5. G.R. No.

76836 June 23, 1988

TRIUMFO GARCES, petitioner, vs. HON. COURT OF APPEALS and DAISY ESCALANTE, respondents. FELICIANO, J.: Petitioner Triumfo Garces (plaintiff below) is owner of an apartment building located at No. 1603 Indiana Street, now General Malvar Street, Malate, Metropolitan Manila. On 14 August 1984, he filed with Branch 13 of the Metropolitan Trial Court of Manila a Complaint for ejectment 1 (docketed as Civil Case No. 102100-CV) against respondent Daisy Escalante (defendant below), the lessee of Room B in that apartment building. Petitioner Garces claimed in his complaint that the verbal contract of lease with respondent Escalante, being on a monthto-month basis, had already expired, but that the latter had unreasonably refused to vacate the leased premises despite oral and written demands. In an Amended Complaint dated 15 October 1984 2 it was further alleged, as an additional ground for eviction, that respondent Escalante had converted the leased premises into a boarding house without the prior consent or approval of petitioner Garces, in violation of the terms and conditions of their verbal lease agreement. On 30 August 1985, the Metropolitan Trial Court, in accordance with the Rule on Summary Procedure, rendered a Decision 3 the dispositive portion of which reads: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff [Garces] and against the defendant [Escalante], ordering the latter: (a) and as others claiming rights or title under her to vacate the premises known as Room B of a residential house designated as No. 1603 Indiana Street, Malate, Manila; (b) to pay the plaintiff the sum of P3,000.00 as and for attorney's fees; and (c) to pay the costs of suit. For utter lack of merit, defendant's answer with counterclaim is hereby dismissed. SO ORDERED. Respondent Escalante subsequently interposed an appeal (docketed as Civil Case No. 85-33232) with Branch 13 of the Regional Trial Court of Manila which, in a Decision dated 28 January 1986 4 reversed the decision of the Metropolitan Trial Court in the following manner: PREMISES CONSIDERED, the judgment appealed from as well as the writ of execution issued pursuant thereto, are hereby set aside for failure of the complaint to state a cause of action and/or want of jurisdiction on the part of the court a quo to take cognizance of the instant case by reason thereof. The regional trial judge, noting that both parties were then residents of Manila, based his decision on the finding that there had been a failure on the part of plaintiff to comply with the requirements of Section 6 of Presidential Decree No. 1508 i.e., the controversy had not been submitted for conciliation before the barangay Lupong Tagapayapa or Pangkat ng Tagapagkasundo, and no Certification to File Action had been issued by the appropriate barangay official, prior to the institution of ejectment proceedings in court. On 22 September 1986, upon Petition for Review filed by plaintiff Garces (docketed as CA-G.R. SP No. 08386), the Court of Appeals (Tenth Division) affirmed in toto the decision of the Regional Trial Court. 5 Petitioner's Motion for Reconsideration was subsequently denied for having been filed late. 6

The present Petition for Review was filed on 14 January 1987. After a Comment thereon and a Reply to the comment had been submitted by respondent Escalante and petitioner Garces, respectively, the Court, in a Resolution dated 22 July 1987, gave due course to the Petition. The parties have since then filed their respective memoranda. After careful consideration of the record, we find, however, that the Petition must fail. In paragraph 1 of both the Complainant and the Amended Complaint filed with the Metropolitan Trial Court, it was alleged that "plaintiff [i.e., petitioner Garces] is a Filipino of legal age, and residing at 2363 Jacobo Street, Singalong, Manila, while defendant [i.e., respondent Escalante] is, likewise, of legal age, Filipino and residing at 1603 Indiana, Malate, Manila, where she may be served with summons and other court processes. 7 A similar allegation appeared in the Petition for Review filed by plaintiff Garces with the Court of Appeals. 8 Furthermore, the record of this case indicates that no Certificate to File Action was issued by the barangay official concerned prior to the initial filing by petitioner Garces of his complaint in court. Clearly, therefore, dismissal of the ejectment suit ordered initially by the Regional Trial Court and later affirmed by the Court of Appeals was not improper, especially considering that, per allegations of complainant himself in his pleadings, both parties were then in fact residents of barangays situated "in the same city or municipality." 9 Petitioner Garces, however, in order to justify non-application in this case of P.D. 1508, would now urge the Court to reverse the dismissal of his complaint on the assertion that the leased apartment unit in Malate "is only the place where (respondent stays) during workdays as respondent Daisy Escalante is working in Manila" i.e., "(respondent's) intention to establish residence is in Cavite where she has her house." 10 The argument is not persuasive. Section 3 of P.D. 1508 specifically provides that the Decree shall be applicable to disputes "between or among persons actually residing in the same barangay" and to disputes "involving actual residents of different barangays within the same city or municipality." We think it clear, and so hold, that P.D. 1508 does not refer here to one's legal residence or domicile which, for differing purposes may differ from the actual or physical habitation of a litigant. The policy of the law is evidently to promote dispute settlement through non-litigious, compulsory conciliation procedures and disputes arise where people actually or physically reside. The fact that respondent Escalante stays in the apartment unit in Malate five (5) days a week, every week, is more than adequate proof that, within the meaning of the Decree, respondent "actually resides" in Manila. In fine, we have held in the past that prior recourse to the conciliation procedure required under P.D. 1508 is nota jurisdictional requirement, non-compliance with which would deprive a court of its jurisdiction either over the subject matter or over the person of the defendant. 11 Where, however, the fact of non-compliance with and non-observance of such procedure has been seasonably raised as an issue before the court first taking cognizance of the complaint, dismissal of the action is proper. 12 We note from the record that respondent Escalante had filed with the Metropolitan Trial Court a total of four (4) pleadings an Answer, a Motion for Opposition of Plaintiffs Motion for Leave to Amend Complaint, an Amended Answer, and a Position Paper before a decision was rendered in this case. In those four pleadings, respondent, then defendant argued, among other things, that the procedural requirement under Section 6 of P.D. 1508 had been improperly by passed by the plaintiff Garces. It should also be borne in mind that this case was, before the Metropolitan Trial Court, governed by the Rule on Summary Procedure and that under Section 15 (a) and (g) of that Rule, no motion to dismiss and no petition for certiorari or prohibition against any interlocutory order issued by the trial court, is possible. Thus, respondent Escalante could not have moved to dismiss, in the Metropolitan Trial Court, upon the ground of failure to comply with the requirements of P.D. 1508. Neither could respondent Escalante have gone on certiorari before the Regional Trial Court at anytime before rendition by the Metropolitan Trial Court of its decision. We conclude that respondent Escalante (contrary to the suggestion of petitioner) had not waived expressly or impliedly the procedural requirement under P.D. 1508 and that, since the Decree is applicable in the present case, petitioner Garces' complaint should have been dismissed outright. The precise technical effect of failure to comply with the requirement of P.D. 1508 where applicable is much the same effect produced by non-exhaustion of administrative remedies: the complaint becomes afflicted with the vice of pre-maturity; the controversy there alleged is not ripe for judicial determination. 13 The complaint becomes vulnerable to a motion to dismiss. 14

It is not without reluctance that we reach the conclusion set forth above which would require petitioner to start again from the beginning, considering that the Metropolitan Trial Court had rendered a decision on the merits of the case. The facts of the present case, however, do not leave us any choice. To grant the Petition for Review under these circumstances would amount to refusal to give effect to P.D. 1508 and to wiping it off the statute books insofar as ejectment and other cases governed by the Rule on Summary Procedure are concerned. This Court has no authority to do that. WHEREFORE, the Petition for Review is DENIED. The Decision of the Metropolitan Trial Court of Manila dated 30 August 1985 is SET ASIDE and the Complaint in Civil Case No. 102100-CV is hereby DISMISSED, without prejudice. Costs against the petitioner. SO ORDERED.

6. G.R. No. 70245 May 5, 1989

ELEUTERIO DOMINGO, petitioner vs. HON. ALFREDO A. ROSERO, Presiding Judge, Regional Trial Court, Branch XXVI, Naga City; LEONILO BERCASIO and CANDIDA DELA TORRE, respondents. Citizens Legal Assistance Office for petitioner. Tirso P. Mariano for respondents.

SARMIENTO, J.: The correct appreciation and application of the provisions of Presidential Decree No. 1508, more commonly known as the Katarungang Pambarangay Law, particularly Section 6 thereof, which mandate the submission of certain disputes before the barangay Lupong Tagapayapa for conciliation and, if possible, amicable settlement between the parties, prior to the filing of the controversy in the courts of justice, is, again, the concern of this special civil action for certiorari. The petitioner assails the public respondent, Judge Alfredo A. Rosero of the Regional Trial Court of Naga City, for allegedly acting with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing on November 23, 1984, the resolution 1 ordering the dismissal of his (petitioner's) complaint in Civil Case No. 84295, entitled, "Eleuterio Domingo vs. Leonilo Bercasio, et al.," then pending in the respondent judge's sala. There is no controversy as to the facts. On February 7, 1984, the petitioner, as plaintiff, filed a complaint 2 for declaration of ownership with damages against the private respondent, the spouses Leonilo Bercasio and Candida dela Torre. Seventeen days thereafter, or on February 24, 1984, to be exact, the private respondents-defendants filed their answer (with counterclaim) 3 to the complaint. Still much later, on November 11, 1984, the private respondents moved for the dismissal of the complaint against them on the sole ground that the petitioner allegedly failed to comply with the provisions of Section 6 of Presidential Decree (P.D.) No. 1508 which require conciliation proceedings before the barangay Lupong Tagapayapa as a pre- condition to the filing of a case in court. 4 The petitioner lost no time in submitting an opposition to the private respondents' motion to dismiss. The respondent judge, to whose sala the case was raffled, on November 23, 1984, issued the questioned resolution dismissing the complaint for lack of jurisdiction. A motion for reconsideration of the trial court's resolution was filed, the petitioner-movant arguing that the case does not come within the ambit of P.D. No. 1508 inasmuch as the parties thereto reside in different provinces. Alternatively, the petitioner insisted that even granting that there was indeed a need to submit the case first before the barangay court, the private respondents' failure to seasonably raise that ground in a motion to dismiss before they filed their answer, or in their answer itself, constitutes a waiver of the said ground.5Apparently, the petitioner's supplications fell on deaf ears because the respondent trial court judge, on February 6, 1985, denied the motion for reconsideration for allegedly being "devoid of merit." 6 From the trial court, the petitioner came straight to us vigorously maintaining, as earlier adverted to, that the respondent judge acted with grave abuse of discretion in dismissing his complaint. We grant the petition. Section 6 of P.D. No. 1508 itself, from which the respondent jugde based his rulings categorically states that it should be taken in conjunction with the provisions of Section 2 of the same decree. SECTION 6. Conciliation, pre-condition to filing of complaint. No complaint, petition, action or proceeding involving any matter within the authority of the Lupon as provided in Section 2 hereof shall be filed or instituted in court or any other government office for adjudication

unless there has been a confrontation of the parties before the Lupon Chairman or the Pangkat and no conciliation or settlement has been reached as certified by the Lupon Secretary or the Pangkat Secretary, attested by the Lupon or Pangkat Chairman, or unless the settlement has been repudiated. However, the parties may go directly to court in the following cases: (1) Where the accused is under detention; (2) Where a person has otherwise been deprived of personal liberty calling for habeas corpus proceedings; (3) Actions coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property and support pendente lite; and (4) Where the action may otherwise be barred by the Statute of Limitations. (Emphasis supplied.) Section 2 of P.D. No. 1508, on the other hand provides: SECTION 2. Subject matters for amicable settlement. The Lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: (1) Where one party is the government, or any subdivision or instrumentality thereof: (2) Where one party is a public officer or employee and the dispute relates to the performance of his official functions; (3) Offenses punishable by imprisonment exceeding 30 days, or a fine exeeding P200.00: (4) Offenses where there is private offended party; (5) Such other classes of dispute which the Prime Minister may in the interest of justice determine upon recommendation of the Minister of Justice and the Minister of Local Government. (Emphasis supplied.) Additionally, Section 3 thereof states that: SECTION 3. Venue Dispute between or among persons actually residing in the same barangay shall be brought to amicable settlement of different barangay. Those involving actual residents of different barangays within the same city or municipality shall be brought in the barangay where the respondent or any of the respondents actually resides, at the election of the complainant. However, all dispute which involve real property or interest therein shall be brought in the barangay where the real property or any part thereof is situated. The Lupon shall have no authority over disputes: (1) involving parties who actually reside in barangays of different cities or municipalities, except where such barangays adjoin each other; and

xxx xxx xxx (Emphasis supplied.) From the foregoing provisions of the Katarungang Pambarangay Law, it is crystal clear that only disputes between parties who are actual residents of barangays located in the same city or municipality, or residents of adjoining barangays located in two different municipalities, are within the jurisdiction of the barangay court. Unfortunately, the respondent judge failed to see the error of his position divesting himself of jurisdiction and insisting that the complaint should first be presented before the barangay court. The petitioner (plaintiff), avers in paragraph 1 of his complaint' that his residence and postal address is at 660 T. Solit Street, Pateros, Metro Manila, while the defendants (private respondents) are residents of Barangay Sto. Domingo, Pacasao, Camarines Sur. This avernment is specifically admitted by the defendants (private respondents) in paragraph 1 of their Answer with Counterclaim. 8 The parties are therefore not only residents of different barangays and municipalities but are also, in fact, residents of different provinces. P.D. No. 1508 only applies to residents of the same municipalities or at most, under par. 1 of Section 3 thereof, residents of adjoining barangays situated in two different municipalities. 9 It would therefore be absurd if the compulsory conciliation process is made to apply to residents of different and distant provinces, as the parties herein, when the law itself is inapplicable to residents of different municipalities unless they are from adjacent barangays. Undoubtedly, the dispute between the petitioner and the private respondent is beyond the jurisdiction of any barangay court and could immediately be filed in the regular courts of justice as the petitioner here did. The private respondents submit that the subject dispute between them and the petitioner is cognizable by the barangay Lupon. They premise their contention on the allegation that at the time the petitioner filed his complaint, he was temporarily residing in Barangay Sto. Domingo, in Pacasao, Camarines Sur. 10 But even if the foregoing allegation were a fact, the private respondents' argument remains seriously flawed. Residence in a barangay within the same municipality if only transient or temporary is not enough to vest jurisdiction upon the barangay Lupon. In the case of Bejer vs. Court of Appeals, et al., 11 we have had the occasion to rule that residence as contemplated in P.D. No. 1508 compels not only actual residence but also membership in the barangay. Here, it has not been shown that the petitioner became a member of Barangay Sto. Domingo during his brief sojourn in Pacasao, Camarines Sur. It follows, lacking in that qualification, that he could not then be considered, for the purpose of applying the provisions of P.D. No. 1508, as an actual resident of Barangay Sto. Domingo. There is therefore no need for the dispute between him and the private respondents to be brought before a barangay Lupon. At any rate, as correctly pointed out by the petitioner, even assuming ex gratia argumenti that the dispute is cognizable by a barangay court, the requirement of submission or referral to the Lupong Tagapayapa under P.D. 1508 is merely a condition precedent for the filing of a complaint in court 12 and not jurisdictional. 13 It is the Judiciary Revamp Law (Batas Pambansa Blg. 129) and the Judiciary Act of 1948, and not P.D. No. 1508, which vest jurisdiction. 14 Accordingly, the failure of the private respondents to raise timely this ground in a motion to dismiss filed before their answer to the complaint, or in their answer, constitutes a waiver thereof. 15 We have consistently adhered to that rule and we see no cogent reason to deviate from it now. WHEREFORE, the Resolution dated September 23, 1984 and the Order dated February 6, 1985 of the public respondent, Judge Alfredo A. Rosero dismissing the petitioner's Complaint, are hereby REVERSED and SET ASIDE, and the trial court is ordered to REINSTATE Civil Case No. 84-295 thereof. No cost.

7. G.R. No. 70261 February 28, 1990

MAURO BLARDONY, JR., petitioner, vs. HON. JOSE L. COSCOLLUELA, JR., as Presiding Judge of Branch CXLVI, REGIONAL TRIAL COURT NATIONAL CAPITAL REGION, MAKATI, METRO MANILA and MA. ROSARIO ARANETA BLARDONY,respondents. Recto Law Offices for petitioner. Araneta, Mendoza & Papa for private respondent.

GRIO-AQUINO, J.: The petitioner seeks a review of the orders dated August 9, 1983, and February 20, 1985, of respondent Judge Jose Coscolluela, Jr., of the Regional Trial Court of Makati, Branch CXLVI, amending the order of his predecessor, Judge Segundo Soza, (which dismissed private respondent's petition for dissolution of the conjugal partnership and partition of conjugal properties) by requiring petitioner to submit an accounting of his salaries, allowances, bonuses and commissions. The petitioner and the private respondent are spouses. They were married on April 30, 1975. During their marriage, they begot one child named Patricia Araneta Blardony, who was born on November 10, 1975. Due to irreconcilable differences, petitioner and private respondent separated in March, 1981. On different dates, the spouses executed the following agreements: (a) Memorandum of Agreement dated July 1981 for the support of their child, Patricia; (b) Receipt dated January 11, 1982, evidencing the Compromise of Settlement of Advances claimed by private respondent from petitioner; (c) The Deed of Conveyance of a property situated in Alabang, Muntinlupa; and (d) The Confirmation of the waiver by private respondent in favor of petitioner over a property situated in Calatagan, Batangas. (p. 25, Rollo.) On May 3, 1982, the wife filed a Petition for Dissolution of Conjugal Partnership and Partition of Conjugal Partnership Properties in the Court of First Instance of Rizal, Branch XXXVI, in Makati, where it was docketed as Sp. No. 9711. The husband, in his answer, admitted that he had abandoned the conjugal home since March 1981; that before the filing of the petition, he and his wife, assisted by their respective counsel, tried to file a joint petition for the dissolution of their conjugal partnership but their attempt failed due to their inability to agree upon the equitable partition of their conjugal partnership properties and he prayed the court to order "a fair and equitable dissolution of their conjugal partnership in accordance with law." (p. 74, Rollo.) On October 8, 1982, the husband filed a motion to dismiss the petition on jurisdictional grounds, claiming that it should have been filed first in the Lupon Tagapamayapa as provided in P.D. 1508, because both are residents of the same Municipality of Makati. Mrs. Blardony opposed the motion to dismiss. Nevertheless, Judge Segundo Soza dismissed her petition on October 8, 1982 for her failure, as plaintiff, to comply with Section 6 of P.D. 1508.

Mrs. Blardony filed a motion for reconsideration. In the meantime, the courts were reorganized and the case was transferred to Branch CXLVI (146) of the Regional Trial Court of Makati, presided over by Judge Jose Coscolluela, Jr. On August 9, 1983, Judge Coscolluela set aside Judge Soza's order of dismissal and required the defendant to submit an accounting of his salaries, allowances, bonuses, and commissions. The latter's motion for reconsideration of that order was denied by the court on February 20, 1985. Hence, this petition for certiorari under Rule 65 of the Rules of Court with a prayer for a writ of preliminary injunction on the grounds that respondent Judge exceeded his jurisdiction: 1. in assuming jurisdiction over the case without prior referral to the Lupon Tagapamayapa as required by P.D. 1508; and 2. in declaring that the issues of support pendente lite and delivery of personal property belonging to the conjugal partnership of the parties are essentially involved in the petition, hence, the parties could go directly to court without passing through the Lupon Tagapamayapa, as provided in Section 6 of P.D. 1508. The petition has no merit. Our jurisprudence is replete with decisions of this Court to the effect that while the referral of a case to the Lupon Tagapayapa is a condition precedent for filing a complaint in court, it is not a jurisdictional requirement, "its non-compliance cannot affect the jurisdiction which the court has already acquired over the subject matter or over the person of the defendant." (Fernandez vs. Militante, May 31, 1988; Gonzales vs. Court of Appeals, 151 SCRA 287; Royales vs. Intermediate Appellate Court, 127 SCRA 470). Petitioner waived the pre-litigation conciliation procedure prescribed in P.D. No. 1508 when he did not file a motion to dismiss the complaint on that score, but filed his answer thereto wherein he prayed the court to make an equitable partition of the conjugal properties. While petitioners could have prevented the trial court from exercising jurisdiction over the case by seasonably taking exception thereto, they instead invoked the very same jurisdiction by filing an answer and seeking affirmative relief from it. ... . Upon this premise, petitioners cannot be allowed belatedly to adopt an inconsistent posture by attacking the jurisdiction of the court to which they had submitted themselves voluntarily. (Royales vs. Intermediate Appellate Court, 127 SCRA 470.) Furthermore, under Section 6 of P.D. 1508, the complaint may be filed directly in a competent court without passing the Lupon Tagapayapa in the following cases: SECTION 6. Conciliation, pre-condition to filing of complaint. No complaint, petition, action or proceeding involving any matter within the authority of the Lupon as provided in Section 2 hereof, shall be filed or instituted in court or any other government office for adjudication unless there has been a confrontation of the parties before the Lupon Chairman or the Pangkat and no conciliation or settlement has been reached as certified by the Lupon Secretary or the Pangkat Secretary, attested by the Lupon or Pangkat Chairman, or unless the settlement has been repudiated. However, the parties may go directly to court in the following cases: xxx xxx xxx (3) Actions coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal properly and support pendente lite; and xxx xxx xxx (Emphasis supplied.)

Respondent Judge correctly observed that: ... the issues of support pendente lite and delivery of personal properties belonging to the conjugal partnership, although not coupled in the strict sense of the word with the instant petition, are essentially involved in this petition because of the minority of the daughter, Patricia Araneta Blardony who, as of this date, is not yet 8 years old, and because the resolution or decision of this court on the pending petition would be incomplete without a clear cut disposition on the partition of the personal and real properties of the conjugal partnership and consequent delivery thereof to the proper parties. (p. 20, Rollo.) WHEREFORE, finding no reversible error in the orders complained of, the petition for certiorari is denied for lack of merit. Costs against the petitioner. This decision is immediately executory.

8. G.R. No. L-62339 October 27, 1983

SPOUSES MARIA LUISA P. MORATA AND JULIUS MORATA, petitioners, vs. SPOUSES VICTOR GO and FLORA C. GO and HON. VALERIANO P. TOMOL, JR., Judge, Court of First Instance of Cebu, Branch XI, respondents. Amado G. Olis for petitioners. Paul G. Gorres for private respondents.

ESCOLIN., J.: In this petition for certiorari and prohibition with prayer for writ of preliminary injunction, the Court is called upon to determine the classes of actions which fall within the coverage of Presidential Decree No. 1508, 1 otherwise known as Katarungang Pambarangay Law. This law requires the compulsory process of arbitration at the Barangay level as a pre-condition for filing a complaint in court, Petitioners contend that said legislation is so broad and all-embracing as to apply to actions cognizable not only by the city and municipal courts, now known as the metropolitan trial courts and municipal trial courts, but also by the courts of first instance, now the regional trial courts. Upon the other hand, respondents would limit its coverage only to those cases falling within the exclusive jurisdiction of the metropolitan trial courts and municipal trial courts. The antecedent facts are not disputed. On August 5, 1982, respondents Victor Go and Flora D. Go filed in the defunct Court of First Instance of Cebu, presided by respondent Judge Valeriano P. Tomol, Jr., a complaint against petitioners Julius Morata and Ma. Luisa Morata for recovery of a sum of money plus damages amounting to P49,400.00. The case was docketed as Civil Case No. R-22154. On the basis of the allegation in the complaint that the parties-litigants are all residents of Cebu City, petitioners filed a motion to dismiss, citing as grounds therefor, the failure of the complaint to allege prior availment by the plaintiffs of the barangay conciliation process required by P.D. 1508, as well as the absence of a certification by the Lupon or Pangkat Secretary that no conciliation or settlement had been reached by the parties. The motion was opposed by private respondents. On September 2, 1982, respondent judge issued an order denying the motion to dismiss. Petitioners filed a motion for reconsideration, but the same was denied in an order dated October 3, 1982, as follows: Considering the specific reference to City or Municipal Courts in the provisions of Sections 11 and 12 of P.D. No. 1508, as the Courts to which the dispute settled or arbitrated by the Lupon Chairman or the Pangkat, shall be elevated for nullification of the award or for execution of the same, and considering that from the provision of Section 14 of the same law, the precondition to the filing of a complaint as provided for in Section 6 thereof, is specifically referred to, it is the considered opinion of this Court that the provision of Section 6 of the law applies only to cases cognizable by the inferior courts mentioned in Sections 11 and 12 of the law. In view of the foregoing, the motion for reconsideration filed by the defendants, of the order of September 2. 1982, denying their motion to dismiss, is hereby denied. [Annex 'G', p. 36, Rollo]. From this order, petitioners came to Us thru this petition. In a resolution dated December 2, 1982, We required respondents to file an answer, and likewise granted a temporary restraining order enjoining respondent judge from requiring petitioners to file their answer and enter into trial in Civil Case No. R-22154.

We find the petition impressed with merit. Section 6 of P.D. 1508 reads as follows: SECTION 6. Conciliation pre-condition to filing of complaint. No complaint, petition, action for proceeding involving any matter within the authority of the Lupon as provided in Section 2 hereof shall be filed or instituted in court or any other government office for adjudication unless there has been a confrontation of the parties before the Lupon Chairman or the Pangkat and no conciliation or settlement has been reached as certified by the Lupon Secretary or the Pangkat Secretary attested by the Lupon or Pangkat Chairman, or unless the settlement has been repudiated. However, the parties may go directly to court in the following cases: [1] Where the accused is under detention; [2] Where a person has otherwise been deprived of personal liberty calling for habeas corpus proceedings; [3] Actions coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property and support pendente lite; and [4] Where the action may otherwise be barred by the Statute of Limitations Section 2 of the law defines the scope of authority of the Lupon thus: SECTION 2. Subject matters for amicable settlement.The Lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: [1] Where one party is the government ,or any subdivision or instrumentality thereof; [2] Where one party is a public officer or employee, and the dispute relates to the performance of his official functions; [3] Offenses punishable by imprisonment exceeding 30 days, or a fine exceeding P200.00; [4] Offenses where there is no private offended party; [5] Such other classes of disputes which the Prime Minister may in the interest of justice determine upon recommendation of the Minister of Justice and the Minister of Local Government. Thus, except in the instances enumerated in sections 2 and 6 of the law, the Lupon has the authority to settle amicably all types of disputes involving parties who actually reside in the same city or municipality. The law, as written, makes no distinction whatsoever with respect to the classes of civil disputes that should be compromised at the barangay level, in contradistinction to the limitation imposed upon the Lupon by paragraph (3), section 2 thereof as regards its authority over criminal cases. In fact, in defining the Lupon's authority, Section 2 of said law employed the universal and comprehensive term "all", to which usage We should neither add nor subtract in consonance with the rudimentary precept in statutory construction that "where the law does not distinguish, We should not distinguish. 2 By compelling the disputants to settle their differences through the intervention of the barangay leader and other respected members of the barangay, the animosity generated by protracted court litigations between members of the same political unit, a disruptive factor toward unity and cooperation, is avoided. It must be borne in mind that the conciliation process at the barangay level is likewise designed to discourage indiscriminate filing of cases in court in order to decongest its clogged dockets and, in the process, enhance the quality of justice dispensed by it. Thus, to say that the authority of the Lupon is limited to cases exclusively cognizable by the inferior courts is to lose sight of this objective. Worse, it would make the law a self-defeating one. For what would stop a party, say in an action for a sum of money or

damages, as in the instant case, from bloating up his claim in order to place his case beyond the jurisdiction of the inferior court and thereby avoid the mandatory requirement of P.D. 1508? And why, indeed, should the law seek to ease the congestion of dockets only in inferior courts and not in the regional trial courts where the logjam of cases is much more serious? Indeed, the lawmakers could not have intended such half-measure and self-defeating legislation. The objectives of the law are set forth in its preamble thus: WHEREAS, the perpetuation and official recognition of the time-honored tradition of amicably settling disputes among family and barangay level without judicial resources would promote the speedy administration of justice and implement the constitutional mandate to preserve and develop Filipino culture and to strengthen the family as a basic social institution; WHEREAS, the indiscriminate filing of cases in the courts of justice contributes heavily and unjustifiably to the congestion of court dockets, thus causing a deterioration in the quality of justice; WHEREAS, in order to help relieve the courts of such docket congestion and thereby enhance the quality of justice dispensed by the courts, it is deemed desirable to formally organize and institutionalize a system of amicably settling disputes at the barangay level. There can be no question that when the law conferred upon the Lupon "the authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes, ... ," its obvious intendment was to grant to the Lupon as broad and comprehensive an authority as possible as would bring about the optimum realization of the aforesaid objectives. These objectives would only be half-met and easily thwarted if the Lupon's authority is exercised only in cases falling within the exclusive jurisdiction of inferior courts. Moreover, if it is the intention of the law to restrict its coverage only to cases cognizable by the inferior courts, then it would not have provided in Section 3 thereof the following rule on Venue, to wit: Section 3. Venue. ... However, all disputes which involve real property or any interest therein shall be brought in the Barangay where the real property or and part thereof is situated. for it should be noted that, traditionally and historically, jurisdiction over cases involving real property or any interest therein, except forcible entry and detainer cases, has always been vested in the courts of first instance [now regional trial court]. But it is pointed out by the respondent judge that Sections 11, 3 12, 4 and 14, 5 of the law speak of the city and/or municipal courts as the forum for the nullification or execution of the settlement or arbitration award issued by the Lupon. We hold that this circumstance cannot be construed as a limitation of the scope of authority of the Lupon. As heretofore stated, the authority of the Lupon is clearly established in Section 2 of the law; whereas Sections 11, 12 and 14, relied upon by respondent judge, deal with the nullification or execution of the settlement or arbitration awards obtained at the barangay level. These sections conferred upon the city and municipal courts the jurisdiction to pass upon and resolve petitions or actions for nullification or enforcement of settlement/arbitration awards issued by the Lupon, regardless of the amount involved or the nature of the original dispute. But there is nothing in the context of said sections to justify the thesis that the mandated conciliation process in other types of cases applies exclusively to said inferior courts. Any doubt on the issue before Us should be dispelled by Circular No. 22 issued by Chief Justice Enrique M. Fernando, 6 the full text of which is quoted as follows: TO: ALL JUDGES OF THE COURTS OF FIRST INSTANCE, CIRCUIT CRIMINAL COURTS, JUVENILE AND DOMESTIC RELATIONS COURTS, COURTS OF AGRARIAN RELATIONS, CITY COURTS, MUNICIPAL COURTS AND THEIR CLERKS OF COURT

SUBJECT: Implementation of the Katarungang Pambarangay Law. Effective upon your receipt of the certification by the Minister of Local Government and Community Development that all the barangays within your respective jurisdictions have organized their Lupons provided for in Presidential Decree No. 1508, otherwise known as the Katarungang Pambarangay Law, in implementation of the barangay system of settlement of disputes, you are hereby directed to desist from receiving complaints, petitions, actions or proceedings in cases falling within the authority of said Lupons. Circular No. 12 dated October 20, 1978, issued by the late Chief Justice Fred Ruiz Castro is to that extent modified. This Circular takes effect immediately. It is significant that the above-quoted circular embodying the directive "to desist from receiving complaints, petitions, actions and proceedings in cases falling within the authority of said Lupons," has been addressed not only to judges of city and municipal courts, but also to all the judges of the courts of first instance, circuit criminal courts, juvenile and domestic courts and courts of agrarian relations, now known as regional trial courts under B.P. No. 129. The said circular was noted by president Ferdinand E. Marcos in a Letter of Implementation, dated November 12, 1979, the first paragraph of which reads as follows: "with the view to easing up the log-jam of cases and solving the backlogs in the case of dockets of all government offices involved in the investigation, trial and adjudication of cases, it is hereby ordered that immediate implementation be made by all government officials and offices concerned of the system of amicably settling disputes at the barangay level as provided for in the Katarungang Pambarangay Law [Presidential Decree No. 1508]." Therefore, for the guidance of the bench and the bar, We now declare that the conciliation process at the barangay level, prescribed by P.D. 1508 as a pre-condition for filing a complaint in court, is compulsory not only for cases falling under the exclusive competence of the metropolitan and municipal trial courts, but for actions cognizable by the regional trial courts as well. ACCORDINGLY, the petition is granted, and the order of respondent judge denying petitioners' motion to dismiss is hereby set aside. Respondent judge is restrained from conducting further proceedings in Civil Case No. R-22154, except to dismiss the case. No costs. SO ORDERED. Fernando, CJ Concepcion, Jr., Guerrero, Abad Santos, Melencio-Herrera, Plana, Relova and Gutierrez, Jr., JJ concur. Makasiar and Teehankee, JJ., reserves his vote. De Castro, J., is on leave.

Separate Opinions

AQUINO, J.: concurring:

I concur. The case filed by the Go spouses in the Court of First Instance of Cebu for the collection of P49,400 from the Morata spouses, Civil Case No. R-22154, is covered by the Katarungang Pambarangay Law, Presidential Decree No. 1508. The impression that the law applies only to cases filed in inferior courts does not seem to be correct. Of course, the law applies only to disputes between or among persons actually residing in the same barangay or to those involving actual residents of different barangays within the same city or municipality (Sec. 3). Cases between or among those persons should undergo the conciliation process, whatever may be the amount involved or the nature of the issue involved as long as they do not belong to the following cases: (a) Where the parties involved reside in barangays of different cities or municipalities unless such barangays adjoin each other; (b) Where the dispute involves real property located in different cities or municipalities; (c) Where one party is the government or any sub-division or instrumentality thereof; (d) Where one party is a public officer or employee and the dispute relates to the performance of his official functions; (e) Where the dispute involves an offense punishable by imprisonment exceeding thirty (30) days or a fine exceeding two hundred pesos (P200.00). Thus, physical injuries requiring medical attendance for not exceeding nine (9) days, slight slander, light threats, unjust vexation, would be appropriate subject matters for settlement; (f) Offenses where there is no private offended party, for example, littering, gambling, jaywalking, public scandal, vagrancy and prostitution; and, (g) Such other classes of disputes which the Prime Minister may, in the interest of justice, determine upon recommendation of the Minister of Justice and the Minister of Local Government and Community Development. (Sec. 2, Rule VI, Katarungan Pambarangay Rules). The parties may go directly to court in the four cases specified in section 6 of the law. Chief Justice Fernando in his Circular No. 22 dated November 9, 1979 has enjoined all Judges of the Courts of First Instance, Circuit Criminal Courts, Juvenile and Domestic Relations Courts, Agrarian Courts, city courts, municipal courts and their clerks of court to desist from receiving complaints, petitions, actions or proceedings in cases falling within the authority of the barangay Lupons effective upon their receipt of the certification of the Minister of Local Government and Community Development that all the barangays within their respective jurisdictions have organized their Lupons as contemplated in the Katarungang Pambarangay Law. The Minister of Justice has assumed that the Katarungang Pambarangay Law applies to the cases in Regional Trial Courts or Courts of First Instance. Thus, he ruled that a complaint for damages in the sum of P100,000 is a matter falling within the authority of the Lupon under section 2 of Presidential Decree No. 1508 (Opinion No. 81, Series of 1981; Katarungang Pambarangay Opinion No. 10 Series of 198 1). The reference in the law to proper city or municipal court contemplates situations for the enforcement or nullification of settlement or arbitration award. If there is no award, the city or municipal court will have no occasion to intervene. Whether the Lupons, will be equal to the task imposed upon them and should receive commensurate remuneration for their work is another question.

Separate Opinions AQUINO, J.: concurring: I concur. The case filed by the Go spouses in the Court of First Instance of Cebu for the collection of P49,400 from the Morata spouses, Civil Case No. R-22154, is covered by the Katarungang Pambarangay Law, Presidential Decree No. 1508. The impression that the law applies only to cases filed in inferior courts does not seem to be correct. Of course, the law applies only to disputes between or among persons actually residing in the same barangay or to those involving actual residents of different barangays within the same city or municipality (Sec. 3). Cases between or among those persons should undergo the conciliation process, whatever may be the amount involved or the nature of the issue involved as long as they do not belong to the following cases: (a) Where the parties involved reside in barangays of different cities or municipalities unless such barangays adjoin each other; (b) Where the dispute involves real property located in different cities or municipalities; (c) Where one party is the government or any sub-division or instrumentality thereof; (d) Where one party is a public officer or employee and the dispute relates to the performance of his official functions; (e) Where the dispute involves an offense punishable by imprisonment exceeding thirty (30) days or a fine exceeding two hundred pesos (P200.00). Thus, physical injuries requiring medical attendance for not exceeding nine (9) days, slight slander, light threats, unjust vexation, would be appropriate subject matters for settlement; (f) Offenses where there is no private offended party, for example, littering, gambling, jaywalking, public scandal, vagrancy and prostitution; and, (g) Such other classes of disputes which the Prime Minister may, in the interest of justice, determine upon recommendation of the Minister of Justice and the Minister of Local Government and Community Development. (Sec. 2, Rule VI, Katarungan Pambarangay Rules). The parties may go directly to court in the four cases specified in section 6 of the law. Chief Justice Fernando in his Circular No. 22 dated November 9, 1979 has enjoined all Judges of the Courts of First Instance, Circuit Criminal Courts, Juvenile and Domestic Relations Courts, Agrarian Courts, city courts, municipal courts and their clerks of court to desist from receiving complaints, petitions, actions or proceedings in cases falling within the authority of the barangay Lupons effective upon their receipt of the certification of the Minister of Local Government and Community Development that all the barangays within their respective jurisdictions have organized their Lupons as contemplated in the Katarungang Pambarangay Law. The Minister of Justice has assumed that the Katarungang Pambarangay Law applies to the cases in Regional Trial Courts or Courts of First Instance. Thus, he ruled that a complaint for damages in the sum of P100,000 is a matter falling within the authority of the Lupon under section 2 of Presidential Decree No. 1508 (Opinion No. 81, Series of 1981; Katarungang Pambarangay Opinion No. 10 Series of 198 1).

The reference in the law to proper city or municipal court contemplates situations for the enforcement or nullification of settlement or arbitration award. If there is no award, the city or municipal court will have no occasion to intervene. Whether the Lupons, will be equal to the task imposed upon them and should receive commensurate remuneration for their work is another question.

9. G.R. No. 83907. September 13, 1989.*

NAPOLEON GEGARE, petitioner vs. HON. COURT OF APPEALS (ELEVENTH DIVISION) AND ARMIE ELMA, respondents. Camilo Cario Dionio, Jr. for petitioner. Cedo, Ferrer & Associates Law Offices for private respondent.

GANCAYCO, J.: The familiar story in the Old Testament is of how King Solomon settled the dispute between two women over a child by deciding that the child be cut into two for them to share. The real mother full of love implored that the King not kill the child and give the child to the other woman. The latter asked the King not to give it to either of them and to go on, cut the child into two. This case involves a small piece of land. The decision was to cut it into two between the parties. But the parallel ends there. The petitioner wants the whole lot. Private respondent is happy with his half. This is the impasse that must be resolved. The center of controversy is Lot 5989, Ts-217 with an area of about 270 square meters situated at Dadiangas, General Santos City. This lot was titled in the name of Paulino Elma under Original Certificate of Title No. (P29947) (P-11503) P-1987 issued by the Office of the Register of Deeds of General Santos City and Miscellaneous Sales Patent No. V-635. A reversion case was filed by the Republic of the Philippines against Paulino Elma in the Court of First Instance of South Cotabato docketed as Civil Case No. 950, wherein in due course a decision was rendered on January 29, 1973 declaring the title of Paulino Elma null and void and the same was ordered cancelled. The lot was reverted to the mass of public domain subject to disposition and giving preferential right to its actual occupant, Napoleon Gegare. This decision was affirmed by this Court when We dismissed the petition for review on certiorari filed by the heirs of Elma on March 13, 1974 in G.R. No. L-38069. Thereafter, the writ of execution was issued and the title of Elma to the property was cancelled. Both petitioner and private respondent filed an application for this lot in the Board of Liquidators (Board for short) in 1975. On June 15, 1976, Resolution No. 606, Series of 1976 was passed by the Board disposing of the lot in favor of petitioner by way of a negotiated sale in conformity with the decision in Civil Case No. 950. Private respondent protested against the application of petitioner and on August 8, 1978, the Board adopted Resolution No. 611, Series of 1978 denying private respondent's protest for the same reason. A request for reconsideration of private respondent was referred by the Board to Mr. Artemio Garlit, liquidator-designee, General Santos Branch, for verification and investigation. After hearings, Mr. Garlit submitted a report to the Manila office recommending division of the lot to the parties. Nevertheless, on March 13, 1981, the Board denied the protest because the case had already been decided by the court. However, a motion for reconsideration filed by private respondent was favorably considered by the Board in Resolution No. 233, Series of 1981 dated July 8, 1981. Thus, the Board directed the chief of LASEDECO to investigate the occupancy and area of the lot. In this investigation, it was found that only private respondent was the actual occupant so the LASEDECO chief recommended the division of the property between petitioner and private respondent.

On August 14, 1981, the Board passed Resolution No. 272, Series of 1981 approving said recommendation by dividing the lot equally between the parties at 135.5 square meters each to be disposed to them by negotiated sale. Both parties appealed to the Office of the President but in a decision dated March 25, 1984, both appeals were dismissed. A motion for reconsideration filed by petitioner was denied on May 29,1984. Private respondent paid for the value of 1/2 of the lot and applied for the issuance of a patent. In Resolution No. 185, Series of 1985 adopted on October 7, 1985, the Board gave due course to the application of private respondent and for the issuance of a patent to 1/2 portion of the lot. Petitioner was also advised to file his application and pay for his portion. Thus, Miscellaneous Sales Patent No. 4261 and Original Certificate of Title No. P-5139 were issued to private respondent. On November 27, 1985, petitioner filed an action for "Annulment and Cancellation of Partition of Lot 5989, Ts217, situated at Dadiangas, General Santos City and Annulment of Resolutions No. 272 and 185 and/or to Declare them Null and Void" against private respondent and the Board. The suit was docketed as Civil Case No. 3270 in the Regional Trial Court of General Santos City. On February 11, 1985, private respondent filed a motion to dismiss the complaint on the following grounds: (1) lack of jurisdiction over the subject matter; (2) petitioner has no capacity to sue; (3) petitioner is not a real partyin-interest; and (4) the action is barred by prior judgment. Private respondent added another ground (5) lack of conciliation efforts pursuant to Section 6 of Presidential Decree No. 1508. The motion was granted in an order dated March 18, 1986. On April 3, 1986, petitioner moved for a reconsideration thereof to which an opposition was filed by private respondent. The motion for reconsideration was granted in an order of April 21, 1986 and private respondent was required to file his responsive pleading. Private respondent filed his answer. On July 10, 1986, private respondent asked for a preliminary hearing of the grounds for the motion to dismiss in his affirmative defenses. This was denied on July 24, 1986. Hence, private respondent filed a petition for certiorari and prohibition in the Court of Appeals questioning the said orders of the trial court dated April 21, 1986 and July 24, 1986. In due course, a decision was rendered by the appellate court on March 16, 1988 granting the petition, declaring the questioned orders null and void, and directing the trial court to dismiss the civil case for lack of jurisdiction, without pronouncement as to costs. An urgent motion for reconsideration filed by petitioner was denied in a resolution dated May 31, 1988. 1 Thus, the herein petition wherein petitioner raises the following issues--FIRST ASSIGNMENT OF ERROR THE RESPONDENT COURT ERRED IN DECIDING CA-G.R. SP NO. 12183WITHOUT FIRST SERVING SUMMONS AND A COPY OF THE PETITION TO THE PRIVATE RESPONDENT IN THE SAID CASE (NOW PETITIONER IN THE INSTANT CASE), THUS, DEPRIVING HIM OF HIS CONSTITUTIONAL RIGHT TO DUE PROCESS OF LAW. SECOND ASSIGNMENT OF ERROR THE RESPONDENT COURT ERRED IN GIVING DUE COURSE TO THE PETITION OF ARMIE ELMA IN CA-G.R. SP NO. 12183 IN SPITE OF THE FACT THAT THE TWO (2) ORDERS SUBJECT MATTER OF THE PETITION ARE INTERLOCUTORY IN NATURE. THIRD ASSIGNMENT OF ERROR

THE RESPONDENT COURT ERRED IN HOLDING THAT THE TRIAL COURT HAS NO JURISDICTION OVER CIVIL CASE NO. 3270. FOURTH ASSIGNMENT OF ERROR

THE RESPONDENT COURT ERRED IN HOLDING THAT THE TRIAL COURT SHOULD HAVE DISMISSED CIVIL CASE NO. 3270 FOR FAILURE OF THE PLAINTIFF TO COMPLY WITH THE PROVISIONS OF P.D. NO. 1508 BEFORE FILING HIS COMPLAINT IN COURT. 2
The petition is devoid of any merit. Under the first assigned error, petitioner alleges that he was not served summons and a copy of the petition so that he was deprived of due process and the respondent court did not acquire jurisdiction over his person. Private respondent disputes this claim by showing that it was at the address of petitioner appearing in the petition at Liwayway Disco Restaurant and Disco Pub, Ilang-Ilang Street, General Santos City, where petitioner was served a copy of private respondent's "Manifestation and Motion for Early Resolution. 3 Petitioner's counsel was also served a copy of the resolution dated June 28, 1987, 4 "Motion for Restraining Order" dated July 28, 1987 and Manifestation dated December 1, 1987. 5 Indeed, petitioner's counsel filed a motion dated April 4, 1988 seeking a reconsideration of the decision of respondent court 6 which was denied on May 31, 1988. Obviously, petitioner voluntarily submitted to the jurisdiction of the respondent court and was never deprived of due process.7 Under the second and third assigned errors, petitioner contends that the appellate court erred in giving due course to the petition that assailed the two orders of the court a quo which are interlocutory in character and in holding that the trial court has no jurisdiction over Civil Case No. 3270. It is precisely to correct the lower court when in the course of proceedings it acts without jurisdiction or in excess thereof or if the trial court judge otherwise acted with grave abuse of discretion that the extraordinary writ of certiorari or prohibition is afforded to parties as a relief. Such writ is available even in respect to interlocutory orders. 8 The appellate court correctly ruled that courts of justice will not interfere with purely administrative matters rendered by administrative bodies or officials acting within the scope of their power and authority. The discretionary power vested in the proper executive official in the absence of arbitrariness or grave abuse so as to go beyond the statutory authority, is not subject to the contrary judgment or control of the courts and is treated with finality. 9 When Board Resolution No. 272 was passed in 1981, petitioner appealed to the Office of the President. After his appeal was denied on March 26, 1984, he did not file a petition for review in this court. Thus, the said decision became final and it was duly implemented. We agree that when petitioner filed Civil Case No. 3270, the trial court should have refrained from interfering with said administrative disposition of the chief executive absent any showing of lack or excess of jurisdiction or grave abuse of discretion. Moreover, petitioner had no capacity to file the questioned suit in the lower court. The real party-in-interest who can seek the nullification of the land grant is the government or the state. 10 Under the fourth and last assigned error, petitioner argues that it was erroneous for the appellate court to hold that the case should be dismissed by the lower court for failure to comply with a provision of Presidential Decree No. 1508 before filing the complaint. He alleges that this rule is not applicable in said case for one of the parties therein is the government or any subdivision or instrumentality thereof which is excepted from this requirement under Section 2 of said law.

True it is that the Board is a government instrumentality but the petitioner and private respondent who are also contending parties in the case are residents of the same barangay so Section 6 of Presidential Decree No. 1508 should apply to them as it provides--Section 6. Conciliation, pre-condition to filing of complaint. No complaint, petition, action or proceeding involving any matter within the authority of the Lupon as provided in Section 2 hereof shall be filed or instituted in court or any other government office for adjudication unless there has been a confrontation of the parties before the Lupon Chairman or the Pangkat and no conciliation or settlement has been reached as certified by the Lupon Secretary or the Pangkat Secretary attested by the Lupon or Pangkat Chairman, or unless the settlement has been repudiated. The purpose of this confrontation is to enable the parties to settle their differences amicably. If the other only contending party is the government or its instrumentality or subdivision the case falls within the exception but when it is only one of the contending parties, a confrontation should still be undertaken among the other parties. WHEREFORE, the petition is DISMISSED. No costs.

10. G.R. No. 90643 June 25, 1993

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. AGUSTIN FORTES Y GARRA, accused-appellant. G.R. No. 91155 June 25, 1993. AGUSTIN G. FORTES, petitioner, vs. THE HONORABLE PRESIDING JUDGE EUGENIO C. GUAN,. JR. of the Regional Trial Court, Branch 55, Irosin, Sorsogon, and PEOPLE OF THE PHILIPPINES, respondents. The Solicitor General for plaintiff-appellee. Gavino L. Barlin for accused-appellant.

DAVIDE, JR., J.: The conviction of Agustin Fortes y Garra for the rape of a young girl described by the trial court as "a guileless lass of only 13, [a] sixth grade pupil, bred in a barangay of rural atmosphere," and the denial by the trial court of his application for bail pending his appeal from the judgment of conviction are questioned in these consolidated cases. In G.R. No. 90643, the accused appeals from the decision of Branch 55 of the Regional Trial Court (RTC) at Irosin, Sorsogon, in Criminal Case No. 219. The court a quo, in its Decision dated 18 November 1988 but promulgated on 25 January 1989, found the accused guilty beyond reasonable doubt of rape and sentenced him to suffer the penalty of reclusion perpetua and pay the victim the sum of P20,000.00 to answer for damages and costs. 1 In G.R. No. 91155, the accused seeks to annul and set aside two (2) related orders of the said trial court denying his application for bail, filed after his conviction, to secure his provisional liberty pending the resolution of his appeal. The records disclose these antecedents: On 26 November 1983, Agripino Gine of Barangay Naburacan, Municipality of Matnog, Province of Sorsogon, accompanied his 13-year old daughter, Merelyn, to the police station of the said municipality to report a rape committed against the latter by the accused at around 11:00 o'clock in the morning of that day. Following this, the accused was forthwith apprehended. Thereupon, on 5 December 1983, Agripino Gine filed on behalf of Merelyn a complaint 2 for rape against the accused before the Municipal Circuit Trial Court (MCTC) of Matnog-Sta. Magdalena in Matnog, Sorsogon. 3 The accusatory portion thereof reads as follows: That on or about 11:00 in the morning of November 26, 1983, at Barangay Naburacan, Municipality of Matnog, Province of Sorsogon, Philippines and within the jurisdiction of this Honorable Court, the above-named accused with deliberate intent and without the consent of the victim MERELYN GINE, and by means of force and intimidation did then and there wilfully, unlawfully and feloniously (sic) armed with a bolo threatened (sic) and dragged (sic) the victim

MERELYN GINE, and there the said accused committed the acts of rape inside the nipa hut owned by Leovegildo (sic) Garra, to the damage and prejudice of the undersigned offended party.

Act contrary to law. 4

Finding probable cause to exist after a preliminary examination was conducted, the MCTC issued on 9 December 1983 an order for the arrest of the accused. 5 The bond for the latter's temporary liberty was initially fixed at P30,000.00 but was later reduced to P25,000.00 6 upon motion of the accused. The latter then put up the required bond; upon its approval, the court ordered his release on 15 December 1983. 7 When the case was finally called for preliminary investigation on 5 December 1984, the accused, through his counsel de oficio, informed the court that he was waiving his right thereto. The court then ordered the transmittal of the records of the case to the Office of the Provincial Fiscal of Sorsogon. 8 On 25 January 1985, the Office of the Provincial Fiscal, through 1st Assistant Provincial Fiscal Manuel C. Genova, filed with Branch 55 of the RTC at Irosin, Sorsogon a complaint for rape against the accused, the accusatory portion of which reads: That on or about, the 26th day of November, 1983, in the Municipality of Matnog, Province of Sorsogon, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused by means of force and intimidation and with lewd design (sic), and armed with a bolo and (sic) threatened her with harm and dragged to a hut the victim and there have (sic) carnal knowledge with one Merelyn Gine against her will and consent, to her damage and prejudice.

CONTRARY TO LAW. 9
The case was docketed as Criminal Case No. 219. Accused pleaded not guilty upon his arraignment on 28 February 1985. 10 The protracted trial began on 26 June 1985 and ended nearly three (3) years later when the case was finally submitted for decision on 22 February 1988. 11 The witnesses presented by the prosecution were Merelyn Gine, her father Agripino and Dr. Eddie Dorotan. The witnesses for the defense, on the other hand, were the accused himself, Leovegildo Garra and Celso Gardon, the Barangay Captain of Naburacan, Matnog, Sorsogon. On 25 January 1989, the trial court promulgated its decision convicting the accused of the crime charged. 12 The dispositive portion thereof reads: WHEREFORE, this Court finds the accused guilty beyond reasonable doubt of the crime of Rape and sentences him to suffer the penalty of Reclusion Perpetua and to indemnify Merelyn Gine the sum of P20,000.00 as damages and to pay the costs. The accused is ordered committed to the Sorsogon Provincial Jail through the Provincial Warden or through any of his provincial guards and eventually committed to the National Penitentiary in accordance with law.

SO ORDERED. 13
On the same day, the accused filed his notice of appeal 14 wherein he requested that the amount of the appeal bond be fixed by the trial court. The following day, 26 January 1989, the trial court gave due course to the appeal15 but did not resolve the request to fix the amount of bail. Thus, on 11 April 1989, the accused filed an "Application for Bail on Appeal" 16 reiterating his earlier request that the bail bond for his provisional liberty pending appeal be set. This was subsequently denied by the trial court in its Order of 19 June 1989 on the ground that ". . . the accused has already been found guilty beyond reasonable doubt of the offense of rape and sentenced to Reclusion Perpetua and his appeal from the decision already approved by the Court . . .

." 17Thereupon, on 19 August 1989, the trial court issued a Commitment of Final Sentence turning over the person of the accused to the Director of Prisons in Muntinglupa, Metro Manila. 18 On 25 August 1989, the accused filed a motion to reconsider the RTC's 19 June 1989 Order denying his application for bail pending appeal, 19 but the same was denied in the Order of 6 September 1989. 20 In the meantime, the trial court, on 12 September 1989, transmitted to this Court the records of criminal Case No. 219. We received the same on 16 November 1989 and docketed the appeal as G.R. No. 90643. On 9 December 1989, the accused filed with this Court a special civil action for certiorari to set aside the aforementioned orders of the trial court denying his application for bail and his motion to reconsider the said denial. The petition was docketed as G.R. No. 91155. In the Resolution of 20 December 1989, 21 this Court required the respondents to comment on the petition. Then, on 18 June 1990, the said case was ordered consolidated with G.R. No. 90643. 22 The records of G.R. No. 91155 do not disclose if the respondents had actually filed the required comment. G.R. No. 91155 We shall first resolve G.R. No. 91155. Accused assails the trial court's refusal to grant his application for bail pending appeal on the ground that the same amounted to an undue denial of his constitutional right to bail. He contends that before his conviction by final judgment, he enjoys the constitutional presumption of innocence, and is therefore entitled to bail as a matter of right. There is no merit in the said petition. It is clear from Section 13, Article III of the 1987 Constitution Court, as amended, 24 that:
23

and Section 3, Rule 114 of the Revised Rules of

. . . before conviction bail is either a matter of right or of discretion. It is a matter of right when the offense charged is punishable by any penalty lower than reclusion perpetua. To that extent the right is absolute. xxx xxx xxx

Upon the other hand, if the offense charged is punishable by reclusion perpetua bail becomes a matter of discretion. It shall be denied if the evidence of guilt is strong. The court's discretion is limited to determining whether or not evidence of guilt is strong. But once it is determined that the evidence of guilt is not strong, bail also becomes a matter of right. . . . 25
The clear implication, therefore is that if an accused who is charged with a crime punishable by reclusion perpetua is convicted by the trial court and sentenced to suffer such a penalty, bail is neither a matter of right on the part of the accused nor of discretion on the part of the court. In such a situation, the court would not have only determined that the evidence of guilt is strong which would have been sufficient to deny bail even before conviction it would have likewise ruled that the accused's guilt has been proven beyond reasonable doubt. Bail must not then be granted to the accused during the pendency of his appeal from the judgment of conviction. Construing Section 3, Rule 114 of the 1985 Rules on Criminal Procedure, as amended, this Court, in the en bancResolution of 15 October 1991 in People vs. Ricardo Cortez, 26 ruled that: Pursuant to the aforecited provision, an accused who is charged with a capital offense or an offense punishable by reclusion perpetua, shall no longer be entitled to bail as a matter of right even if he appeals the case to this Court since his conviction clearly imports that the evidence of his guilt of the offense charged is strong.

In the instant case, the rape for which the accused was indicted is punishable by reclusion perpetua pursuant to Article 335 of the Revised Penal Code; he was convicted therefor and subsequently sentenced to serve that penalty. It is thus evident that the trial court correctly denied his application for bail during the pendency of the appeal. G.R. No. 90643 We now turn to the accused's appeal from the judgment of conviction. The inculpatory facts, proven by the prosecution and upon which the trial court based its judgment of conviction, are summarized by the trial court in its decision. Finding the same to be fully supported by the evidence adduced, We hereby adopt the said summary as follows: xxx xxx xxx (3) The evidence for the prosecution shows that in the morning of 26 November 1983, Merelyn Gine accompanied her father Agripino Gine to Barangay Naburacan, Matnog, Sorsogon, where he was going to work in the farm of Patrolman Nonito Galeria. Her father left her in the nipa hut of one Leovegildo Garra so she can cook his meal for lunch. She was alone in the hut. (4) While she was preparing to cook the meal, accused appeared from nowhere and inserted his T-shirt inside her mouth. Accused also held her hands and tore her pedal pant (sic). She tried to kick him but to no avail. After he was able to remove her pedal, she was threatened with a bolo and was warned that he will kill her if she shouted. The bolo which was presented in evidence as Exhibit C (sic) was 23 inches long including the handle. The sharp end of the bolo was pointed by the accused to her throat. Accused laid her down and it was in this position when (sic) the accused had sexually abused her by inserting his penis through her (sic) panty she was wearing which was torn and stained with her (Exhibits B, B1 and B2). She suffered extreme pain and her vagina started bleeding. She cried and wished that her father were around so that she could ask him to kill the accused. (5) Just as the accused consummated the rape, her father returned from the farm to inquire whether his meal was cooked already. He called for his daughter but she did not answer during the first call and on the second call he heard her answer "po" (meaning yes). Suddenly, the accused jumped out of the window with his short pants on but leaving behind in his hurry to escape, the T-shirt which he inserted inside the mouth of the victim and the bolo he used to threaten her. Her father gave chase but was not able to catch up with the accused. (6) When her father went gave inside the hut, he found her in a state of shock and (sic) was trying to get up but was swaying for she could hardly stand. It was at this instance when his daughter narrated to him the dastardly act perpetrated upon her by the accused. (7) On the same day, she and her father reported the incident to the police authorities in Matnog, Sorsogon, and an investigation was made. On that same day, the accused was apprehended. (8) From the police, went to the Irosin District Hospital for medical examination. Thereat, she was subjected to a medical examination by a certain Dr. Tito Garrido but he did not issue her a medical certificate. So she had another medical examination by Dr. Eddie Dorotan of the same hospital who issued her a medical certificate which was introduced in evidence as E and E1.

(9) At the time she was sexually abused, Merelyn Gine was only 13 years old (Exhibit D). She demonstrated to the Court the position in which she was raped by the accused. She

felt so ashamed after the rape and underwent so much suffering and pain like her father, which could not be compensated with money alone and wants justice done. 27
On the other hand, the accused capsulated his version of the incident in this manner: On November 26, 1983 at about 8:30 in the morning, accused Fortes on his way to the Nipa Hut which he used as a rest house met Agripino Gine, father of Complainant Merelyn Gine in the ricefield at Bgy. Naburacan, Matnog, Sorsogon where they both work and cultivate their respective ricelands. In that meeting Agripino asked permission from accused if her ( sic) daughter, Merelyn, could cook their lunch at the Nipa Hut, ("Payag" in local dialect), owned by the grandfather of accused Leovegeldo (sic) Garra. Accused who is a neighbor and family friend of Agripino (sic) in Bgy. Camachilis where they both reside gave his permission. Accused proceeded to the Nipa Hut owned by his grandfather for the purpose of preparing his own lunch. When accused arrived in the Nipa Hut, he saw Merelyn preparing their lunch. Accused waited for his turn while Merelyn was preparing their lunch. Accused spent his waiting time in repairing the plow (araro) which he used in the cultivation of the riceland. At this point in time his grandfather Leovegeldo (sic) Garra arrived. Merelyn Gine and accused who are known to each other being neighbors and family friends exchanged pleasanties (sic) and jokes. In the process, accused accidentally dropped the fish which he was about to cook for lunch outside the window. Accused passed through the window which is about half () meter from the ground to pick-up the fish. At this juncture, Agripino (sic) arrived from the ricefield at about 11:00 in the morning and called his daughter, Merelyn, to inquire if lunch was ready. Merelyn answered in the negative. Agripino got angry and scolded his daughter, Merelyn for failing to cook the lunch on time.

In the meantime, accused-appellant returned to the ricefield to pick-up his bottle of drinking water. He returned back to the Nipa Hut at about 12:00 noon and he saw inside the nipa hut, the following people: Agripino Gine, Joel, Mondoy, sons of Agripino and Dick Galeria son the owner of the riceland being cultivated, by Agripino Gine eating their lunch. 28
To bolster his defense, the accused presented two (2) other witnesses, namely Leovegildo Garra, his grandfather, and Celso Gardon, the Barangay Captain of Naburacan, Matnog. The trial court accorded full faith and credit to the prosecution's version; it was convinced beyond reasonable doubt that Merelyn fell victim to a sexual assault on the morning of 26 November 1983 which was perpetrated through force and intimidation. On that same day, both she and her father immediately reported the incident to the police authorities. She then submitted to a medical examination. There seems to be no logical reason for her or her father to concoct the charge of rape against the accused. During her testimony, Merelyn "showed an unmistakable determination to exact justice, from the man who had forcibly violated her and caused her early loss of virginity." She "has no motive other than to bring to justice the culprit who had grievously wronged her." 29 In his Brief, the accused, hereinafter referred to as the Appellant, urges this Court to reverse his conviction and acquit him on the ground that the trial court erred in: I . . . GIVING UNDUE WEIGHT TO THE UNCORROBORATED TESTIMONY OF PRIVATE COMPLAINANT. II . . . NOT GIVING DUE WEIGHT TO THE MEDICAL CERTIFICATE SHOWING THAT PRIVATE COMPLAINANT WAS NOT SEXUALLY ABUSED ON NOVEMBER 26, 1983.

III . . . NOT GIVING DUE WEIGHT TO THE TESTIMONY OF THE BGY. CAPTAIN WHERE THE ALLEGED CRIME WAS COMMITTED.

IV . . . NOT ACQUITTING THE ACCUSED-APPELLANT BECAUSE HIS GUILT HAS NOT BEEN PROVEN BEYOND REASONABLE DOUBT. 30
For his first assigned error, the appellant contends that the rape for which he was charged and subsequently convicted was not established by clear, positive and convincing evidence. He claims that the complainant's statement that she had her panty on while she was being raped is incredible, as "[E]xperience will show that it is physically [I]mpossible to perform and execute the act of sexual intercourse to woman with her panty on." 31 In support of the second assigned error, he asserts that the medical examination conducted by Eddie Dorotan, a government physician assigned to the Irosin District Hospital, which revealed that "there was no bleeding" and "no spermatozoa" 32 present, conclusively proved that the accused did not commit the crime of rape. The latter further contends that the trial court erred in believing the complainant's declaration that her panty was stained with her blood because, as he points out, there was no "corroborated (sic) evidence to prove that indeed the alleged blood stain is indeed the blood coming from the vagina of complainant." 33 As to his third ascribed error, the appellant faults the trial court for not giving due weight to the testimony of the Barangay Captain of the locality wherein the rape was committed. He further contends that since Barangay Captain Celso Gardon testified that he (Gordon) passed by the nipa hut and saw the complainant and her father Agripino together with other persons at around lunch time the time of the commission of the alleged rape Agripino should have immediately reported the sexual assault to him as he is the barangay captain. The appellant additionally assails the credibility of Agripino Gine, claiming that the latter failed to corroborate his daughter's story that there was blood on the spot where she was purportedly raped and that her panty and pants were torn by the appellant. Moreover, it is averred that Agripino did not even describe to the court his daughter's attire when he found her in the nipa hut. Appellant then faults the trial court for concluding that he had presented the defense of alibi when the records reveals that no such defense was offered by him. Appellant's last assigned error is but a summation of the previous three (3) errors; he concludes that the totality of the prosecution's evidence creates sufficient doubt as to his guilt. Hence, he concludes that he is entitled to an acquittal. Our careful review of the records and painstaking evaluation of the evidence adduced by the parties yield nothing to support the assigned errors, and lead Us to the inevitable conclusion that the culpability of the appellant has been proven beyond reasonable doubt. This appeal must therefore be dismissed for palpable lack of merit. The victim narrated her ordeal in a simple, yet candid and straightforward manner as evidenced by the transcripts of her testimony, the pertinent portions of which read: FISCAL GENOVA What happened while you were getting the kettle preparatory to cooking your meal? A Suddenly, this Agustin Fortes appeared from nowhere and tried to embrace me. Q In what part of your body? A He tried to insert his T-shirt in my mouth. xxx xxx xxx

Q What happened after you were held and a piece of T-shirt put (sic) inside your mouth? A He had sexual intercourse with me. Q Before he had sexual intercourse with you, what did he do? A He torn (sic) my panty and my pedal. Q Do you mean to tell this Court that you were dressed during that time? A Yes, sir. Q And how did Agustin Fortes tried (sic) to torn (sic) your pedal and panty? A When he was trying to hold my hands, he was pulling my panty at the same time tearing my pedal and I was kicking him. Q I am showing to you clothes from the Police Station labeled "Criminal Case No. 3226" which I presumed is the criminal case number . . . a panty with dark stain and a pedal. I am showing to you these in connection to what you just stated. This is from the Police Station of Matnog. A This is the pedal I was wearing at the time. Q When you were wearing this, was it already torn? A Not yet. Q How about this panty of yours, is this already in this kind (sic)? A No, sir. Q What is this dark stain here . . . which you could see? A That is a blood. Q Whose blood? A Mine. Q How was this torn? The pedal . . . no the panty? A He was the one who torn (sic) my panty. Q And in the process this was removed from your body? A Yes sir. Q What happened now after this pedal also was removed? A I was able to shout but he warned me that he is going to kill me.

Q When he stated that he was going to kill you, what was in his possession? A A bolo. Q I am showing to you a bolo wrapped in a coupon bond, 23 inches labelled "People of the Philippines versus Agustin Fortes November 26, 1983." What is the relation of this bolo to the bolo that was used? A This is the bolo that was used. xxx xxx xxx Q Now, how was this bolo being used in your body? A He was trying to thrust it below my neck. Q With what hand was the accused using this? A Left. Q When you say it was being poked in your body, which part of the bolo? A The sharp end. Q On what part of your body was it being poked? A On my neck. xxx xxx xxx Q Now, you said you were sexually abused by Agustin fortes, how was this sexual abuse made in (sic) your body? A By holding my hands and laying me down on the floor and he lied (sic) down on top of me . . . and then he performed the sexual intercourse. Q When you said "ikiti" (sexual intercourse), my question is, did the penis of the accused penetrate your vagina? A Yes sir. Q And while he was on that act of sexual intercourse with his penis inside your vagina, what happened then? A I felt pain. And my vagina started bleeding. Q And what happened next? A And then I cried and I remembered that if only my father is there I will ask him to kill the accused. Q Did your father arrive?

A Yes sir and Agustin Fortes jumped out of the window.

34

The jumping of the appellant out of the window was witnessed by Merelyn's father whose testimony thereon was further bolstered during cross-examination: ATTY. ZULUETA: xxx xxx xxx Q When you returned to the hut of Leovegildo Garra, what happened? A When I was about in a distance of (sic) three meters from the house of Leovegildo (sic) Garra, I called for my daughter. My first call, there was no answer, and on my second call, there was an answer "po", then, suddenly, somebody jumped out of the window in the person of Agustin Fortes. Q When you saw the alleged accused in this case jumped (sic) out of the window of the hut of Leovegildo Garra, what did you do? A Instead of trying to run after Agustin Fortes, I felt apprehensive, and so, I went to the succor of my daughter which (sic) was speechless. xxx xxx xxx Q After you went to the house of Leovegildo Garra, what happened there? A That (sic) my daughter was raped. Q How come that you knew that your daughter was raped?

A Because my daughter herself told me. 35

Agripino's daughter was in a sitting position and could hardly stand when he saw her. 36 He thus decided to report the incident to the police authorities immediately. Thus, both he and Merelyn proceeded to the police station where they were consequently interrogated. Thereafter, the appellant was apprehended. 37 From Merelyn's testimony, it is evident that the appellant had carnal knowledge of her through force and intimidation. He gagged her first with a t-shirt and then forced her into the sexual act by threatening to kill her with his bolo. Her testimony on this point was even further strengthened and enhanced when, during cross-examination, counsel for the appellant gambled on the fate of the latter by asking Merelyn to show how the rape was committed. Merelyn then demonstrated how the appellant gripped her hands and pointed the bolo to her neck. 38 As to the alleged impossibility of the commission of the sexual act because of the fact that Merelyn's panty was not actually removed, the appellant seems to have forgotten that it was he, through the cross-examination of his lawyer, who elicited from Merelyn the declaration that his penis was inserted through a hold in the said panty. Thus: ATTY ZULUETA: xxx xxx xxx

Q You have said that the accused had forcefully made sexual intercourse with you. How come that (sic) the penis penetrated your vagina? A When his right hand was holding my hands he unzipped his pants and put out his penis and inserted his penis to (sic) my vagina. Q When the accused conducted sexual intercourse with you, do (sic) you have your panty? A Yes sir. There is a hole in my panty where he inserted his penis to (sic) my vagina. Q While the accused was having sexual intercourse with you, what happened next?

A My vagina was bleeding because it was very painful.

39

Neither may the medical certificate (Exhibit "E") issued by Dr. Eddie Dorotan be of any help to the appellant. The said certificate does not, contrary to the latter's claim, prove that Merelyn did not have sexual intercourse because of the findings therein reported that there was no bleeding, the vagina admitted two (2) fingers and the vaginal fluid contained no spermatozoa. Again, the appellant conveniently forgot that Dr. Dorotan examined Merelyn only on 28 November 1983 at 9:45 o'clock in the morning, 40 or two (2) days after the incident. By that time, the bleeding, which had taken place earlier, may no longer have been noticeable and the spermatozoa may no longer have been present. It is settled that the absence of spermatozoa does not disprove the consummation of rape. The important consideration is not the emission of semen, but the penetration by the male organ. 41 It must likewise be emphasized that Dr. Tito Garrido of the District Hospital of Irosin, the physician who examined Merelyn in the afternoon of 26 November 1983, did not issue a medical certificate, although he promised to deliver one in Matnog. It has been shown that Dr. Garrido reneged on this pledge. Furthermore, during trial, complainant's father claimed that he had later learned that Dr. Garrido is related to the appellant. 42 This assertion was not even rebutted by the defense. Moving on, this Court is not persuaded by the appellant's contention that if Merelyn had in fact been raped, then either she or her father should have first informed the barangay captain about the incident. Suffice it to say, reporting the commission of a crime to a barangay captain is not a prerequisite for the formal institution of criminal charges. Even under P.D. No. 1508, the governing law then, rapes was not among the crimes which required referral to the Barangay Lupon for the purpose of seeking an amicable settlement. As a matter of fact, it was among those excepted from such a referral considering that the penalty imposable is more than thirty (30) days imprisonment. 43 If the complainant and her father seemed to have "by-passed" the barangay captain and instead reported the incident directly to the police, it is quite obvious that they wanted immediate action to ensure the appellant's arrest and forestall any possible escape on his part. Finally, the appellant's contention that the trial court erroneously characterized his defense as one of alibi, is without any basis. The trial court actually characterized the appellant's defense as one of "alibi and absolute denial." 44 Besides, the "alibi" aspect thereof is not entirely inaccurate for in fact, as shown by his own story, the appellant went back to the ricefield to retrieve his bottle of drinking water before returning to the nipa hut at around 12:00 o'clock noon. In effect, he suggested that he was not at the scene of the crime at the time the sexual assault was committed. All told, We have in this case a 13-year old barrio lass who: immediately revealed the commission of the heinous crime to her father just as the appellant consummated the act and jumped out of the window to escape, forthwith reported it to the police authorities who, after having heard her story, apprehended the appellant; thereafter, in the afternoon of the same day, voluntarily submitted to a medical examination of her private parts; submitted again to a second medical examination on her private parts on 28 November 1983; underwent the ordeal of a public trial; and, upon demand by the appellant's counsel, even demonstrated as part of the cross-examination how she was raped. We need no further evidence to convince Us that indeed, the complainant was raped by the appellant. We have

repeatedly held that when a woman admits that she has been raped, she says in effect all that is necessary to show that rape had been committed. A complainant would make public the offense, undergo the troubles and humiliation of public trial and endure the ordeal of testifying to all the gory details if she had not in fact been raped, for no decent Filipina would publicly admit that she has been raped unless it is the truth. 45 Moreover, the appellant has not shown that the complainant and her father were actuated by any ulterior motives which could have induced them to falsely implicate him in the commission of the crime. It is settled that when there is no evidence to show any improper motive on the part of the prosecution witnesses to testify falsely against an accused, the logical conclusion is that no such improper motive existed, and their testimonies are worthy of full faith and credit. 46 Indeed, if an accused had really nothing to do with the crime, it is against the natural order of events and of human nature and against the presumption of good faith that the prosecution witness would falsely testify against the former. 47 We thus affirm the decision appealed from except as to the matter of the indemnity, which is hereby increased from P20,000.00 to P40,000.00 pursuant to the current policy of the Court. WHEREFORE, judgment is hereby rendered: 1) In G.R. No. 90643, AFFIRMING the appealed Decision in Criminal Case No. 219 of Branch 55 of the Regional Trial Court, Fifth Judicial Region, at Irosin, Sorsogon, with the modification of the indemnity which is increased from P20,000.00 to P40,000.00; and 2) In G.R. No. 91155, DENYING, for lack of merit, the petition.

11. G.R. No. 82211-12 March 21, 1989

TERESITA MONTOYA, petitioner, vs. TERESITA ESCAYO, JOY ESCAYO, AIDA GANANCIAL, MARY ANN CAPE, CECILIA CORREJADO, ERLINDA PAYPON and ROSALIE VERDE, AND NATIONAL LABOR RELATIONS COMMISSION,respondents. Rolando N. Medalla and Segundo Y Chua for petitioner. The Solicitor General for public respondent. Archie S. Baribar for private respondents.

SARMIENTO, J.: This petition for certiorari seeks the annullment and setting aside of the resolution 1 9dated August 20, 1987 of the National Labor Relations Commission (NLRC), Third Division, which reversed and set aside the order dated September 27, 1985 of Labor Arbiter Ethelwoldo R. Ovejera of the NLRC's Regional Arbitration Branch No. VI, Bacolod City, dismissing the complaint filed by the private respondents against the petitioner. This petition raises a singular issue, i.e., the applicability of Presidential Decree (P.D.) No. 1508, more commonly known as the Katarungang Pambarangay Law, to labor disputes. The chronology of events leading to the present controversy is as follows: The private respondents were all formerly employed as salesgirls in the petitioner's store, the "Terry's Dry Goods Store," in Bacolod City. On different dates, they separately filed complaints for the collection of sums of money against the petitioner for alleged unpaid overtime pay, holiday pay, 13th month pay, ECOLA, and service leave pay: for violation of the minimum wage law, illegal dismissal, and attorney's fees. The complaints, which were originally treated as separate cases, were subsequently consolidated on account of the similarity in their nature. On August 1, 1984, the petitioner-employer moved (Annex "C" of Petition) for the dismissal of the complaints, claiming that among others, the private respondents failed to refer the dispute to the Lupong Tagapayapa for possible settlement and to secure the certification required from the Lupon Chairman prior to the filing of the cases with the Labor Arbiter. These actions were allegedly violative of the provisions of P.D. No. 1508, which apply to the parties who are all residents of Bacolod City. Acting favorably on the petitioner's motion, Labor Arbiter Ethelwoldo R. Ovejera, on September 27, 1985, ordered the dismissal of the complaints. The private respondents sought the reversal of the Labor Arbiter's order before the respondent NLRC. On August 20, 1987, the public respondent rendered the assailed resolution reversing the order of Ovejera, and remanded the case to the Labor Arbiter for further proceedings. A motion for reconsideration was filed by the petitioner but this was denied for lack of merit on October 28, 1987. Hence, this petition. It is the petitioner's contention that the provisions of the Katarungang Pambarangay Law (P.D. No. 1508) relative to the prior amicable settlement proceedings before the Lupong Tagapayapa as a jurisdictional requirement at the trial level apply to labor cases. More particularly, the petitioner insists that the failure of the private respondents to first submit their complaints for possible conciliation and amicable settlement in the proper barangay court in Bacolod City and to secure a certification from the Lupon Chairman prior to their filing with the Labor Arbiter, divests the Labor Arbiter, as well as the respondent Commission itself, of jurisdiction over these labor controversies and renders their judgments thereon null and void. On the other hand, the Solicitor General, as counsel for the public respondent NLRC, in his comment, strongly argues and convincingly against the applicability of P.D. No. 1508 to labor cases.

We dismiss the petition for lack of merit, there being no satisfactory showing of any grave abuse of discretion committed by the public respondent. The provisions of P.D. No. 1508 requiring the submission of disputes before the barangay Lupong Tagapayapa prior to their filing with the court or other government offices are not applicable to labor cases. For a better understanding of the issue in this case, the provisions of P.D. No. 1508 invoked by the petitioner are quoted: SEC. 6. Conciliation pre-condition to filing of complaint. No complaint, petition, action or proceeding involving any matter within the authority of the Lupon as provided in Section 2 hereof shall be filed or instituted in court or any other government office for adjudication unless there has been a confrontation of the parties before the Lupon Chairman or the Pangkat and no conciliation or settlement has been reached as certified by the Lupon Secretary or the Pangkat Secretary, attested by the Lupon or Pangkat Chairman, or unless the settlement has been repudiated. However, the parties may go directly to court in the following cases: (1) Where the accused is under detention; (2) Where a person has otherwise been deprived of per sonal liberty calling for habeas corpus proceedings; (3) Actions coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property and support pendente lite; and (4) Where the action may otherwise be barred by the Statute of Limitations. As correctly pointed out by the Solicitor General in his comment to the petition, even from the three "WHEREAS" clauses of P.D. No. 1508 can be gleaned clearly the decree's intended applicability only to courts of justice, and not to labor relations commissions or labor arbitrators' offices. The express reference to "judicial resources", to "courts of justice", "court dockets", or simply to "courts" are significant. On the other band, there is no mention at all of labor relations or controversies and labor arbiters or commissions in the clauses involved. These "WHEREAS" clauses state: WHEREAS, the perpetuation and official recognition of the time-honored tradition of amicably settling disputes among family and barangay members at the barangay level without judicial resourceswould promote the speedy administration of justice and implement the constitutional mandate to preserve and develop Filipino culture and to strengthen the family as a basic social institution; WHEREAS, the indiscriminate filing of cases in the courts of justice contributes heavily and unjustifiably to the congestion of court dockets, thus causing a deterioration in the quality of justice; WHEREAS, in order to help relieve the courts of such docket congestion and thereby enhance the quality of Justice dispensed by the courts, it is deemed desirable to formally organize and institutionalize a system of amicably settling disputes at the barangay level; (Emphasis supplied.) In addition, Letter of Instructions No. 956 and Letter of Implementation No. 105, both issued on November 12, 1979 by the former President in connection with the implementation of the Katarungang Pambarangay Law, affirm this conclusion. These Letters were addressed only to the following officials: all judges of the Courts of

first Instance, Circuit Criminal Courts, Juvenile and Domestic Relations Courts, Courts of Agrarian Relations, City Courts and Municipal Courts, and all Fiscals and other Prosecuting Officers. These presidential issuances make clear that the only official directed to oversee the implementation of the provisions of the Katarungang Pambarangay Law (P.D. No. 1508) are the then Minister of Justice, the then Minister of Local Governments and Community Development, and the Chief Justice of the Supreme Court. If the contention of the petitioner were correct, the then Minister (now Secretary) of Labor and Employment would have been included in the list, and the two presidential issuances also would have been addressed to the labor relations officers, labor arbiters, and the members of the National Labor Relations Commission. Expressio unius est exclusio alterius. Nor can we accept the petitioner's contention that the "other government office" referred to in Section 6 of P.D. No. 1508 includes the Office of the Labor Arbiter and the Med-Arbiter. The declared concern of the Katarungan Pambarangay Law is "to help relieve the courts of such docket congestion and thereby enhance the quality of justice dispensed by the courts." Thus, the" other government office" mentioned in Section 6 of P.D. No. 1508 refers only to such offices as the Fiscal's Office or, in localities where there is no fiscal, the Municipal Trial Courts, where complaints for crimes (such as those punishable by imprisonment of not more than 30 days or a, fine of not more than P 200.00) falling under the jurisdiction of the barangay court but which are not amicably settled, are subsequently filed for proper disposition. But, the opinion of the Honorable Minister of Justice (Opinion No. 59, s. 1983) to the contrary notwithstanding, all doubts on this score are dispelled by The Labor Code Of The Philippines (Presidential Decree No. 442, as amended) itself. Article 226 thereof grants original and exclusive jurisdiction over the conciliation and mediation of disputes, grievances, or problems in the regional offices of the Department of Labor and Employ- ment. It is the said Bureau and its divisions, and not the barangay Lupong Tagapayapa, which are vested by law with originaland exclusive authority to conduct conciliation and mediation proceedings on labor controversies before their endorsement to the appropriate Labor Arbiter for adjudication. Article 226, previously adverted to is clear on this regard. It provides: ART. 226. Bureau of Labor Relations.- The Bureau of Labor Relations and the Labor relations divisions in the regional officer of the Department of Labor shall have original and exclusive authority to act, at their own initiative or upon request of either or both parties, on all interunion and intra-union conflicts, and all disputes, grievances or problems arising from or affecting labor-management relations in all workplaces whether agricultural or nonagricultural, except those arising from the implementation or interpretation of collective bargaining agreements which shall be the subject of grievance procedure and/or voluntary arbitration. The Bureau shall have fifteen (15) working days to act on all labor cases, subject to extension by agreement of the parties, after which the Bureau shall certify the cases to the appropriate Labor Arbiters. The 15-working day deadline, however, shall not apply to cases involving deadlocks in collective bargaining which the Bureau shall certify to the appropriate Labor Arbiters only after all possibilities of voluntary settlement shall have been tried. Requiring conciliation of labor disputes before the barangay courts would defeat the very salutary purposes of the law. Instead of simplifying labor proceedings designed at expeditious settlement or referral to the proper court or office to decide it finally, the position taken by the petitioner would only duplicate the conciliation proceedings and unduly delay the disposition of the labor case. The fallacy of the petitioner's submission can readily be seen by following it to its logical conclusion. For then, if the procedure suggested is complied with, the private respondent would have to lodge first their complaint with the barangay court, and then if not settled there, they would have to go to the labor relations division at the Regional Office of Region VI of the Department of Labor and Employment, in Bacolod City, for another round of conciliation proceedings. Failing there, their long travail would continue to the Office of the Labor Arbiter, then to the NLRC, and finally to us. This suggested procedure would destroy the salutary purposes of P.D. 1508 and of The Labor Code Of The Philippines. And labor would then be given another unnecessary obstacle to hurdle. We reject the petitioner's submission. It does violence to the constitutionally mandated policy of the State to afford full protection to labor. 2

Finally, it is already well-settled that the ordinary rules on procedure are merely suppletory in character vis-a-vis labor disputes which are primarily governed by labor laws. 3 And "(A)ll doubts in the implementation and interpretation of this Code (Labor), including its implementing rules and regulations, shall be resolved in favor of labor. 4 WHEREFORE, the petition is DISMISSED. Costs against the petitioner.

12. G.R. No. 157830 November 17, 2005

DANTE M. PASCUAL, represented by REYMEL R. SAGARIO, Petitioner, vs. MARILOU M. PASCUAL, Respondent. DECISION CARPIO MORALES, J.: On challenge via Petition for Review on Certiorari is the February 10, 2003 Order of the Regional Trial Court (RTC) of Isabela, Branch 23 at Roxas dismissing, on motion of herein respondent Marilou M. Pascual, the complaint filed against her by her brother-herein petitioner Dante M. Pascual, represented by his attorney-infact Reymel R. Sagario (Sagario), for non-compliance with the conciliation provision-pre condition to filing of complaint in court under R.A. 7160 (the Local Government Code). Petitioner, a permanent resident of the United States of America, appointed Sagario as his attorney-in-fact by a Special Power of Attorney (SPA) dated April 10, 2002: 1. To file a case for the cancellation of Transfer Certificate of Title No. T-271656 issued in the name of Marilou M. Pascual as well as the Deed of Sale of Registered Land (Dec. No. 639; Page No. 52; Book No. XXI; Series of 1994) and/or Reconveyance at the appropriate court; 2. To collect the monthly rentals from the tenant; 3. To enter into amicable settlement with Marilou M. Pascual or any other mode of payment/and/or dispute resolution; 4. To execute and sign any and all papers, contracts/documents which may be necessary relative to the above acts. x x x1 Pursuant to the SPA, Sagario filed on October 14, 2002 before the Isabela RTC at Roxas a complaint entitled "Dante M. Pascual, plaintiff v. Marilou M. Pascual and Register of Deeds, Defendants ," docketed as Civil Case No. Br. 23-713-02, for Annulment of Transfer Certificate of Title No. T-271657 of Isabela and Deed of Absolute Sale of Registered Land and/or Reconveyance with Damages.2 To the Complaint the defendant-herein respondent Marilou M. Pascual filed a Motion to Dismiss3 on two grounds one of which was non-compliance with the requirement under Section 412 of the Local Government Code,4 she contending that there is no showing that the dispute was referred to the barangay court before the case was filed in court. By the assailed Order of February 10, 2003,5 Branch 23 of the Isabela RTC at Roxas granted respondents Motion to Dismiss in this wise: . . . RA 7160 repealing P.D. 1508 otherwise known as the Revised Katarungang Pambarangay provides under Section 409 "All disputes involving real property or any interest therein shall be brought in the barangay where the real property or the larger portion thereof is situated." Hence, the reliance of the plaintiff on Section 408 of R.A. 7160 is incorrect. When real property or any interest therein is involved, the dispute shall be filed before the barangay where the property is located, regardless of the residence of the parties. Besides, it is incorrect to say that the parties are not residents of the same place, Vira, Roxas, Isabela. The Attorney-in-fact of the plaintiff in the person of Reymel R. Sagario is a resident of Vira, Roxas, Isabela, and he substitute (sic)Dante Pascual by virtue of said Special Power of Attorney. Hence, said Attorney-in-fact should have brought the dispute before barangay Vira, Roxas, Isabela, where the property is located. In the

case of Royales vs. Intermediate Appellate Court 127 SCRA 470, "Ordinarily, non-compliance with the condition precedent prescribed by P.D. 1508 could affect the sufficiency of the plaintiffs cause of action and make his complaint vulnerable to dismissal on ground of lack of cause of action or prematurity." 6 (Emphasis and underscoring supplied) Petitioners Motion for Reconsideration7 of the above-said order was denied by Order of March 24, 2003:8 xxx Consequently, the Court is [of] the opinion that the said Attorney-in-fact shall be deemed to be the real party in interest, reading from the tenor of the provisions of the Special Power of Attorney. Being a real party in interest, the Attorney-in-fact is therefore obliged to bring this case first before the Barangay Court. Sec. 3, Rule 3 of the Rules of Court provides that "Where the action is allowed to be prosecuted or defended by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed to be the real party in interest. xxx Being the real party in interest, the Attorney-in-fact may therefore bring the necessary complaint before the Lupon Tagapayapa and appear in person as if he is the owner of the land.9 (Emphasis and underscoring supplied) Hence, the present petition questioning "the palpable legal errors" of the RTC. Petitioner argues that since he, not his attorney-in-fact Sagario, is the real party in interest, and since he actually resides abroad, the lupon would have no jurisdiction to pass upon the dispute involving real property, he citingAgbayani v. Belen.10 Respondent submits, on the other hand, that Section 408, paragraph (f), of the Local Government Code, is qualified by paragraph (c) of Section 409 of the same Code the latter of which provides that "[a]ll disputes involving real property or any interest therein shall be brought in the barangay where the real property is located," hence, the use of the word "shall" makes it mandatory for the bringing of the dispute before the lupon. That attorney-in-fact Sagario is a resident of the same barangay as that of hers, respondent argues in any event, brings the matter under the jurisdiction of the lupon, for Sagario, following Section 3 of Rule 3 of the 1997 Rules of Civil Procedure which provides: Sec. 3. Representative as parties. - Where the action is allowed to be prosecuted or defended by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed to be the real party in interest. A representative may be a trustee of an express trust, a guardian, an executor or administrator, or a party authorized by law or these Rules. An agent acting in his own name for the benefit of an undisclosed principal may sue or be sued without joining the principal except when the contract involves things belonging to the principal, being a substitute, becomes the real party-in-interest. Respondents submissions do not lie. The pertinent provisions of the Local Government Code read: SEC. 408. Subject Matter for Amicable Settlement; Exception Thereto. The lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: (a) Where one party is the government or any subdivision or instrumentality thereof;

(b) Where one party is a public officer or employee, and the dispute relates to the performance of his official functions; (c) Offenses punishable by imprisonment exceeding one (1) year or a fine exceeding Five Thousand pesos (P5,000.00); (d) Offenses where there is no private offended party; (e) Where the dispute involves real properties located in different cities or municipalities unless the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (f) Disputes involving parties who actually reside in barangays of different cities or municipalities, except where such barangay units adjoin each other and the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; and (g) Such other classes of disputes which the President may determine in the interest of justice or upon the recommendation of the Secretary of Justice. The court in which non-criminal cases not falling within the authority of the lupon under this Code are filed may, at any time before trial, motu proprio refer the case to the lupon concerned for amicable settlement. (Emphasis supplied) SEC. 409. Venue. (a) Disputes between persons actually residing in the same barangay shall be brought for amicable settlement before the lupon of said barangay . (b) Those involving actual residents of different barangays within the same city or municipality shall be brought in the barangay where the respondent or any of the respondents actually resides, at the election of the complainant. (c) All disputes involving real property or any interest therein shall be brought in the barangay where the real property or the larger portion thereof is situated. (d) Those arising at the workplace where the contending parties are employed or at the institution where such parties are enrolled for study shall be brought in the barangay where such workplace or institution is located. Objections to venue shall be raised in the mediation proceedings before the punong barangay; otherwise, the same shall be deemed waived. Any legal question which may confront the punong barangay in resolving objections to venue herein referred to may be submitted to the Secretary of Justice or his duly designated representative whose ruling thereon shall be binding. (Emphasis supplied) In the 1982 case of Tavora v. Veloso,11 this Court held that where the parties are not actual residents in the same city or municipality or adjoining barangays, there is no requirement for them to submit their dispute to thelupon as provided for in Section 6 vis a vis Sections 2 and 3 of P.D. 1508 (Katarungang Pambarangay Law). [B]y express statutory inclusion and exclusion, the Lupon shall have no jurisdiction over disputes where the partiesare not actual residents of the same city or municipality, except where the barangays in which they actually reside adjoin each other. (Underscoring supplied) In the 2000 case of Vercide v. Hernandez,12 this Court, noting that the Tavora ruling, reiterated in other cases including the 1996 case of Agbayani13 cited by petitioner, was decided under the provisions of P.D. No. 1508 (Katarungang Pambarangay) Law which were, except for some modifications, echoed in Sections 408-409 of the Local Government Code which took effect on January 1, 1992, held that the Tavora ruling remained. To construe the express statutory requirement of actual residency as applicable to the attorney-in-fact of the party-plaintiff, as contended by respondent, would abrogate the meaning of a "real party in interest" as defined

in Section 2 of Rule 314 of the 1997 Rules of Court vis a vis Section 3 of the same Rule which was earlier quoted but misread and misunderstood by respondent. In fine, since the plaintiff-herein petitioner, the real party in interest, is not an actual resident of the barangay where the defendant-herein respondent resides, the local lupon has no jurisdiction over their dispute, hence, prior referral to it for conciliation is not a pre-condition to its filing in court. The RTC thus erred in dismissing petitioners complaint. WHEREFORE, the petition is granted. The assailed February 10, 2003 Order, as well as the March 24, 2003 Order denying reconsideration of the first, of Branch 23 of the Regional Trial Court of Isabela at Roxas is SET ASIDE. Said court is accordingly directed to reinstate Civil Case No. 23-713-02 to its docket and take appropriate action thereon with dispatch.

13. [A.M. No. MTJ-00-1265. April 6, 2000]

VALENCIDES VERCIDE, complainant, vs. JUDGE PRISCILLA T. HERNANDEZ, Fifth Municipal Circuit Trial Court, Clarin and Tudela, Misamis Occidental, respondent
. francis

DECISION
MENDOZA, J.: This is a complaint filed against Judge Priscilla T. Hernandez of the Fifth Municipal Circuit Trial Court, Clarin and Tudela, Misamis Occidental, charging her with grave abuse of authority and ignorance of the law for her dismissal of a case which complainant Valencides Vercide and his wife had filed against Daria Lagas Galleros for recovery of possession of a piece of land. The land is located in Upper Centro, Tudela, Misamis Occidental. Defendant Galleros is a resident of the same municipality, while complainant and his wife are residents of Dipolog City. Because of this fact, the case was filed in court without prior referral to the Lupong Tagapamayapa. However, this matter was raised by defendant in her answer as an affirmative defense, and respondent, in her order of July 15, 1997, ordered the dismissal of the case without prejudice to the prosecution of the counterclaim pleaded by the defendant in her answer. In support of her order, respondent cited P.D. No. 1508, 3 of which provides: Venue. - Disputes between or among persons actually residing in the same barangay shall be brought for amicable settlement before the Lupon of said barangay. Those involving actual residents of different barangays within the same city or municipality shall be brought in the barangay where the respondent or any of the respondents actually resides, at the election of the complainant. However, all disputes which involve real property or any interest therein shall be brought in the barangay where the real property or any part thereof is situated. (Emphasis added) Complainant and his wife moved for a reconsideration, citing the following provisions of R.A. 7160, "The Local Government Code of 1991": SEC. 408. Subject matter for Amicable Settlement; Exception Thereto . The lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: (a) Where one party is the government of any subdivision or instrumentality thereof; (b) Where one party is a public officer or employee, and the dispute relates to the performance of his official functions;

(c) Offenses punishable by imprisonment exceeding one (1) year or a fine exceeding Five Thousand pesos (P5,000.00); (d) Offenses where there is no private offended party; (e) Where the dispute involves real property located in different cities or municipalities unless the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (f) Disputes involving parties who actually reside in barangays of different cities or municipalities, except where such barangay units adjoin each other and the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (g) Such other classes of disputes which the President may determine in the interest of justice or upon recommendation of the Secretary of Justice. marie The court in which the non-criminal cases not falling within the authority of the lupon under this Code are filed may, at any time before trial, motu proprio refer the case to the lupon concerned for amicable settlement. SEC. 409. Venue. - (a) Disputes between persons actually residing in the same barangay shall be brought for amicable settlement before the lupon of said barangay. (b) Those involving actual residents of different barangays within the same city of municipality shall be brought in the barangay where the respondent or any of the respondents actually resides, at the election of the complainant. (c) All disputes involving real property or any interest therein shall be brought in the barangay where the real property or the larger portion thereof is situated. (d) Those arising at the workplace where the contending parties are employed or at the institution where such parties are enrolled for study shall be brought in the barangay where such workplace or institution is located. Objections to venue shall be raised in the mediation proceedings before the punong barangay; otherwise, the same shall be deemed waived. Any legal question which may confront the punong barangay in resolving objections to venue herein referred to may be submitted to the Secretary of Justice or his duly designated representative whose ruling thereon shall be binding.

They argued that under 408(f), in relation to 409(c), where the parties to a dispute involving real property or any interest therein are not actual residents of the same city or municipality or of adjoining barangays, prior resort to barangay conciliation is not required. However, respondent denied the motion. In her order dated September 9, 1997, respondent stated: The Court after taking into consideration the Motion for Reconsideration and the ground relied upon by the counsel finds that counsel for the plaintiffs failed to correlate Sections 408 and 409 of Republic Act No. 7160 and to consider Rule VIII, paragraph (a) of the Katarungang Pambarangay Rules, the rules and regulations [of] which were promulgated to implement Sections 399 to 422, Chapter 7, Title One Book III and Section 515, Book IV of R.A. No. 7160, otherwise known as the Katarungang Pambarangay Law, to wit: "RULE VIII - PRE-CONDITION FOR FORMAL ADJUDICATION Conciliation, pre-condition for filing of complaint in court or government office. novero (a) No individual may go directly to court or to any government office for adjudication of his dispute with another individual upon any matter falling within the authority of the Punong Barangay or Pangkat ng Tagapagkasundo to settle under these Rules, unless, after personal confrontation of the parties before them earnest efforts to conciliate have failed to result in a settlement or such settlement has been effectively repudiated." and also Rule VI, Section 3 paragraph (c) of the same Katarungang Pambarangay Rules which provides: "Rule VI - Amicable Settlement of Disputes Section 3. Venue. The place of settlement shall be subject to the following rules: .... (c) Dispute involving real property shall be brought for settlement in the Barangay where the real property or larger portion thereof is situated.

From the provisions of the above-cited Rules it was very clear that parties whose disputes involved real property should first br[ing] the said dispute before the barangay where the property was located, and that [because of] failure to bring the dispute before the Barangay for conciliation no action may be filed in court for final adjudication of the said dispute. That parties should first comply with the provisions of the Katarungang Pambarangay Law before the Court can acquire jurisdiction over the complaint. That non-compliance of the plaintiff to the requirement of the Katarungang Pambarangay Law was admitted by her in paragraph 3 of the complaint. Her allegation of non-compliance with the mandatory requirement of Lupon Conciliation before the filing of the complaint, in a way divest[s] the Court of its jurisdiction over the case. In the 1997 Rules of Civil Procedure, Rule 16, Section 1, paragraph (j) provides: "That a condition precedent for filing the claim has not been complied with" WHEREFORE, in view of the foregoing, the Motion for Reconsideration is hereby denied. Complainant alleges that in dismissing Civil Case No. 295, respondent judge committed "(a) Grave abuse of authority by knowingly rendering an unjust and unlawful order; (b) Ignorance of the law in its highest order, she being a judge; (c) Grave disobedience to the jurisprudence laid down by the Supreme Court of the Philippines on the matter of exemption of lupon conciliation of contending parties who are not residen[ts] of the same city or municipality." He states that respondent "practically threw several decisions of the Supreme Court on the matter out of the window and obviously followed hook, line and sinker the arguments of the [defendant] Daria Galleros." In answer, respondent judge claims that she merely followed the law in dismissing the case. She prays that the complaint against her be dismissed and that complainant be ordered to stop harassing her just because he had not been able to obtain the relief he wanted in Civil Case No. 295. nigel In its memorandum dated February 29, 2000, the Office of the Court Administrator recommends the dismissal of this case on the ground that the "issue [raised] is purely judicial and is best resolved by a court of competent jurisdiction" and that, even if respondent had erred, she should not be held administratively liable since there is no allegation that she acted in bad faith or knowingly rendered an unjust judgment. In Tavora v. Veloso,[1] this Court already ruled that where parties do not reside in the same city or municipality or in adjoining barangays, there is no requirement for them to submit their dispute involving real property to the Lupong Tagapamayapa. As explained in that case:

The sole issue raised is one of law: Under the given facts, is the respondent judge barred from taking cognizance of the ejectment case pursuant to Sec. 6 of PD 1508 establishing a system of amicably settling disputes at the barangay level? The section reads: "SECTION. 6. Conciliation, precondition to filing of complaint. - No complaint, petition, action or proceeding involving any matter within the authority of the Lupon as provided in Section 2 hereof shall be filed or instituted in court or any other government office for adjudication unless there has been a confrontation of the parties before the Lupon Chairman or the Pangkat and no conciliation or settlement has been reached as certified by the Lupon Secretary or the Pangkat Secretary, attested by the Lupon or Pangkat Chairman, or unless the settlement has been repudiated. . . ." (Italics supplied) For the above provision to be operative, the controversy must be within the jurisdiction of the Lupong Tagapayapa (Lupon or Barangay court). On this point, the relevant provisions of PD 1508 are: "SECTION 2. Subject matters for amicable settlement. - The Lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: (1) Where one party is the government, or any subdivision or instrumentality thereof; (2) Where one party is a public officer or employee, and the dispute relates to the performance of his official functions; (3) Offenses punishable by imprisonment exceeding 30 days, or a fine exceeding P200.00; (4) Offenses were there is no private offended party; (5) Such other classes of disputes which the Prime Minister may in the interest of justice determine, upon recommendation of the Minister of Justice and the Minister of Local Government. ella "SECTION 3. Venue. Disputes between or among persons actually residing in the same barangay shall be brought for amicable settlement before the Lupon of said barangay. Those involving actual residents of different barangays within the same city or municipality shall be brought in the barangay where the respondent or any of the respondents actually resides, at the election of the complainant. However, all disputes which

involve real property or any interest therein shall be brought in the barangay where the real property or any part thereof is situated. "The Lupon shall have no authority over disputes: (1) involving parties who actually reside in barangays of different cities or municipalities, except where such barangays adjoin each other; and (2) involving real property located in different municipalities." (Italics supplied) The foregoing provisions are quite clear. Section 2 specifies the conditions under which the Lupon of a barangay "shall have authority" to bring together the disputants for amicable settlement of their dispute: The parties must be "actually residing in the same city or municipality." At the same time, Section 3 while reiterating that the disputants must be "actually residing in the same barangay" or in "different barangays within the same city or municipality" unequivocably declares that the Lupon shall have "no authority" over disputes "involving parties who actually reside in barangays of different cities or municipalities," except where such barangays adjoin each other. Thus, by express statutory inclusion and exclusion, the Lupon shall have no jurisdiction over disputes where the parties are not actual residents of the same city or municipality, except where the barangays in which they actually reside adjoin each other. It is true that immediately after specifying the barangay whose Lupon shall take cognizance of a given dispute, Sec. 3 of PD 1508 adds: "However, all disputes which involve real property or any interest therein shall be brought in the barangay where the real property or any part thereof is situated." Actually, however, this added sentence is just an ordinary proviso and should operate as such. marinella The operation of a proviso, as a rule, should be limited to its normal function, which is to restrict or vary the operation of the principal clause, rather than expand its scope, in the absence of a clear indication to the contrary.[2] To be sure, the Court was interpreting in that case the provisions of P.D. No. 1508 which, except for some modifications, are applicable to the case before respondent judge because they are now found in 408-409 of R.A. No. 7160 which took effect on January 1, 1992. The ruling in Tavora

v. Veloso, reiterated in other cases,[3] should be familiar to the bench and the bar. As we have held in Espiritu v. Jovellanos,[4] the phrase "Ignorance of the law excuses no one" has a special application to judges who, under the injunction of Canon 1.01 of the Code of Judicial Conduct, "should be the embodiment of competence, integrity, and independence." In Bacar v. De Guzman,[5] it was held that when the law violated is basic, the failure to observe it constitutes gross ignorance. Reiterating this ruling, it was emphasized in Almeron v. Sardido[6] that the disregard of an established rule of law amounts to gross ignorance of the law and makes the judge subject to disciplinary action. In the case at bar, respondent showed patent ignorance if not disregard of this Courts rulings on the jurisdiction of the Lupong Tagapamayapa by her erroneous quotations of the provisions of the Katarungang Pambarangay Rules implementing R.A. No. 7160. While a judge may not be held administratively accountable for every erroneous order or decision he renders, his error may be so gross or patent that he should be administratively disciplined for gross ignorance of the law and incompetence. In this case, respondent at first cited P.D. No. 1508, 3 as basis of her action. When her attention was called to the fact that this had been repealed by 409(c) of R.A. No. 7160, respondent, who obviously was more intent in justifying her previous order than correcting her error, quoted out of context the provisions of the Katarungang Pambarangay Rules implementing the Katarungang Pambarangay provisions of R.A. No. 7160. She thus violated Canon 3 of the Code of Judicial Conduct which provides that "In every case, a judge shall endeavor diligently to ascertain the facts and the applicable law unswayed by partisan interest, public opinion or fear of criticism." Contrary to respondents interpretation, it is clear even from the Katarungang Pambarangay Rules that recourse to barangay conciliation proceedings is not necessary where the parties do not reside in the same municipality or city or in adjoining barangays. Rule VI of the same states in pertinent part: SECTION 2. Subject matters for settlement. - All disputes may be the subject of proceedings for amicable settlement under these rules except the following enumerated cases: (a) Where one party is the government, or any subdivision or instrumentality thereof; alonzo (b) Where one party is a public officer or employee, and the dispute relates to the performance of his official functions; (c) Offenses for which the law prescribes a maximum penalty of imprisonment exceeding one (1) year or a fine exceeding Five Thousand pesos (P5,000.00);

(d) Offenses where there is no private offended party; (e) Where the dispute involves real properties located in different cities or municipalities unless the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (f) Disputes involving parties who actually reside in barangays of different cities or municipalities, except where such barangay units adjoin each other and the parties thereto to agree to submit their differences to amicable settlement by an appropriate lupon; (g) Such other classes of disputes which the President may determine in the interest of justice or upon the recommendation of the Secretary of Justice. The foregoing exceptions notwithstanding, the court in which non-criminal cases not falling within the authority of the lupon under these Katarungang Pambarangay Law and Rules are filed may, at any time before trial, motu proprio refer the case to the lupon concerned for amicable settlement. SECTION 3. Venue. The place of settlement shall be subject to the following rules: (a) Where the parties reside in the same barangay, the dispute shall be brought for settlement in said barangay; (b) Where the parties reside in different barangays in the same city or municipality, the dispute shall be settled in the barangay where the respondent or any one of the respondents actually resides, at the choice of the complainant; (c) Dispute involving real property shall be brought for settlement in the barangay where the real property or larger portion thereof is situated; (d) Disputes arising at the workplace where the contending parties are employed or at the institution where such parties are enrolled for study, shall be brought in the barangay where such workplace or institution is located; (e) Any objection relating to venue shall be raised before the Punong Barangay during the mediation proceedings before him. Failure to do so shall be deemed a waiver of such objection; (f) Any legal question which may confront the Punong Barangay in resolving objections to venue herein referred to may be submitted to the

Secretary of Justice, or his duly designated representative, whose ruling thereon shall be binding. brando (Emphasis added) Indeed, these provisions, which are also found in P.D. No. 1508, have already been authoritatively interpreted by this Court, and the duty of respondent judge was to follow the rulings of this Court. Her insistence on her own interpretation of the law can only be due either to an ignorance of this Courts ruling or to an utter disregard thereof. We choose to believe that her failure to apply our rulings to the case before her was simply due to gross ignorance which, nevertheless, is inexcusable. In accordance with the ruling in Ting v. Atal,[7] in which a judge who was similarly found guilty of gross ignorance of the law was fined P2,000.00, respondent judge should likewise be fined the same amount. WHEREFORE, respondent is hereby found guilty of gross ignorance of the law and is hereby ordered to pay a FINE of TWO THOUSAND (P2,000.00) PESOS with a WARNING that repetition of the same or similar acts will be dealt with more severely.

14. G.R. No. 111416 September 26, 1994

FELICIDAD UY, petitioner, vs. HON. MAXIMO C. CONTRERAS, Presiding Judge, Metropolitan Trial Court, Branch 61, Makati, Metro Manila; HON. MAURO M. CASTRO, Provincial Prosecutor of Pasig, Metro Manila; SUSANNA ATAYDE and WINNIE JAVIER, respondents. Albon & Serrano Law Office for petitioner. Ramon M. Velez for private respondents.

DAVIDE, JR., J.: Assailed in this petition for certiorari under Rule 65 of the Rules of Court is the order dated 2 July 1993 of public respondent Judge Maximo C. Contreras of Branch 61 of the Metropolitan Trial Court (MTC) of Makati, Metro Manila, denying the petitioner's motion to dismiss Criminal Cases Nos. 145233 and 145234 for slight physical injuries. The motion to dismiss is based on the failure of the private respondents, as the offended parties therein, to comply with Section 6 of P.D. No. 1508 and Section 18 of the 1991 Revised Rule on Summary Procedure requiring prior referral of disputes to the Lupong Tagapamayapa of the proper barangay. At the outset, it must be stated that were it not for the importance of the issue to be resolved in the light of the revised law on katarungang pambarangay provided for in the Local Government Code of 1991 (R.A. No. 7160) which took effect on 1 January 1992, 1 this Court would have declined to accept the invocation of its original jurisdiction to issue the extraordinary writ prayed for. We have already ruled that while it is true that this Court, the Court of Appeals, and the Regional Trial Courts have concurrent original jurisdiction to issue writs ofcertiorari, prohibition, mandamus, quo warranto, and habeas corpus, such concurrence does not accord litigants unrestrained freedom of choice of the court to which application therefor may be directed. There is a hierarchy of courts determinative of the venue of appeals which should also serve as a general determinant of the proper forum for the application for the extraordinary writs. A becoming regard for this judicial hierarchy by the petitioner and her lawyers ought to have led them to file the petition with the proper Regional Trial Court. 2 The antecedent facts as disclosed by the pleadings of the parties are not complicated. Petitioner subleased from respondent Susanna Atayde (hereinafter Atayde) the other half of the second floor of a building located at corner Reposo and Oliman Streets, Makati, Metro Manila. She operated and maintained therein a beauty parlor. 3 The sublease contract expired on 15 April 1993. However, the petitioner was not able to remove all her movable properties. On 17 April 1993, an argument arose between the petitioner and Atayde when the former sought to withdraw from the subleased premises her remaining movable properties such as cabinets, shelves, frames, a mirror, a shampoo bowl, and an airconditioning casing. 4 The argument degenerated into a scuffle between the petitioner, on the one hand, and Atayde and several of Atayde's employees, including private respondent Winnie Javier (hereinafter Javier), on the other. On 21 April 1993, the private respondent had themselves medically examined for the alleged injuries inflicted on them by the petitioner. 5 On 23 April 1993, the private respondents filed a complaint with the barangay captain of Valenzuela, Makati, which was docketed as Barangay Cases Nos. 1023 6 and 1024. 7

The confrontation of the parties was scheduled by the barangay captain for 28 April 1993. On the said date, only the petitioner appeared. The barangay captain then reset the confrontation to 26 May 1993. 8 On 11 May 1993, the Office of the Provincial Prosecutor of Rizal filed two informations for slight physical injuries against the petitioner with the MTC of Makati, which were docketed as Criminal Cases Nos. 145233 and 145234 and assigned to Branch 61 thereof. On 21 May 1993, public respondent Judge Contreras of Branch 61 ordered the petitioner to submit her counteraffidavit and those of her witnesses. On 14 June 1993, the petitioner submitted the required counteraffidavits. 9 In her own counter-affidavit, the petitioner specifically alleged the prematurity of the filing of the criminal cases for failure to undergo conciliation proceedings as she and the private respondents are residents of Manila. 10 She also attached to it a certification by the barangay captain of Valenzuela, Makati, dated 18 May 1993, that there was an ongoing conciliation between Atayde and the petitioner in Barangay Case No. 1023. 11 On 18 June 1993, the petitioner filed a motion to dismiss Criminal Cases Nos. 145233 and 145234 for noncompliance with the requirement of P.D. No. 1508 on prior referral to the Lupong Tagapamayapa and pursuant to Section 18 of the 1991 Revised Rule on Summary Procedure. On 2 July 1993, public respondent Judge Contreras handed down an order denying the motion to dismiss, pertinent portions of which read: The court finds the motion to be without sufficient merit. In the first place, the offense subject of these cases accussed in Makati, Metro Manila on April 17, 1993; that Barangay Valenzuela of the Municipality of Makati had started the conciliation proceedings between the parties but as of May 18, 1993 nothing has been achieved by the barangay (Annex "2" of the CounterAffidavit of the accused); that the above-entitled cases were filed directly with this court by the public prosecutor on May 11, 1993; and the accused and her witnesses had already filed their counter-affidavits and documents. At this stage of the proceedings, the court believes that the accused had already waived the right to a reconciliation proceedings before the barangay of Valenzuela, Makati considering that accused and complainant are residents of different barangays; that the offense charged occurred in the Municipality of Makati; and finally, this offense is about to prescribe.

Under the foregoing circumstances, the court believes, and so holds, that the complainants may go directly to the court where their complaint is about to prescribe or barred by statute of limitations pursuant to Section 6 of PD 1508." 12
A motion to reconsider the above order was denied on 5 August 1993. Hence this special civil action for certiorari. The petitioner contends that the respondent judge committed grave abuse of discretion amounting to lack of jurisdiction when he denied the motion to dismiss considering that the private respondents failed to comply with the mandatory requirement of P.D. No. 1508, now embodied in Section 412 of the Local Government Code of 1991 and further required under the 1991 Revised Rule on Summary Procedure. In their Comment, the private respondents contend that the denial of the motion to dismiss is proper because prior referral of the dispute to the lupon is not applicable in the case of private respondent Javier since she and the petitioner are not residents of barangays in the same city or municipality or of adjoining barangays in different cities or municipalities and that referral to the lupon is not likewise required if the case may otherwise be barred by the statute of limitations. Moreover, even assuming arguendo that prior referral to the lupon applies to the case of private respondent Atayde, the latter had, nevertheless, substantially complied with the requirement.

In its Comment, the Office of the Solicitor General agrees with the petitioner that Criminal Cases Nos. 145233 and 145234 should be dismissed for non-compliance with Sections 408, 409, 410, and 412 of the Local Government Code of 1991 in relation to Section 7, Rule VI of the Rules Implementing P.D. No. 1508. The petitioner replied to the comments of the private respondents and of the Office of the Solicitor General. The private respondents filed a rejoinder to the petitioner's reply to their comment and a reply to the comment of the Office of the Solicitor General. In the Resolution of 16 May 1994, this Court gave due course to the petition and required the parties to submit their respective memoranda, which the petitioner and the private respondents complied with. The Office of the Solicitor General, in view of its prior submission, moved that it be excused from filing a memorandum. The petition is impressed with merit. The law on the katarungang pambarangay was originally governed by P.D. No. 1508 which was enacted on 11 June 1978. However, the Local Government Code of 1991, specifically Chapter 7, Title I, Book III thereof, 13revised the law on the katarungang pambarangay. As a consequence of this revision, P.D. No. 1508 was expressly repealed pursuant to Section 534(b) of the Code. Pertinent portions of Chapter 7, Title I, Book III thereof read as follows: Sec. 408. Subject Matter for Amicable Settlement; Exception Thereto. The luppon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: (a) Where one party is the government or any subdivision or instrumentality thereof; (b) Where one party is a public officer or employee, and the dispute relates to the performance of his official functions; (c) Offenses punishable by imprisonment exceeding one (1) year or a fine exceeding Five thousand pesos (P5,000.00); (d) Offenses where there is no private offended party; (e) Where the dispute involves real properties located in different cities or municipalities unless the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (f) Disputes involving parties who actually reside in barangays of different cities or municipalities, except where such barangay units adjoin each other and the parties thereto agree to submit their differences to amicable settlement by appropriate lupon; (g) Such other classes of disputes which the President may determine in the interest of justice or upon the recommendation of the Secretary of Justice. The court in which non-criminal cases not falling within the authority of the lupon under this Code are filed may, at anytime before trial, motu proprio refer the case to the lupon concerned for amicable settlement. Sec. 409. Venue. (a) Disputes between persons actually residing in the same barangay shall be brought for amicable settlement before the lupon of said barangay. (b) Those involving actual residents of different barangays within the same city or municipality shall be brought in the barangay where the respondent or any of the respondents actually resides, at the election of the complainant.

(c) All disputes involving real property or any interest therein shall be brought in the barangay where the real property or the larger portion thereof is situated. (d) Those arising at the workplace where the contending parties are employed or at the institution where such parties are enrolled for study shall be brought in the barangay where such workplace or institution is located. Objections to venue shall be raised in the mediation proceedings before the punong barangay; otherwise, the same shall be deemed waived. Any legal question which may confront the punong barangay in resolving objections to venue herein referred to may be submitted to the Secretary of Justice or his duly designated representative whose ruling thereon shall be binding. Sec. 410. Procedure for Amicable Settlement. . . . xxx xxx xxx (c) Suspension of prescriptive period of offenses. While the dispute is under mediation, conciliation, or arbitration, the prescriptive periods for offenses and cause of action under existing laws shall be interrupted upon filing of the complaint with the punong barangay. The prescriptive periods shall resume upon receipt by the complainant of the complaint or the certificate of repudiation or of the certification to file action issued by the lupon or pangkat secretary: Provided, however, That such interruption shall not exceed sixty (60) days from the filing of the complaint with the punong barangay. xxx xxx xxx Sec. 412. Conciliation. (a) Pre-condition to filing of complaint in court. No complaint, petition, action, or proceeding involving any matter within the authority of the lupon shall be filed or instituted directly in court or any other government office for adjudication, unless there has been a confrontation between the parties before the lupon chairman or the pangkat, and that no conciliation or settlement has been reached as certified by the lupon secretary or pangkat secretary as attested to by the lupon chairman or pangkat chairman or unless the settlement has been repudiated by the parties thereto. (b) Where parties may go directly to court. The parties may go directly to court in the following instances: (1) Where the accused is under detention; (2) Where a person has otherwise been deprived of personal liberty calling for habeas corpus proceedings; (3) Where actions are coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property, and support pendente lite; and (4) Where the action may otherwise be barred by the statute of limitations. xxx xxx xxx Sec. 415. Appearance of Parties in Person. In all katarungang pambarangay proceedings, the parties must appear in person without the assistance of counsel or representative, except for minors and incompetents who may be assisted by their next-of-kin who are not lawyers.

Pursuant to the authority vested in him under Section 421 of the Code, the Secretary of Justice promulgated theKatarungang Pambarangay Rules to implement the revised law on katarungang pambarangay. Sections 8 and 11 of Rule VI (Amicable Settlement of Disputes) thereof provide in part as follows: SECTION 8. Failure to appear. a. Sanctions The complaint may be dismissed when complainant, after due notice, refuses or willfully fails to appear without justifiable reason on the date set for mediation, conciliation or arbitration. Such dismissal ordered by the Punong Barangay/Pangkat Chairman after giving the complainant an opportunity to explain his non-appearance shall be certified to by the Lupon or Pangkat Secretary as the case may be, and shall bar the complainant from seeking judicial recourse for the same cause of action as that dismissed. xxx xxx xxx Sec. 11. Suspension of prescriptive period of offenses and cause of action . The prescriptive periods for offenses and causes of action under existing laws shall be interrupted upon filing of the complaint with the Punong Barangay. The running of the prescriptive periods shall resume upon receipts by the complainant of the certificate of repudiation or of the certification to file action issued by the Lupon or Pangkat Secretary: Provided, however, that such interruption shall not exceed sixty (60) days from the filing of the complaint with the Punong Barangay. After the expiration of the aforesaid period of sixty days, the filing of the case in court or government office for adjudication shall be subject to the provision of paragraph (b) (4) of Rule VIII of these Rules. It may thus be observed that the revised katarungang pambarangay law has at least three new significant features, to wit: 1. It increased the authority of the lupon in criminal offenses from those punishable by imprisonment not exceeding thirty days or a fine not exceeding P200.00 in P.D. No. 1508 to those offenses punishable by imprisonment not exceeding one year or a fine not exceeding P5,000.00. 2. As to venue, it provides that disputes arising at the workplace where the contending parties are employed or at the institution where such parties are enrolled for study, shall be brought in the barangay where such workplace or institution is located. 3. It provides for the suspension of the prescriptive periods of offenses during the pendency of the mediation, conciliation, or arbitration process. Paragraph (c) of Section 410 of the law, however, suffers from some ambiguity when it provides that the prescriptive periods "shall resume upon receipt by the complainant of the complaint or the certificate of repudiation or of the certification to file action issued by the lupon or pangkat secretary." What is referred to as receipt by the complainant of the complaint is unclear; obviously, it could have been a drafting oversight. Accordingly, in the above quoted Section 11 of the Rules and Regulations issued by the Secretary of Justice, the phrase "the complaint or" is not found, such that the resumption of the running of the prescriptive period shall, properly, be from receipt by the complainant of the certificate of repudiation or the certification to file action issued by the lupon or the pangkat secretary. Such suspension, however, shall not exceed sixty days. The first feature has necessarily broadened the jurisdiction of the lupon and if the mediation and conciliation process at that level would be effectively pursued, few cases would reach the regular courts, justice would be achieved at less expense to the litigants, cordial relationships among protagonists in a small community would be restored, and peace and order therein enhanced.

The second feature, which is covered by paragraph (d), Section 409 of the Local Government code, also broadens the authority of the lupon in the sense that appropriate civil and criminal cases arising from incidents occurring in workplaces or institutions of learning shall be brought in the barangay where such workplace or institution is located. That barangay may not be the appropriate venue in either paragraph (a) or paragraph (b) of the said section. This rule provides convenience to the parties. Procedural rules including those relating to venue are designed to insure a fair and convenient hearing to the parties with complete justice between them as a result. 14 Elsewise stated, convenience is the raison d'etre of the rule on venue. The third feature is aimed at maximizing the effectiveness of the mediation, conciliation, or arbitration process. It discourages any intentional delay of the referral to a date close to the expiration of the prescriptive period and then invoking the proximity of such expiration as the reason for immediate recourse to the courts. It also affords the parties sufficient time to cool off and face each other with less emotionalism and more objectivity which are essential ingredients in the resolution of their dispute. The sixty-day suspension of the prescriptive period could spell the difference between peace and a full-blown, wearisome, and expensive litigation between the parties. While P.D. No. 1508 has been repealed by the Local Government Code of 1991, the jurisprudence built thereon regarding prior referral to the lupon as a pre-condition to the filing of an action in court remains applicable because its provisions on prior referral were substantially reproduced in the Code. In Peregrina vs. Panis, 15 this Court stated: Thus, Morata vs. Go, 125 SCRA 444 (1983), and Vda. de Borromeo vs. Pogoy, 126 SCRA 217 (1983) have held that P.D. No. 1508 makes the conciliation process at the Barangay level a condition precedent for the filing of a complaint in Court. Non-compliance with that condition precedent could affect the sufficiency of the plaintiff's cause of action and make his complaint vulnerable to dismissal on the ground of lack of cause of action or prematurity. The condition is analogous to exhaustion of administrative remedies, or the lack of earnest efforts to compromise suits between family members, lacking which the case can be dismissed. The parties herein fall squarely within the ambit of P.D. No. 1508. They are actual residents in the same barangay and their disputes does not fall under any of the excepted cases." (Emphasis omitted) Such non-compliance is not, however, jurisdictional. This Court said so in Garces vs. Court of Appeals: 16 In fine, we have held in the past that prior recourse to the conciliation procedure required under P.D. 1508 is not a jurisdictional requirement, non-compliance with which would deprive a court of its jurisdiction either over the subject matter or over the person of the defendant. Where, however, the fact of non-compliance with and non-observance of such procedure has been seasonably raised as an issue before the court first taking cognizance of the complaint, dismissal of the action is proper. xxx xxx xxx The precise technical effect of failure to comply with the requirement of P.D. 1508 where applicable is much the same effect produced by non-exhaustion of administrative remedies; the complaint becomes afflicted with the vice of pre-maturity; the controversy there alleged is not ripe for judicial determination. The complaint becomes vulnerable to a motion to dismiss. (emphasis omitted) There were, of course, cases where this Court ruled that the failure of the defendant to seasonably invoke nonreferral to the appropriate lupon operated as a waiver thereof. 17 Furthermore, when such defect was initially present when the case was first filed in the trial court, the subsequent issuance of the certification to file action by the barangay, which constituted substantial compliance with the said requirement, cured the defect. 18

On 15 October 1991, this Court promulgated the Revised Rule on Summary Procedure. 19 Section 18 thereof provides: Sec. 18. Referral to Lupon. Cases requiring referral to the Lupon for conciliation under the provisions of Presidential Decree No. 1508 where there is no showing of compliance with such requirement, shall be dismissed without prejudice, and may be revived only after such requirement shall have been complied with. This provision shall not apply to criminal cases where the accused was arrested without a warrant. In the proceeding before the court a quo, the petitioner and the respondent had in mind only P.D. No. 1508. The petitioner further invoked the aforequoted Section 18. None knew of the repeal of the decree by the Local Government Code of 1991. Even in her instant petition, the petitioner invokes the decree and Section 18 of the Revised Rule on Summary Procedure. However, the private respondents, realizing the weakness of their position under P.D. No. 1508 since they did refer their grievances to what might be a wrong forum under the decree, changed tack. In their Comment, they assert that on 20 April 1993 Atayde "filed a complaint against petitioner before the barangay council of Barangay Valenzuela, Makati, in compliance with the requirement of the Katarungang Pambarangay Law under the Local Government Code." 20 Yet, in a deliberate effort to be cunning or shrewd, which is condemnable for it disregards the virtue of candor, they assert that the said law is not applicable to their cases before the court a quo because (a) the petitioner and respondent Atayde are not residents of barangays in the same city or municipality; (b) the law does not apply when the action, as in the said cases, may otherwise be barred by the statute of limitations; and (c) even assuming that the law applies insofar as Atayde is concerned, she has substantially complied with it. The Office of the Provincial Prosecutor of Rizal should have exerted enough diligence to inquire from the private respondents if prior referral to the lupon was necessary before filing the informations. Respondent judge did not do any better. His total unawareness of the Local Government Code of 1991, more specifically on the provisions on the Katarungang pambarangay, is distressing. He should have taken judicial notice thereof, ever mindful that under Section 1, Rule 129 of the Rules of Court, courts are mandatorily required to take judicial notice of "the official acts of the legislative, executive and judicial departments of the Philippines." We have ruled that a judge is called upon to exhibit more than just a cursory acquaintance with the statutes and procedural rules. 21 He should have applied the revised katarungang pambarangay law under the Local Government Code of 1991. Had he done so, this petition would not have reached us and taken valuable attention and time which could have been devoted to more important cases. In view of the private respondents' failure to appear at the first scheduled mediation on 28 April 1993 for which the mediation was reset to 26 May 1993, no complaint for slight physical injuries could be validly filed with the MTC of Makati at any time before such date. The filing then of Criminal Cases Nos. 145233 and 145234 with the said court on 11 May 1993 was premature and, pursuant to paragraph (a), Section 412 of the Local Government Code, respondent Judge Contreras should have granted the motion to dismiss the criminal cases. He cannot justify its denial by taking refuge under Section 6 of P.D. No. 1508 (more properly, Section 412(b)(4) of the Local Government Code of 1991) which states that the parties may go directly to court where the action is about to prescribe. This is because, as earlier stated, pursuant to paragraph (c), Section 410 of the Code, the prescriptive period was automatically suspended for a maximum period of sixty days from 23 April 1993 when the private respondents filed their complaints with the lupon of Valenzuela Makati. Moreover, having brought the dispute before the lupon of barangay Valenzuela, Makati, the private respondents are estopped from disavowing the authority of the body which they themselves had sought. Their act of trifling with the authority of the lupon by unjustifiably failing to attend the scheduled mediation hearings and instead filing the complaint right away with the trial court cannot be countenanced for to do so would wreak havoc on the barangay conciliation system. Granting arguendo that the petitioner did inflict the alleged physical injuries, the offense for which she may be liable would only be slight physical injuries under paragraph (2), Article 266 of the Revised Penal Code, considering that per the medical certificates 22 the injuries sustained by the private respondents would "heal" in nine days "in the absence of complication" and there is no showing that the said injuries incapacitated them for labor or would require medical attendance for such period. The penalty therefor would only be " arresto

menor or a fine not exceeding 200 pesos and censure." These penalties are light under Article 25 of the Revised Penal Code and would prescribe in two months pursuant to Article 90. Accordingly, since the slight physical injuries charged in Criminal Cases Nos. 145233 and 145234 were allegedly inflicted on 17 April 1993, the prescriptive period therefor would have expired two months thereafter. Nevertheless, its running was tolled by the filing of the private respondents' complaints with the lupon of Valenzuela, Makati, on 23 April 1993 and automatically suspended for a period of sixty days, or until 22 June 1993. If no mediation or conciliation could be reached within the said period of suspension and, accordingly, a certification to file action is issued, the private respondents would still have fifty-six days within which to file their separate criminal complaints for such offense. Evidently, there was no basis for the invocation by the respondent judge of the exception provided for in paragraph (b), Section 412 of the Local Government Code. Neither are we persuaded by the reasoning of the respondent Judge that the petitioner "had already waived the right to a reconciliation proceedings before the barangay of Valenzuela, Makati, considering that the accused and the complainant are residents of different barangays." The petitioner did not waive the reconciliation proceedings before the lupon of Valenzuela, Makati; she submitted to it and attended the scheduled conciliation on 28 April 1993 and invoked the pre-condition of referral to the lupon in her counter-affidavit. 23 Nor would this Court accept the contention of the private respondent that the parties could not agree on a compromise and that they had to request the barangay captain to issue a certification to file action. 24 The request is dated 23 June 1993, 25 or nearly one and a half months after Criminal Cases Nos. 145233 and 145234 were filed with the court a quo. Evidently, this was done to support their contention in the said court that, in any event, there was substantial compliance with the requirement of referral to the lupon. It must be stressed that the private respondents, after failing to appear at the initial confrontation and long after the criminal cases were filed, had no right to demand the issuance of a certification to file action. The respondent judge thus acted with grave abuse of discretion in refusing to dismiss Criminal Cases Nos. 145233 and 145234. Before closing these cases, this Court wishes to emphasize the vital role which the revised katarungang pambarangay law plays in the delivery of justice at the barangay level, in promoting peace, stability, and progress therein, and in effectively preventing or reducing expensive and wearisome litigation. Parties to disputes cognizable by the lupon should, with sincerity, exhaust the remedies provided by that law, government prosecutors should exercise due diligence in ascertaining compliance with it, and trial courts should not hesitate to impose the appropriate sanctions for non-compliance thereof. WHEREFORE, the instant petition is GRANTED. The Orders of respondent Judge of 2 July 1993 and 5 August 1993 in Criminal Cases Nos. 145233 and 1452334, both entitled "People of the Philippines vs. Felicidad Uy" are hereby SET ASIDE and the respondent Judge is hereby DIRECTED to DISMISS said cases within ten (10) days from receipt of a copy of this decision.

15. G.R. No. 169129

March 28, 2007

SPS. VIRGILIO F. SANTOS & ESPERANZA LATI SANTOS, SPS.VICTORINO F. SANTOS, & LAGRIMAS SANTOS, ERNESTO F. SANTOS, and TADEO F. SANTOS, Petitioners, vs. SPS. JOSE LUMBAO and PROSERFINA LUMBAO, Respondents. DECISION CHICO-NAZARIO, J.: Before this Court is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure seeking to annul and set aside the Decision1 and Resolution2 of the Court of Appeals in CA-G.R. CV No. 60450 entitled, Spouses Jose Lumbao and Proserfina Lumbao v. Spouses Virgilio F. Santos and Esperanza Lati, Spouses Victorino F. Santos and Lagrimas F. Santos, Ernesto F. Santos and Tadeo F. Santos, dated 8 June 2005 and 29 July 2005, respectively, which granted the appeal filed by herein respondents Spouses Jose Lumbao and Proserfina Lumbao (Spouses Lumbao) and ordered herein petitioners Spouses Virgilio F. Santos and Esperanza Lati, Spouses Victorino F. Santos and Lagrimas F. Santos, Ernesto F. Santos and Tadeo F. Santos to reconvey to respondents Spouses Lumbao the subject property and to pay the latter attorneys fees and litigation expenses, thus, reversing the Decision3 of the Regional Trial Court (RTC) of Pasig City, dated 17 June 1998 which dismissed the Complaint for Reconveyance with Damages filed by respondents Spouses Lumbao for lack of merit. Herein petitioners Virgilio, Victorino, Ernesto and Tadeo, all surnamed Santos, are the legitimate and surviving heirs of the late Rita Catoc Santos (Rita), who died on 20 October 1985. The other petitioners Esperanza Lati and Lagrimas Santos are the daughters-in-law of Rita. Herein respondents Spouses Jose Lumbao and Proserfina Lumbao are the alleged owners of the 107-square meter lot (subject property), which they purportedly bought from Rita during her lifetime. The facts of the present case are as follows: On two separate occasions during her lifetime, Rita sold to respondents Spouses Lumbao the subject property which is a part of her share in the estate of her deceased mother, Maria Catoc (Maria), who died intestate on 19 September 1978. On the first occasion, Rita sold 100 square meters of her inchoate share in her mothers estate through a document denominated as "Bilihan ng Lupa," dated 17 August 1979.4 Respondents Spouses Lumbao claimed the execution of the aforesaid document was witnessed by petitioners Virgilio and Tadeo, as shown by their signatures affixed therein. On the second occasion, an additional seven square meters was added to the land as evidenced by a document also denominated as "Bilihan ng Lupa," dated 9 January 1981.5 After acquiring the subject property, respondents Spouses Lumbao took actual possession thereof and erected thereon a house which they have been occupying as exclusive owners up to the present. As the exclusive owners of the subject property, respondents Spouses Lumbao made several verbal demands upon Rita, during her lifetime, and thereafter upon herein petitioners, for them to execute the necessary documents to effect the issuance of a separate title in favor of respondents Spouses Lumbao insofar as the subject property is concerned. Respondents Spouses Lumbao alleged that prior to her death, Rita informed respondent Proserfina Lumbao she could not deliver the title to the subject property because the entire property inherited by her and her co-heirs from Maria had not yet been partitioned. On 2 May 1986, the Spouses Lumbao claimed that petitioners, acting fraudulently and in conspiracy with one another, executed a Deed of Extrajudicial Settlement,6 adjudicating and partitioning among themselves and the other heirs, the estate left by Maria, which included the subject property already sold to respondents Spouses Lumbao and now covered by TCT No. 817297 of the Registry of Deeds of Pasig City.

On 15 June 1992, respondents Spouses Lumbao, through counsel, sent a formal demand letter 8 to petitioners but despite receipt of such demand letter, petitioners still failed and refused to reconvey the subject property to the respondents Spouses Lumbao. Consequently, the latter filed a Complaint for Reconveyance with Damages9before the RTC of Pasig City. Petitioners filed their Answer denying the allegations that the subject property had been sold to the respondents Spouses Lumbao. They likewise denied that the Deed of Extrajudicial Settlement had been fraudulently executed because the same was duly published as required by law. On the contrary, they prayed for the dismissal of the Complaint for lack of cause of action because respondents Spouses Lumbao failed to comply with the Revised Katarungang Pambarangay Law under Republic Act No. 7160, otherwise known as the Local Government Code of 1991, which repealed Presidential Decree No. 150810 requiring first resort to barangay conciliation. Respondents Spouses Lumbao, with leave of court, amended their Complaint because they discovered that on 16 February 1990, without their knowledge, petitioners executed a Deed of Real Estate Mortgage in favor of Julieta S. Esplana for the sum of P30,000.00. The said Deed of Real Estate Mortgage was annotated at the back of TCT No. PT-81729 on 26 April 1991. Also, in answer to the allegation of the petitioners that they failed to comply with the mandate of the Revised Katarungang Pambarangay Law, respondents Spouses Lumbao said that the Complaint was filed directly in court in order that prescription or the Statute of Limitations may not set in. During the trial, respondents Spouses Lumbao presented Proserfina Lumbao and Carolina Morales as their witnesses, while the petitioners presented only the testimony of petitioner Virgilio. The trial court rendered a Decision on 17 June 1998, the dispositive portion of which reads as follows: Premises considered, the instant complaint is hereby denied for lack of merit. Considering that [petitioners] have incurred expenses in order to protect their interest, [respondents spouses Lumbao] are hereby directed to pay [petitioners], to wit: 1) the amount of P30,000.00 as attorneys fees and litigation expenses, and 2) costs of the suit.11 Aggrieved, respondents Spouses Lumbao appealed to the Court of Appeals. On 8 June 2005, the appellate court rendered a Decision, thus: WHEREFORE, premises considered, the present appeal is hereby GRANTED. The appealed Decision dated June 17, 1998 of the Regional Trial Court of Pasig City, Branch 69 in Civil Case No. 62175 is hereby REVERSED and SET ASIDE. A new judgment is hereby entered ordering [petitioners] to reconvey 107 square meters of the subject [property] covered by TCT No. PT-81729 of the Registry of Deeds of Pasig City, Metro Manila, and to pay to [respondents spouses Lumbao] the sum of P30,000.00 for attorneys fees and litigation expenses. No pronouncement as to costs.12 Dissatisfied, petitioners filed a Motion for Reconsideration of the aforesaid Decision but it was denied in the Resolution of the appellate court dated 29 July 2005 for lack of merit. Hence, this Petition. The grounds relied upon by the petitioners are the following: I. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN REVERSING THE DECISION OF THE TRIAL COURT, THEREBY CREATING A VARIANCE ON THE FINDINGS OF FACTS OF TWO COURTS.

II. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN ORDERING THE PETITIONERS TO RECONVEY THE SUBJECT [PROPERTY] TO THE RESPONDENTS [SPOUSES LUMBAO] AND IN NOT RULING THAT THEY ARE GUILTY OF LACHES, HENCE THEY CANNOT RECOVER THE LOT ALLEGEDLY SOLD TO THEM. III. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING HEREIN PETITIONER[S] TO BE IN GOOD FAITH IN EXECUTING THE "DEED OF EXTRAJUDICIAL SETTLEMENT" DATED [2 MAY 1986]. IV. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT PETITIONERS ARE NOT LEGALLY BOUND TO COMPLY WITH THE SUPPOSED BILIHAN NG LUPA DATED [17 AUGUST 1979] AND [9 JANUARY 1981] THAT WERE SUPPOSEDLY EXECUTED BY THE LATE RITA CATOC. V. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAOS] ACTION FOR RECONVEYANCE WITH DAMAGES CANNOT BE SUPPORTED WITH AN UNENFORCEABLE DOCUMENTS, SUCH AS THE BILIHAN NG LUPA DATED [17 AUGUST 1979] AND [9 JANUARY 1981]. VI. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAOS] COMPLAINT FOR RECONVEYANCE IS DISMISSABLE (SIC) FOR NON COMPLIANCE OF THE MANDATE OF [P.D. NO.] 1508, AS AMENDED BY Republic Act No. 7160. VII. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO] SHOULD BE HELD LIABLE FOR PETITIONERS CLAIM FOR DAMAGES AND ATTORNEY[]S FEES. Petitioners ask this Court to scrutinize the evidence presented in this case, because they claim that the factual findings of the trial court and the appellate court are conflicting. They allege that the findings of fact by the trial court revealed that petitioners Virgilio and Tadeo did not witness the execution of the documents known as "Bilihan ng Lupa"; hence, this finding runs counter to the conclusion made by the appellate court. And even assuming that they were witnesses to the aforesaid documents, still, respondents Spouses Lumbao were not entitled to the reconveyance of the subject property because they were guilty of laches for their failure to assert their rights for an unreasonable length of time. Since respondents Spouses Lumbao had slept on their rights for a period of more than 12 years reckoned from the date of execution of the second "Bilihan ng Lupa," it would be unjust and unfair to the petitioners if the respondents will be allowed to recover the subject property. Petitioners allege they are in good faith in executing the Deed of Extrajudicial Settlement because even respondents Spouses Lumbaos witness, Carolina Morales, testified that neither petitioner Virgilio nor petitioner Tadeo was present during the execution of the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981. Petitioners affirm that the Deed of Extrajudicial Settlement was published in a newspaper of general circulation to give notice to all creditors of the estate subject of partition to contest the same within the period prescribed by law. Since no claimant appeared to interpose a claim within the period allowed by law, a title to the subject property was then issued in favor of the petitioners; hence, they are considered as holders in good faith and therefore cannot be barred from entering into any subsequent transactions involving the subject property. Petitioners also contend that they are not bound by the documents denominated as "Bilihan ng Lupa" because the same were null and void for the following reasons: 1) for being falsified documents because one of those documents made it appear that petitioners Virgilio and Tadeo were witnesses to its execution and that they appeared personally before the notary public, when in truth and in fact they did not; 2) the identities of the properties in the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981 in relation to the subject property in litigation were not established by the evidence presented by the respondents Spouses Lumbao; 3) the right of the respondents Spouses Lumbao to lay their claim over the subject property had already been barred through estoppel by laches; and 4) the respondents Spouses Lumbaos claim over the subject property had already prescribed.

Finally, petitioners claim that the Complaint for Reconveyance with Damages filed by respondents Spouses Lumbao was dismissible because they failed to comply with the mandate of Presidential Decree No. 1508, as amended by Republic Act No. 7160, particularly Section 412 of Republic Act No. 7160. Given the foregoing, the issues presented by the petitioners may be restated as follows: I. Whether or not the Complaint for Reconveyance with Damages filed by respondents spouses Lumbao is dismissible for their failure to comply with the mandate of the Revised Katarungang Pambarangay Law under R.A. No. 7160. II. Whether or not the documents known as "Bilihan ng Lupa" are valid and enforceable, thus, they can be the bases of the respondents spouses Lumbaos action for reconveyance with damages. III. Whether or not herein petitioners are legally bound to comply with the "Bilihan ng Lupa" dated 17 August 1979 and 9 January 1981 and consequently, reconvey the subject property to herein respondents spouses Lumbao. It is well-settled that in the exercise of the Supreme Courts power of review, the court is not a trier of facts and does not normally undertake the re-examination of the evidence presented by the contending parties during the trial of the case considering that the findings of fact of the Court of Appeals are conclusive and binding on the Court.13 But, the rule is not without exceptions. There are several recognized exceptions 14 in which factual issues may be resolved by this Court. One of these exceptions is when the findings of the appellate court are contrary to those of the trial court. This exception is present in the case at bar. Going to the first issue presented in this case, it is the argument of the petitioners that the Complaint for Reconveyance with Damages filed by respondents Spouses Lumbao should be dismissed for failure to comply with the barangay conciliation proceedings as mandated by the Revised Katarungang Pambarangay Law under Republic Act No. 7160. This argument cannot be sustained. Section 408 of the aforesaid law and Administrative Circular No. 14-9315 provide that all disputes between parties actually residing in the same city or municipality are subject to barangay conciliation. A prior recourse thereto is a pre-condition before filing a complaint in court or any government offices. Non-compliance with the said condition precedent could affect the sufficiency of the plaintiffs cause of action and make his complaint vulnerable to dismissal on ground of lack of cause of action or prematurity; but the same would not prevent a court of competent jurisdiction from exercising its power of adjudication over the case before it, where the defendants failed to object to such exercise of jurisdiction.16 While it is true that the present case should first be referred to the Barangay Lupon for conciliation because the parties involved herein actually reside in the same city (Pasig City) and the dispute between them involves a real property, hence, the said dispute should have been brought in the city in which the real property, subject matter of the controversy, is located, which happens to be the same city where the contending parties reside. In the event that respondents Spouses Lumbao failed to comply with the said condition precedent, their Complaint for Reconveyance with Damages can be dismissed. In this case, however, respondents Spouses Lumbaos non-compliance with the aforesaid condition precedent cannot be considered fatal. Although petitioners alleged in their answer that the Complaint for Reconveyance with Damages filed by respondents spouses Lumbao should be dismissed for their failure to comply with the condition precedent, which in effect, made the complaint prematurely instituted and the trial court acquired no jurisdiction to hear the case, yet, they did not file a Motion to Dismiss the said complaint. Emphasis must be given to the fact that the petitioners could have prevented the trial court from exercising jurisdiction over the case had they filed a Motion to Dismiss. However, instead of doing so, they invoked the very same jurisdiction by filing an answer seeking an affirmative relief from it. Worse, petitioners actively participated in the trial of the case by presenting their own witness and by cross-examining the witnesses presented by the respondents Spouses Lumbao. It is elementary that the active participation of a party in a case pending against him before a court is tantamount to recognition of that courts jurisdiction and a willingness to abide by the resolution of the case which will bar said party from later on impugning the courts

jurisdiction.17 It is also well-settled that the non-referral of a case for barangay conciliation when so required under the law is not jurisdictional in nature and may therefore be deemed waived if not raised seasonably in a motion to dismiss.18Hence, herein petitioners can no longer raise the defense of non-compliance with the barangay conciliation proceedings to seek the dismissal of the complaint filed by the respondents Spouses Lumbao, because they already waived the said defense when they failed to file a Motion to Dismiss. As regards the second issue, petitioners maintain that the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981 are null and void for being falsified documents as it is made to appear that petitioners Virgilio and Tadeo were present in the execution of the said documents and that the identities of the properties in those documents in relation to the subject property has not been established by the evidence of the respondents Spouses Lumbao. Petitioners also claim that the enforceability of those documents is barred by prescription of action and laches. It is the petitioners incessant barking that the "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981 were falsified because it was made to appear that petitioners Virgilio and Tadeo were present in the executions thereof, and their allegation that even respondents Spouses Lumbaos witness Carolina Morales proved that said petitioners were not present during the execution of the aforementioned documents. This is specious. Upon examination of the aforesaid documents, this Court finds that in the "Bilihan ng Lupa," dated 17 August 1979, the signatures of petitioners Virgilio and Tadeo appeared thereon. Moreover, in petitioners Answer and Amended Answer to the Complaint for Reconveyance with Damages, both petitioners Virgilio and Tadeo made an admission that indeed they acted as witnesses in the execution of the "Bilihan ng Lupa," dated 17 August 1979.19However, in order to avoid their obligations in the said "Bilihan ng Lupa," petitioner Virgilio, in his crossexamination, denied having knowledge of the sale transaction and claimed that he could not remember the same as well as his appearance before the notary public due to the length of time that had passed. Noticeably, petitioner Virgilio did not categorically deny having signed the "Bilihan ng Lupa," dated 17 August 1979 and in support thereof, his testimony in the cross-examination propounded by the counsel of the respondents Spouses Lumbao is quoted hereunder: ATTY. CHIU: Q. Now, you said, Mr. WitnessVirgilio Santos, that you dont know about this document which was marked as Exhibit "A" for the [respondents spouses Lumbao]? ATTY. BUGARING: The question is misleading, your Honor. Counsel premised the question that he does not have any knowledge but not that he does not know. ATTY. CHIU: Q. Being you are one of the witnesses of this document? [I]s it not? WITNESS: A. No, sir. Q. I am showing to you this document, there is a signature at the left hand margin of this document Virgilio Santos, will you please go over the same and tell the court whose signature is this? A. I dont remember, sir, because of the length of time that had passed. Q. But that is your signature?

A. I dont have eyeglasses My signature is different. Q. You never appeared before this notary public Apolinario Mangahas? A. I dont remember.20 As a general rule, facts alleged in a partys pleading are deemed admissions of that party and are binding upon him, but this is not an absolute and inflexible rule. An answer is a mere statement of fact which the party filing it expects to prove, but it is not evidence.21 And in spite of the presence of judicial admissions in a partys pleading, the trial court is still given leeway to consider other evidence presented.22 However, in the case at bar, as the Court of Appeals mentioned in its Decision, "[herein petitioners] had not adduced any other evidence to override the admission made in their [A]nswer that [petitioners Virgilio and Tadeo] actually signed the [Bilihan ng Lupa dated 17 August 1979] except that they were just misled as to the purpose of the document, x x x."23 Virgilios answers were unsure and quibbled. Hence, the general rule that the admissions made by a party in a pleading are binding and conclusive upon him applies in this case. On the testimony of respondents Spouses Lumbaos witness Carolina Morales, this Court adopts the findings made by the appellate court. Thus [T]he trial court gave singular focus on her reply to a question during cross-examination if the [petitioners Virgilio and Tadeo] were not with her and the vendor [Rita] during the transaction. It must be pointed out that earlier in the direct examination of said witness, she confirmed that [respondents spouses Lumbao] actually bought the lot from [Rita] ("nagkabilihan"). Said witness positively identified and confirmed the two (2) documents evidencing the sale in favor of [respondents spouse Lumbao]. Thus, her subsequent statement that the [petitioners Virgilio and Tadeo] were not with them during the transaction does not automatically imply that [petitioners Virgilio and Tadeo] did not at any time sign as witnesses as to the deed of sale attesting to their mothers voluntary act of selling a portion of her share in her deceased mothers property. The rule is that testimony of a witness must be considered and calibrated in its entirety and not by truncated portions thereof or isolated passages therein.24 Furthermore, both "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981 were duly notarized before a notary public. It is well-settled that a document acknowledged before a notary public is a public document25 that enjoys the presumption of regularity. It is a prima facie evidence of the truth of the facts stated therein and a conclusive presumption of its existence and due execution.26 To overcome this presumption, there must be presented evidence that is clear and convincing. Absent such evidence, the presumption must be upheld.27 In addition, one who denies the due execution of a deed where ones signature appears has the burden of proving that contrary to the recital in the jurat, one never appeared before the notary public and acknowledged the deed to be a voluntary act. Nonetheless, in the present case petitioners denials without clear and convincing evidence to support their claim of fraud and falsity were not sufficient to overthrow the above-mentioned presumption; hence, the authenticity, due execution and the truth of the facts stated in the aforesaid "Bilihan ng Lupa" are upheld. The defense of petitioners that the identities of the properties described in the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981 in relation to the subject property were not established by respondents Spouses Lumbaos evidence is likewise not acceptable. It is noteworthy that at the time of the execution of the documents denominated as "Bilihan ng Lupa," the entire property owned by Maria, the mother of Rita, was not yet divided among her and her co-heirs and so the description of the entire estate is the only description that can be placed in the "Bilihan ng Lupa, dated 17 August 1979 and 9 January 1981" because the exact metes and bounds of the subject property sold to respondents Spouses Lumbao could not be possibly determined at that time. Nevertheless, that does not make the contract of sale between Rita and respondents Spouses Lumbao invalid because both the law and jurisprudence have categorically held that even while an estate remains undivided, co-owners have each full ownership of their respective aliquots or undivided shares and may therefore alienate, assign or mortgage them.28 The co-owner, however, has no right to sell or alienate a specific or determinate part of the thing owned in common, because such right over the thing is represented by an aliquot or ideal portion without any physical division. In any case, the mere fact that the deed purports to transfer a concrete portion does not per se render

the sale void. The sale is valid, but only with respect to the aliquot share of the selling co-owner. Furthermore, the sale is subject to the results of the partition upon the termination of the co-ownership.29 In the case at bar, when the estate left by Maria had been partitioned on 2 May 1986 by virtue of a Deed of Extrajudicial Settlement, the 107- square meter lot sold by the mother of the petitioners to respondents Spouses Lumbao should be deducted from the total lot, inherited by them in representation of their deceased mother, which in this case measures 467 square meters. The 107-square meter lot already sold to respondents Spouses Lumbao can no longer be inherited by the petitioners because the same was no longer part of their inheritance as it was already sold during the lifetime of their mother. Likewise, the fact that the property mentioned in the two "Bilihan ng Lupa" documents was described as "a portion of a parcel of land covered in Tax Declarations No. A-018-01674," while the subject matter of the Deed of Extrajudicial Settlement was the property described in Transfer Certificate of Title (TCT) No. 3216 of the Registry of Deeds of the Province of Rizal in the name of Maria is of no moment because in the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981, it is clear that there was only one estate left by Maria upon her death. And this fact was not refuted by the petitioners. Besides, the property described in Tax Declaration No. A-018-01674 and the property mentioned in TCT No. 3216 are both located in Barrio Rosario, Municipality of Pasig, Province of Rizal, and almost have the same boundaries. It is, thus, safe to state that the property mentioned in Tax Declaration No. A-018-01674 and in TCT No. 3216 are one and the same. The defense of prescription of action and laches is likewise unjustifiable. In an action for reconveyance, the decree of registration is respected as incontrovertible. What is sought instead is the transfer of the property or its title which has been wrongfully or erroneously registered in another persons name to its rightful or legal owner, or to the one with a better right. It is, indeed, true that the right to seek reconveyance of registered property is not absolute because it is subject to extinctive prescription. However, when the plaintiff is in possession of the land to be reconveyed, prescription cannot set in. Such an exception is based on the theory that registration proceedings could not be used as a shield for fraud or for enriching a person at the expense of another.30 In the case at bar, the right of the respondents Spouses Lumbao to seek reconveyance does not prescribe because the latter have been and are still in actual possession and occupation as owners of the property sought to be reconveyed, which fact has not been refuted nor denied by the petitioners. Furthermore, respondents Spouses Lumbao cannot be held guilty of laches because from the very start that they bought the 107-square meter lot from the mother of the petitioners, they have constantly asked for the transfer of the certificate of title into their names but Rita, during her lifetime, and the petitioners, after the death of Rita, failed to do so on the flimsy excuse that the lot had not been partitioned yet. Inexplicably, after the partition of the entire estate of Maria, petitioners still included the 107-square meter lot in their inheritance which they divided among themselves despite their knowledge of the contracts of sale between their mother and the respondents Spouses Lumbao. Under the above premises, this Court holds that the "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981 are valid and enforceable and can be made the basis of the respondents Spou ses Lumbaos action for reconveyance. The failure of respondents Spouses Lumbao to have the said documents registered does not affect its validity and enforceability. It must be remembered that registration is not a requirement for validity of the contract as between the parties, for the effect of registration serves chiefly to bind third persons. The principal purpose of registration is merely to notify other persons not parties to a contract that a transaction involving the property had been entered into. Where the party has knowledge of a prior existing interest which is unregistered at the time he acquired a right to the same land, his knowledge of that prior unregistered interest has the effect of registration as to him.31 Hence, the "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981, being valid and enforceable, herein petitioners are bound to comply with their provisions. In short, such documents are absolutely valid between and among the parties thereto. Finally, the general rule that heirs are bound by contracts entered into by their predecessors-in-interest applies in the present case. Article 131132 of the NCC is the basis of this rule. It is clear from the said provision that whatever rights and obligations the decedent have over the property were transmitted to the heirs by way of succession, a mode of acquiring the property, rights and obligations of the decedent to the extent of the value of the inheritance of the heirs.33 Thus, the heirs cannot escape the legal consequence of a transaction entered

into by their predecessor-in-interest because they have inherited the property subject to the liability affecting their common ancestor. Being heirs, there is privity of interest between them and their deceased mother. They only succeed to what rights their mother had and what is valid and binding against her is also valid and binding as against them. The death of a party does not excuse nonperformance of a contract which involves a property right and the rights and obligations thereunder pass to the personal representatives of the deceased. Similarly, nonperformance is not excused by the death of the party when the other party has a property interest in the subject matter of the contract.34 In the end, despite the death of the petitioners mother, they are still bound to comply with the provisions of the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981. Consequently, they must reconvey to herein respondents Spouses Lumbao the 107-square meter lot which they bought from Rita, petitioners mother. And as correctly ruled by the appellate court, petitioners must pay respondents Spouses Lumbao attorneys fees and litigation expenses for having been compelled to litigate and incur expenses to protect their interest. 35 On this matter, we do not find reasons to reverse the said findings. WHEREFORE, premises considered, the instant Petition is hereby DENIED. The Decision and Resolution of the Court of Appeals dated 8 June 2005 and 29 July 2005, respectively, are hereby AFFIRMED. Herein petitioners are ordered to reconvey to respondents Spouses Lumbao the subject property and to pay the latter attorneys fees and litigation expenses. Costs against petitioners. SO ORDERED.

16. G.R. No. 155713

May 5, 2006

MILAGROS G. LUMBUAN,* Petitioner, vs. ALFREDO A. RONQUILLO, Respondent. DECISION QUISUMBING, J.: This petition for review on certiorari seeks to reverse and set aside the Decision1 dated April 12, 2002, of the Court of Appeals in CA-G.R. SP No. 52436 and its Resolution2 dated October 14, 2002, denying the petitioners motion for reconsideration. The salient facts, as found by the Court of Appeals,3 are as follows: Petitioner Milagros G. Lumbuan is the registered owner of Lot 19-A, Block 2844 with Transfer Certificate of Title No. 193264, located in Gagalangin, Tondo, Manila. On February 20, 1995, she leased it to respondent Alfredo A. Ronquillo for a period of three years with a monthly rental of P5,000. The parties also agreed that there will be a 10% annual increase in rent for the succeeding two years, i.e., 1996 and 1997,4 and the leased premises will be used exclusively for the respondents fastfood business, unless any other use is given, with the petitioners prior written consent.5 While the respondent at the start operated a fastfood business, he later used the premises as residence without the petitioners prior written consent. He also failed to pay the 10% annual increase in rent of P500/month starting 1996 and P1,000/month in 1997 to the present. Despite repeated verbal and written demands, the respondent refused to pay the arrears and vacate the leased premises. On November 15, 1997, the petitioner referred the matter to the Barangay Chairmans office but the parties failed to arrive at a settlement. The Barangay Chairman then issued a Certificate to File Action. 6 On December 8, 1997, the petitioner filed against the respondent an action for Unlawful Detainer, docketed as Civil Case No. 157922-CV. It was raffled to the Metropolitan Trial Court (MeTC) of Manila, Branch 6. On December 15, 1997, the respondent received the summons and copy of the complaint. On December 24, 1997, he filed his Answer by mail. Before the MeTC could receive the respondents Answer, the petitioner filed a Motion for Summary Judgment dated January 7, 1998.7 Acting upon this motion, the MeTC rendered a decision8 on January 15, 1998, ordering the respondent to vacate and surrender possession of the leased premises; to pay the petitioner the amount of P46,000 as unpaid rentals with legal interest until fully paid; and to pay the petitionerP5,000 as attorneys fees plus cost of the suit. The respondent then filed a Manifestation calling the attention of the MeTC to the fact that his Answer was filed on time and praying that the decision be set aside. The MeTC denied the prayer, ruling that the Manifestation was in the nature of a motion for reconsideration which is a prohibited pleading under the Rules on Summary Procedure. Upon appeal, the case was raffled to the Regional Trial Court (RTC) of Manila, Branch 38, and docketed as Civil Case No. 98-87311. On July 8, 1998, the RTC rendered its decision9 setting aside the MeTC decision. The RTC directed the parties to go back to the Lupon Chairman or Punong Barangay for further proceedings and to comply strictly with the condition that should the parties fail to reach an amicable settlement, the entire records of the case will be remanded to MeTC of Manila, Branch 6, for it to decide the case anew. The respondent sought reconsideration but the RTC denied the motion in an Order dated March 15, 1999. Thus, he sought relief from the Court of Appeals through a petition for review.10 On April 12, 2002, the appellate court promulgated a decision, reversing the decision of the RTC and ordering the dismissal of the ejectment case. The appellate court ruled that when a complaint is prematurely instituted, as when the mandatory

mediation and conciliation in the barangay level had not been complied with, the court should dismiss the case and not just remand the records to the court of origin so that the parties may go through the prerequisite proceedings. The petitioner filed a motion for reconsideration, which was denied by the appellate court. Hence, this present petition. In the meantime, while this petition was pending before this Court, the parties went through barangay conciliation proceedings as directed by the RTC of Manila, Branch 38. Again, they failed to arrive at an amicable settlement prompting the RTC to issue an Order11 remanding the case to the MeTC of Manila, Branch 6, where the proceedings took place anew. On April 25, 2000, the MeTC rendered a second decision, the dispositive portion of which reads: WHEREFORE, premises considered, judgment on the merits is hereby rendered for the plaintiff as follows: 1. Ordering defendant and all persons claiming right of possession under him to voluntarily vacate the property located at Lot 19-A Block 2844, Gagalangin, Tondo, Manila and surrender possession thereof to the plaintiff; 2. Ordering defendant to pay to plaintiff the amount of P387,512.00 as actual damages in the form of unpaid rentals and its agreed increase up to January 2000 and to pay the amount of P6,500.00 a month thereafter until the same is actually vacated; 3. Ordering the defendant to pay to plaintiff the sum of P10,000.00 as and for attorneys fees plus cost of the suit. SO ORDERED.12 The respondent appealed the foregoing decision. The case was raffled to RTC of Manila, Branch 22, and docketed as Civil Case No. 00-98173. The RTC ruled in favor of the petitioner and dismissed the appeal. The respondent elevated the case to the Court of Appeals, where it is now pending.
1avvphil.net

The sole issue for our resolution is: [WHETHER] THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE COMPLAINT FOR THE ALLEGED FAILURE OF THE PARTIES TO COMPLY WITH THE MANDATORY MEDIATION AND CONCILIATION PROCEEDINGS IN THE BARANGAY LEVEL.13 With the parties subsequent meeting with the Lupon Chairman or Punong Barangay for further conciliation proceedings, the procedural defect was cured. Nevertheless, if only to clear any lingering doubt why the Court of Appeals erred in dismissing the complaint, we shall delve on the issue. The petitioner alleges that the parties have gone through barangay conciliation proceedings to settle their dispute as shown by the Certificate to File Action issued by the Lupon/Pangkat Secretary and attested by the Lupon/Pangkat Chairman. The respondent, on the other hand, contends that whether there was defective compliance or no compliance at all with the required conciliation, the case should have been dismissed. The primordial objective of the Katarungang Pambarangay Rules,14 is to reduce the number of court litigations and prevent the deterioration of the quality of justice which has been brought about by the indiscriminate filing of cases in the courts. To attain this objective, Section 412(a) of Republic Act No. 7160 15 requires the parties to undergo a conciliation process before the Lupon Chairman or the Pangkat as a precondition to filing a complaint in court,16 thus: SECTION 412. Conciliation. (a) Pre-condition to Filing of Complaint in Court. No complaint, petition, action, or proceeding involving any matter within the authority of the lupon shall be filed or instituted directly in court or

any other government office for adjudication, unless there has been a confrontation between the parties before the lupon chairman or the pangkat, and that no conciliation or settlement has been reached as certified by the lupon secretary or pangkat secretary as attested to by the lupon or pangkat chairman. Here, the Lupon/Pangkat Chairman and Lupon/Pangkat Secretary signed the Certificate to File Action stating that no settlement was reached by the parties. While admittedly no pangkat was constituted, it was not denied that the parties met at the office of the Barangay Chairman for possible settlement. The efforts of the Barangay Chairman, however, proved futile as no agreement was reached. Although no pangkat was formed, in our mind, there was substantial compliance with the law. It is noteworthy that under the aforequoted provision, the confrontation before the Lupon Chairman or the pangkat is sufficient compliance with the precondition for filing the case in court.17 This is true notwithstanding the mandate of Section 410(b) of the same law that the Barangay Chairman shall constitute a pangkat if he fails in his mediation efforts. Section 410(b) should be construed together with Section 412, as well as the circumstances obtaining in and peculiar to the case. On this score, it is significant that the Barangay Chairman or Punong Barangay is herself the Chairman of the Lupon under the Local Government Code.18 Finally, this Court is aware that the resolution of the substantial issues in this case is pending with the Court of Appeals. While ordinarily, we would have determined the validity of the parties substantial claims since to await the appellate courts decision will only frustrate speedy justice and, in any event, would be a futile exercise, as in all probability the case would end up with this Court, we find that we cannot do so in the instant case. It must be underscored that supervening events have taken place before the lower courts where the parties have been adequately heard, and all the issues have been ventilated. Since the records of those proceedings are with the Court of Appeals, it is in a better position to fully adjudicate the rights of the parties. To rely on the records before this Court would prevent us from rendering a sound judgment in this case. Thus, we are left with no alternative but to leave the matter of ruling on the merits to the appellate court. WHEREFORE, the petition is GRANTED. The decision and resolution of the Court of Appeals in CA-G.R. SP No. 52436 are REVERSED and SET ASIDE, and the decision of the Regional Trial Court of Manila, Branch 38, in Civil Case No. 98-87311 is AFFIRMED.

17. G.R. No. 156228

December 10, 2003

MA. TERESA VIDAL, LULU MARQUEZ, and CARLOS SOBREMONTE, petitioners, vs. MA. TERESA O. ESCUETA, represented by HERMAN O. ESCUETA, respondent. DECISION CALLEJO, SR., J.: This is a petition for review of the Decision1 dated July 23, 2002 of the Court of Appeals in CA-G.R. SP NO. 68895 which affirmed the decision2 of the Regional Trial Court (RTC) of Mandaluyong City, Branch 208, which reversed and set aside the decision3 of the Metropolitan Trial Court of Mandaluyong City (MTC), Branch 60; and granted the motion for execution filed by private respondent Ma. Teresa O. Escueta in Civil Case No. 17520. The petition at bar stemmed from the following antecedents: When Abelardo Escueta died intestate on December 3, 1994, he was survived by his widow Remedios Escueta and their six children, including Ma. Teresa O. Escueta and her brother Herman O. Escueta. Part of his estate was a parcel of land located at No. 14 Sierra Madre corner Kanlaon Streets, Barangay Highway Hills, Mandaluyong City, covered by Transfer Certificate of Title (TCT) No. (77083) - 27568, and the house thereon. The property was leased to Rainier Llanera, who sublet the same to 25 persons. The heirs executed an extrajudicial settlement of estate over the property. They also executed a special power of attorney authorizing Ma. Teresa Escueta to sell the said property.4 Sometime in 1999, Ma. Teresa Escueta, as a co-owner of the property, filed an ejectment case against Llanera and the sub-lessees before the Lupon of Barangay Highway Hills, docketed as Barangay Case No. 99-09.5 In the meantime, on April 15, 1999, the heirs of Abelardo Escueta executed a deed of conditional sale 6 over the property including the house thereon, to Mary Liza Santos for P13,300,000.00 payable as follows: "Down payment ONE MILLION FIVE HUNDRED THOUSAND (P1,500,000.00) which the HEIRS-SELLERS acknowledged receipt thereof with complete and full satisfaction; Second payment - TEN MILLION EIGHT HUNDRED THOUSAND (P10,800,000.00) after publication of the Extra-Judicial Settlement of the Estate of the late Abelardo Escueta and payment of the taxes with the Bureau of Internal Revenue by the Attorney-in-Fact; and The balance of ONE MILLION (P1,000,000.00) upon vacation of all the occupants of the subject property within SIX (6) months from date hereof."7 The parties further agreed that: "Ms. Maria Teresa Escueta shall deliver unto the BUYER the Owners Duplicate Copy of the title upon receipt of the down payment while the original copies of the Special Power of Attorney shall be delivered upon payment of the Second Payment stated above. The ATTORNEY-IN-FACT-SELLER shall be responsible for the ejectment of all the tenants in the said subject property. The ATTORNEY-IN-FACT-SELLER shall pay the estate tax, capital gains tax and documentary stamp tax including the telephone, water and Meralco bills and the publication for the Extra-Judicial Settlement of the

estate of the late ABELARDO ESCUETA while the registration and transfer fees shall be shouldered by the BUYER."8 On May 5, 1999, Escueta and Llanera, and the sub-lessees, executed an "Amicable Settlement,"9 where they agreed that (a) the owners of the property would no longer collect the rentals due from the respondents therein (lessee and sub-lessees) starting May 1999, with the concomitant obligation of the respondents to vacate the property on or before December 1999; (b) time was the essence of the agreement, and that consequently, if the lessee and sub-lessees fail or refuse to vacate the property on or before December 1999, the barangay chairman was authorized without any court order to cause the eviction and removal of all the respondents on the property.10 The amicable settlement was attested by Pangkat Chairman Jose Acong. The parties did not repudiate the amicable settlement within ten days from the execution thereof. Neither did any of the parties file any petition to repudiate the settlement. The vendees having paid the down payment and second installment of the price of the property, the vendors caused the cancellation on December 17, 1999, of TCT No. 27568 and the issuance of TCT No. 15324 to and under the names of the vendees Mary Liza Santos, Susana Lim and Johnny Lim.11 However, Escueta and the other vendors had yet to receive the balance of the purchase price of P1,000,000.00 because the respondents were still in the property. Llanera vacated the leased premises. Later, twenty of the sub-lessees also vacated the property. By January 2000, five sub-lessees, namely, Ma. Teresa Vidal, Lulu Marquez, Marcelo Trinidad, Carlos Sobremonte,12 and Jingkee Ang remained in the property, and requested Escueta for extensions to vacate the property. Escueta agreed, but despite the lapse of the extensions granted them, the five sub-lessees refused to vacate the property. Escueta opted not to have the sub-lessees evicted through the Punong Barangay as provided for in the amicable settlement. Neither did she file a motion with the Punong Barangay for the enforcement of the settlement. Instead, she filed on May 12, 2000, a verified "Motion for Execution" against the recalcitrant sublessees with the MTC for the enforcement of the amicable settlement and the issuance of a writ of execution. The pleading was docketed as Civil Case No. 17520, with Teresa Escueta as plaintiff, and the sub-lessees as defendants.13 The defendants opposed the motion14 alleging that they were enveigled into executing the amicable settlement despite the fact that they had not violated any of the terms and conditions of the verbal lease of the property; they were coerced and forced to enter into such amicable settlement as it was the only way of prolonging their stay in the leased premises; and that they had been paying faithfully and religiously the monthly rentals in advance. They also contended that the plaintiff came to court with unclean hands, as the property had been sold by the co-owners thereof on June 8, 1999, without notifying them. The real parties-in-interest as plaintiffs, would be the new owners of the property, and not the Escuetas. The defendants further asserted that the amicable settlement was not elevated to or approved by the MTC as required by Section 419 of the Local Government Code (LGC), nor approved by a competent court; hence, there was no judgment to enforce by a new motion for a writ of execution. As such, the plaintiffs motion was premature and procedurally improper. The defendants asserted that the plaintiff must first secure a certification to file action from the barangay and thereafter, file an action for ejectment against them as required by Section 417 of the LGC. The amicable settlement of the parties before the Lupon cannot be a substitute for an action for ejectment. Finally, they averred that they had been sub-lessees for more than ten years already; hence, had the right of first refusal under Section 6 of the Urban Land Reform Law (P.D. No. 1517). For her part, the plaintiff asserted that there having been no execution of the amicable settlement on or before November 6, 1999 by the Lupon, the settlement may now be enforced by action in the proper city or municipal court. On February 22, 2001, the court issued an Order15 denying the "Motion for Execution." The court held that the plaintiff was not the real party-in-interest as the subject property had already been sold and titled to Susana Lim, Johnny Lim and Mary Liza Santos. Only the vendees had the right to demand the ejectment of the defendants from the said property. The court further ruled that the defendants had the right of first refusal to

purchase the property under Presidential Decree No. 1517. The MTC, however, did not rule on the issue of whether or not the plaintiffs motion for execution was premature. Aggrieved, the plaintiff, now the appellant, appealed the order to the RTC where she contended that: THE METROPOLITAN TRIAL COURT COMMITTED THE REVERSIBLE ERROR IN FINDING AND IN CONCLUDING THAT PLAINTIFF IS NO LONGER THE REAL PARTY-IN-INTEREST. THE METROPOLITAN TRIAL COURT COMMITTED THE REVERSIBLE ERROR IN FINDING AND IN CONCLUDING THAT DEFENDANTS CANNOT BE EJECTED AND CAN EXERCISE THE RIGHT OF FIRST REFUSAL. THE METROPOLITAN TRIAL COURT COMMITTED THE REVERSIBLE ERROR IN NOT FINDING AND IN NOT MAKING THE CONCLUSION THAT DEFENDANTS HAVE VIOLATED THE FINAL AND EXECUTORY THE WRITTEN AMICABLE SETTLEMENT BETWEEN PARTIES EXECUTED IN THEIR BARANGAY CONFRONTATION. THE METROPOLITAN TRIAL COURT COMMITTED THE REVERSIBLE ERROR IN NOT ORDERING THE EJECTMENT OF THE DEFENDANTS AND IN NOT ORDERING SAID DEFENDANTS TO PAY THEIR ARREARAGES IN RENTAL PAYMENTS FROM MAY 1999 UP TO THE DAY THEY ACTUALLY LEAVE THE PREMISES AS WELL AS ATTORNEYS FEES AND DAMAGES.16 On August 31, 2001, the RTC rendered a decision holding that the plaintiff-appellant was still the owner of the property when the ejectment case was filed in the office of the barangay captain, and, as such, was the real party-in-interest as the plaintiff in the MTC. Moreover, under the deed of conditional sale between her and the buyers, it was stipulated therein that the purchase price of P1,000,000.00 would be delivered to the vendors only "upon the vacation of all the occupants of the subject property within six (6) months from date hereof." She was duty-bound to cause the eviction of the defendant from the property; hence, the appellant, as a co-owner, had a substantial interest in the property. The MTC further held that the sale, having been executed while the appellants complaint was pending with the Lupon, the action in the MTC may be continued by the plaintiff appellant. As to the right of first refusal being asserted by the appellees, the court ruled that there was no showing that the land leased had been proclaimed to be within a specific Urban Land Reform Zone. In fact, the Housing and Land Use Regulatory Board had certified that the subject property was outside the area for priority development; thus, the appellees may not claim that they had been deprived of their preemptive right when no such right existed in the first place. The court did not rule on the third and fourth issues on the ground that the said issues were never raised by the parties. The decretal portion of the RTC decision reads as follows: PREMISES CONSIDERED, the appeal is GRANTED. The Order dated February 2, 2001 issued by the Metropolitan Trial Court of Mandaluyong City, Branch 60, in Civil Case No. 17520 is hereby REVERSED and SET ASIDE, and a new one is entered granting the Motion for Execution. Let the Record of this case be remanded to the court a quo for proper disposition. SO ORDERED.17 A petition for review under Rule 42 was filed with the Court of Appeals by three of the appellees, now petitioners Ma. Teresa Vidal, Lulu Marquez and Carlos Sobremonte. The court, however, dismissed the petition on (1) procedural grounds, and (2) for lack of merit. 18 On procedural grounds, the CA ruled that the petitioners failed to indicate the specific material dates, showing that their petition was filed on time as required by the rules, and in declaring that they failed to justify their failure to do so.

On the merits of the petition, the appellate court upheld the ruling of the RTC. The decretal portion of the decision of the CA reads: WHEREFORE, the instant petition is hereby DISMISSED. The assailed Decision of the Regional Trial Court of Mandaluyong City, Branch 208, rendered in Civil Case No. MC01-333-A, dated August 31, 2001 is hereby AFFIRMED. SO ORDERED.19 In their petition at bar, the petitioners assert that the CA erred as follows: (1) in not applying the rules of procedure liberally; (2) in declaring that there was no need for the respondents to file an ejectment case for the eviction of the petitioners; (3) that the real parties-in-interest as plaintiffs in the MTC were the new owners of the property, Susana Lim, Johnny Lim and Mary Liza Santos; (4) in not finding that the Amicable Settlement was obtained through deceit and fraud; and (5) in ruling that the petitioners had no right of first refusal in the purchase and sale of the subject property under Presidential Decree No. 1517. The petition is bereft of merit. On the procedural issue, the CA dismissed the petition before it for the petitioners failure to comply with Section 2, par. 1, Rule 42 of the 1997 Rules of Civil Procedure.20 The CA ratiocinated that there was no justification for a relaxation of the Rules, thus: Petitioners cited decisions of the Supreme Court where a relaxation of procedural rules was allowed. However, a reading of those cases shows that they are not exactly similar with the present case. In the case of Mactan Cebu International Airport Authority vs. Francisco Cuizon Mangubat, the Supreme Court allowed the late payment of docket fee by the Solicitor General on the ground that the 1997 Rules of Civil Procedure regarding payment of docket fees was still new at that time. The same cannot be said in the present case. The petition was filed on February 28, 2002, almost five years from the issuance of the 1997 Rules of Civil Procedure. The circumstances of typhoon and holiday for failure to obtain a certified true copy of the DOJs Decision, in the case of Hagonoy Market Vendor Association vs. Municipality of Hagonoy, Bulacan, were present in the instant petition. The case of Salazar vs. Court of Appeals is also not similar with the present case.21 The petitioners aver in this case that the failure of their counsel to include the material dates in their petition with the CA was, as stated in their Amended Manifestation, because the said counsel was suffering from a slight heart attack. The Court finds the petitioners pretext flimsy. If the petitioners counsel was able to prepare their petition despite her condition, there was no valid reason why she failed to include the material dates required under the Rules of Court. Besides, the petitioners stated in their petition that they had appended a copy of their Amended Manifestation, but failed to do so. If the rules were to be applied strictly, the CA could not be faulted for dismissing the petition. However, in order to promote their objective of securing a just, speedy and inexpensive dispensation of every action and proceedings, the Rules are to be liberally construed.22 Rules of procedure are intended to promote, not to defeat substantial justice and, therefore, should not be applied in a very rigid and technical sense. This Court ruled in Buenaflor vs. Court of Appeals, et al.23 that appeal is an essential part of our judicial system and trial courts and the Court of Appeals are advised to proceed with caution so as not to deprive a party of the right to appeal and that every party litigant should be afforded the amplest opportunity for the proper and just disposition of his cause, free from the constraints of technicalities. The Court has given due course to petitions where to do so would serve the demands of substantial justice and in the exercise of its equity jurisdiction. 24 In this case, the Court opts to apply the rules liberally to enable it to delve into and resolve the cogent substantial issues posed by the petitioners. We agree with the contention of the petitioners that under Section 416 of the LGC, the amicable settlement executed by the parties before the Lupon on the arbitration award has the force and effect of a final judgment of a court upon the expiration of ten (10) days from the date thereof, unless the settlement is repudiated within the period therefor, where the consent is vitiated by force, violence or intimidation, or a petition to nullify the award

is filed before the proper city or municipal court.25 The repudiation of the settlement shall be sufficient basis for the issuance of a certification to file a complaint.26 We also agree that the Secretary of the Lupon is mandated to transmit the settlement to the appropriate city or municipal court within the time frame under Section 418 of the LGC and to furnish the parties and the Lupon Chairman with copies thereof.27 The amicable settlement which is not repudiated within the period therefor may be enforced by execution by the Lupon through the Punong Barangay within a time line of six months, and if the settlement is not so enforced by the Lupon after the lapse of the said period, it may be enforced only by an action in the proper city or municipal court as provided for in Section 417 of the LGC of 1991, as amended, which reads: SEC. 417. Execution. The amicable settlement or arbitration award may be enforced by execution by the Lupon within six (6) months from the date of the settlement. After the lapse of such time, the settlement may be enforced by action in the proper city or municipal court. (Underlining supplied). Section 417 of the Local Government Code provides a mechanism for the enforcement of a settlement of the parties before the Lupon. It provides for a two-tiered mode of enforcement of an amicable settlement executed by the parties before the Lupon, namely, (a) by execution of the Punong Barangay which is quasi-judicial and summary in nature on mere motion of the party/parties entitled thereto;28 and (b) by an action in regular form, which remedy is judicial. Under the first remedy, the proceedings are covered by the LGC and the Katarungang Pambarangay Implementing Rules and Regulations. The Punong Barangay is called upon during the hearing to determine solely the fact of non-compliance of the terms of the settlement and to give the defaulting party another chance at voluntarily complying with his obligation under the settlement. Under the second remedy, the proceedings are governed by the Rules of Court, as amended. The cause of action is the amicable settlement itself, which, by operation of law, has the force and effect of a final judgment. Section 417 of the LGC grants a party a period of six months to enforce the amicable settlement by the Lupon through the Punong Barangay before such party may resort to filing an action with the MTC to enforce the settlement. The raison d etre of the law is to afford the parties during the six-month time line, a simple, speedy and less expensive enforcement of their settlement before the Lupon. The time line of six months is for the benefit not only of the complainant, but also of the respondent. Going by the plain words of Section 417 of the LGC, the time line of six months should be computed from the date of settlement. However, if applied to a particular case because of its peculiar circumstance, the computation of the time line from the date of the settlement may be arbitrary and unjust and contrary to the intent of the law. To illustrate: Under an amicable settlement made by the parties before the Lupon dated January 15, 2003, the respondents were obliged to vacate the subject property on or before September 15, 2003. If the time line of six months under Section 417 were to be strictly and literally followed, the complainant may enforce the settlement through the Lupon only up to July 15, 2003. But under the settlement, the respondent was not obliged to vacate the property on or before July 15, 2003; hence, the settlement cannot as yet be enforced. The settlement could be enforced only after September 15, 2003, when the respondent was obliged to vacate the property. By then, the six months under Section 417 shall have already elapsed. The complainant can no longer enforce the settlement through the Lupon, but had to enforce the same through an action in the MTC, in derogation of the objective of Section 417 of the LGC. The law should be construed and applied in such a way as to reflect the will of the legislature and attain its objective, and not to cause an injustice. As Justice Oliver Wendell Holmes aptly said, "courts are apt to err by sticking too closely to the words of the law where these words support a policy that goes beyond them. The Court should not defer to the latter that killeth but to the spirit that vivifieth." 29 In light of the foregoing considerations, the time line in Section 417 should be construed to mean that if the obligation in the settlement to be enforced is due and demandable on the date of the settlement, the six-month period should be counted from the date of the settlement; otherwise, if the obligation to be enforced is due and demandable on a date other than the date of the settlement, the six-month period should be counted from the date the obligation becomes due and demandable. Parenthetically, the Katarungang Pambarangay Implementing Rules and Regulations, Rule VII, Section 2 provides:

SECTION 2. Modes of Execution. - The amicable settlement or arbitration award may be enforced by execution by the Lupon within six [6] months from date of the settlement or date of receipt of the award or from the date the obligation stipulated in the settlement or adjudged in the arbitration award becomes due and demandable. After the lapse of such time, the settlement or award may be enforced by the appropriate local trial court pursuant to the applicable provisions of the Rules of Court . An amicable settlement reached in a case referred by the Court having jurisdiction over the case to the Lupon shall be enforced by execution by the said court. (Underlining supplied). By express provision of Section 417 of the LGC, an action for the enforcement of the settlement should be instituted in the proper municipal or city court. This is regardless of the nature of the complaint before the Lupon, and the relief prayed for therein. The venue for such actions is governed by Rule 4, Section 1 of the 1997 Rules of Civil Procedure, as amended. An action for the enforcement of a settlement is not one of those covered by the Rules on Summary Procedure in civil cases;30 hence, the rules on regular procedure shall apply, as provided for in Section 1, Rule 5 of the Rules of Civil Procedure, as amended. 31 As to the requisite legal fees for the filing of an action in the first level court under Section 417 of the Local Government Code, indigents-litigants (a) whose gross income and that of their immediate family do not exceed ten thousand (P10,000.00) pesos a month if residing in Metro Manila, and five thousand (P5,000.00) pesos a month if residing outside Metro Manila, and (b) who do not own real property with an assessed value of more than fifty thousand (P50,000.00) pesos shall be exempt from the payment of legal fees. Section 18, Rule 141 of the Revised Rules of Court, as amended by A.M. No. 00-2-01-SC, is hereby further amended accordingly. In this case, the parties executed their Amicable Settlement on May 5, 1999. However, the petitioners were obliged to vacate the property only in January 2000, or seven months after the date of the settlement; hence, the respondent may enforce the settlement through the Punong Barangay within six months from January 2000 or until June 2000, when the obligation of the petitioners to vacate the property became due. The respondent was precluded from enforcing the settlement via an action with the MTC before June 2000. However, the respondent filed on May 12, 2000 a motion for execution with the MTC and not with the Punong Barangay. Clearly, the respondent adopted the wrong remedy. Although the MTC denied the respondents motion for a writ of execution, it was for a reason other than the impropriety of the remedy resorted to by the respondent. The RTC erred in granting the respondents motion for a writ of execution, and the CA erred in denying the petitioners petition for review. Normally, the Court would remand the case to the Punong Barangay for further proceedings. However, the Court may resolve the issues posed by the petitioners, based on the pleadings of the parties to serve the ends of justice. It is an accepted rule of procedure for the Court to strive to settle the existing controversy in a single proceeding, leaving no root or branch to bear the seeds of future litigation.32 In this case, there is no question that the petitioners were obliged under the settlement to vacate the premises in January 2000. They refused, despite the extensions granted by the respondent, to allow their stay in the property. For the court to remand the case to the Lupon and require the respondent to refile her motion for execution with the Lupon would be an idle ceremony. It would only unduly prolong the petitioners unlawful retention of the premises.33 The RTC and the CA correctly ruled that the respondent is the real party-in-interest to enforce amicable settlement. Rule 3, Section 2 of the Rules of Court, as amended, reads: SEC. 2. Parties in interest. - A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party in interest. The party-in-interest applies not only to the plaintiff but also to the defendant. "Interest" within the meaning of the rules means material interest, an interest in issue and to be affected by the decree as distinguished from mere interest in the question involved, or a mere incidental interest.34 A real party in interest is one who has a legal right.35 Since a contract may be violated only by the parties thereto as against each other, in an action upon that contract, the real parties-in-interest, either as plaintiff or as defendant, must be parties to the said contract.36 The action must be brought by the person who, by substantive law, possesses the right sought to be
1wphi 1

enforced.37 In this case, the respondent was the party in the amicable settlement. She is the real party-ininterest to enforce the terms of the settlement because unless the petitioners vacate the property, the respondent and the other vendors should not be paid the balance of P1,000,000.00 of the purchase price of the property under the Deed of Conditional Sale. The petitioners are estopped from assailing the amicable settlement on the ground of deceit and fraud. First. The petitioners failed to repudiate the settlement within the period therefor. Second. The petitioners were benefited by the amicable settlement. They were allowed to remain in the property without any rentals therefor until December 1998. They were even granted extensions to continue in possession of the property. It was only when the respondent filed the motion for execution that the petitioners alleged for the first time that the respondents deceived them into executing the amicable settlement.38 On the petitioners claim that they were entitled to the right of first refusal under P.D. No. 1517, we agree with the disquisition of the trial court, as quoted by the Court of Appeals: We likewise find no reversible error on the part of [the] RTC in rejecting that the petitioners have a right of first refusal in the purchase and sale of the subject property. As ratiocinated by the court: "xxx. Presidential Decree No. 1517 (The Urban Land Reform Law) does not apply where there is no showing that the land leased has been proclaimed to be within a specific Urban Land Reform Zone. In the instant case, the annex attached to the Proclamation 1967 creating the areas declared as priority development and urban land reform zone ... does not indicate that the barangay where the subject property is located is included therein. This is bolstered by the certification issued by the Housing and Land Regulatory Board to the effect that the location of the property is outside the area of Priority Development. It is therefore a reversible error for the lower court to conclude that defendants-appellees were deprived of their preemptive right when no right exists in the first place." Indeed, before a preemptive right under PD 1517 can be exercised, the disputed land should be situated in an area declared to be both an APD (Areas for Priority Development) and a ULRZ (Urban Land Reform Zones). Records show, and as not disputed by the petitioners, the disputed property is not covered by the aforementioned areas and zones.39
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IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The petitioners and all those acting for and in their behalf are directed to vacate, at their own expense, the property covered by Transfer Certificate of Title No. 15324 of the Register of Deeds of Muntinlupa City and deliver possession of the property to the vendees Mary Liza Santos, Susana Lim and Johnny Lim. This is without prejudice to the right of the vendees to recover from the petitioners reasonable compensation for their possession of the property from January 2000 until such time that they vacate the property. Costs against the petitioners.

18.

19. G.R. No. 159411. March 18, 2005

TEODORO I. CHAVEZ, Petitioners, vs. HON. COURT OF APPEALS and JACINTO S. TRILLANA, Respondents. DECISION PUNO, J.: Assailed in this petition for review is the Decision dated April 2, 20031 of the Court of Appeals in CA-G.R. CV No. 590232 which modified the Decision dated December 15, 1997 of the Regional Trial Court (RTC) of Valenzuela City, Branch 172, in Civil Case No. 5139-V-97, as well as its Resolution dated August 8, 20033 which denied petitioners motion for reconsideration. The antecedent facts are as follows: In October 1994, petitioner Teodoro Chavez and respondent Jacinto Trillana entered into a contract of lease4whereby the former leased to the latter his fishpond at Sitio Pariahan, Taliptip, Bulacan, Bulacan, for a term of six (6) years commencing from October 23, 1994 to October 23, 2000. The rental for the whole term was two million two hundred forty thousand (P2,240,000.00) pesos, of which one million (P1,000,000.00) pesos was to be paid upon signing of the contract. The balance was payable as follows: b. That, after six (6) months and/or, on or before one (1) year from the date of signing this contract, the amount of THREE HUNDRED FORTY-FOUR THOUSAND (P344,000.00) pesos shall be paid on April 23, 1995 and/or, on or before October 23, 1995 shall be paid by the LESSEE to the LESSOR. c. That, the LESSEE, shall pay the amount of FOUR HUNDRED FORTY-EIGHT THOUSAND (P448,000.00) pesos x x x to the LESSOR on April 23, 1997 and/or, on or before October 23, 1997, and on April 23, 1998 and/or, on or before October 23, 1998 the amount of FOUR HUNDRED FORTY-EIGHT THOUSAND (P448,000.00) pesos x x x. Paragraph 5 of the contract further provided that respondent shall undertake all construction and preservation of improvements in the fishpond that may be destroyed during the period of the lease, at his expense, without reimbursement from petitioner. In August 1996, a powerful typhoon hit the country which damaged the subject fishpond. Respondent did not immediately undertake the necessary repairs as the water level was still high. Three (3) weeks later, respondent was informed by a barangay councilor that major repairs were being undertaken in the fishpond with the use of a crane. Respondent found out that the repairs were at the instance of petitioner who had grown impatient with his delay in commencing the work. In September 1996, respondent filed a complaint before the Office of the Barangay Captain of Taliptip, Bulacan, Bulacan. He complained about the unauthorized repairs undertaken by petitioner, the ouster of his personnel from the leased premises and its unlawful taking by petitioner despite their valid and subsisting lease contract. After conciliation proceedings, an agreement was reached, viz.: KASUNDUAN Napagkasunduan ngayong araw na to ika-17 ng Setyembre ng nagpabuwis Teodoro Chavez at bumubuwis na si G. Jay Trillana na ibabalik ni G. Chavez ang halagang P150,000.00 kay G. Trillana bilang sukli sa natitirang panahon ng buwisan. Ngunit kung maibibigay ni G. Chavez ang halagang P100,000.00 bago sumapit o pagsapit ng ika-23 ng Setyembre, taong kasalukuyan, to ay nangangahulugan ng buong kabayaran at hindi P150,000.00.

Kung sakali at hindi maibigay ang P100,000.00 ang magiging kabayaran ay mananatiling P150,000.00 na may paraan ng pagbabayad ng sumusunod: Ang P50,000.00 ay ibibigay bago sumapit o pagsapit ng ika-31 ng Oktubre 1996 at ang balanseng P100,000.00 ay ibibigay sa loob ng isang taon subalit magbibigay ng promissory note si G. Chavez at kung mabubuwisang ang kanyang palaisdaan ay ibibigay lahat ni G. Chavez ang buong P150,000.00 sa lalong madaling panahon. Kung magkakaroon ng sapat at total na kabayaran si G. Chavez kay G. Trillana ang huli ay lalagda sa kasulatan bilang waiver o walang anumang paghahabol sa nabanggit na buwisan. Alleging non-compliance by petitioner with their lease contract and the foregoing "Kasunduan," respondent filed a complaint on February 7, 1997 against petitioner before the RTC of Valenzuela City, docketed as Civil Case No. 5139-V-97. Respondent prayed that the following amounts be awarded him, viz.: (a) P300,000.00 as reimbursement for rentals of the leased premises corresponding to the unexpired portion of the lease contract; (b)P500,000.00 as unrealized profits; (c) P200,000.00 as moral damages; (d) P200,000.00 as exemplary damages; and, (e) P100,000.00 as attorneys fees plus P1,000.00 for each court appearance of respondents counsel. Petitioner filed his answer but failed to submit the required pretrial brief and to attend the pretrial conference. On October 21, 1997, respondent was allowed to present his evidence ex-parte before the Acting Branch Clerk of Court.5 On the basis thereof, a decision was rendered on December 15, 1997 6 in favor of respondent, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered as follows: (1) Ordering the defendant to reimburse to the plaintiff the sum of P300,000.00 representing rental payment of the leased premises for the unused period of lease; (2) Ordering the defendant to pay plaintiff the sum of P500,000.00 representing unrealized profit as a result of the unlawful deprivation by the defendant of the possession of the subject premises; (3) Ordering the defendant to pay plaintiff the sum of P200,000.00 as moral damages; (4) Ordering the defendant to pay plaintiff the sum of P200,000.00 as exemplary damages; and (5) Ordering the defendant to pay plaintiff the sum of P100,000.00 as and for attorneys fees, plus costs of suit. Petitioner appealed to the Court of Appeals which modified the decision of the trial court by deleting the award ofP500,000.00 for unrealized profits for lack of basis, and by reducing the award for attorneys fees to P50,000.00.7Petitioners motion for reconsideration was denied. Hence, this petition for review. Petitioner contends that the Court of Appeals erred in ruling that the RTC of Valenzuela City had jurisdiction over the action filed by respondent considering that the subject matter thereof, his alleged violation of the lease contract with respondent, was already amicably settled before the Office of the Barangay Captain of Taliptip, Bulacan, Bulacan. Petitioner argued that respondent should have followed the procedure for enforcement of the amicable settlement as provided for in the Revised Katarungang Pambarangay Law . Assuming arguendo that the RTC had jurisdiction, it cannot award more than the amount stipulated in the "Kasunduan" which isP150,000.00. In any event, no factual or legal basis existed for the reimbursement of alleged advance rentals for the unexpired portion of the lease contract as well as for moral and exemplary damages, and attorneys fees. Indeed, the Revised Katarungang Pambarangay Law 8 provides that an amicable settlement reached after barangay conciliation proceedings has the force and effect of a final judgment of a court if not repudiated or a petition to nullify the same is filed before the proper city or municipal court within ten (10) days from its date.9 It

further provides that the settlement may be enforced by execution by the lupong tagapamayapa within six (6) months from its date, or by action in the appropriate city or municipal court, if beyond the six-month period.10 This special provision follows the general precept enunciated in Article 2037 of the Civil Code, viz.: A compromise has upon the parties the effect and authority of res judicata; but there shall be no execution except in compliance with a judicial compromise. Thus, we have held that a compromise agreement which is not contrary to law, public order, public policy, morals or good customs is a valid contract which is the law between the parties themselves. 11 It has upon them the effect and authority of res judicata even if not judicially approved,12 and cannot be lightly set aside or disturbed except for vices of consent and forgery.13 However, in Heirs of Zari, et al. v. Santos,14 we clarified that the broad precept enunciated in Art. 2037 is qualified by Art. 2041 of the same Code, which provides: If one of the parties fails or refuses to abide by the compromise, the other party may either enforce the compromise or regard it as rescinded and insist upon his original demand. We explained, viz: [B]efore the onset of the new Civil Code, there was no right to rescind compromise agreements. Where a party violated the terms of a compromise agreement, the only recourse open to the other party was to enforce the terms thereof. When the new Civil Code came into being, its Article 2041 x x x created for the first time the right of rescission. That provision gives to the aggrieved party the right to "either enforce the compromise or regard it as rescinded and insist upon his original demand." Article 2041 should obviously be deemed to qualify the broad precept enunciated in Article 2037 that "[a] compromise has upon the parties the effect and authority of res judicata. (underscoring ours) In exercising the second option under Art. 2041, the aggrieved party may, if he chooses, bring the suit contemplated or involved in his original demand, as if there had never been any compromise agreement, without bringing an action for rescission.15 This is because he may regard the compromise as already rescinded16 by the breach thereof of the other party. Thus, in Morales v. National Labor Relations Commission17 we upheld the National Labor Relations Commission when it heeded the original demand of four (4) workers for reinstatement upon their employers failure to comply with its obligation to pay their monetary benefits within the period prescribed under the amicable settlement. We reiterated the rule that the aggrieved party may either (1) enforce the compromise by a writ of execution, or (2) regard it as rescinded and so insist upon his original demand upon the other partys failure or refusal to abide by the compromise. We also recognized the options in Mabale v. Apalisok,18 Canonizado v. Benitez,19 and Ramnani v. Court of Appeals,20 to name a few cases. In the case at bar, the Revised Katarungang Pambarangay Law provides for a two-tiered mode of enforcement of an amicable settlement, to wit: (a) by execution by the Punong Barangay which is quasi-judicial and summary in nature on mere motion of the party entitled thereto; and (b) an action in regular form, which remedy is judicial.21 However, the mode of enforcement does not rule out the right of rescission under Art. 2041 of the Civil Code. The availability of the right of rescission is apparent from the wording of Sec. 41722 itself which provides that the amicable settlement "may" be enforced by execution by the lupon within six (6) months from its date or by action in the appropriate city or municipal court, if beyond that period. The use of the word "may" clearly makes the procedure provided in the Revised Katarungang Pambarangay Law directory23 or merely optional in nature. Thus, although the "Kasunduan" executed by petitioner and respondent before the Office of the Barangay Captain had the force and effect of a final judgment of a court, petitioners non-compliance paved the way for the application of Art. 2041 under which respondent may either enforce the compromise, following the

procedure laid out in the Revised Katarungang Pambarangay Law , or regard it as rescinded and insist upon his original demand. Respondent chose the latter option when he instituted Civil Case No. 5139-V-97 for recovery of unrealized profits and reimbursement of advance rentals, moral and exemplary damages, and attorneys fees. Respondent was not limited to claiming P150,000.00 because although he agreed to the amount in the"Kasunduan," it is axiomatic that a compromise settlement is not an admission of liability but merely a recognition that there is a dispute and an impending litigation24 which the parties hope to prevent by making reciprocal concessions, adjusting their respective positions in the hope of gaining balanced by the danger of losing.25Under the "Kasunduan," respondent was only required to execute a waiver of all possible claims arising from the lease contract if petitioner fully complies with his obligations thereunder. 26 It is undisputed that herein petitioner did not. Having affirmed the RTCs jurisdiction over the action filed by respondent, we now resolve petitioners remaining contention. Petitioner contends that no factual or legal basis exists for the reimbursement of alleged advance rentals, moral and exemplary damages, and attorneys fees awarded by the court a quo and the Court of Appeals. The rule is that actual damages cannot be presumed, but must be proved with a reasonable degree of certainty.27 In the case at bar, we agree with petitioner that no competent proof was presented to prove that respondent had paid P300,000.00 as advance rentals for the unexpired period of the lease contract. On the contrary, the lease contract itself provided that the remaining rentals of P448,000.00 shall be paid "on April 23, 1997 and/or, on or before October 23, 1997, and on April 23, 1998 and/or, on or before October 23, 1998 the amount P448,000.00." Respondent filed his complaint on February 7, 1997. No receipt or other competent proof, aside from respondents self-serving assertion, was presented to prove that respondent paid the rentals which were not yet due. No proof was even presented by respondent to show that he had already paid P1,000,000.00 upon signing of the lease contract, as stipulated therein. Petitioner, in paragraphs 2 and 7 of his answer,28specifically denied that respondent did so. Courts must base actual damages suffered upon competent proof and on the best obtainable evidence of the actual amount thereof.29 As to moral damages, Art. 2220 of the Civil Code provides that same may be awarded in breaches of contract where the defendant acted fraudulently or in bad faith. In the case at bar, respondent alleged that petitioner made unauthorized repairs in the leased premises and ousted his personnel therefrom despite their valid and subsisting lease agreement. Petitioner alleged, by way of defense, that he undertook the repairs because respondent abandoned the leased premises and left it in a state of disrepair. However, petitioner presented no evidence to prove his allegation, as he did not attend the pretrial conference and was consequently declared in default. What remains undisputed therefore is that petitioner had a valid and subsisting lease contract with respondent which he refused to honor by giving back possession of the leased premises to respondent. We therefore sustain the conclusion of both the trial court and the Court of Appeals that an award of moral damages is justified under the circumstances. We likewise sustain the award for exemplary damages considering petitioners propensity not to honor his contractual obligations, first und er the lease contract and second, under the amicable settlement executed before the Office of the Barangay Captain. Since respondent was compelled to litigate and incur expenses to protect his interest on account of petitioners refusal to comply with his contractual obligations,30 the award of attorneys fees has to be sustained. IN VIEW WHEREOF, the petition is PARTIALLY GRANTED. The assailed Decision dated April 2, 2003 of the Court of Appeals in CA-G.R. CV No. 59023 is modified by deleting the award of P300,000.00 as reimbursement of advance rentals. The assailed Decision is AFFIRMED in all other respects.