AGBAYANI vs. CA
FACTS: Agbayani and Genabe were both employees of the
Regional Trial Court (RTC), Branch 275 of Las Piñas City,
working as Court Stenographer and Legal Researcher II,
respectively. On December 29, 2006, Agbayani filed a criminal
complaint for grave oral defamation against Genabe before the
Office of the City Prosecutor of Las Pias City, docketed as I.S.
No. 07-0013, for allegedly uttering against her, in the presence
of their fellow court employees and while she was going about
her usual duties at work, the following statements, to wit:
ANG GALING MO LETY, SINABI MO NA TINAPOS MO YUNG
MARVILLA CASE, ANG GALING MO. FEELING LAWYER KA KASI,
BAKIT DI KA MAGDUTY NA LANG, STENOGRAPHER KA
MAGSTENO KA NA LANG, ANG GALING MO, FEELING LAWYER
KA TALAGA. NAGBEBENTA KA NG KASO, TIRADOR KA NG
JUDGE. SIGE HIGH BLOOD DIN KA, MAMATAY KA SANA SA
HIGH BLOOD MO
In a resolution rendered on February 12, 2007, the Office of the
City Prosecutor of Las Pias City, found probable cause for the
filing of the information for the grave oral defamation against
Genabe. However, upon petition for review filed by Genabe, the
DOJ Undersecretary Ernesto Pineda found that subject
utterances of respondent constitute only slight oral
defamation. The complaint-affidavit, however, failed to show
that the instant case was previously referred to the barangay for
conciliation in compliance with Sections 408 and 409,
paragraph (d), of the Local Government Code, which provides:
Section 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: xxx
Section 409. Venue. x x x (d) Those arising at the workplace
where the contending parties are employed or xxx shall be
brought in the barangay where such workplace or institution is
located.
The records of the case likewise show that the instant case is
not one of the exceptions enumerated under Section 408 of the
Local Government Code. Hence, the dismissal of the instant
petition is proper. It is well-noted that the Supreme Court held
that where the case is covered by P.D. 1508 (Katarungang
Pambarangay Law), the compulsory process of arbitration
required therein is a pre-condition for filing a complaint in
court. Where the complaint (a) did not state that it is one of the
excepted cases, or (b) it did not allege prior availment of said
conciliation process, or (c) did not have a certification that no
conciliation or settlement had been reached by the parties, the
case should be dismissed x x x. While the foregoing doctrine is
handed down in civil cases, it is submitted that the same
should apply to criminal cases covered by, but filed without
complying with, the provisions of P.D. 1508.
The DOJ Undersecretary move for the withdrawal of the
Information. The petitioner filed a motion for reconsideration,
which was denied in a Resolution dated June 25, 2007.
Consequently, Agbayani filed a petition for certiorari with the
CA alleging that the DOJ committed grave abuse of discretion
in setting aside the Resolution dated February 12, 2007 of the
City Prosecutor of Las Pias City in I.S. Case No. 07-0013. She
averred that the respondents petition for review filed with the
DOJ did not comply with Sections 5 and 6 of DOJ Circular No.
70, or the 2000 National Prosecution Service
(NPS) Rules on Appeal, and maintained that her evidence
supported a finding of probable cause for grave oral
defamation against respondent Genabe. Petition was denied
by CA.
ISSUE: Whether the DOJ Undersecretary committed grave
abuse of discretion when it ruled out the withdrawal of the filing
of Information in court for non-compliance with the Barangay
conciliation. NO
HELD: Undeniably, both petitioner Agbayani and respondent
Genabe are residents of Las Pias City
and both work at the RTC, and the incident which is the subject
matter of the case happened in their workplace. Agbayani’s
complaint should have undergone the mandatory barangay
conciliation for possible amicable settlement with respondent
Genabe, pursuant to Sections 408 and 409 of Republic Act No.
7160 or the Local Government Code of 1991 which provide:
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: x
xx
Sec. 409. Venue. x x x (d) Those arising at the workplace where
the contending parties are employed or x x x shall be brought in
the barangay where such workplace or institution is located.
Administrative Circular No. 14-93 issued by the Supreme Court
on July 15, 1993 states that:
I. All disputes are subject to Barangay conciliation pursuant to
the Revised Katarungang Pambarangay Law [formerly P.D.
1508, repealed and now replaced by Secs. 399-422, Chapter
VII, Title I, Book III, and Sec. 515, Title I, Book IV, R.A. 7160,
otherwise known as the Local Government Code of 1991], and
prior recourse thereto is a pre-condition before filing a
complaint in court or any government offices, except in the
following disputes:
[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] Where the dispute involves real properties located in
different cities and municipalities, unless the parties thereto
agree to submit their difference to amicable settlement by an
appropriate Lupon;
[4] Any complaint by or against corporations, partnerships or
juridical entities, since only individuals shall be parties to
Barangay conciliation proceedings either as complainants or
respondents [Sec. 1, Rule VI, Katarungang Pambarangay
1
Rules];
[5] 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;
[6] Offenses for which the law prescribes a maximum penalty
of imprisonment exceeding one [1] year or a fine of over five
thousand pesos ([P]5,000.00);
[7] Offenses where there is no private offended party;
[8] Disputes where urgent legal action is necessary to prevent
injustice from being committed or further continued,
specifically the following:
[a] Criminal cases where accused is under police
custody or detention [See Sec. 412(b)(1), Revised
Katarungang Pambarangay Law];
[b] Petitions for habeas corpus by a person illegally
deprived of his rightful custody over another or a
person illegally deprived of or on acting in his behalf;
[c] Actions coupled with provisional remedies such
as preliminary injunction, attachment, delivery of
personal property and support during the pendency
of the action; and
[d]Actions which may be barred by the Statute of
Limitations.
[9] Any class of disputes which the President may determine in
the interest of justice or upon the recommendation of the
Secretary of Justice;
[10] Where the dispute arises from the Comprehensive
Agrarian Reform Law (CARL) [Secs. 46 & 47, R. A.
6657];
[11] Labor disputes or controversies arising from employeremployee relations [Montoya vs. Escayo, 171
SCRA 442; Art. 226, Labor Code, as amended, which grants
original and exclusive jurisdiction over conciliation and
mediation of disputes, grievances or problems to certain
offices of the Department of Labor and Employment];
[12] Actions to annul judgment upon a compromise which may
be filed directly in court [See Sanchez vs. [Judge] Tupaz, 158
SCRA 459].
The compulsory process of arbitration is a pre-condition for the
filing of the complaint in court. Where the complaint (a) did not
state that it is one of excepted cases, or (b) it did not allege prior
availment of said conciliation process, or (c) did not have a
certification that no conciliation had been reached by the
parties, the case should be dismissed. Here, petitioner
Agbayani failed to show that the instant case is not one of the
exceptions enumerated above. Neither has she shown that the
oral defamation caused on her was so grave as to merit a
penalty of more than one year. Oral defamation under Article
358 of the Revised Penal Code, as amended, is penalized as
follows:
Article 358. Slander. Oral defamation shall be punished by
arresto mayor in its maximum period to prision correccional in
its minimum period if it is of a serious and insulting nature;
otherwise, the penalty shall be arresto menor or a fine not
exceeding 200 pesos.
We recall that in the morning of December 27, 2006 when the
alleged utterances were made, Genabe was about to punch in
her time in her card when she was informed that she had been
suspended for failing to meet her deadline in a case, and that it
was Agbayani who informed the presiding judge that she had
missed her deadline when she left to attend a convention in
Baguio City, leaving Agbayani to finish the task herself.
According to Undersecretary Pineda, the confluence of these
circumstances was the immediate cause of respondent
Genabe's emotional and psychological distress. We rule that
his determination that the defamation was uttered while the
respondent was in extreme excitement or in a state of passion
and obfuscation, rendering her offense of lesser gravity than if
it had been made with cold and calculating deliberation, is
beyond the ambit of our review. The CA concurred that the
complained utterances constituted only slight oral
defamation, having been said in the heat of anger and with
perceived provocation from Agbayani. Respondent Genabe
was of a highly volatile personality prone to throw fits
(sumpongs), who thus shared a hostile working environment
with her co-employees, particularly with her superiors,
Agbayani and Hon. Bonifacio Sanz Maceda, the Presiding Judge
of Branch 275, whom she claimed had committed against her
grievous acts that outrage moral and social conduct. That there
had been a long-standing animosity between Agbayani and
Genabe is not denied.
MILAGROS LUMBUAN vs. ALFREDO RONQUILLO
Facts: Petitioner Milagros G. Lumbuan is the registered owner
of a lot in Gagalangin, Tondo, Manila. On February 20, 1995,
she leased it to respondent Alfredo A. Ronquillo for a period of
three years. They agreed that the leased premises will be used
exclusively for the respondent’s fastfood business, unless any
other use is given, with the petitioner’s prior written consent.
While the respondent at the start operated a fastfood business,
he later used the premises as residence without the
petitioner’s 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.
Petitioner filed against the respondent an action for Unlawful
Detainer. Before the MeTC could receive the respondent’s
Answer, the petitioner filed a Motion for Summary Judgment.
Acting upon this motion, the MeTC rendered a decision asking
respondent to vacate the premises. Upon elevation, 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 for it to decide the case anew. On
petition for review with the CA, it 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.
ISSUE: WHETHER THE COURT OF APPEALS GRAVELY ERRED
2
IN DISMISSING THE COMPLAINT FOR THE ALLEGED FAILURE
OF THE PARTIES TO COMPLY WITH THE MANDATORY
MEDIATION AND CONCILIATION PROCEEDINGS IN THE
BARANGAY LEVEL. YES. CA erred and it should proceed with
the appeal.
HELD: The primordial objective of the Katarungang
Pambarangay Rules, 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 requires the
parties to undergo a conciliation process before the Lupon
Chairman or the Pangkat as a precondition to filing a complaint
in court. 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. 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.
BAÑARES vs BALISANG
FACTS: Petitioners Fidel M. Bañares II, Lilia C. Valeriano, Edgar
M. Bañares, Emilia Gatchialian and Fidel Besarino were the
accused in sixteen criminal cases for estafa filed by the private
respondents. The cases were assigned to the Municipal Trial
Court of Antipolo, Rizal, Branch II. After petitioner's
arraignment, they then filed a motion to dismiss on the ground
that they did not undergo Barangay conciliation with the
opposing parties considering that they live in the same
barangay and the amount involved does not exceed Two
Hundred Pesos (Php 200.00).
On November 13, 1995, the municipal trial court issued an
Order dismissing the sixteen criminal cases against petitioners
without prejudice, pursuant to Section 18 of the 1991 Revised
Rule on Summary Procedure (referral to Lupon). Roughly two
months after, respondents filed a motion to revive the case on
the ground that it already complied with the conciliation
proceedings before the Lupon. Petitioners filed their comment
and opposition to the same alleging that the order dismissing
the case had long been final and executory, hence,
respondent's only remedy is to re-file the cases.
ISSUE/S:
1. Whether or not an order dismissing a case or action without
prejudice may attain finality if not appealed within the
reglementary period, as in the present case;
2. Whether or not the action or case that had been dismissed
without prejudice may be revived by motion after the order of
dismissal had become final and executory; and
3. Whether or not the court that had originally acquired
jurisdiction of the case that was dismissed without prejudice
still have jurisdiction to act on the motion to revive after the
order of dismissal has become final and executory.
HELD:
Petitioners' contentions are meritorious.
A "final order" issued by a court has been defined as one which
disposes of the subject matter in its entirety or terminates a
particular proceeding or action, leaving nothing else to be done
but to enforce by execution what has been determined by the
court. 29 As distinguished therefrom, an "interlocutory order"
is one which does not dispose of a case completely, but leaves
something more to be adjudicated upon.
This Court has previously held that an order dismissing a case
without prejudice is a final order if no motion for
reconsideration or appeal therefrom is timely filed.
The law grants an aggrieved party a period of fifteen (15) days
from his receipt of the court's decision or order disposing of the
action or proceeding to appeal or move to reconsider the same.
After the order of dismissal of a case without prejudice has
become final, and therefore becomes outside the court's
power to amend and modify, a party who wishes to reinstate
the case has no other remedy but to file a new complaint.
Thus, the regional trial court erred when it denied the petition
for certiorari, injunction and prohibition and ruled that the
order of the municipal trial court, dated November 13, 1995
dismissing without prejudice the criminal cases against
petitioners had not attained finality and hence, could be
reinstated by the mere filing of a motion to revive.
Equally erroneous is private respondents' contention that the
rules regarding finality of judgments under the Revised Rules of
Court 40 do not apply to cases covered by the 1991 Revised
Rule on Summary Procedure. Private respondents claim that
Section 18 of the 1991 Revised Rule on Summary Procedure
allows the revival of cases which were dismissed for failure to
submit the same to conciliation at the barangay level, as
required under Section 412 in relation to Section 408 of the
Local Government Code. The said provision states:
Referral to Lupon. — Cases requiring referral to the Lupon for
conciliation under the provisions of Presidential Decree No.
1508 41 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. 42
There is nothing in the aforecited provision which supports
private respondents' view. Section 18 merely states that when
3
a case covered by the 1991 Revised Rule on Summary
Procedure is dismissed without prejudice for non-referral of
the issues to the Lupon, the same may be revived only after the
dispute subject of the dismissed case is submitted to barangay
conciliation as required under the Local Government Code.
There is no declaration to the effect that said case may be
revived by mere motion even after the fifteen-day period within
which to appeal or to file a motion for reconsideration has
lapsed.
Moreover, the 1991 Revised Rule on Summary Procedure
expressly provides that the Rules of Court applies suppletorily
to cases covered by the former:
Sec. 22. Applicability of the regular rules. — The regular
procedure prescribed in the Rules of Court shall apply to the
special cases herein provided for in a suppletory capacity
insofar as they are not inconsistent therewith. 43
Nothing in Section 18 of the 1991 Revised Rule on Summary
Procedure conflicts with the prevailing rule that a judgment or
order which is not appealed or made subject of a motion for
reconsideration within the prescribed fifteen-day period
attains finality. 46 Hence, the principle expressed in the maxim
interpretare et concordare legibus est optimus interpretandi,
or that every statute must be so construed and harmonized
with other statutes as to form a uniform system of
jurisprudence 47 applies in interpreting both sets of Rules.
The rationale behind the doctrine of finality of judgments and
orders, likewise, supports our conclusion that said doctrine
applies to cases covered by the 1991 Revised Rule on
Summary Procedure:
The doctrine of finality of judgments is grounded on
fundamental considerations of public policy and sound
practice that at the risk of occasional error, the judgments of
the courts must become final at some definite date set by law.
48
It is but logical to infer that the foregoing principle also applies
to cases subject to summary procedure especially since the
objective of the Rule governing the same is precisely to settle
these cases expeditiously.
The Court also finds it necessary to correct the mistaken
impression of petitioners and the municipal trial court that the
non-referral of a case for barangay conciliation as required
under the Local Government Code of 1991 51 may be raised in
a motion to dismiss even after the accused has been arraigned.
It is well-settled that the non-referral of a case for barangay
conciliation when so required under the law 52 is not
jurisdictional in nature 53 and may therefore be deemed
waived if not raised seasonably in a motion to dismiss. 54The
Court notes that although petitioners could have invoked the
ground of prematurity of the causes of action against them due
to the failure to submit the dispute to Lupon prior to the filing of
the cases as soon as they received the complaints against
them, petitioners raised the said ground only after their
arraignment.
However, while the trial court committed an error in dismissing
the criminal cases against petitioners on the ground that the
same were not referred to the Lupon prior to the filing thereof in
court although said ground was raised by them belatedly, the
said order may no longer be revoked at present considering that
the same had already become final and executory, and as
earlier stated, may no longer be annulled 55 by the Municipal
Trial Court, nor by the Regional Trial Court or this Court.
QUIROS vs. ARJONA
FACTS: Petitioners Proceso Quiros and Leonarda Villegas filed
with the office of the Brgy. Captain of Labney, San Jacinto,
Pangasinan, a complaint for recovery of ownership and
possession of a parcel of land against their uncle Marcelo
Arjona (one of the respondents). The subject land was their
lawful share/inheritance from their late grandmother.
The parties eventually reached an amicable settlement. By
reason thereof, Arjona executed a document/agreement which
states that he will give to petitioners the 1 hectare land he
inherited from his mother. Another document/agreement was
executed by a Jose Banda which states that the land he is
cultivating/tilling belongs to the Arjona family, and that he will
voluntarily surrender said land if ever the petitioners would get
it from him.
Petitioners filed a complaint with the MCTC for the execution of
the compromise agreement, which was denied because the
subject property cannot be determined with certainty.
On appeal, the RTC reversed the decision.
Respondents appealed to the CA which reversed the decision
of the trial court.
ISSUE: Whether the amicable settlement between the
parties is valid and enforceable. NO
HELD: The Court held that the general rule regarding the
finality of amicable settlements (which is: “where no
repudiation was made during the 10-day period, such
settlement attains the status of finality and the courts have the
ministerial duty to implement and enforce it”) admits certain
exceptions; such as those special and exceptional
circumstances or facts that may have transpired after the
finality of judgment and which would render its execution
unjust. In the case at bar, the ends of justice would be
frustrated if a writ of execution is issued considering the
uncertainty of the object of the agreement. Perusal of the 2
documents of the amicable settlement show that the lands
referred to were different from each other. Hence, no writ of
execution could be issued for failure to determine with
certainty what parcel of land respondent intended to convey.
An amicable settlement partakes of the nature of a contract.
Thus, it is subject to the same legal provisions providing for the
validity, enforcement, rescission or annulment of ordinary
contracts –i.e. there is a need to ascertain whether said
documents sufficiently complied with the requisites of validity
in accordance with Art. 1318, NCC.
•
CONSENT: There is no question that there was
meeting of the minds between the contracting
4
•
•
parties.
OBJECT: The object is a 1-hectare parcel of land that
the petitioners inherited from their grandmother.
CAUSE: The cause of the contract is the delivery of
petitioners’ share in the inheritance.
NOTE: The inability to identify the land did not negate the
principal object of the contract. Such error may be corrected by
reformation of the instrument and not its nullification.
Reformation is a remedy in equity whereby a written instrument
is made or construed so as to express or conform to the real
intention of the parties where some error or mistake has been
committed. In granting reformation, the remedy in equity is not
making a new contract for the parties, but establishing and
perpetuating the real contract between the parties which,
under the technical rules of law, could not be enforced but for
such reformation.
In order that an action for reformation of instrument as
provided in Article 1359 of the Civil Code may prosper, the
following requisites must concur: (1) there must have been a
meeting of the minds of the parties to the contract; (2) the
instrument does not express the true intention of the parties;
and (3) the failure of the instrument to express the true
intention of the parties is due to mistake, fraud, inequitable
conduct or accident.
CHAVEZ vs. CA
FACTS: Petitioner Teodoro Chavez and respondent Jacinto
Trillana entered into a contract of lease whereby the former
leased to the latter his fishpond at Sitio Pariahan, Taliptip,
Bulacan, Bulacan, for a term of six (6) years. 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.
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.During the course of the lease, 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.
Thereafter, 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.
Alleging non-compliance by petitioner with their lease contract
and the foregoing “Kasunduan,” respondent filed a complaint
against petitioner before the RTC of Valenzuela City. 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.
ISSUE: Whether the institution of complaint in the trial court is
valid. (Yes)
HELD: Article 2037 of the Civil Code, provides that 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.
However, in Heirs of Zari, et al. v. Santos, the court clarified that
the broad precept enunciated in Art. 2037 is qualified by Art.
2041 of the same Code, which provides that 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.
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.
VIDAL vs. ESCUETA
FACTS: Abelardo Escueta died intestate on December 3, 1994.
He was survived by his widow, Remedios Escueta, and their six
children, respondent Ma. Teresa O. Escueta and her brother
Herman O. Escueta. Part of his estate was a parcel of land,
subject of the present controversy, located at No. 14 Sierra
Madre corner Kanlaon Streets, Barangay Highway Hills,
Mandaluyong City. The property was leased to a certain Rainier
Llanera. 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 L u p o n of Barangay Highway Hills. In
the meantime, the heirs of Abelardo Escueta executed a deed
of conditional sale over the property, including the house
thereon, to Mary Liza Santos for P13,300,000.00. It was agreed
that the remaining balance of the purchase price shall be paid
upon vacation of all the occupants of the subject property.
Escueta and Llanera, and the sub-lessees, executed an
"Amicable Settlement;" where they agreed, among others, that
the owners of the property would no longer collect the rentals
due from the lessee and sub-lessees, but with the concomitant
obligation to vacate the property on or before December 1999.
Llanera and the other sub-lessees vacated the leased
premises. The other sub-lessees, petitioners Ma. Teresa Vidal,
Lulu Marquez, Marcelo Trinidad, Carlos Sobremonte, 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 sub5
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. Instead, she filed on
May 12, 2000, a verified "Motion for Execution" against the
recalcitrant sub-lessees with the MTC for the enforcement of
the amicable settlement and the issuance of a writ of
execution. Petitioners opposed the. motion, contending that
the real party-in -interest as plaintiff, would be the new owners
of the property, and not the Escuetas. Petitioners 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 plaintiff's motion was premature
and procedurally improper. The trial court denied the "Motion
for Execution." On appeal, the Regional Trial Court rendered a
decision holding that the respondent was still the owner of the
property when the ejectment case was filed in the office of the
barangay captain, and, as such, is the real party-in-interest as
the plaintiff in the MTC Petitioners elevated the case to the
Court of Appeals which upheld the ruling of the Regional Trial
Court. Hence, the present petition.
ISSUE: Whether the filing in court for action for enforcement of
settlement before the lapse of 6 months was proper? NO
HELD: The Supreme Court denied the petition. The Court
upheld the appellate court in holding that respondent Ma.
Teresa O. Escueta is the real party-in-interest to enforce the
terms of the amicable 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 Court, however, ruled that the RTC erred in granting
the respondent's motion for a writ of execution, and the CA
erred in denying the petitioners' petition for review. 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 and 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. 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 respondent's motion for
a writ of execution, it was for a reason other than the
impropriety of the remedy resorted to by the respondent.
GALUBA vs. SPS LAURETA
FACTS: Alfredo and Revelina Laureta ceded to petitioner all
their rights and interests over a house and lot located in Quezon
Hill, Baguio City for P70,000. Petitioner paid the Lauretas
P50,000 with the balance payable later.
When P18,000 of the balance remained unpaid, the parties
brought the matter before the barangay captain of Victoria
Village in Baguio City. On February 10, 1984, the parties
entered into an amicable settlement whereby they agreed that
the P18,000 would be paid in monthly installments starting
April, 1984 and that noncompliance therewith would "mean
execution in accordance with the Barangay Law.
A month later, petitioner discovered that the house he had
bought was encroaching on the adjoin- ing lot, that the owner
thereof was demanding payment for such encroachment, and
that there were arrears on electric bills and taxes amounting to
P6,117. Consequently, on July 17, 1984, he filed in the office of
the barangay captain of Victoria Village an unsworn complaint
for the annulment of the amicable settlement. He alleged
therein that his consent to said settlement had been vitiated by
mistake or fraud and therefore, the amicable settlement
should be annulled and a new one entered into by the parties.
Meanwhile, the Lauretas filed in the Municipal Trial Court of
Baguio City, Branch IV, a motion for the issuance of a writ of
execution based on the amicable settlement. As the inferior
court issued the writ, petitioner filed in the Regional Trial Court
of Baguio City a complaint for the annulment of the amicable
settlement with prayer for a writ of preliminary injunction
and/or restraining order.
The lower court denied the prayer for the issuance of a
restraining order and/or writ of preliminary injunction.
Thereafter, the Lauretas filed a motion to dismiss the
complaint on the ground of lack of jurisdiction over the nature
of the action. Alleging that in praying for a restraining order
and/or writ of preliminary injunction, petitioner wanted to
"circumvent the mandatory provisions of P.D. 1508", the
Lauretas averred that "without the unmeritorious petition for
preliminary injunction", the dispute between them and
petitioner was subject to amicable settlement.
The lower court issued an order granting the motion to dismiss
on the grounds of lack of jurisdiction as well as cause of action.
Citing Sections 11 and 13 of P.D. 1508, the lower court said: "x
x x [T]here is no authorized judicial procedure under P.D. 1508
for the annulment of an amicable settlement. Only an
arbitration award, which is different from an amicable
settlement, may become the subject of a petition for
nullification to be filed yet with the proper municipal trial court.
x x x." The court noted the fact that petitioner failed to repudiate
the amicable settlement within the 10-day period provided for
in Section 11 of P.D. 1508 as the parties entered into said
amicable settlement on February 10, 1984 and yet it was only
on July 27, 1984 when
ISSUE: Whether the RTC has jurisdiction to annul an amicable
settlement arrived at by the parties through the mediation of
the Lupong Tagapayapa, in the absence of a repudiation of said
amicable settlement within the 10-day period provided for in
Section 11 of Presidential Decree No. 1508. NO
HELD: Section 6 of P.D. 1508 is mandatory in character. Thus,
in Morata v. Go, 125 SCRA 444, Vda. de Borromeo v. Pogoy, 126
SCRA 216 and Peregrina v. Panis, 133 SCRA 72, We accordingly
held that the conciliation process at the barangay level is a
condition precedent for the filing of a complaint in court. In
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Royales v. Intermediate Appellate Court, 127 SCRA 470, We
ruled that non-compliance with the condition precedent
prescribed by P.D. 1508 could affect the sufficiency of the
plaintiff's cause of action and make his complaint vulnerable
to dismissal on the ground of lack of cause of action or
prematurity.
Once the parties have signed an amicable settlement, any
party who finds reasons to reject it must do so in accordance
with Section 13 of P.D. 1508 which states:
"SEC. 13. Repudiation.- Any party to the dispute may, within ten
[10] days from the date of the settlement, repudiate the same
by filing with the Barangay Captain a statement to that effect
sworn to before him, where the consent is vitiated by fraud,
violence or intimidation. Such repudiation shall be sufficient
basis for the issuance of the certification for filing of a
complaint, provided for in Section 6, hereof."
Pursuant to P.D. 1508, Section 12, Rule VI of the Katarungang
Pambarangay Rules which were promulgated "for the amicable
settlement of disputes at the barangay level, without judicial
recourse”, also provides that "[f]ailure to repudiate the
settlement or the arbitration agreement within the time limits
respectively set [in Section 10 thereof], shall be deemed a
waiver of the right to challenge on said grounds", i.e., fraud,
violence or intimidation.
Any party, therefore, who fails to avail himself of the remedy set
forth in Section 13 must face the consequences of the
amicable settlement for he can no longer file an action in court
to redress his grievances arising from said settlement.
It should be emphasized that under Section 11 of said law,
"[t]he amicable settlement and arbitration award shall have the
force and effect of a final judgment of a court upon the
expiration of the ten [10] days from the date thereof unless
repudiation of the settlement has been made or a petition for
nullification of the award has been filed before the proper city
or municipal court.”
KOREA TECHNOLOGIES vs. LERMA
FACTS: Petitioner Korea Technologies Co., Ltd. (KOGIES) is a
Korean corporation which is engaged in the supply and
installation of Liquefied Petroleum Gas (LPG) Cylinder
manufacturing plants, while private respondent Pacific
General Steel Manufacturing Corp. (PGSMC) is a domestic
corporation. On March 5, 1997, PGSMC and KOGIES executed
a Contract whereby KOGIES would set up an LPG Cylinder
Manufacturing Plant in Carmona, Cavite. The contract was
executed in the Philippines. On April 7, 1997, the parties
executed, in Korea, an Amendment for Contract No. KLP970301 dated March 5, 1997 amending the terms of payment.
The contract and its amendment stipulated that KOGIES will
ship the machinery and facilities necessary for manufacturing
LPG cylinders for which PGSMC would pay USD 1,224,000.
KOGIES would install and initiate the operation of the plant for
which PGSMC bound itself to pay USD 306,000 upon the plants
production of the 11-kg. LPG cylinder samples. Thus, the total
contract price amounted to USD 1,530,000. On October 14,
1997, PGSMC entered into a Contract of Lease with Worth
Properties, Inc. (Worth) for use of Worths 5,079-square meter
property with a 4,032-square meter warehouse building to
house the LPG manufacturing plant. The monthly rental was
PhP 322,560 commencing on January 1, 1998 with a 10%
annual increment clause. Subsequently, the machineries,
equipment, and facilities for the manufacture of LPG cylinders
were shipped, delivered, and installed in the Carmona plant.
PGSMC paid KOGIES USD 1,224,000. However, gleaned from
the Certificate executed by the parties on January 22, 1998,
after the installation of the plant, the initial operation could not
be conducted as PGSMC encountered financial difficulties
affecting the supply of materials, thus forcing the parties to
agree that KOGIES would be deemed to have completely
complied with the terms and conditions of the March 5, 1997
contract. For the remaining balance of USD306,000 for the
installation and initial operation of the plant, PGSMC issued
two postdated checks: (1) BPI Check No. 0316412 dated
January 30, 1998 for PhP 4,500,000; and (2) BPI Check No.
0316413 dated March 30, 1998 for PhP 4,500,000. When
KOGIES deposited the checks, these were dishonored for the
reason PAYMENT STOPPED. Thus, on May 8, 1998, KOGIES
sent a demand letter to PGSMC threatening criminal action for
violation of Batas Pambansa Blg. 22 in case of nonpayment. On
the same date, the wife of PGSMCs President faxed a letter
dated May 7, 1998 to KOGIES President who was then staying
at a Makati City hotel. She complained that not only did KOGIES
deliver a different brand of hydraulic press from that agreed
upon but it had not delivered several equipment parts already
paid for.
ISSUE: Whether or not the arbitration clause in the contract of
the parties should govern. YES
HELD: Yes. Established in this jurisdiction is the rule that the
law of the place where the contract is made governs. Lex loci
contractus. The contract in this case was perfected here in the
Philippines. Therefore, our laws ought to govern. Nonetheless,
Art. 2044 of the Civil Code sanctions the validity of mutually
agreed arbitral clause or the finality and binding effect of an
arbitral award. Art. 2044 provides, Any stipulation that the
arbitrators award or decision shall be final, is valid, without
prejudice to Articles 2038, 2039 and 2040.
The arbitration clause was mutually and voluntarily agreed
upon by the parties. It has not been shown to be contrary to any
law, or against morals, good customs, public order, or public
policy. There has been no showing that the parties have not
dealt with each other on equal footing. We find no reason why
the arbitration clause should not be respected and complied
with by both parties. In Gonzales v. Climax Mining Ltd., we held
that submission to arbitration is a contract and that a clause in
a contract providing that all matters in dispute between the
parties shall be referred to arbitration is a contract. Again in Del
Monte Corporation-USA v. Court of Appeals, we likewise ruled
that [t]he provision to submit to arbitration any dispute arising
therefrom and the relationship of the parties is part of that
contract and is itself a contract.
Having said that the instant arbitration clause is not against
public policy, we come to the question on what governs an
arbitration clause specifying that in case of any dispute arising
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from the contract, an arbitral panel will be constituted in a
foreign country and the arbitration rules of the foreign country
would govern and its award shall be final and binding.
Thus, it can be gleaned that the concept of a final and binding
arbitral award is similar to judgments or awards given by some
of our quasi-judicial bodies, like the National Labor Relations
Commission and Mines Adjudication Board, whose final
judgments are stipulated to be final and binding, but not
immediately executory in the sense that they may still be
judicially reviewed, upon the instance of any party. Therefore,
the final foreign arbitral awards are similarly situated in that
they need first to be confirmed by the RTC.
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