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G.R. No.

169890 March 12, 2007 On respondents’ application for registration of title, the then Court of First Instance
(CFI) of Bulacan, by Decision4 of February 20, 1967, awarded Lot No. 3593 in their
FELICIANO ESGUERRA, CANUTO ESGUERRA, JUSTA ESGUERRA, ANGEL ESGUERRA, favor in Land Registration Case No. N-323-V. Pursuant to the Decision, the Land
FIDELA ESGUERRA, CLARA ESGUERRA, and PEDRO ESGUERRA, Petitioners, Registration Commission (LRC, now the Land Registration Authority [LRA]) issued
vs. Decree No. N-114039 by virtue of which the Register of Deeds of Bulacan issued
Meanwhile, under a notarized Bilihan ng Lupa6 dated November 10, 1958,
DECISION petitioners sold to respondents’ parents Eulalio Trinidad and Damiana Rodeadilla
(Trinidad spouses) a portion of about 5,000 square meters of the 23,489-square
CARPIO MORALES, J.: meter of land which they previously acquired from the Esguerra spouses.7

Involved in the present controversy are two parcels of land located in Camalig, During the same cadastral survey conducted in the late 1960s, it was discovered
Meycauayan, Bulacan. that the about 5,000-square meter portion of petitioners’ parcel of land sold to the
Trinidad spouses which was assigned Lot No. 3591 actually measured 6,268 square
Felipe Esguerra and Praxedes de Vera (Esguerra spouses) were the owners of
several parcels of land in Camalig, Meycauayan, Bulacan – among them a 35,284-
square meter parcel of land covered by Tax Declaration No. 10374, half of which In a subsequent application for registration of title over Lot No. 3591, docketed as
(17,642 square meters) they sold to their grandchildren, herein petitioners Land Registration Case No. N-335-V, the CFI, by Decision8 of August 21, 1972,
Feliciano, Canuto, Justa, Angel, Fidela, Clara and Pedro, all surnamed Esguerra; and awarded Lot No. 3591 in favor of Eulalio Trinidad. Pursuant to the Decision, the LRC
a 23,989-square meter issued Decree No. N-149491 by virtue of which the Register of Deeds of Bulacan
issued OCT No. 0-64989 in the name of Trinidad.
parcel of land covered by Tax Declaration No. 12080, 23,489 square meters of
which they also sold to petitioners, and the remaining 500 square meters they sold Upon the death of the Trinidad spouses, Lot No. 3591 covered by OCT No. 0-6498
to their other grandchildren, the brothers Eulalio and Julian Trinidad (Trinidad was transmitted to respondents by succession.
Petitioners, alleging that upon verification with the LRA they discovered the
Also sold to the Trinidad brothers were a 7,048-square meter parcel of land covered issuance of the above-stated two OCTs, filed on August 29, 1994 before the
by Tax Declaration No. 9059, a 4,618-square meter parcel of land covered by Tax Regional Trial Court (RTC) of Malolos, Bulacan two separate complaints for their
Declaration No. 12081, and a 768-square meter parcel of land covered by Tax nullification on the ground that they were procured through fraud or
Declaration No. 13989. misrepresentation.

The Esguerra spouses executed the necessary Deed of Sale in favor of petitioners on In the first complaint, docketed as Civil Case No. 737-M-94, petitioners sought the
August 11, 1937,1 and that in favor of the Trinidad brothers on August 17, cancellation of OCT No. 0-3631.
1937.2 Both documents were executed before notary public Maximo Abaño.
In the other complaint, docketed as Civil Case No. 738-M-94, petitioners sought the
Eulalio Trinidad later sold his share of the land to his daughters-respondents herein, cancellation of OCT No. 0-6498.
via a notarized Kasulatan ng Bilihang Tuluyan ng Lupa3 dated October 13, 1965. A
portion of the land consisting of 1,693 square meters was later assigned Lot No. Both cases were consolidated and tried before Branch 79 of the RTC which, after
3593 during a cadastral survey conducted in the late 1960s. trial, dismissed the cases by Joint Decision 10 of May 15, 1997.
Their appeal with the Court of Appeals having been dismissed by Decision of nature of the pleadings and portions of the case record which must accompany a
February 28, 2005, a reconsideration of which was, by Resolution of October 3, petition is not specified.17
2005,11 denied, petitioners filed the instant petition.
At all events, technicality aside, the petition must be denied.
Petitioners fault the appellate court
It is settled that fraud is a question of fact and the circumstances constituting the
1. . . . in misappreciating the fact that the act of the respondent Eulalio same must be alleged and proved in the court below.18
Trinidad in acquiring the property from Felipe Esguerra constituted fraud.
In the present cases, as did the trial court, the appellate court found no fraud in
2. . . . in the [i]nterpretation and application of the provisions of Article respondents’ acquisition and registration of the land, viz:
1542 of the New Civil Code.
. . . Appellant Pedro Esguerra even testified that he does not know how appellees
3. . . . in ruling that there is prescription, res judicata, and violation of the were able to secure a title over the lot in question and that they never sold Lot No.
non-[forum] shopping.12 3593 to Virginia Trinidad since it is part of the whole lot of 23,489 square meters.
The said testimony is a mere conclusion on the part of appellants. On the other
In their Comment, respondents assailed the petition as lacking verification and hand, the evidence shows that appellees acquired title over the subject property by
certification against forum shopping and failing to attach to it an affidavit of service virtue of a deed of sale executed by their father Eulalio Trinidad in their favor.
and material portions of the record in support thereof. Petitioners counter that the
procedural deficiencies have been mooted by the filing of a Compliance. [T]hey failed to establish that appellees’ acquisition of the certificate of title is
fraudulent. In fact, in their two complaints, appellants acknowledged that appellees
A check of the rollo shows that attached to the petition are an Affidavit of Service observed and took the initial procedural steps in the registration of the land, thus
dated November 21, 2005 and the appellate court’s Decision of February 28, 2005 ruling out fraud in the acquisition of the certificate of title. . . .19
and Resolution of October 3, 2005; and that on January 16, 2006 or almost three
months following the last day to file the petition, petitioners submitted, not at their Factual findings of the trial court, when affirmed by the Court of Appeals, are final,
own instance,13 a Verification and Sworn Certification on Non-Forum Shopping conclusive and binding on this Court,20 which is not a trier of facts,21 hence, bereft
signed by petitioner Pedro Esguerra who cited honest and excusable mistake of function under Rule 45 to examine and weigh the probative value of the evidence
behind the omission to submit the same. presented,22 its jurisdiction being limited only to the review and revision of errors of
law.23Albeit there are exceptions24 to this rule, the cases at bar do not fall
This Court has strictly enforced the requirement of verification and certification, thereunder, there being no showing that the trial and appellate courts overlooked
obedience to which and to other procedural rules is needed if fair results are to be matters which, if considered, would alter their outcome.
expected therefrom.14 While exceptional cases have been considered to correct
patent injustice concomitant to a liberal application of the rules of procedure, there Under the Torrens System, an OCT enjoys a presumption of validity, which
should be an effort on the part of the party invoking liberality to advance a correlatively carries a strong presumption that the provisions of the law governing
reasonable or meritorious explanation for his failure to comply with the rules. 15 In the registration of land which led to its issuance have been duly followed. 25 Fraud
petitioners’ case, no such explanation has been advanced. being a serious charge, it must be supported by clear and convincing
proof.26 Petitioners failed to discharge the burden of proof, however.
With regard to petitioners’ failure to attach material portions of the record in
support of the petition, this requirement is not a mere technicality but an essential On the questioned interpretation and application by the appellate court of Article
requisite for the determination of prima facie basis for giving due course to the 1542 of the Civil Code reading:
petition.16 As a rule, a petition which lacks copies of essential pleadings and
portions of the case record may be dismissed. Much discretion is left to the In the sale of real estate, made for a lump sum and not at the rate of a certain sum
reviewing court, however, to determine the necessity for such copies as the exact for a unit of measure or number, there shall be no increase or decrease of the price,
although there be a greater or less areas or number than that stated in the xxxx
Where both the area and the boundaries of the immovable are declared, the area
The same rule shall be applied when two or more immovables are sold for a single covered within the boundaries of the immovable prevails over the stated area. In
price; but if, besides mentioning the boundaries, which is indispensable in every cases of conflict between areas and boundaries, it is the latter which should
conveyance of real estate, its area or number should be designated in the contract, prevail. What really defines a piece of ground is not the area, calculated with more
the vendor shall be bound to deliver all that is included within said boundaries, or less certainty, mentioned in its description, but the boundaries therein laid
even when it exceeds the area or number specified in the contract; and, should he down, as enclosing the land and indicating its limits. In a contract of sale of land in a
not be able to do so, he shall suffer a reduction in the price, in proportion to what is mass, it is well established that the specific boundaries stated in the contract must
lacking in the area or number, unless the contract is rescinded because the vendee control over any statement with respect to the area contained within its
does not accede to the failure to deliver what has been stipulated. (Emphasis and boundaries. It is not of vital consequence that a deed or contract of sale of land
underscoring supplied), should disclose the area with mathematical accuracy. It is sufficient if its extent is
objectively indicated with sufficient precision to enable one to identify it. An error
while petitioners admittedly sold Lot No. 3591 to the Trinidad spouses, they as to the superficial area is immaterial. Thus, the obligation of the vendor is to
contend that what they sold were only 5,000 square meters and not 6,268 square deliver everything within the boundaries, inasmuch as it is the entirety thereof that
meters, and thus claim the excess of 1,268 square meters. distinguishes the determinate object.28 (Emphasis and underscoring supplied)

In sales involving real estate, the parties may choose between two types of pricing The courts below correctly characterized the sale of Lot No. 3591 as one involving a
agreement: a unit price contract wherein the purchase price is determined by way lump sum contract. The Bilihan ng Lupa shows that the parties agreed on the
of reference to a stated rate per unit area (e.g., ₱1,000 per square meter), or purchase price of ₱1,000.00 on a predetermined, albeit unsurveyed, area of 5,000
a lump sum contract which states a full purchase price for an immovable the area square meters and not on a particular rate per unit area. As noted by the Court of
of which may be declared based on an estimate or where both the area and Appeals, the identity of the realty was sufficiently described as riceland:
boundaries are stated (e.g., ₱1 million for 1,000 square meters, etc.). In Rudolf Lietz,
Inc. v. Court of Appeals,27 the Court discussed the distinction: It is clear from the afore-quoted Bilihan ng Lupa that what appellants sold to Eulalio
was the "bahaging palayan." Though measured as 5,000 square meters, more or
. . . In a unit price contract, the statement of area of immovable is not conclusive less, such measurement is only an approximation, and not an exact measurement.
and the price may be reduced or increased depending on the area actually Moreover, we take note of the fact that the said deed of sale mentioned the
delivered. If the vendor delivers less than the area agreed upon, the vendee may boundaries covering the whole area of 33,489 square meters, including the
oblige the vendor to deliver all that may be stated in the contract or demand for the "bahaging palayan." Had appellants intended to sell only a portion of the "bahaging
proportionate reduction of the purchase price if delivery is not possible. If the palayan," they could have stated the specific area in the deed of sale and not the
vendor delivers more than the area stated in the contract, the vendee has the entire "bahaging palayan" . . . .29
option to accept only the amount agreed upon or to accept the whole area,
provided he pays for the additional area at the contract rate. In fine, under Article 1542, what is controlling is the entire land included within the
boundaries, regardless of whether the real area should be greater or smaller than
xxxx that recited in the deed. This is particularly true since the area of the land in OCT
No. 0-6498 was described in the deed as "humigit kumulang," that is, more or
In the case where the area of the immovable is stated in the contract based on an less.30
estimate, the actual area delivered may not measure up exactly with the area
stated in the contract. According to Article 1542 of the Civil Code, in the sale of real A caveat is in order, however. The use of "more or less" or similar words in
estate, made for a lump sum and not at the rate of a certain sum for a unit of designating quantity covers only a reasonable excess or deficiency. A vendee of land
measure or number, there shall be no increase or decrease of the price, although sold in gross or with the description "more or less" with reference to its area does
there be a greater or less areas or number than that stated in the contract. . . . not thereby ipso facto take all risk of quantity in the land.31
Numerical data are not of course the sole gauge of unreasonableness of the excess IN FINE, it is a fundamental principle in land registration that a certificate of title
or deficiency in area. Courts must consider a host of other factors. In one case, 32 the serves as evidence of an indefeasible and incontrovertible title to the property in
Court found substantial discrepancy in area due to contemporaneous favor of the person whose name appears therein. Such indefeasibility commences
circumstances. Citing change in the physical nature of the property, it was therein after the lapse or expiration of one year from the date of entry of the decree of
established that the excess area at the southern portion was a product of registration when all persons are considered to have a constructive notice of the
reclamation, which explained why the land’s technical description in the deed of title to the property. After the lapse of one year, therefore, title to the property can
sale indicated the seashore as its southern boundary, hence, the inclusion of the no longer be contested. This system was so effected in order to quiet title to land.38
reclaimed area was declared unreasonable.
WHEREFORE, the petition is DENIED. The assailed Decision and resolution of the
In OCT No. 0-6498, the increase by a fourth of a fraction of the area indicated in the Court of Appeals are AFFIRMED.
deed of sale cannot be considered as an unreasonable excess. Most importantly,
the circumstances attendant to the inclusion of the excess area bare nothing Costs against petitioners.
atypical or significant to hint at unreasonableness. It must be noted that the land
was not yet technically surveyed at the time of the sale. As vendors who themselves SO ORDERED.
executed the Bilihan ng Lupa, petitioners may rightly be presumed to have acquired
a good estimate of the value and area of the bahaging palayan.

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

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

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

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

While petitioners admittedly failed to comply with the requirement of barangay

conciliation, they assert that respondents waived such objection when they failed
to raise it in their Answer. Contrary to petitioners’ claim, however, the records
reveal that respondents raised their objection in their Amended Answers 37 filed in
both cases.
[G.R. No. 146195. November 18, 2004] against Anita Punzalan (respondents attorney-in-fact), docketed as Usaping Bgy.
Blg. 1-27-97, Ukol sa: Hindi Pagbibigay ng Pahintulot sa Pagpapakabit ng Tubig.
On August 24, 1997, during the barangay conciliation proceedings, petitioner
AVELINA ZAMORA, EMERITA ZAMORA-NICOL, SONNY NICOL, TERESA ZAMORA- Avelina Zamora declared that she refused to sign the new lease contract because she
UMALI, CLARENCE UMALI, ROBERTO ZAMORA, ROLANDO ZAMORA, MARY is not agreeable with the conditions specified therein.
ANN ZAMORA, MICHELLE ZAMORA and RODRIGO The following day, Anita Punzalan sent Avelina a letter[4] informing her that the
ZAMORA, petitioners, vs. HEIRS of CARMEN IZQUIERDO, represented by lease is being terminated and demanding that petitioners vacate the premises within
their attorney-in-fact, ANITA F. PUNZALAN, respondents. 30 days from notice.

DECISION Despite several barangay conciliation sessions, the parties failed to settle their
dispute amicably. Hence, the Barangay Chairman issued a Certification to File Action
SANDOVAL-GUTIERREZ, J.: dated September 14, 1997.[5]
Consequently, on October 2, 1997, respondents, represented by Anita
Before us is a petition for review on certiorari[1] assailing the Decision[2] of the
Punzalan, filed with the Metropolitan Trial Court (MTC), Branch 49, Caloocan City, a
Court of Appeals dated September 12, 2000 and its Resolution dated December 1,
complaint for unlawful detainer and damages against petitioners, docketed as Civil
2000 in CA-G.R. SP No. 54541, entitled Avelina Zamora, et al., petitioners, versus Heirs
Case No. 23702.[6] Forthwith, petitioners filed a motion to dismiss[7] the complaint on
of Carmen Izquierdo, represented by the executrix, Anita F. Punzalan, respondents.
the ground that the controversy was not referred to the barangay for
The records show that sometime in 1973, Carmen Izquierdo and Pablo Zamora conciliation. First, they alleged that the barangay Certification to File Action is fatally
entered into a verbal stipulation whereby the former leased to the latter one of her defective because it pertains to another dispute, i.e., the refusal by respondents
apartment units located at 117-B General Luna Street, Caloocan City. They agreed on attorney-in-fact to give her written consent to petitioners request for installation of
the following: the rental is P3,000.00 per month; the leased premises is only for water facilities in the premises. And, second, when the parties failed to reach an
residence; and only a single family is allowed to occupy it. amicable settlement before the Lupong Tagapamayapa, the Punong Barangay
(as Lupon Chairman), did not constitute the Pangkat ng Tagapagkasundo before
After the death of Carmen (lessor) in 1996 her attorney-in-fact, Anita Punzalan, whom mediation or arbitration proceedings should have been conducted, in violation
representing the heirs, herein respondents, prepared a new contract of lease of Section 410(b), Chapter 7 (Katarungang Pambarangay), Title One, Book III of
wherein the rental was increased from P3,000.00 to P3,600.00 per Republic Act No. 7160[8] (otherwise known as the Local Government Code of 1991),
month.[3] However, petitioners refused to sign it. which reads:
In January 1997, Pablo (lessee) died. His wife, Avelina Zamora, and their children
(two of whom have their own families), herein petitioners, continued to reside in the SECTION 410. Procedure for Amicable Settlement.
apartment unit. However, they refused to pay the increased rental and persisted in
operating a photocopying business in the same apartment. (a) x x x
Meanwhile, petitioner Avelina Zamora applied with the Metropolitan
(b) Mediation by lupon chairman Upon receipt of the complaint,
Waterworks & Sewerage System (MWSS) for a water line installation in the premises.
the lupon chairman[9] shall, within the next working day, summon the
Since a written consent from the owner is required for such installation, she
respondent(s), with notice to the complainant(s) for them and their witnesses to
requested respondents attorney-in-fact to issue it. However, the latter declined
appear before him for a mediation of their conflicting interests. If he fails in his
because petitioners refused to pay the new rental rate and violated the restrictions
mediation effort within fifteen (15) days from the first meeting of the parties
on the use of the premises by using a portion thereof for photocopying business and
before him, he shall forthwith set a date for the constitution of the pangkat in
allowing three families to reside therein.
accordance with the provisions of this Chapter. (Underscoring supplied)
This prompted petitioner Avelina Zamora to file with the Office of the Punong
Barangay of Barangay 16, Sona 2, District I, Lungsod ng Caloocan, a complaint Respondents opposed the motion to dismiss,[10] the same being prohibited
under Section 19 of the 1991 Revised Rule on Summary Procedure. They prayed that
judgment be rendered as may be warranted by the facts alleged in the complaint, On appeal, the Regional Trial Court (RTC), Branch 125, Caloocan City, rendered
pursuant to Section 6[11] of the same Rule. its Decision[15] dated February 15, 1999 affirming the MTC Judgment. Subsequently,
it denied petitioners motion for reconsideration.[16]
On July 9, 1998, the MTC issued an Order[12] denying petitioners motion to
dismiss and considering the case submitted for decision in view of their failure to file Petitioners then filed with the Court of Appeals a petition for review, docketed
their answer to the complaint. as CA-G.R. SP No. 54541. On September 12, 2000, it rendered a Decision[17] affirming
the RTC Decision.
Petitioners filed a motion for reconsideration,[13] contending that a motion to
dismiss the complaint on the ground of failure to refer the complaint to the Lupon for Thereafter, petitioners filed a motion for reconsideration but was denied by the
conciliation is allowed under Section 19 of the 1991 Revised Rule on Summary Appellate Court in its Resolution dated December 1, 2000.[18]
Procedure, which partly provides:
Hence, the instant petition.
SEC. 19. Prohibited pleadings and motions. The following pleadings, motions, or I
petitions shall not be allowed in the cases covered by this Rule:
The primordial objective of Presidential Decree No. 1508 (the Katarungang
Pambarangay Law), now included under R.A. No. 7160 (the Local Government Code
(a) Motion to dismiss the complaint or to quash the complaint or
of 1991), is to reduce the number of court litigations and prevent the deterioration
information except on the ground of lack of jurisdiction over the subject matter,
of the quality of justice which has been brought about by the indiscriminate filing of
or failure to comply with the preceding section [referring to Section 18 on referral
cases in the courts.[19] To attain this objective, Section 412(a) of R.A. No. 7160
of the complaint to the Lupon for conciliation];
requires the parties to undergo a conciliation process before the Lupon Chairman or
the Pangkat as a precondition to filing a complaint in court, thus:
x x x.
SECTION 412. Conciliation. (a) Pre-condition to Filing of Complaint in Court. No
On August 26, 1998, the MTC rendered a Judgment [14] in favor of respondents complaint, petition, action, or proceeding involving any matter within the authority
and against petitioners, the dispositive portion of which reads: 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
WHEREFORE, Judgment is hereby rendered in favor of the plaintiff and against the before the lupon chairman or the pangkat, and that no conciliation or settlement
defendants, ordering defendants and all persons claiming right under them: has been reached as certified by the lupon or pangkat secretary and attested to by
the lupon or pangkat chairman x x x. (Underscoring supplied)
1) To vacate the leased premises located at No. 117-B General
Luna Street, Caloocan City and to surrender possession thereof In the case at bar, the Punong Barangay, as Chairman of the Lupong
to the plaintiff; Tagapamayapa, conducted conciliation proceedings to resolve the dispute between
the parties herein. Contrary to petitioners contention, the complaint does not only
2) To pay the amount of three thousand six hundred (P3,600.00) allege, as a cause of action, the refusal of respondents attorney-in-fact to give her
pesos per month starting January, 1997 until the premises consent to the installation of water facilities in the premises, but also petitioners
being occupied by them is finally vacated and possession violation of the terms of the lease, specifically their use of a portion therein for their
thereof is restored to the plaintiff; photocopying business and their failure to pay the increased rental. As correctly
found by the RTC:
3) To pay plaintiff the sum of five thousand (P5,000.00) pesos as
and for attorneys fees; and The records show that confrontations before the barangay chairman were held on
January 26, 1997, February 9, 1997, February 23, 1997, February 28, 1997, July 27,
4) To pay the costs of this suit. 1997, August 3, 1997, August 10, 1997, August 17, 1997 and August 24, 1997
wherein not only the issue of water installation was discussed but also the terms of
SO ORDERED. the lease and the proposed execution of a written contract relative thereto. It
appears, however, that no settlement was reached despite a total of nine meetings SEC. 18. Referral to Lupon. Cases requiring referral to the Lupon for
at the barangay level. conciliation under the provisions of Presidential Decree No. 1508 where there is no
showing of compliance with such requirement, shall be dismissed without
It is of no moment that the complaint was initially made by defendant-appellant prejudice, and may be revived only after such requirement shall have been
Avelina Zamora because herein plaintiff-appellee was given by the Sangguniang complied with. This provision shall not apply to criminal cases where the accused
Barangay the authority to bring her grievance to the Court for resolution. While it is was arrested without a warrant. (Underscoring supplied)
true that the Sertifikasyon dated September 14, 1997 is entitled Ukol Sa Hindi
Pagbibigay Ng Pahintulot Sa Pagpapakabit Ng Tubig, this title must not prevail over As discussed earlier, the case was referred to the Lupon Chairman for
the actual issues discussed in the proceedings. conciliation. Obviously, petitioners motion to dismiss, even if allowed, is bereft of
Hence, to require another confrontation at the barangay level as a sine qua non for
WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of
the filing of the instant case would not serve any useful purpose anymore since no
the Court of Appeals in CA-G.R. SP No. 54541 sustaining the Decision of the RTC which
new issues would be raised therein and the parties have proven so many times in
upheld the MTC Judgment is AFFIRMED.
the past that they cannot get to settle their differences amicably. [20]
Costs against petitioners.
We cannot sustain petitioners contention that the Lupon conciliation alone,
without the proceeding before the Pangkat ng Tagapagkasundo, contravenes the
law on Katarungang Pambarangay. Section 412(a) of R.A. No. 7160, quoted earlier,
clearly provides that, as a precondition to filing a complaint in court, the parties shall
go through the conciliation process either before the Lupon Chairman (as what
happened in the present case), or the Pangkat.
Moreover, in Diu vs. Court of Appeals,[21] we held that notwithstanding the
mandate in Section 410(b) of R.A. No. 7160 that the Barangay Chairman shall
constitute a Pangkat if he fails in his mediation efforts, the same Section 410(b)
should be construed together with Section 412(a) of the same law (quoted earlier),
as well as the circumstances obtaining in and peculiar to the case. Here, while
the Pangkat was not constituted, however, the parties met nine (9) times at the
Office of the Barangay Chairman for conciliation wherein not only the issue of water
installation was discussed but also petitioners violation of the lease contract. It is thus
manifest that there was substantial compliance with the law which does not require
strict adherence thereto.[22]
We hold that petitioners motion to dismiss the complaint for unlawful detainer
is proscribed by Section 19(a) of the 1991 Revised Rule on Summary Procedure,
quoted earlier. Section 19(a) permits the filing of such pleading only when the ground
for dismissal of the complaint is anchored on lack of jurisdiction over the subject
matter, or failure by the complainant to refer the subject matter of his/her
complaint to the Lupon for conciliation prior to its filing with the court. This is clear
from the provisions of Section 18 of the same Rule, which reads:
G.R. No. 153567 February 18, 2008 On 20 April 1999, the MeTC rendered a Decision in Civil Case No. 17450 in favor of
Aquino and dismissed the Complaint for ejectment of Aure and Aure Lending for
LIBRADA M. AQUINO, petitioner, non-compliance with the barangay conciliation process, among other grounds. The
vs. MeTC observed that Aure and Aquino are residents of the same barangay but there
ERNEST S. AURE1, respondent. is no showing that any attempt has been made to settle the case amicably at
the barangay level. The MeTC further observed that Aure Lending was improperly
DECISION included as plaintiff in Civil Case No. 17450 for it did not stand to be injured or
benefited by the suit. Finally, the MeTC ruled that since the question of ownership
was put in issue, the action was converted from a mere detainer suit to one
"incapable of pecuniary estimation" which properly rests within the original
exclusive jurisdiction of the RTC. The dispositive portion of the MeTC Decision
Before this Court is a Petition for Review on Certiorari2 under Rule 45 of the Revised
Rules of Court filed by petitioner Librada M. Aquino (Aquino), seeking the reversal
and the setting aside of the Decision3 dated 17 October 2001 and the
WHEREFORE, premises considered, let this case be, as it is, hereby ordered
Resolution4 dated 8 May 2002 of the Court of Appeals in CA-G.R. SP No. 63733. The
DISMISSED. [Aquino’s] counterclaim is likewise dismissed.12
appellate court, in its assailed Decision and Resolution, reversed the Decision 5 of
the Regional Trial Court (RTC) of Quezon City, Branch 88, affirming the Decision 6 of
the Metropolitan Trial Court (MeTC) of Quezon City, Branch 32, which dismissed On appeal, the RTC affirmed the dismissal of the Complaint on the same ground
respondent Ernesto Aure’s (Aure) complaint for ejectment on the ground, inter alia, that the dispute was not brought before the Barangay Council for conciliation
of failure to comply with barangay conciliation proceedings. before it was filed in court. In a Decision dated 14 December 2000, the RTC stressed
that the barangay conciliation process is a conditio sine qua non for the filing of an
ejectment complaint involving residents of the same barangay, and failure to
The subject of the present controversy is a parcel of land situated in Roxas District,
comply therewith constitutes sufficient cause for the dismissal of the action. The
Quezon City, with an area of 449 square meters and covered by Transfer Certificate
RTC likewise validated the ruling of the MeTC that the main issue involved in Civil
of Title (TCT) No. 205447 registered with the Registry of Deeds of Quezon City
Case No. 17450 is incapable of pecuniary estimation and cognizable by the RTC.
(subject property).7
Hence, the RTC ruled:
Aure and E.S. Aure Lending Investors, Inc. (Aure Lending) filed a Complaint for
WHEREFORE, finding no reversible error in the appealed judgment, it is
ejectment against Aquino before the MeTC docketed as Civil Case No. 17450. In
hereby affirmed in its entirety.13
their Complaint, Aure and Aure Lending alleged that they acquired the subject
property from Aquino and her husband Manuel (spouses Aquino) by virtue of a
Deed of Sale8 executed on 4 June 1996. Aure claimed that after the spouses Aquino Aure’s Motion for Reconsideration was denied by the RTC in an Order 14 dated 27
received substantial consideration for the sale of the subject property, they refused February 2001.
to vacate the same.9
Undaunted, Aure appealed the adverse RTC Decision with the Court of Appeals
In her Answer, Aquino countered that the Complaint in Civil Case No. 17450 lacks arguing that the lower court erred in dismissing his Complaint for lack of cause of
cause of action for Aure and Aure Lending do not have any legal right over the action. Aure asserted that misjoinder of parties was not a proper ground for
subject property. Aquino admitted that there was a sale but such was governed by dismissal of his Complaint and that the MeTC should have only ordered the
the Memorandum of Agreement11 (MOA) signed by Aure. As stated in the MOA, exclusion of Aure Lending as plaintiff without prejudice to the continuation of the
Aure shall secure a loan from a bank or financial institution in his own name using proceedings in Civil Case No. 17450 until the final determination thereof. Aure
the subject property as collateral and turn over the proceeds thereof to the spouses further asseverated that mere allegation of ownership should not divest the MeTC
Aquino. However, even after Aure successfully secured a loan, the spouses Aquino of jurisdiction over the ejectment suit since jurisdiction over the subject matter is
did not receive the proceeds thereon or benefited therefrom. conferred by law and should not depend on the defenses and objections raised by
the parties. Finally, Aure contended that the MeTC erred in dismissing his Complaint
with prejudice on the ground of non-compliance with barangay conciliation process.
He was not given the opportunity to rectify the procedural defect by going through system, the late Chief Justice Fred Ruiz Castro, is essentially arbitration in character,
the barangay mediation proceedings and, thereafter, refile the Complaint. 15 and to make it truly effective, it should also be compulsory. With this primary
objective of the barangay justice system in mind, it would be wholly in keeping with
On 17 October 2001, the Court of Appeals rendered a Decision, reversing the MeTC the underlying philosophy of Presidential Decree No. 1508, otherwise known as the
and RTC Decisions and remanding the case to the MeTC for further proceedings and Katarungang Pambarangay Law, and the policy behind it would be better served if
final determination of the substantive rights of the parties. The appellate court an out-of-court settlement of the case is reached voluntarily by the parties. 17
declared that the failure of Aure to subject the matter to barangay conciliation is
not a jurisdictional flaw and it will not affect the sufficiency of Aure’s Complaint The primordial objective of Presidential Decree No. 1508 is to reduce the number of
since Aquino failed to seasonably raise such issue in her Answer. The Court of court litigations and prevent the deterioration of the quality of justice which has
Appeals further ruled that mere allegation of ownership does not deprive the MeTC been brought by the indiscriminate filing of cases in the courts.18 To ensure this
of jurisdiction over the ejectment case for jurisdiction over the subject matter is objective, Section 6 of Presidential Decree No. 1508 19 requires the parties to
conferred by law and is determined by the allegations advanced by the plaintiff in undergo a conciliation process before the Lupon Chairman or the Pangkat ng
his complaint. Hence, mere assertion of ownership by the defendant in an Tagapagkasundo as a precondition to filing a complaint in court subject to certain
ejectment case will not oust the MeTC of its summary jurisdiction over the same. exceptions20 which are inapplicable to this case. The said section has been declared
The decretal part of the Court of Appeals Decision reads: compulsory in nature.21

WHEREFORE, premises considered, the petition is hereby GRANTED - and the Presidential Decree No. 1508 is now incorporated in Republic Act No. 7160,
decisions of the trial courts below REVERSED and SET ASIDE. Let the records be otherwise known as The Local Government Code, which took effect on 1 January
remanded back to the court a quo for further proceedings – for an eventual 1992.
decision of the substantive rights of the disputants.16
The pertinent provisions of the Local Government Code making conciliation a
In a Resolution dated 8 May 2002, the Court of Appeals denied the Motion for precondition to filing of complaints in court, read:
Reconsideration interposed by Aquino for it was merely a rehash of the arguments
set forth in her previous pleadings which were already considered and passed upon SEC. 412. Conciliation.- (a) Pre-condition to filing of complaint in court. – No
by the appellate court in its assailed Decision. complaint, petition, action, or proceeding involving any matter within the
authority of the lupon shall be filed or instituted directly in court or any
Aquino is now before this Court via the Petition at bar raising the following issues: other government office for adjudication, unless there has been a
confrontation between the parties before the lupon chairman or the
I. pangkat, and that no conciliation or settlement has been reached as
certified by the lupon secretary or pangkat secretary as attested to by the
WHETHER OR NOT NON-COMPLIANCE WITH THE BARANGAY lupon chairman or pangkat chairman or unless the settlement has been
(b) Where parties may go directly to court. – The parties may go directly to
II. court in the following instances:

WHETHER OR NOT ALLEGATION OF OWNERSHIP OUSTS THE MeTC OF ITS (1) Where the accused is under detention;
(2) Where a person has otherwise been deprived of personal liberty calling
The barangay justice system was established primarily as a means of easing up the for habeas corpus proceedings;
congestion of cases in the judicial courts. This could be accomplished through a
proceeding before the barangay courts which, according to the conceptor of the
(3) Where actions are coupled with provisional remedies such as In fact, no allegation of such barangay conciliation proceedings was made in Aure
preliminary injunction, attachment, delivery of personal property, and and Aure Lending’s Complaint before the MeTC. The only issue to be resolved is
support pendente lite; and whether non-recourse to the barangay conciliation process is a jurisdictional flaw
that warrants the dismissal of the ejectment suit filed with the MeTC.
(4) Where the action may otherwise be barred by the statute of
limitations. Aquino posits that failure to resort to barangay conciliation makes the action for
ejectment premature and, hence, dismissible. She likewise avers that this objection
(c) Conciliation among members of indigenous cultural communities. – The was timely raised during the pre-trial and even subsequently in her Position Paper
customs and traditions of indigenous cultural communities shall be applied submitted to the MeTC.
in settling disputes between members of the cultural communities.
We do not agree.
SEC. 408. Subject Matter for Amicable Settlement; Exception Therein. – The
lupon of each barangay shall have authority to bring together the parties It is true that the precise technical effect of failure to comply with the requirement
actually residing in the same city or municipality for amicable settlement of of Section 412 of the Local Government Code on barangay conciliation (previously
all disputes except: contained in Section 5 of Presidential Decree No. 1508) is much the same effect
produced by non-exhaustion of administrative remedies -- the complaint becomes
(a) Where one party is the government or any subdivision or afflicted with the vice of pre-maturity; and the controversy there alleged is not ripe
instrumentality thereof; for judicial determination. The complaint becomes vulnerable to a motion to
dismiss.22 Nevertheless, the conciliation process is not a jurisdictional
(b) Where one party is a public officer or employee, and the dispute relates requirement, so that non-compliance therewith cannot affect the jurisdiction
to the performance of his official functions; which the court has otherwise acquired over the subject matter or over the
person of the defendant.23
(c) Offenses punishable by imprisonment exceeding one (1) year or a fine
exceeding Five thousand pesos (P5,000.00); As enunciated in the landmark case of Royales v. Intermediate Appellate Court24:

(d) Offenses where there is no private offended party; Ordinarily, non-compliance with the condition precedent prescribed by
P.D. 1508 could affect the sufficiency of the plaintiff's cause of action and
make his complaint vulnerable to dismissal on ground of lack of cause of
(e) Where the dispute involves real properties located in different cities or
action or prematurity; but the same would not prevent a court of
municipalities unless the parties thereto agree to submit their differences
competent jurisdiction from exercising its power of adjudication over the
to amicable settlement by an appropriate lupon;
case before it, where the defendants, as in this case, failed to object to
such exercise of jurisdiction in their answer and even during the entire
(f) Disputes involving parties who actually reside in barangays of different
proceedings a quo.
cities or municipalities, except where such barangay units adjoin each
other and the parties thereto agree to submit their differences to amicable
While petitioners could have prevented the trial court from exercising
settlement by an appropriate lupon;
jurisdiction over the case by seasonably taking exception thereto, they
instead invoked the very same jurisdiction by filing an answer and seeking
(g) Such other classes of disputes which the President may determine in affirmative relief from it. What is more, they participated in the trial of the
the interest of justice or upon the recommendation of the Secretary of
case by cross-examining respondent Planas. Upon this premise,
petitioners cannot now be allowed belatedly to adopt an inconsistent
posture by attacking the jurisdiction of the court to which they had
There is no dispute herein that the present case was never referred to the Barangay submitted themselves voluntarily.x x x (Emphasis supplied.)
Lupon for conciliation before Aure and Aure Lending instituted Civil Case No. 17450.
In the case at bar, we similarly find that Aquino cannot be allowed to attack the all objections then available, and all objections not so included shall be
jurisdiction of the MeTC over Civil Case No. 17450 after having submitted herself deemed waived.
voluntarily thereto. We have scrupulously examined Aquino’s Answer before the
MeTC in Civil Case No. 17450 and there is utter lack of any objection on her part to The spirit that surrounds the foregoing statutory norm is to require the party filing a
any deficiency in the complaint which could oust the MeTC of its jurisdcition. pleading or motion to raise all available exceptions for relief during the single
opportunity so that single or multiple objections may be avoided. 26 It is clear and
We thus quote with approval the disquisition of the Court of Appeals: categorical in Section 1, Rule 9 of the Revised Rules of Court that failure to raise
defenses and objections in a motion to dismiss or in an answer is deemed a waiver
Moreover, the Court takes note that the defendant [Aquino] herself did thereof; and basic is the rule in statutory construction that when the law is clear
not raise in defense the aforesaid lack of conciliation proceedings in her and free from any doubt or ambiguity, there is no room for construction or
answer, which raises the exclusive affirmative defense of simulation. By interpretation.27 As has been our consistent ruling, where the law speaks in clear
this acquiescence, defendant [Aquino] is deemed to have waived such and categorical language, there is no occasion for interpretation; there is only room
objection. As held in a case of similar circumstances, the failure of a for application.28 Thus, although Aquino’s defense of non-compliance with
defendant [Aquino] in an ejectment suit to specifically allege the fact that Presidential Decree No. 1508 is meritorious, procedurally, such defense is no longer
there was no compliance with the barangay conciliation procedure available for failure to plead the same in the Answer as required by
constitutes a waiver of that defense. x x x. 25 the omnibus motion rule.

By Aquino’s failure to seasonably object to the deficiency in the Complaint, she is Neither could the MeTC dismiss Civil Case No. 17450 motu proprio. The 1997 Rules
deemed to have already acquiesced or waived any defect attendant thereto. of Civil Procedure provide only three instances when the court may motu
Consequently, Aquino cannot thereafter move for the dismissal of the ejectment proprio dismiss the claim, and that is when the pleadings or evidence on the record
suit for Aure and Aure Lending’s failure to resort to the barangay conciliation show that (1) the court has no jurisdiction over the subject matter; (2) there is
process, since she is already precluded from doing so. The fact that Aquino raised another cause of action pending between the same parties for the same cause; or
such objection during the pre-trial and in her Position Paper is of no moment, for (3) where the action is barred by a prior judgment or by a statute of limitations.
the issue of non-recourse to barangay mediation proceedings should be impleaded Thus, it is clear that a court may not motu proprio dismiss a case on the ground of
in her Answer. failure to comply with the requirement for barangay conciliation, this ground not
being among those mentioned for the dismissal by the trial court of a case on its
As provided under Section 1, Rule 9 of the 1997 Rules of Civil Procedure: own initiative.

Sec. 1. Defenses and objections not pleaded. – Defenses and objections Aquino further argues that the issue of possession in the instant case cannot be
not pleaded either in a motion to dismiss or in the answer are deemed resolved by the MeTC without first adjudicating the question of ownership, since
waived. However, when it appears from the pleadings or the evidence on the Deed of Sale vesting Aure with the legal right over the subject property is
record that the court has no jurisdiction over the subject matter, that there simulated.
is another action pending between the same parties for the same cause, or
that the action is barred by a prior judgment or by statute of limitations, Again, we do not agree. Jurisdiction in ejectment cases is determined by the
the court shall dismiss the claim. (Emphasis supplied.) allegations pleaded in the complaint. As long as these allegations demonstrate a
cause of action either for forcible entry or for unlawful detainer, the court acquires
While the aforequoted provision applies to a pleading (specifically, an Answer) or a jurisdiction over the subject matter. This principle holds, even if the facts proved
motion to dismiss, a similar or identical rule is provided for all other motions in during the trial do not support the cause of action thus alleged, in which instance
Section 8 of Rule 15 of the same Rule which states: the court -- after acquiring jurisdiction -- may resolve to dismiss the action for
insufficiency of evidence.
Sec. 8. Omnibus Motion. - Subject to the provisions of Section 1 of Rule 9, a
motion attacking a pleading, order, judgment, or proceeding shall include The necessary allegations in a Complaint for ejectment are set forth in Section 1,
Rule 70 of the Rules of Court, which reads:
SECTION 1. Who may institute proceedings, and when. – Subject to the property and claimed that the Deed of Sale was simulated should not divest the
provisions of the next succeeding section, a person deprived of the MeTC of jurisdiction over the ejectment case.30
possession of any land or building by force, intimidation, threat, strategy,
or stealth, or a lessor, vendor, vendee, or other person against whom the As extensively discussed by the eminent jurist Florenz D. Regalado in Refugia v.
possession of any land or building is unlawfully withheld after the Court of Appeals31:
expiration or termination of the right to hold possession, by virtue of any
contract, express or implied, or the legal representatives or assigns of any As the law on forcible entry and unlawful detainer cases now stands, even
such lessor, vendor, vendee, or other person may at any time within one where the defendant raises the question of ownership in his pleadings and
(1) year after such unlawful deprivation or withholding of possession, bring the question of possession cannot be resolved without deciding the issue
an action in the proper Municipal Trial Court against the person or persons of ownership, the Metropolitan Trial Courts, Municipal Trial Courts, and
unlawfully withholding or depriving of possession, or any person or Municipal Circuit Trial Courts nevertheless have the undoubted
persons claiming under them, for the restitution of such possession, competence to resolve the issue of ownership albeit only to determine the
together with damages and costs. issue of possession.

In the case at bar, the Complaint filed by Aure and Aure Lending on 2 April 1997, x x x. The law, as revised, now provides instead that when the question of
alleged as follows: possession cannot be resolved without deciding the issue of ownership,
the issue of ownership shall be resolved only to determine the issue of
2. [Aure and Aure Lending] became the owners of a house and lot located possession. On its face, the new Rule on Summary Procedure was
at No. 37 Salazar Street corner Encarnacion Street, B.F. Homes, Quezon extended to include within the jurisdiction of the inferior courts ejectment
City by virtue of a deed of absolute sale executed by [the spouses Aquino] cases which likewise involve the issue of ownership. This does not mean,
in favor of [Aure and Aure Lending] although registered in the name of x x however, that blanket authority to adjudicate the issue of ownership in
x Ernesto S. Aure; title to the said property had already been issued in the ejectment suits has been thus conferred on the inferior courts.
name of [Aure] as shown by a transfer Certificate of Title , a copy of which
is hereto attached and made an integral part hereof as Annex A; At the outset, it must here be stressed that the resolution of this particular
issue concerns and applies only to forcible entry and unlawful detainer
3. However, despite the sale thus transferring ownership of the subject cases where the issue of possession is intimately intertwined with the issue
premises to [Aure and Aure Lending] as above-stated and consequently of ownership. It finds no proper application where it is otherwise, that is,
terminating [Aquino’s] right of possession over the subject property, where ownership is not in issue, or where the principal and main issue
[Aquino] together with her family, is continuously occupying the subject raised in the allegations of the complaint as well as the relief prayed for
premises notwithstanding several demands made by [Aure and Aure make out not a case for ejectment but one for recovery of ownership.
Lending] against [Aquino] and all persons claiming right under her to
vacate the subject premises and surrender possession thereof to [Aure and Apropos thereto, this Court ruled in Hilario v. Court of Appeals32:
Aure Lending] causing damage and prejudice to [Aure and Aure Lending]
and making [Aquino’s] occupancy together with those actually occupying
Thus, an adjudication made therein regarding the issue of ownership
the subject premises claiming right under her, illegal.29
should be regarded as merely provisional and, therefore, would not bar or
prejudice an action between the same parties involving title to the land.
It can be inferred from the foregoing that Aure, together with Aure Lending, sought The foregoing doctrine is a necessary consequence of the nature of forcible
the possession of the subject property which was never surrendered by Aquino entry and unlawful detainer cases where the only issue to be settled is the
after the perfection of the Deed of Sale, which gives rise to a cause of action for an physical or material possession over the real property, that is,
ejectment suit cognizable by the MeTC. Aure’s assertion of possession over the possession de facto and not possession de jure."
subject property is based on his ownership thereof as evidenced by TCT No. 156802
bearing his name. That Aquino impugned the validity of Aure’s title over the subject
In other words, inferior courts are now "conditionally vested with adjudicatory
power over the issue of title or ownership raised by the parties in an ejectment
suit." These courts shall resolve the question of ownership raised as an incident in
an ejectment case where a determination thereof is necessary for a proper and
complete adjudication of the issue of possession.33

WHEREFORE, premises considered, the instant Petition is DENIED. The Court of

Appeals Decision dated 17 October 2001 and its Resolution dated 8 May 2002 in CA-
G.R. SP No. 63733 are hereby AFFIRMED. Costs against the petitioner.

[G.R. No. 159411. March 18, 2005] 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.
TRILLANA, respondents. 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
PUNO, J.: subsisting lease contract. After conciliation proceedings, an agreement was reached,
Assailed in this petition for review is the Decision dated April 2, 2003 [1] of the
Court of Appeals in CA-G.R. CV No. 59023[2] which modified the Decision dated
December 15, 1997 of the Regional Trial Court (RTC) of Valenzuela City, Branch 172, KASUNDUAN
in Civil Case No. 5139-V-97, as well as its Resolution dated August 8, 2003[3] which
denied petitioners motion for reconsideration.
Napagkasunduan ngayong araw na to ika-17 ng Setyembre ng nagpabuwis Teodoro
The antecedent facts are as follows: Chavez at bumubuwis na si G. Jay Trillana na ibabalik ni G. Chavez ang
In October 1994, petitioner Teodoro Chavez and respondent Jacinto Trillana halagang P150,000.00 kay G. Trillana bilang sukli sa natitirang panahon ng
entered into a contract of lease[4] whereby the former leased to the latter his buwisan.
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 Ngunit kung maibibigay ni G. Chavez ang halagang P100,000.00 bago sumapit o
term was two million two hundred forty thousand (P2,240,000.00) pesos, of which pagsapit ng ika-23 ng Setyembre, taong kasalukuyan, to ay nangangahulugan ng
one million (P1,000,000.00) pesos was to be paid upon signing of the contract. The buong kabayaran at hindi P150,000.00.
balance was payable as follows:
Kung sakali at hindi maibigay ang P100,000.00 ang magiging kabayaran ay
b. That, after six (6) months and/or, on or before one (1) year from the date of mananatiling P150,000.00 na may paraan ng pagbabayad ng sumusunod:
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 Ang P50,000.00 ay ibibigay bago sumapit o pagsapit ng ika-31 ng Oktubre 1996 at
23, 1995 shall be paid by the LESSEE to the LESSOR. 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
c. That, the LESSEE, shall pay the amount of FOUR HUNDRED FORTY-EIGHT ibibigay lahat ni G. Chavez ang buong P150,000.00 sa lalong madaling panahon.
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, Kung magkakaroon ng sapat at total na kabayaran si G. Chavez kay G. Trillana ang
1998 the amount of FOUR HUNDRED FORTY-EIGHT THOUSAND (P448,000.00) pesos huli ay lalagda sa kasulatan bilang waiver o walang anumang paghahabol sa
x x x. nabanggit na buwisan.

Paragraph 5 of the contract further provided that respondent shall undertake all Alleging non-compliance by petitioner with their lease contract and the
construction and preservation of improvements in the fishpond that may be foregoing Kasunduan, respondent filed a complaint on February 7, 1997 against
destroyed during the period of the lease, at his expense, without reimbursement petitioner before the RTC of Valenzuela City, docketed as Civil Case No. 5139-V-97.
from petitioner. 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
In August 1996, a powerful typhoon hit the country which damaged the subject portion of the lease contract; (b) P500,000.00 as unrealized profits; (c) P200,000.00
fishpond. Respondent did not immediately undertake the necessary repairs as the
as moral damages; (d) P200,000.00 as exemplary damages; and, (e) P100,000.00 as Indeed, the Revised Katarungang Pambarangay Law[8] provides that an
attorneys fees plus P1,000.00 for each court appearance of respondents counsel. 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
Petitioner filed his answer but failed to submit the required pretrial brief and to
same is filed before the proper city or municipal court within ten (10) days from its
attend the pretrial conference. On October 21, 1997, respondent was allowed to
date.[9] It further provides that the settlement may be enforced by execution by the
present his evidence ex-parte before the Acting Branch Clerk of Court.[5] On the basis
lupong tagapamayapa within six (6) months from its date, or by action in the
thereof, a decision was rendered on December 15, 1997[6] in favor of respondent, the appropriate city or municipal court, if beyond the six-month period.[10] This special
dispositive portion of which reads:
provision follows the general precept enunciated in Article 2037 of the Civil
Code, viz.:
WHEREFORE, judgment is hereby rendered as follows:
A compromise has upon the parties the effect and authority of res judicata; but
(1) Ordering the defendant to reimburse to the plaintiff the sum of P300,000.00 there shall be no execution except in compliance with a judicial compromise.
representing rental payment of the leased premises for the unused period of lease;
Thus, we have held that a compromise agreement which is not contrary to law,
(2) Ordering the defendant to pay plaintiff the sum of P500,000.00 representing public order, public policy, morals or good customs is a valid contract which is the law
unrealized profit as a result of the unlawful deprivation by the defendant of the between the parties themselves.[11] It has upon them the effect and authority of res
possession of the subject premises; judicata even if not judicially approved,[12] and cannot be lightly set aside or disturbed
except for vices of consent and forgery.[13]
(3) Ordering the defendant to pay plaintiff the sum of P200,000.00 as moral
damages; 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:
(4) Ordering the defendant to pay plaintiff the sum of P200,000.00 as exemplary
damages; and 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.
(5) Ordering the defendant to pay plaintiff the sum of P100,000.00 as and for
attorneys fees, plus costs of suit.
We explained, viz:
Petitioner appealed to the Court of Appeals which modified the decision of the
trial court by deleting the award of P500,000.00 for unrealized profits for lack of [B]efore the onset of the new Civil Code, there was no right to rescind compromise
basis, and by reducing the award for attorneys fees to P50,000.00.[7] Petitioners agreements. Where a party violated the terms of a compromise agreement, the
motion for reconsideration was denied. Hence, this petition for review. only recourse open to the other party was to enforce the terms thereof.

Petitioner contends that the Court of Appeals erred in ruling that the RTC of When the new Civil Code came into being, its Article 2041 x x x created for the first
Valenzuela City had jurisdiction over the action filed by respondent considering that time the right of rescission. That provision gives to the aggrieved party the right to
the subject matter thereof, his alleged violation of the lease contract with either enforce the compromise or regard it as rescinded and insist upon his original
respondent, was already amicably settled before the Office of the Barangay Captain demand. Article 2041 should obviously be deemed to qualify the broad precept
of Taliptip, Bulacan, Bulacan. Petitioner argued that respondent should have followed enunciated in Article 2037 that [a] compromise has upon the parties the effect and
the procedure for enforcement of the amicable settlement as provided for in authority of res judicata. (underscoring ours)
the Revised Katarungang Pambarangay Law. Assuming arguendo that the RTC had
jurisdiction, it cannot award more than the amount stipulated in the Kasunduan
In exercising the second option under Art. 2041, the aggrieved party may, if he
which is P150,000.00. In any event, no factual or legal basis existed for the
chooses, bring the suit contemplated or involved in his original demand, as if there
reimbursement of alleged advance rentals for the unexpired portion of the lease
had never been any compromise agreement, without bringing an action for
contract as well as for moral and exemplary damages, and attorneys fees.
rescission.[15] This is because he may regard the compromise as already legal basis exists for the reimbursement of alleged advance rentals, moral and
rescinded[16] by the breach thereof of the other party. exemplary damages, and attorneys fees awarded by the court a quo and the Court of
Thus, in Morales v. National Labor Relations Commission[17] we upheld the
National Labor Relations Commission when it heeded the original demand of four (4) The rule is that actual damages cannot be presumed, but must be proved with
workers for reinstatement upon their employers failure to comply with its obligation a reasonable degree of certainty.[27] In the case at bar, we agree with petitioner that
to pay their monetary benefits within the period prescribed under the amicable no competent proof was presented to prove that respondent had paid P300,000.00
settlement. We reiterated the rule that the aggrieved party may either (1) enforce as advance rentals for the unexpired period of the lease contract. On the contrary,
the compromise by a writ of execution, or (2) regard it as rescinded and so insist upon the lease contract itself provided that the remaining rentals of P448,000.00 shall be
his original demand upon the other partys failure or refusal to abide by the paid on April 23, 1997 and/or, on or before October 23, 1997, and on April 23, 1998
compromise. We also recognized the options in Mabale v. Apalisok,[18] Canonizado and/or, on or before October 23, 1998 the amount P448,000.00. Respondent filed his
v. Benitez,[19] and Ramnani v. Court of Appeals,[20] to name a few cases. 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
In the case at bar, the Revised Katarungang Pambarangay Law provides for a
rentals which were not yet due. No proof was even presented by respondent to show
two-tiered mode of enforcement of an amicable settlement, to wit: (a) by execution that he had already paid P1,000,000.00 upon signing of the lease contract, as
by the Punong Barangay which is quasi-judicial and summary in nature on mere
stipulated therein. Petitioner, in paragraphs 2 and 7 of his answer, [28] specifically
motion of the party entitled thereto; and (b) an action in regular form, which remedy
denied that respondent did so. Courts must base actual damages suffered upon
is judicial.[21] However, the mode of enforcement does not rule out the right of
competent proof and on the best obtainable evidence of the actual amount
rescission under Art. 2041 of the Civil Code. The availability of the right of rescission thereof.[29]
is apparent from the wording of Sec. 417[22] itself which provides that the amicable
settlement may be enforced by execution by the lupon within six (6) months from its As to moral damages, Art. 2220 of the Civil Code provides that same may be
date or by action in the appropriate city or municipal court, if beyond that period. awarded in breaches of contract where the defendant acted fraudulently or in bad
The use of the word may clearly makes the procedure provided in the Revised faith. In the case at bar, respondent alleged that petitioner made unauthorized
Katarungang Pambarangay Law directory[23] or merely optional in nature. 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
Thus, although the Kasunduan executed by petitioner and respondent before
undertook the repairs because respondent abandoned the leased premises and left
the Office of the Barangay Captain had the force and effect of a final judgment of a it in a state of disrepair. However, petitioner presented no evidence to prove his
court, petitioners non-compliance paved the way for the application of Art. 2041
allegation, as he did not attend the pretrial conference and was consequently
under which respondent may either enforce the compromise, following the
declared in default. What remains undisputed therefore is that petitioner had a valid
procedure laid out in the Revised Katarungang Pambarangay Law, or regard it as
and subsisting lease contract with respondent which he refused to honor by giving
rescinded and insist upon his original demand. Respondent chose the latter option back possession of the leased premises to respondent. We therefore sustain the
when he instituted Civil Case No. 5139-V-97 for recovery of unrealized profits and
conclusion of both the trial court and the Court of Appeals that an award of moral
reimbursement of advance rentals, moral and exemplary damages, and attorneys
damages is justified under the circumstances. We likewise sustain the award for
fees. Respondent was not limited to claiming P150,000.00 because although he exemplary damages considering petitioners propensity not to honor his contractual
agreed to the amount in the Kasunduan, it is axiomatic that a compromise settlement
obligations, first under the lease contract and second, under the amicable settlement
is not an admission of liability but merely a recognition that there is a dispute and an
executed before the Office of the Barangay Captain. Since respondent was compelled
impending litigation[24] which the parties hope to prevent by making reciprocal
to litigate and incur expenses to protect his interest on account of petitioners refusal
concessions, adjusting their respective positions in the hope of gaining balanced by to comply with his contractual obligations,[30] the award of attorneys fees has to be
the danger of losing.[25] Under the Kasunduan, respondent was only required to
execute a waiver of all possible claims arising from the lease contract if petitioner
fully complies with his obligations thereunder.[26] It is undisputed that herein IN VIEW WHEREOF, the petition is PARTIALLY GRANTED. The assailed Decision
petitioner did not. 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
Having affirmed the RTCs jurisdiction over the action filed by respondent, we
assailed Decision is AFFIRMED in all other respects.SO ORDERED.
now resolve petitioners remaining contention. Petitioner contends that no factual or
of P1,338,0003 or P6,000 per square meter. On the same date, Harold was made to
sign an acknowledgment receipt and other papers which were made to appear that
G.R. No. 130864 October 2, 2007 Harold accepted the sum of P480,000 as full and final payment for the lot.

MARIA L. HAROLD, petitioner, Harold later discovered that Aliba made it appear that she had sold the lot to him
vs. for P80,000 and had her certificates of title cancelled and transferred to him. Harold
AGAPITO T. ALIBA, respondent. also found out that the alleged deed of sale was the document that Aliba caused
Harold and her husband to sign in January 1994.
Thinking that she can no longer recover her property, Harold asked for the payment
QUISUMBING, J.: of the fair market value of her property but to no avail. The dispute between Harold
and Aliba was referred to Punong Barangay Limson Ogas and the Lupong
Tagapamayapa. During the June 8, 1994 barangay conciliation proceedings, the
For review on certiorari is the Decision1 dated September 3, 1997 of the Court of
parties herein agreed that Aliba will pay an additional amount of P75,000 to the
Appeals in CA-G.R. SP No. 40416, affirming the dismissal of petitioner Maria L.
initial P500,000 Aliba had already given to Harold. In the same proceedings, Aliba
Harold’s complaint before the Municipal Trial Court of La Trinidad, Benguet.
tendered P70,000, which Harold accepted.4 The receipt of the amount given was
evidenced by an acknowledgment receipt signed by the parties herein, attested to
The pertinent facts are as follows: by the Lupon chairman, and witnessed by several barangay officials.5

Sometime in January 1993, Harold engaged the services of respondent Agapito T. On June 9, 1994, as agreed upon, Aliba tendered the remaining P5,000 to Harold to
Aliba, a geodetic engineer, to conduct a relocation survey and to execute a complete their amicable settlement. Unfortunately, Harold refused to accept the
consolidation-subdivision of their properties including that of Harold’s sister, Alice same, saying that P5,000 is not enough and insisted on the elevation of the case to
Laruan, located in Pico, La Trinidad, Benguet. After completing his work, Aliba was the court.6 Thus, a certification to file action7 was issued by the Office of the Lupong
paid P4,050 for his services, but he failed to return the certificates of title of the said Tagapamayapa on June 29, 1994. Immediately thereafter, Harold filed a
properties for more than one year, despite repeated demands to return them. Complaint8 against Aliba before the Municipal Trial Court (MTC) of La Trinidad,
It also appears that sometime in January 1994, Aliba prevailed upon Harold and her
husband to sign a document which was supposedly needed to facilitate the In his Answer,9 Aliba prayed for the dismissal of the complaint, considering that he
consolidation-subdivision and the issuance of separate transfer certificates of title had already been absolutely released from any obligation to Harold and that what
over the properties. Harold and her husband signed the document without reading remains to be done is merely the completion of the amicable settlement of the
it. parties.

Thereafter, on April 18, 1994, a truck loaded with G.I. sheets and construction On September 4, 1995, the MTC issued an Order dismissing Harold’s complaint,
materials came to the subject lot2owned by Harold. Upon inquiry, Harold and her holding that
husband were informed that Aliba had sold the lot to a third person.
On several occasions, Aliba tried to convince Harold to accept the sum of P400,000
which was later on increased to P500,000, as purchase price of the said lot. It was
It is not disputed that on June 8, 1994, both parties met before Barangay
only after such offers were made that Aliba told Harold that he had indeed sold the
Captain Limson Ogas. After a lengthy deliberation, towards mediation, it
was agreed by both parties in the presence of Barangay Officials that Mr.
Agapito Aliba will pay an additional amount of P75,000.00 to settle once
On May 3, 1994, Harold agreed to accept the P500,000 from Aliba but only as and for all the case. Mr. Aliba at that time has in his possession P70,000.00,
partial payment, considering that the lot has an aggregate value because that was the amount previously agreed upon by both parties. The
amount of P70,000.00 was personally handed by Mr. Aliba to Mrs. Harold, WHEREFORE, in view of the foregoing findings, the Motion to Dismiss,
on that day, the remaining balance of P5,000.00 to be paid the following incorporated in the Answer is hereby granted. This case is hereby ordered
day, June 9, 1994. An Acknowledgment Receipt was signed by Mrs. Harold dismissed.
and witnessed by the barangay officials. . . .
However, defendant is hereby ordered to tender payment to plaintiff his
The said minutes further states therein, "continued for the second day", balance in the amount of P5,000.00 when this order becomes final and
which logically means that the balance be given the following day. executory.

In the afternoon of June 9, 1994, Mr. Aliba returned with the remaining SO ORDERED.12
balance of P5,000.00. It was at this time that when Mr. Aliba was supposed
to hand the money Mrs. Harold bluntly told him the amount of P5,000 is Dissatisfied, Harold filed an appeal before the Regional Trial Court (RTC), Branch 63,
still not enough and instead she started crying and shouting . . . . of La Trinidad, Benguet.

The last paragraph [of the minutes] states "Mr. Aliba requested then if the In an Order dated February 20, 1996, the RTC affirmed in toto the assailed Order of
paid amount of P70,000.00 be returned. Mrs. Harold refused and opted the MTC.
that this case be elevated to the higher court."
Undaunted, Harold further appealed to the Court of Appeals, which however
Based on the minutes of the mediation proceedings, it is clear that denied the same. Hence this petition, on the following grounds:
Barangay Captain Ogas was able to successfully mediate the case between
plaintiff and defendant. As a matter of fact, Aliba has already substantially I.
complied. It is not disputed that he gave plaintiff, on that occasion,
P70,000.00, and to give the balance of P5,000.00, the day after. Thus,
there was meeting of the minds between the parties on a lawful subject,
and there was substantial fulfillment of the obligation. Regret[t]ably, when
the small balance is to be paid, Mrs. Harold reneged on the agreement,
saying P75,000.0010 is not enough, then insisted that the case be filed in
court, but at the same time refusing to return the P70,000.00, when
defendant tried to collect it back. Consequently, the issuance of the
Certificate to File Action, is improper because no valid repudiation [of the
amicable settlement] was made.


Obviously, Mrs. Harold wants her cake and eat it too, so to speak. It is
in[i]quitous to allow Mrs. Harold to exact substantial fulfillment from Aliba
then conveniently change her mind overnight and worse, to refuse to give
back what she already received.
The Court agrees with defendant that there is no clear repudiation of the
agreement. It would have been different if Mrs. Harold returned the
P70,000.00 to the defendant, after changing her mind. There would have
been a clear repudiation of the amicable settlement.11
The dispositive portion of the said MTC Order reads:
GRANTING, WITHOUT ADMITTING, SAID LAW WAS SUBSTANTIALLY offer and the P70,000 tendered to her, Harold had already effectively waived
COMPLIED WITH, WHETHER OR NOT PETITIONER’S ACT OF NOT whatever claims she might have against Aliba regarding the subject lot. Moreover,
ACCCEPTING THE REMAINING BALANCE BEING PROFFERED BY she is likewise barred from pursuing her case against Aliba under the principle of
ALSO BE CONSIDERED A REPUDIATION OF SAID AMICABLE SETTLEMENT OR Under Article 1431 of the Civil Code, through estoppel, an admission or
AT THE VERY LEAST A SUBSTANTIAL COMPLIANCE THEREOF.13 representation is rendered conclusive upon the person making it, and cannot be
denied or disproved as against the person relying on it. Expounding on the principle
Essentially, we are asked to resolve whether the Court of Appeals committed of estoppel, we held in Springsun Management Systems Corporation v.
reversible error in affirming the dismissal of the complaint on the ground that the Camerino19 that "where a party, by his deed or conduct, has induced another to act
dispute between the parties had already been amicably settled during the barangay in a particular manner, estoppel effectively bars the former from adopting an
conciliation proceedings. inconsistent position, attitude or course of conduct that causes loss or injury to the
After a careful scrutiny of the records of this case, we hold that no reason exists to
overturn the decision of the Court of Appeals affirming the dismissal of the subject The doctrine of estoppel is based upon the grounds of public policy, fair dealing,
complaint. good faith and justice, and its purpose is to forbid one to speak against his own act,
representations, or commitments to the injury of one to whom they were directed
In this case, Harold’s main contention was hinged on the alleged non-perfection of and who reasonably relied thereon.21
the questioned amicable settlement between her and Aliba because there was
allegedly no meeting of the minds between them regarding the subject matter and The issue concerning the alleged non-compliance of the amicable settlement
the cause thereof.14 On the other hand, Aliba’s principal defense is anchored on the pursuant to the mandate of Section 41122 of Republic Act No. 7160 or the Local
alleged existence and validity of the said amicable settlement.15 Government Code (LGC) arose because there was no formal document
denominated as "Amicable Settlement" signed by the parties. However, we agree
Harold’s submission that there was no meeting of the minds between the parties with the similar holdings of the Court of Appeals and the RTC that the requirements
herein pertaining to the subject matter and cause of the questioned amicable under Section 411 of the LGC had been substantially complied with. The minutes of
settlement is a clear deviation from the facts on record. Admittedly, both parties the barangay conciliation proceedings readily disclose the terms agreed upon by the
agreed during the June 8, 1994 barangay conciliation proceedings for Aliba to pay parties for the settlement of their dispute, and that the acknowledgment receipt,
an additional amount of P75,000 (which was the object or subject matter of the which was written in a language known to the parties, signed by them, attested to
amicable settlement) to the initial P500,000 Aliba had given to Harold as purchase by the Lupon Chairman, and witnessed by several barangay officials, serves as an
price for the subject lot in order to put an end to their dispute (which was the cause indubitable proof of the amicable settlement and of the substantial compliance of
or reason of the amicable settlement). Thus, it is evident that the parties herein its terms by respondent Aliba.
entered into an amicable settlement, or more specifically, a compromise
agreement, during the said barangay conciliation proceedings. Moreover, even without the minutes of the meeting and the acknowledgment
receipt, the amicable settlement, or more specifically the compromise agreement,
Under Article 2028 of the Civil Code, a compromise agreement was defined as "a entered into by the parties is undeniably valid, considering that "a compromise
contract whereby the parties, by making reciprocal concessions, avoid litigation or agreement is a consensual contract, and as such, it is perfected upon the meeting
put an end to one already commenced." In Sanchez v. Court of Appeals,16 we held of' the minds of the parties to the contract."23
that a "compromise is a form of amicable settlement that is not only allowed but
also encouraged in civil cases."17 Furthermore, to rule against the validity of the cited amicable settlement herein
would militate against the spirit and purpose of the Katarungang
It must also be highlighted that Harold expressly acknowledged that the offer made Pambarangay Law,24 which is to encourage the amicable settlement of disputes at
by Aliba to pay an additional P75,000 was made in order for her to desist from the barangay level as an alternative to court litigation.
pursuing her case against him.18 By reason of her unconditional acceptance of the
Harold’s refusal to accept the remaining P5,000 that Aliba had tendered cannot
constitute an effective repudiation of the questioned amicable settlement,
considering that the reason for her refusal to accept the said amount or alleged
repudiation of the assailed amicable settlement is not one of the grounds for
repudiation clearly specified under Section 418 25 of the LGC. As borne out by the
records, her refusal to accept the same was based on the alleged insufficiency of
the remaining P5,000 as settlement for the lot, without any reference to vitiation of
her consent by any fraud, violence or intimidation on Aliba’s part.

WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision dated
September 3, 1997 of the Court of Appeals in CA-G.R. SP No. 40416 is AFFIRMED.
Costs against the petitioner.