. Harold refused and opted that denied the same. Hence this petition, on the following grounds:
this case be elevated to the higher court."
I.
Based on the minutes of the mediation proceedings, it is clear that Barangay WHETHER OR NOT THE THREE LOWER COURTS WERE CORRECT IN
Captain Ogas was able to successfully mediate the case between plaintiff DISMISSING HER COMPLAINT ON THE SOLE GROUND THAT SHE AND
and defendant. As a matter of fact, Aliba has already substantially complied. RESPONDENT WERE ABLE TO ARRIVE [AT] A MUTUALLY
It is not disputed that he gave plaintiff, on that occasion, P70,000.00, and to ACCEPTABLE AMICABLE SETTLEMENT BEFORE THE BARANGAY
give the balance of P5,000.00, the day after. Thus, there was meeting of the COURT OF THEIR PLACE WHEN CLEARLY ALL CIRCUMSTANCES
minds between the parties on a lawful subject, and there was substantial SHOW THERE WAS NO MEETING OF MINDS BETWEEN THEM.
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 II.
enough, then insisted that the case be filed in court, but at the same time GRANTING, WITHOUT ADMITTING, THERE WAS A MEETING OF MINDS
refusing to return the P70,000.00, when defendant tried to collect it back. BETWEEN THE PARTIES AND THEREFORE, THERE WAS A VALID
Consequently, the issuance of the Certificate to File Action, is improper AMICABLE SETTLEMENT, WHETHER OR NOT THE
because no valid repudiation [of the amicable settlement] was made. ACKNOWLEDGEMENT RECEIPT SIGNED BY PETITIONER AND THE
MINUTES OF THE PROCEEDINGS IS A SUBSTANTIAL COMPLIANCE
Obviously, Mrs. Harold wants her cake and eat it too, so to speak. It is WITH THE REQUIREMENT OF SECTION 411 OF RA 7160, OTHERWISE
in[i]quitous to allow Mrs. Harold to exact substantial fulfillment from Aliba KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991 AS
then conveniently change her mind overnight and worse, to refuse to give CONCLUDED BY THE MUNICIPAL TRIAL COURT, AND AFFIRMED BY
back what she already received. THE REGIONAL TRIAL COURT AND COURT OF APPEALS.

The Court agrees with defendant that there is no clear repudiation of the III.
agreement. It would have been different if Mrs. Harold returned the GRANTING, WITHOUT ADMITTING, SAID LAW WAS SUBSTANTIALLY
P70,000.00 to the defendant, after changing her mind. There would have COMPLIED WITH, WHETHER OR NOT PETITIONER’S ACT OF NOT
been a clear repudiation of the amicable settlement. ACCCEPTING THE REMAINING BALANCE BEING PROFFERED BY
RESPONDENT AND HER INSISTENCE THAT THE CASE BE INSTEAD
The dispositive portion of the said MTC Order reads: ELEVATED TO THE COURTS DURING THE SECOND DAY OF HEARING
SHOULD NOT ALSO BE CONSIDERED A REPUDIATION OF SAID
WHEREFORE, in view of the foregoing findings, the Motion to Dismiss, AMICABLE SETTLEMENT OR AT THE VERY LEAST A SUBSTANTIAL
incorporated in the Answer is hereby granted. This case is hereby ordered COMPLIANCE THEREOF.13
dismissed.
Essentially, we are asked to resolve whether the Court of Appeals committed
However, defendant is hereby ordered to tender payment to plaintiff his reversible error in affirming the dismissal of the complaint on the ground that
balance in the amount of P5,000.00 when this order becomes final and the dispute between the parties had already been amicably settled during the
executory. barangay conciliation proceedings.

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After a careful scrutiny of the records of this case, we hold that no reason The doctrine of estoppel is based upon the grounds of public policy, fair
exists to overturn the decision of the Court of Appeals affirming the dismissal dealing, good faith and justice, and its purpose is to forbid one to speak
of the subject complaint. against his own act, representations, or commitments to the injury of one to
whom they were directed and who reasonably relied thereon.
In this case, Harold’s main contention was hinged on the alleged non-
perfection of the questioned amicable settlement between her and Aliba The issue concerning the alleged non-compliance of the amicable settlement
because there was allegedly no meeting of the minds between them pursuant to the mandate of Section 41122 of Republic Act No. 7160 or the
regarding the subject matter and the cause thereof. On the other hand, Local Government Code (LGC) arose because there was no formal
Aliba’s principal defense is anchored on the alleged existence and validity of document denominated as "Amicable Settlement" signed by the parties.
the said amicable settlement. 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
Harold’s submission that there was no meeting of the minds between the substantially complied with. The minutes of the barangay conciliation
parties herein pertaining to the subject matter and cause of the questioned proceedings readily disclose the terms agreed upon by the parties for the
amicable settlement is a clear deviation from the facts on record. Admittedly, settlement of their dispute, and that the acknowledgment receipt, which was
both parties agreed during the June 8, 1994 barangay conciliation written in a language known to the parties, signed by them, attested to by the
proceedings for Aliba to pay an additional amount of P75,000 (which was the Lupon Chairman, and witnessed by several barangay officials, serves as an
object or subject matter of the amicable settlement) to the initial P500,000 indubitable proof of the amicable settlement and of the substantial
Aliba had given to Harold as purchase price for the subject lot in order to put compliance of its terms by respondent Aliba.
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 Moreover, even without the minutes of the meeting and the acknowledgment
amicable settlement, or more specifically, a compromise agreement, during receipt, the amicable settlement, or more specifically the compromise
the said barangay conciliation proceedings. agreement, entered into by the parties is undeniably valid, considering that "a
compromise agreement is a consensual contract, and as such, it is perfected
Under Article 2028 of the Civil Code, a compromise agreement was defined upon the meeting of' the minds of the parties to the contract."
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 Furthermore, to rule against the validity of the cited amicable settlement
Appeals,16 we held that a "compromise is a form of amicable settlement that herein would militate against the spirit and purpose of the Katarungang
is not only allowed but also encouraged in civil cases." Pambarangay Law, which is to encourage the amicable settlement of
disputes at the barangay level as an alternative to court litigation.
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 Harold’s refusal to accept the remaining P5,000 that Aliba had tendered
desist from pursuing her case against him.18 By reason of her unconditional cannot constitute an effective repudiation of the questioned amicable
acceptance of the offer and the P70,000 tendered to her, Harold had already settlement, considering that the reason for her refusal to accept the said
effectively waived whatever claims she might have against Aliba regarding amount or alleged repudiation of the assailed amicable settlement is not one
the subject lot. Moreover, she is likewise barred from pursuing her case of the grounds for repudiation clearly specified under Section 41825 of the
against Aliba under the principle of estoppel now._ 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,
Under Article 1431 of the Civil Code, through estoppel, an admission or without any reference to vitiation of her consent by any fraud, violence or
representation is rendered conclusive upon the person making it, and cannot intimidation on Aliba’s part.
be denied or disproved as against the person relying on it. Expounding on
the principle of estoppel, we held in Springsun Management Systems WHEREFORE, the petition is DENIED for lack of merit. The assailed
Corporation v. Camerino that "where a party, by his deed or conduct, has Decision dated September 3, 1997 of the Court of Appeals in CA-G.R. SP
induced another to act in a particular manner, estoppel effectively bars the No. 40416 is AFFIRMED. Costs against the petitioner.
former from adopting an inconsistent position, attitude or course of conduct
that causes loss or injury to the latter." SO ORDERED.

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