Katarangunag Pambarangay Cases

ALTERNATIVE DISPUTE RESOLUTION: KATARUNGANG PAMBARANGAY CASES Page 1 of 19
1G.R. No. 82211-12 March 21, 1989
TERESITA MONTOYA, petitioner,

vs.
TERESITA ESCAYO, JOY ESCAYO, AIDA GANANCIAL, MARY ANN CAPE, CECILIA CORREJADO,
ERLINDA PAYPON and ROSALIE VERDE, AND NATIONAL LABOR RELATIONS
COMMISSION, respondents.
This petition for certiorari seeks the annullment and setting aside of the resolution 1 9dated August 20, 1987 of the National
Labor Relations Commission (NLRC), Third Division, which reversed and set aside the order dated September 27, 1985 of
Labor Arbiter Ethelwoldo R. Ovejera of the NLRC's Regional Arbitration Branch No. VI, Bacolod City, dismissing the
complaint filed by the private respondents against the petitioner. This petition raises a singular issue, i.e., the applicability
of Presidential Decree (P.D.) No. 1508, more commonly known as the Katarungang Pambarangay Law, to labor disputes.
The chronology of events leading to the present controversy is as follows:
The private respondents were all formerly employed as salesgirls in the petitioner's store, t he "Terry's Dry Goods Store," in
Bacolod City. On different dates, they separately filed complaints for the collection of sums of money against the petitioner
for alleged unpaid overtime pay, holiday pay, 13th month pay, ECOLA, and service leave pay: for violation of the minimum
wage law, illegal dismissal, and attorney's fees. The complaints, which were originally treated as separate cases, were
subsequently consolidated on account of the similarity in their nature. On August 1, 1984, the petitioner-employer moved
(Annex "C" of Petition) for the dismissal of the complaints, claiming that among others, the private respondents failed to
refer the dispute to the Lupong Tagapayapa for possible settlement and to secure the certification required from the Lupon
Chairman prior to the filing of the cases with the Labor Arbiter. These actions were allegedly violative of the provisions of
P.D. No. 1508, which apply to the parties who are all residents of Bacolod City.
Acting favorably on the petitioner's motion, Labor Arbiter Ethelwoldo R. Ovejera, on September 27, 1985, ordered the
dismissal of the complaints. The private respondents sought the reversal of the Labor Arbiter's order before the respondent
NLRC. On August 20, 1987, the public respondent rendered the assailed resolution reversing the order of Ovejera, and
remanded the case to the Labor Arbiter for further proceedings. A motion for reconsideration was filed by the petitioner but
this was denied for lack of merit on October 28, 1987. Hence, this petition.
It is the petitioner's contention that the provisions of the Katarungang Pambarangay Law (P.D. No. 1508) relative to the
prior amicable settlement proceedings before the Lupong Tagapayapa as a jurisdictional requirement at the trial level apply
to labor cases. More particularly, the petitioner insists that the failure of the private respondents to first submit their
complaints for possible conciliation and amicable settlement in the proper barangay court in Bacolod City and to secure a
certification from the Lupon Chairman prior to their filing with the Labor Arbiter, divests the Labor Arbiter, as well as the
respondent Commission itself, of jurisdiction over these labor controversies and renders their judgments thereon null and
void.
On the other hand, the Solicitor General, as counsel for the public respondent NLRC, in his comment, strongly argues and
convincingly against the applicability of P.D. No. 1508 to labor cases.
We dismiss the petition for lack of merit, there being no satisfactory showing of any grave abuse of discretion committed
by the public respondent.
The provisions of P.D. No. 1508 requiring the submission of disputes before the barangay Lupong Tagapayapa prior to their
filing with the court or other government offices are not applicable to labor cases.
For a better understanding of the issue in this case, the provisions of P.D. No. 1508 invoked by the petitioner are quoted:
SEC. 6. Conciliation pre-condition to filing of complaint. No complaint, petition, action or proceeding

involving any matter within the authority of the Lupon as provided in Section 2 hereof shall be filed or
instituted in court or any other government office for adjudication unless there has been a confrontation of
the parties before the Lupon Chairman or the Pangkat and no conciliation or settlement has been reached
as certified by the Lupon Secretary or the Pangkat Secretary, attested by the Lupon or Pangkat Chairman,
or unless the settlement has been repudiated. However, the parties may go directly to court in the following
cases:
(1) Where the accused is under detention;
(2) Where a person has otherwise been deprived of per sonal liberty calling for habeas corpus proceedings;
(3) Actions coupled with provisional remedies such as preliminary injunction, attachment, delivery of
personal property and support pendente lite; and
(4) Where the action may otherwise be barred by the Statute of Limitations.
As correctly pointed out by the Solicitor General in his comment to the petition, even from the three "WHEREAS" clauses
of P.D. No. 1508 can be gleaned clearly the decree's intended applicability only to courts of justice, and not to labor relations
commissions or labor arbitrators' offices. The express reference to "judicial resources", to "courts of justice", "court
dockets", or simply to "courts" are significant. On the other band, there is no mention at all of labor relations or controversies
and labor arbiters or commissions in the clauses involved.
These "WHEREAS" clauses state:
WHEREAS, the perpetuation and official recognition of the time-honored tradition of amicably settling
disputes among family and barangay members at the barangay level without judicial resources would
promote the speedy administration of justice and implement the constitutional mandate to preserve and
develop Filipino culture and to strengthen the family as a basic social institution;
WHEREAS, the indiscriminate filing of cases in the courts of justice contributes heavily and unjustifiably
to the congestion of court dockets, thus causing a deterioration in the quality of justice;
WHEREAS, in order to help relieve the courts of such docket congestion and thereby enhance the quality
of Justice dispensed by the courts, it is deemed desirable to formally organize and institutionalize a system
of amicably settling disputes at the barangay level; (Emphasis supplied.)
In addition, Letter of Instructions No. 956 and Letter of Implementation No. 105, both issued on November 12, 1979 by the
former President in connection with the implementation of the Katarungang Pambarangay Law, affirm this conclusion.
These Letters were addressed only to the following officials: all judges of the Courts of first Instance, Circuit Criminal
Courts, Juvenile and Domestic Relations Courts, Courts of Agrarian Relations, City Courts and Municipal Courts, and all
Fiscals and other Prosecuting Officers. These presidential issuances make clear that the only official directed to oversee
the implementation of the provisions of the Katarungang Pambarangay Law (P.D. No. 1508) are t he then Minister of Justice,
the then Minister of Local Governments and Community Development, and the Chief Justice of the Supreme Court. If the
contention of the petitioner were correct, the then Minister (now Secretary) of Labor and Employment would have been
included in the list, and the two presidential issuances also would have been addressed to the labor relations officers, labor
arbiters, and the members of the National Labor Relations Commission. Expressio unius est exclusio alterius.
Nor can we accept the petitioner's contention that the "other government office" referred to in Section 6 of P.D. No. 1508
includes the Office of the Labor Arbiter and the Med-Arbiter. The declared concern of the Katarungan Pambarangay Law
is "to help relieve the courts of such docket congestion and thereby enhance the quality of justice dispensed by the courts."
Thus, the" other government office" mentioned in Section 6 of P.D. No. 1508 refers only to such offices as the Fiscal's
Office or, in localities where there is no fiscal, the Municipal Trial Courts, where complaints for crimes (such as those
punishable by imprisonment of not more than 30 days or a, fine of not more than P 200.00) falling under the jurisdiction of
the barangay court but which are not amicably settled, are subsequently filed for proper disposition.
But, the opinion of the Honorable Minister of Justice (Opinion No. 59, s. 1983) to the contrary notwithstanding, all doubts
on this score are dispelled by The Labor Code Of The Philippines (Presidential Decree No. 442, as amended) itself. Article
226 thereof grants original and exclusive jurisdiction over the conciliation and mediation of disputes, grievances, or
problems in the regional offices of the Department of Labor and Employ- ment. It is the said Bureau and its divisions, and
not the barangay Lupong Tagapayapa, which are vested by law with original and exclusive authority to conduct conciliation
and mediation proceedings on labor controversies before their endorsement to the appropriate Labor Arbiter for
adjudication. Article 226, previously adverted to is clear on this regard. It provides:
ART. 226. Bureau of Labor Relations.- The Bureau of Labor Relations and the Labor relations divisions in
the regional officer of the Department of Labor shall have original and exclusive authority to act, at their
own initiative or upon request of either or both parties, on all inter-union and intra-union conflicts, and all
disputes, grievances or problems arising from or affecting labor-management relations in all workplaces
whether agricultural or non-agricultural, except those arising from the implementation or interpretation of
collective bargaining agreements which shall be the subject of grievance procedure and/or voluntary
arbitration.
The Bureau shall have fifteen (15) working days to act on all labor cases, subject to extension by agreement
of the parties, after which the Bureau shall certify the cases to the appropriate Labor Arbiters. The 15-
working day deadline, however, shall not apply to cases involving deadlocks in collective bargaining which
the Bureau shall certify to the appropriate Labor Arbiters only after all possibilities of voluntary settlement
shall have been tried.
Requiring conciliation of labor disputes before the barangay cou rts would defeat the very salutary purposes of the law.
Instead of simplifying labor proceedings designed at expeditious settlement or referral to the proper court or office to decide
it finally, the position taken by the petitioner would only duplicate th e conciliation proceedings and unduly delay the
disposition of the labor case. The fallacy of the petitioner's submission can readily be seen by following it to its logical
conclusion. For then, if the procedure suggested is complied with, the private respondent would have to lodge first their
complaint with the barangay court, and then if not settled there, they would have to go to the labor relations division at the
Regional Office of Region VI of the Department of Labor and Employment, in Bacolod City, for another round of
conciliation proceedings. Failing there, their long travail would continue to the Office of the Labor Arbiter, then to the
NLRC, and finally to us. This suggested procedure would destroy the salutary purposes of P.D. 1508 and of The Labor
Code Of The Philippines. And labor would then be given another unnecessary obstacle to hurdle. We reject the petitioner's
submission. It does violence to the constitutionally mandated policy of the State to afford full protection to labor. 2
Finally, it is already well-settled that the ordinary rules on procedure are merely suppletory in character vis-a-vis labor
disputes which are primarily governed by labor laws. 3 And "(A)ll doubts in the implementation and interpretation of this
Code (Labor), including its implementing rules and regulations, shall be resolved in favor of labor. 4
WHEREFORE, the petition is DISMISSED. Costs against the petitioner.
SO ORDERED.
2G.R. No. 76690 February 29, 1988
CLAUDIA RIVERA SANCHEZ, petitioner,

vs.
HONORABLE MARIANO C. TUPAS, Presiding Judge of the Regional Trial Court, Branch XII of Davao City
and Private Respondent ALFONSO ESCOVILLA, respondents.
This is a petition for review on certiorari seeking to set aside the October 10, 1986 Order of the Regional Trial Court of
Davao * in Civil Case No. 17383 dismissing herein petitioner's action for annulment of judgment on the ground . of lack of
cause of action or prematurity, the same not having been passed upon by the Barangay Court as man dated in Section 12,
Rule VI, of P.D. 1508.
Herein petitioner and private respondent are both occupants of a public agricultural land Identified as Lot 595, Cad-102
located at Budbud, Tibungco, Davao City. Petitioner claims that the area of 450 square meters, more or less, has been in her
possession since 1947, long before private respondent came in and occupied another portion of Lot 595. On the other hand,
private respondent claims that the area being claimed by petitioner is a part of his three-fourth (3/4) of a hectare parcel, the
right to which he acquired from its former possessor and owner of the improvements thereon. Sometime in 1966, out of
charity and upon their agreement that petitioner will vacate the premises upon demand, he granted petitioner's request to
build her house inside the land occupied by him.
On September 18,1980, private respondent filed with the City Court of Davao an ejectment case against petitioner. The case
was docketed therein as Civil Case No.1710-D.
On March 26,1982, the City Court of Davao rendered a "Judgment by Compromise."
On January 25, 1985, petitioner filed with the Regional Trial Court of Davao a petition to annul the aforesaid judgment of
the City Court of Davao (Rollo, pp. 8-10). Said petition was docketed therein as Civil Case No. 17383. In the same, petitioner
alleged, among others, that she is an illiterate, that sometime before March 26, 1982, her lawyer, Atty. Jose M. Madrazo
came to her residence at Budbud, Bunawan, Davao City, bringing a certain document which she signed by her thumbmark
after being told that she cannot be ejected anymore during her lifetime; that thereafter, her lawyer came back to her residen ce
and furnished her a copy of the said decision of the City Court of Davao; that it is only on March 30, 1984 when she learned
for the first time that what she had signed with her thumbmark was a compromise agreement, wherein she recognized private
respondent's prior occupancy of the land in question, when she received an Order of Guillermo C. Ferraris, OIC Regional
Director of Lands, dropping her petition, together with the petitions of three others, based, allegedly, on their withdrawal,
of their claims over the disputed land; that she had never intended to recognize the private respondent as having prior
possession and occupancy of the land, the truth of the matter being that she had been in possession of the area of 450 square
meters, more or less, since 1947, long before private respondent came in and occupied another portion of Lot 595; that in
sheer bad faith, private respondent caused the survey of the entire Lot No. 595 sometime in 1980, which survey became
null and void after the same was formally opposed by Eufemio Escovilla, brother of private respondent, before Atty.
Uldarico G. Aquino, then District Officer, Bureau of Lands, Davao City; that on January 21, 1982, petitioner and the other
occupants Eufemio Escovilla, Damaso Escovilla and Emiliana Monleon, requested the Land District Officer to authorize
Geodetic Engineer Timoteo D. Cajipe of the same Office to execute a segregation survey; that the request was granted and
the District Land Officer, Atty. Bienvenido Sambrano, directed Engr. Timoteo D. Cajipe to survey the land; that Engr.
Cajipe was not able to conduct the segregation survey because private respondent threatened bodily harm on and even death
to the survey team, especially against the petitioner and the other actual occupants; and that pursuant to the 1st Indorsement
of the District Land Officer dated January 21, 1982, Land Investigator Manuel Flores conducted an investigation of the
disputed area. (Rollo, pp. 8-10)
Private respondent, in a Motion to Dismiss dated May 7,1986 (Ibid., pp. 14-16), moved for the dismissal of the complaint
on the grounds that (1) the records of the case do n ot show that the same has been referred to the barangay court for
confrontation, conciliation or settlement of the parties concerned as required under the provisions of Section 6 of PD 1508,
and as ruled by the Supreme Court in Spouses Maria Luisa P. Morat a, et al. vs. Spouses Victor Go, et al., G.R. L-62339,
October 27, 1983, 125 SCRA 444; and (2) the complaint does not state a cause of action.
On May 12, 1986, petitioner filed an Opposition to the Motion to Dismiss (Ibid., pp. 17-21) on the grounds that (1) the
motion to dismiss was filed beyond the period prescribed by the Rules of Court; and (2) the petition states a cause of action .
On the same date, May 12,1986, private respondent filed his Answer (Ibid., pp, 22-24) and his Reply to Opposition to
Motion to Dismiss, Opposition to Prayer therein to Declare Defendant in Default, and Manifestation, dated May 12, 1986
(Ibid., pp. 2526).
On May 26,1986, petitioner filed a Supplemental Opposition to Motion to Dismiss (Ibid., pp. 27-36).
Respondent Judge in an order dated May 16, 1986 (Ibid., p. 37), granted the prayer of counsel for private respondent to be
allowed one (1) week to file a memorandum in support of his stand, which was to be commented upon within like period
by petitioner's counsel; after which, all the pending incidents are to be deemed submitted for the resolution of the Court.
On May 29,1986, private respondent submitted his Memorandum (Ibid., pp. 29-36).
In an Order dated October 10, 1986 (Ibid., pp. 38-39), respondent Judge sustained private respondent's Motion to Dismiss
by dismissing the case for lack of cause of action or prematurity for not having passed the Barangay Court.
Hence, the instant petition (Ibid., pp. 3-7).
The Second Division of this Court, in a Resolution dated January 7,1987 (Ibid., p. 41), required respondent to comment. In
compliance therewith, private respondent filed his Comment (Ibid., pp. 83-91) on February 18,1987.
In the Resolution of March 9, 1987 (Ibid., pp. 93), petitioner was required to reply. The same was filed (Ibid., pp. 94-96) on
April 23,1987.
In the Resolution of June 3, 1987 (Ibid., p. 98), the petition was given due course and the parties were required to submit
their respective memoranda.
On July 23, 1977, private respondent filed a Manifestation (Ibid., p. 106) submitting his Comment of February 5,1987 to
the petition as his memorandum.
On August 25,1987, petitioner filed her Memorandum (Ibid., pp. 109-115).
Petitioner raised two (2) issues, to wit:
1. WHETHER OR NOT THE JUDGMENT BY COMPROMISE IS NULL AND VOID; AND
2. WHETHER OR NOT THE REGIONAL TRIAL COURT GRAVELY ERRED IN DISMISSING THE PETITION FOR
ANNULMENT OF JUDGMENT.
Petitioner contends that respondent Judge erred in dismissing petitioner's action for annulment of judgment simply because
said action did not pass the Barangay Court.
This contention is impressed with merit.
Presidential Decree No. 1508 requires that the parties who actually reside in the same city or municipality should bring their
controversy first to the Barangay Court for possible amicable settlement before filing a complaint in court. This requirement
is compulsory (as ruled in the cited case of Morato vs. Go, 125 SCRA 444), [1983] and non -compliance of the same could
affect the sufficiency of the cause of action and make the complaint vulnerable to dismissal on the ground of lack of cause
of action or prematurity (Peregrina vs. Panis, 133 SCRA 75). [1984] It must be borne in mind that the purpose of the
conciliation process at the barangay level is to discourage indiscriminate filing of cases in court in order to decongest the
clogged dockets and in the process enhance the quality of justice dispensed by courts (Morato, vs. Go, supra).
In the instant case, it will be noted that the ejectment case in the City Cou rt of Davao, Civil Case No. 17-10-D, was filed on
September 18, 1980, when Presidential Decree No. 1508 was already enforced. However, the records do not show that there
was an opposition to the filing of the said ejectment case on the ground that the dispute had not been submitted to the
Barangay Court for possible amicable settlement under P.D. 1508. The only logical conclusion therefore is that either such
requirement had already been complied with or had been waived. Under either circumstance, there appears to be no reason,
much less a requirement that this case be subjected to the provisions of P.D. 1508. In fact, the present controversy is an
action for annulment of a compromise judgment which as a general rule is immediately executory (De Guzman vs. Court
of Appeals, 137 SCRA 730,[1985]), and accordingly, beyond the authority of the Barangay Court to change or modify.
Normally, the instant case should be remanded to the lower court for further proceedings. Nevertheless, a close examination
of the records shows that such time-consuming procedure may be dispensed with in resolving the issue at hand. Thus, this
Court, in the case of Velasco, et al. vs. Gayapa (G.R. No. 58651, promulgated on July 30,1987), ruled:
Since the main case is manifestly without merit, the order of the lower court dismissing the appeal cannot
be impugned. As held in Castro vs. Court of appeals (supra), "a remand for further proceedings therefore,
would only result in needless delays — a few more yearn perhaps of a tortuous journey; through new
proceedings in the trial court, the intermediate appeal and another resort to this Court through a petition for
review to finally achieve the same result."
Petitioner's action for annulment of judgment is based on the ground of extrinsic fraud allegedly committed by her own
lawyer by telling her "that she cannot be elected any more during her lifetime" from the land in dispute, but did not disclose
to her that at the same time she would have to recognize the prior possession of private responden t.
While there can be no question as to the right of any person adversely affected by a judgment to maintain an action and to
have the decision declared a nullity, such an action to annul a judgment upon the ground of fraud, will not lie unless the
fraud be extrinsic or collateral and committed by the adverse party, not by one's own counsel. Said ruling was reiterated in
a subsequent case where it was stressed that the fraud mentioned in Rule 38 is the fraud committed by the adverse party
(Velayo vs. Shell Company of the Philippines, Ltd., et al., 105 Phil. 1114, [1959]).
In the instant case, petitioner, in her action for annulment of judgment, never made any allegation that private respondent
had anything to do with such actuation other lawyer. Such being the case, the most that she has is an action against her own
lawyer and not against the private respondent.
Moreover, miscalculation or misappreciation of the legal import of the compromise agreement, where the party is assisted
by counsel, win not provide basis for setting aside agreement on the ground of mistake or error. A compromise, entered into
and carried out in good faith, will not be discarded even if there was a mistake of law or fact. (Periquet vs. Reyes, 21 SCRA
1503, [1967]).
PREMISES CONSIDERED, the instant petition is DISMISSED, without prejudice to petitioner's action against her own
lawyer.
SO ORDERED.
3G.R. No. 79404 January 27, 1989
SPOUSES FELICIANO BEJER and GLORIA BEJER, petitioners,

vs.
THE HONORABLE COURT OF APPEALS and SPOUSES SOLANO SAMAR and "JOHN DOE/S", respondents.
Considering the identity of petitioner lessors, the subject matter and the issues in these two cases, and that the respondents
therein are tenants in the same property involved, a joint decision is indicated.
An identical pivotal issue, which would be determinative of the present recourses in both cases, presents itself for resolution
by the Court: Does P.D. 1508 (Katarungang Pambarangay Law), which requires the compulsory process of conciliation as
a pre-condition for filing a case in court, apply where the plaintiffs are permanent residents of another province but, at the
time of the institution of the action, are temporarily residing for a transient purpose in the same city where the defendants
reside?
The petitioners in these cases are the owners of a parcel of land and the building erected thereon located at and known as
No. 1162-B San Andres St., Malate, Manila. In 1984, the petitioners entered into a verbal contract of lease with the Samar
spouses, respondents in G.R. 79404, on a month-to-month basis over a portion of the said premises at a monthly rental of
P75.00. In September, 1985, petitioners notified said respondents of their need to repossess the leased premises for their
own use and due to the immediate need therefor by their family, and granted the respondents up to December 31, 1985 to
vacate the premises. Respondents stayed on and despite another 3-month notice to pay and vacate they not only failed to do
so but refused to pay their monthly rentals from December, 1985, hence the petitioners filed a complaint against them on
April 21, 1986 in the Metropolitan Trial Court of Manila. 1
The same antecedent facts obtain with respect to the respondent Esplano spouses, involved in G.R. No. 80045, against
whom a separate complaint was filed and raffled to the same trial court. The aforesaid two cases, together with that against
a third tenant-defendant but which is not involved in these appellate proceedings, were the subjects of a consolidated
decision of the lower court 2 rendered on November 7, 1986 ordering therein defendants and all persons claiming rights
under them to vacate their respective leased premises; to pay the rentals from December, 1985 until they shall have vacated
the premises, with legal interest thereon; and to individually pay P1,000.00 as attorney's fees, plus costs of suit.
In said cases, the defendants, respondents herein, duly raised in their respective answers the defenses of lack of cause of
action of the plaintiffs and/or that the lower court had no jurisdiction for non -compliance with the conciliation requirement
of P.D. 1508; and further that they could not be ejected by reason of the applicability and proscription in their favor of P. D.
1517 (Urban Land Reform Law) in relation to P.D. 1520.
However, the lower court held that P.D. 1508 was not applicable in both cases since the plaintiffs were actual residents of
Orense, Bauan, Batangas and, at the time of filing the individual suits against the respective defendants therein, the former
were merely transient residents of 1284 Burgos Street, Pandacan, Manila. Defendants' invocation of P.D. 1517 was given
short shrift in view of the doctrine laid down by this Court in Santos, et. al. vs. Court of appeals, et al., 3 holding that —
... P.D. No. 1517, in referring to the pre-emptive or redemptive right of a lessee speaks only of urban land
under lease on which a tenant has built his home and in which he has resided for ten years or more. If both
land and the building belong to the lessor, the right referred to hereinabove does not apply.
Therein defendant Samar spouses appealed to the Regional Trial Court which affirmed 4 the judgment of the lower court,
further pointing out that therein plaintiffs "occasional visits to the Pandacan apartment of their children do not make
plaintiffs 'ACTUAL RESIDENTS' of that place. In short, plaintiffs are as st rangers to the community at Burgos Street,
Pandacan, Manila as they can be." With respect to defendants' reliance on P.D. 1517 and P.D. 2016, it was additionally
noted that said decrees require that the area must be defined and proclaimed to be within a specified Urban Land Reform
Zone, 5 that is, the 245 depressed areas covered by Proclamation No. 1967 and within the Area of Priority Development and
the ZIP Program of the Government. The premises in controversy were within an area not yet proclaimed by only being
recommended for feasibility study for the Zonal Improvement Program. 6
Therein defendants elevated the case on a petition for review to the Court of Appeals, 7 which, in its decision on July 23,
1987 sustained the ruling on the inapplicability of P.D. 1517. 8 However, it held that P.D. 1508 was applicable to the case
although the therein private respondents were only "temporarily residing" at 1284 Burgos Street, Pandacan, Manila" since
P.D. 1508 merely requires that the parties are "actually residing' in the place involved. The decisions of the two lower courts
were consequently set aside and the ejectment case was dismissed on the ground of lack of cause of action or pre-maturity. 9
Herein petitioners fared no better in their case against the Esplano spouses who likewise appealed from the aforesaid
consolidated decision of the Metropolitan Trial Court to the Regional Trial Court of Manila 10 which affirmed in toto the
decision of the lower court. However, on a petition for review in the Court of Appeals, the decision of the trial court was
set aside and the complaint for ejectment was dismissed likewise for lack of cause of action or pre-maturity. Said
decision 11 of the Sixth Division of respondent Court of Appeals specifically adverted to and noted with approval the
aforesaid decision of the Fourteenth Division in CA-G.R. SP. No. 11697.
Both decisions of the respondent court are now before Us presenting the same determinant issue stated at the outset of this
decision.
Prefatorily, this Court has heretofore repeatedly held that non-compliance with P.D. 1508 does not warrant jurisdictional
objections; non-availment of the conciliation process required therein only renders the complaint vulnerable to a timely
motion to dismiss for lack of cause of action or prematurity. 12 The private respondents in the two cases at bar seasonably
raised that affirmative defense in their respective answers filed in the court a quo, hence waiver of such objection or estoppel
by laches are not in issue in the present controversy.
Instead, the contending parties have locked their argumentative horns on the nature or concept of the "residence"
requirement in P.D. 1508, the petitioners contending that permanent residence is required for the application thereof, while
the private respondents insist that all that is required is actual residence, whether temporary or permanent, at the time the
dispute arose. In procedural law, however, specifically for purposes of venue it has been held that the residence of a person
is his personal, actual or physical habitation or his actual residence or place of abode, 13 which may not necessarily be his
legal residence or domicile provided he resides therein with continuity and consistency, 14 thus:
... We lay down the doctrinal rule that the term 'resides' connotes ex vi termini 'actual residence' as
distinguished from 'legal residence or domicile'. The term 'resides', like the term 'residing' or 'residence' is
elastic and should be interpreted in the light of the object or purpose of the statute or rule in which it is
employed. ... In other words, 'resides' should be viewed or understood in its popular sense, meaning, the
personal, actual or physical habitation of a person, actual residence or place of abode. It signifies physical
presence in a place and actual stay thereat. ... No particular length of time of residence is required
though; however, the residence must be more than temporary (Emphasis supplied).
Parenthetically, the lower courts held that herein petitioners are permanent residents of Orense, Bauan, Batangas, although
they periodically come to visit and stay for a few days at the aforesaid place in Pandacan where their children live while
attending classes. Both complaints filed by them in the Metropolitan Trial Court also state that they are "residents of Oren se,
Bauan, Batangas, and temporarily residing at 1284 Burgos Street, Pandacan, Manila." Tested by the rules on sufficiency of
pleadings, it is readily apparent that the allegation regarding their temporary residence should be treated as an
inconsequential surplusage. However, as already stated, respondents' reliance is place squarely and literally on the reference
of P.D. 1508 to persons "actually residing" in the barangays as the rationale for its applicability. We feel, however, that for
an adequate denouement the inquiry should go farther than such statutory provisions.
It will be noted that the first preambular paragraph of P.D. 1508 15 provides:
Whereas, the perpetuation and official recognition of the time-honored tradition of amicably settling
disputes among family and barangay members at the barangay level without judicial recourse would
promote the speedy administration of justice and implement the constit utional mandate to preserve and
develop Filipino culture and to strengthen the family as a basic social institution;' (Emphasis supplied).
Evidently, therefore, the primary purpose of P.D. 1508 is to provide the conciliation mechanism, as an alternative to
litigations in dispute settlement, to member of the corresponding barangays who are actually residing therein. Residence
alone, without membership, in said barangays would not be an accurate and reliable criterion, considering that such
residence may be actual but be merely temporary, transient or categorized into other permutations as in the case of a house
guest or a sojourner on a visit of a day or two. On the other hand, mere membership in a barangay, without actual residence
therein, should not suffice since absentee membership would not subserve the avowed purpose of P.D. 1508 for lack of the
common bond and sense of belonging generally fostered in members of an Identified aggroupment.
Hence, the Local Government Code16 thereafter specifically provided 17 for the appointment of a barangay secretary with
the duties, inter alia, to:
xxx xxx xxx
(c) Prepare separate lists of the members of the barangay and the registered voters of the barangay assembly,
and have the same posted on conspicuous places within the barangay;
(d) Register all new members of the barangay;'
xxx xxx xxx

That such regulatory provisions in B.P. 337 on barangays should be read conjointly with and applies to P.D. 1508 is shown
by the provision in the former as follow:
Sec. 114. Amicable Settlement of Disputes on the Barangay Level. There shall be a system of amicable
settlement of disputes on the barangay level which shall be governed by law.
Incidentally, the importance of membership, and not mere actual residence, in the barangay is underscored by the
requirement that it must have an actual population of at least one thousand inhabitants, 18 which cannot but mean barangay
members actually residing therein. Membership in the barangay is also required for candidacy to an office therein, 19 to be
considered as persons in authority 20 and for membership in the kabataang barangay assembly. 21
Turning now to the cases at bar, there is no dispute that the petitioners are not members of the barangay in question. There
is no evidence of that fact nor was there a certification that they are residents of 1284 Burgos Street, Pandacan, Manila, in
contrast to the respondents in both cases whose residence at 1162-B San Andres Street, Malate, Manila was certified to by
the barangay chairman thereof. 22 Petitioners cannot even be accurately categorized as temporary residents but as mere
periodic and brief sojourners who only used to come to visit and attend to their children's needs while in school. From all
the foregoing disquisitions, therefore, we cannot confer in the existence of the requisite residential or, for purposes of the
issue involved, the legal nexus between the petitioners and the Pandacan barangay involved.
The literalism in respondents' suggested construction of the pertinent provisions of P.D. 1508 may even result in unwanted,
if not absurd, results not contemplated in and contrary to its purposes. For instance, if a transient visitor, like the herein
petitioners, obtains a loan of P15,000.00 on a verbal agreement from a barangay member during the former's brief stay in
that barangay in Manila and fails to pay the same but, like the petitioners herein, he is a resident of Batangas, following
respondents' theory prior conciliation proceedings must first be conducted in said Manila barangay before suit may be
brought in the municipal trial court in Batangas as the court of proper venue. This situation could not have been within the
intendment of P.D. 1508.
On the equities of these cases, it bears mention that petitioners and their family have been prevented up to now from
repossessing their own house and lot for their use despite their demonstrated compliance with the legal requirements therefor
as found by the two courts below, and that the respondents have deliberately refused to pay the respective stipulated rentals
for their occupancy of said premises.
WHEREFORE, judgment is hereby rendered SETTING ASIDE the assailed decisions of the Fourteenth and Sixth Divisions
of the respondent Court of Appeals in CA-G.R. SP. No. 11697 and CA G.R. No. SP-11893, respectively; REINSTATING
the decisions of the Regional Trial Court of Manila in Civil Cases Nos. 87-39033 and 87-39032 thereof, and ORDERING
the respondents to vacate the premises in question and surrender possession thereof to the petitioners. This decision is
immediately EXECUTORY.
SO ORDERED.
4G.R. No. L-65629 November 24, 1986
TERESITA E. AGBAYANI and LUCAS F. AGBAYANI, petitioners,

vs.
THE HONORABLE ANTONIO M. BELEN, in his capacity as Regional Trial Judge, Branch XXXVIII, Regional
Trial Court, First Judicial Region, and SPOUSES SEVERO A. VILLAFUERTE AND ANA P.
VILLAFUERTE, respondents.
Nullification is sought by petitioners of the Order of respondent Judge 1 dated September 28, 1983, dismissing the civil
action instituted by said petitioners against private respondents and other persons for quieting of title and damages involving
three (3) parcels of land in Dayomaca (Tobuan), Poblacion, Sual, Pangasinan. 2 The Court sustained the defendants' motion
to dismiss "on the ground that ... (it had) not yet acquired jurisdiction to try the case" because of the failure of the petitioners
to submit the controversy to conciliation proceedings pursuant to P.D. No. 1508 before filing their complaint with the Court.
The Trial Court justified its action as follows:
The Court after carefully examining and studying the ground set forth by the defendants in their motion to dismiss, as well
as the arguments advanced by the plaintiff, together with the pertinent provision of P.D. 1508 cited by the parties, hereby
finds that the instant action falls within the authority of the Lupon Tagapayapa, and therefore the parties should first appear
before the Lupon Chairman or the Pangkat of the barangay (Tobuan, Sual, Pangasinan) where the properties are located for
confrontation as mandated in Section 6 of P.D. 1508. While it appears in the record that the parties reside in barargays of
different cities or municipalities, the real property subject matter of the case are not however located in different barangays
but in one and the same barangay, that is, Barangay Tobuan, Sual, Pangasinan. Based on these facts obtaining in this case,
it is clear and clean that the present action is within the authority of the Lupon, hence the provision of P.D. 1508 should first
be complied with before the complaint could be flied in court. 3
The Order is incorrect and win have to be reversed.
PD 1508 declares that generally, disputes involving parties actually residing in the same city or municipality, or in adjoining
barangays of different cities or municipalities, should first be brought before the appropriate Barangay Lupon which shall
have the authority to bring together the parties for amicable settlement." 4 The proceedings before the Lupon are a
"precondition" to the filing of any action or proceeding in court or other "government office," PD 1508 further declaring
that "No complaint, petition, action or proceeding involving any matter within the authority of the Lupon as provided in
Section 2 hereof shall be filed or instituted in court or any other government office for adjudiration unless there has been a
confrontation of the parties before the Lupon Chairman or the Pangkat and no conciliation or settlement has been reached
as certified by the Lupon Secretary or the Pangkat Secretary, attested by the Lupon or Pangkat Chairman, or unless the
settlement has been repudiated." 5
A complaint or petition filed in court or other government office without compliance with the precondition may be dismissed
on motion of any interested party on the ground that the complaint fails to state a cause of action. 6 The defect may however
be waived by failing to make seasonable objection, in a motion to dismiss or answer, 7 the defect being a mere procedural
imperfection which does not affect the jurisdiction of the court. 8
The venue of these pre-requisite proceedings for conciliation is the Lupon of the barangay: (1) in which the parties to the
dispute are actually residing, or (2) where the respondent or any of the respondents actually resides, if the parties are actual
residents of different barangays within the same city or municipality,or (3) where the real property or any part thereof is
situated, if the dispute affects real property or any interest therein. 9
But the "precondition" does not apply to disputes over which the Lupon has no authority, namely: those —
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) involving "offenses punishable by imprisonment exceeding 30 days or a fine exceeding P200.00," or

"where there is no private offended party;
4) which the Prime Minister may in the interest of justice determine, upon recommendation of the Minister
of Justice and the Minister of Local Government; 10
5) involving parties who actually reside in barangays of different cities or municipalities, except where such
barangays adjoin each other; and
6) involving real property located in different municipalities. 11

The question presented in this case is whether the "precondition," i.e., the prior submission of the dispute to the Barangay
Lupon for conciliation, should apply to actions affecting real property situated in one city or municipality al-though the
parties actually reside in barangays which are located in different cities or municipalities and do not adjoin each other.
The question has already been passed upon and answered by thisCourt. In Tavora vs. Veloso, et al., 12 the Court en banc held
that the "precondition" had no application to cases over which the Lupon had no authority. Specifically, the Court ruled that
by express statutory inclusion and exclusion, the Lupon shall have no jurisdiction over disputes where the parties are not
actual residents of the same city or municipality, except where the barangays in which they actually reside adjoin each
other." 13 In such a situation, where the Lupon is without jurisdiction of the controversy because the parties are not actual
residents of the same city or municipality or of adjoining' barangays, the nature of the controversy is of no moment -whether
or not affecting real property or interest therein, located in the same city or municipality. And the principle is not at an
altered by the proviso of Section 3 of PD 1508(governing venue) that "disputes which involve real property or any interest
therein shall be brought in the barangay where the real property or any part thereof is situated." The "quoted proviso should
simply be deemed to restrict or vary the rule on venue prescribed in the principal clauses of the first paragraph of Section
3;" 14 but obviously, the rule on venue is utterly in-consequential as regards a case over which the Barangay Lupon does
not, in the first place, have any jurisdiction.
Since the dispute between the parties in this case was never within the authority or jurisdiction of the Barangay Lupon
because the parties admittedly reside in different cities and municipalities (and not in adjoining barangays), there was no
occasion or reason to invoke or apply the rule on venue governing disputes concerning real property. Petitioners were there-
fore under no obligation to comply with the "precondition" of first referring their dispute with private respondents to the
Barangay Lupon for conciliation and amicable settlement before instituting their suit in court. Hence, it was incorrect for
the Trial Court to ascribe this obligation to them, and to dismiss their action for omission to fulfill it.
WHEREFORE, the Order of the Trial Court dated September 28, 1983 is hereby annulled and set aside, and the case is
remanded to that Court for further proceedings, with costs against private respondents.
SO ORDERED.
5G.R. No. L-69334 July 28, 1986
SERVILLANO ALINSUGAY, petitioner,

vs.
HONORABLE PERFECTO M. CAGAMPANG, JR., Presiding Judge Designate of Branch IX, Regional Trial
Court of Bukidnon, 10th Judicial Region, ESTHER G. CAJES and RICARDO M. CAJES, respondents.
The issue raised in this case is whether referral to the Pangkat ng Tagapagkasundo under Presidential Decree No. 1508, the
Katarungang Pambarangay Law, is mandatory even where the failure at conciliation is due to the non -appearance of one
party.
On October 19, 1984 petitioner Servillano Alinsugay instituted an action in the Regional Trial Court of Bukidnon,
Malaybalay branch, against respondents Ester G. Cajes and Ricardo M. Cajes for the annulment of title and recovery of
possession and ownership of a parcel of land with an area of 3,068 square meters located in Barangay Dologon, Maramag,
Bukidnon [Civil Case No. 1566].
Respondents Cajes filed a motion to dismiss on the grounds that: [1] the trial court did not acquire jurisdiction over the
action because the dispute was not brought before the barangay for amicable settlement in accordance with Presidential
Decree No. 1508, [2] the complaint was premature, and [3] the action was barred by prescription and laches. Specifically,
respondents argued that petitioner did not follow the process of going through a Pangkat in the settlement of his dispute,
after mediation before the barangay chairman had failed.
In reply, petitioner asserted that the trial court had jurisdiction over the case because of the "certification to file action"
issued on July 31, 1983 by the Punong Barangay and attested by the Barangay Secretary to the effect that respondent Esther
Cajes "wilfully failed or refused to obey summons or to appear for hearing, and therefore the corresponding complaint for
the dispute may now be filed in court/government office. 1
In an order dated November 13, 1984, respondent Judge Perfecto M. Cagampang, Jr. dismissed the complaint "without
prejudice to the filing of the same after the provisions of PD 1508 shall have been complied properly as prayed for in the
'Motion to Dismiss' filed by defendants despite the Opposition filed by plaintiff; and without passing on the merits on the
other grounds alleged in the same 'Motion to Dismiss.' "2
Assailing the order of dismissal as a patent nullity and having been issued with grave abuse of discretion, petitioner filed
the instant special civil action for certiorari.
There is no question that the controversy was referred to the Punong Barangay of Dologon, Maramag, Bukidnon. It was
docketed as Barangay Case No. 26. Summons were served upon the parties. For one reason or another, respondent Esther
Cajes failed to appear before the barangay chairman, prompting the latter to issue on July 31, 1983 the certification to file
action for the complainant, herein petitioner Alinsugay. There is no mention in the records of the reason for Cajes' non-
appearance.
In his memorandum, petitioner Alinsugay contends that the issuance of the certification to file action by the Punong
Barangay, attested by the Barangay Secretary, substantially complies with the provisions of Presidential Decree No. 1508
and its implementing rules.
On the other hand, respondents Esther Cajes and Ricardo M. Cajes argue that the certification is premature and therefore
null and void. They theorize that under the law, the Punong Barangay should have constituted the Pangkat ng
Tagapagkasundo after he had failed to bring about a settlement between the contending parties; that the Punong Barangay
on his level is bereft of legal authority to issue the questioned certification, and that what is contemplated by PD No. 1508
is intervention by the Punong Barangay and members of the Pangkat, otherwise what would prevent a corrupt barangay
chairman from issuing indiscriminate certifications.
We hold for petitioner Alinsugay.
This is a case wherein only one party appears before the Punong Barangay and the other party fails to do so despite due
notice or summons. What should the Punong Barangay do in such a case?
Rule VI, Section 7 of the Katarungang Pambarangay Rules provides:
SECTION 7. Failure to appear.- The complaint may be dismissed when complainant, after due notice,
wilfully fails or refuses to appear on the date set for mediation, conciliation or arbitration. Such dismissal,
as certified to by the Lupon or Pangkat Secretary as the case may be, shall bar the complainant from seeking
judicial recourse for the same cause of action as that dismissed.
Upon a similar failure of the respondent to appear, any counterclaim he has made that arises from or is
necessarily connected with complainant's action, may be dismissed. Such dismissal, as certified to by the
Lupon or Pangkat Secretary, as the case may be, shall bar the respondent from filing such counterclaim in
court; and it shall likewise be a sufficient basis for the issuance of a certification for filing complainant's
cause of action in court or with the proper government agency or office.
In addition, such willful failure or refusal to appear may subject the recalcitrant party or witness to
punishment as for contempt of court, i.e., by a fine not exceeding one hundred pesos (P100.00) or
imprisonment of not more than one (1) month or both.
Thus it is very clear from the Rules that the willful refusal or failure to appear on the part of respondent is sufficient basis
for the complainant present to be given a certification to file action. The issuance of a certification to file action means that
the complainant may already bring his case to the court or other government office for adjudication.
Section 4[b] of PD No. 1508 likewise provides that if the Punong Barangay fails in his mediation efforts within fifteen [15]
days from the first meeting of the parties, he shall forthwith set the date for the constitution of the Pangkat. However, such
referral to the Pangkat is mandatory only in those cases where both parties have submitted themselves to the Lupon for
conciliation and conciliation has failed.
In instances where one party fails to appear for no justifiable reason, convening the Pangkat as a necessary second step will
serve no useful purpose. It will accomplish nothing in view of a party's unwillingness, as reflected in his unjustified absen ce,
to settle the dispute outside the regular courts. In that case, the only feasible alternative for the Lupon is to issue the
certification allowing complainant to bring the controversy to court.
It is evident that the respondents have not come to court with clean hands. The desired conciliation at the barangay level
failed to materialize due to their non-appearance. They should not be subsequently allowed to frustrate petitioner's cause of
action by invoking that situation which they themselves created.
Respondent Judge Cagampang, Jr. acted arbitrarily and with grave abuse of discretion in dismissing petitioner's complaint.
Petitioner has complied with the condition precedent set forth in Presidential Decree No. 1508. The issuance of the
certification to file action is warranted by the Rules in view of respondent's unexplained refusal to appear.
WHEREFORE, the order of respondent Judge Cagampang, Jr. dated November 13, 1984 is set aside and a new one is
entered directing the Regional Trial Court of Bukidnon, Malaybalay branch to proceed with the hearing on the merits of
Civil Case No. 1566.
Case remanded. Costs against the respondents.
SO ORDERED.
6G.R. No. 156228 December 10, 2003
MA. TERESA VIDAL, LULU MARQUEZ, and CARLOS SOBREMONTE, petitioners,

vs.
MA. TERESA O. ESCUETA, represented by HERMAN O. ESCUETA, respondent.
This is a petition for review of the Decision 1 dated July 23, 2002 of the Court of Appeals in CA-G.R. SP NO. 68895 which
affirmed the decision 2 of the Regional Trial Court (RTC) of Mandaluyong City, Branch 208, which reversed and set aside
the decision 3 of the Metropolitan Trial Court of Mandaluyong City (MTC), Branch 60; and granted the motion for execution
filed by private respondent Ma. Teresa O. Escueta in Civil Case No. 17520.
The petition at bar stemmed from the following antecedents:
When Abelardo Escueta died intestate on December 3, 1994, he was survived by his widow Remedios Escueta and their six
children, including Ma. Teresa O. Escueta and her brother Herman O. Escueta. Part of his estate was a parcel of land located
at No. 14 Sierra Madre corner Kanlaon Streets, Barangay Highway Hills, Mandaluyong City, covered by Transfer Certificate
of Title (TCT) No. (77083) - 27568, and the house thereon. The property was leased to Rainier Llanera, who sublet the
same to 25 persons. The heirs executed an extra-judicial settlement of estate over the property. They also executed a special
power of attorney authorizing Ma. Teresa Escueta to sell the said property. 4
Sometime in 1999, Ma. Teresa Escueta, as a co-owner of the property, filed an ejectment case against Llanera and the sub-
lessees before the Lupon of Barangay Highway Hills, docketed as Barangay Case No. 99-09.5
In the meantime, on April 15, 1999, the heirs of Abelardo Escueta executed a deed of conditional sale 6 over the property
including the house thereon, to Mary Liza Santos for ₱13,300,000.00 payable as follows:
"Down payment – ONE MILLION FIVE HUNDRED THOUSAND (₱1,500,000.00) which the HEIRS-SELLERS
acknowledged receipt thereof with complete and full satisfaction;
Second payment - TEN MILLION EIGHT HUNDRED THOUSAND (₱10,800,000.00) after publication of the Extra-
Judicial Settlement of the Estate of the late Abelardo Escueta and payment of the taxes with the Bureau of Internal Revenue
by the Attorney-in-Fact; and
The balance of ONE MILLION (₱1,000,000.00) upon vacation of all the occupants of the subject property within SIX (6)
months from date hereof."7
The parties further agreed that:
"Ms. Maria Teresa Escueta shall deliver unto the BUYER the Owner’s Duplicate Copy of the title upon receipt of the down
payment while the original copies of the Special Power of Attorney shall be delivered upon payment of the Second Payment
stated above.
The ATTORNEY-IN-FACT-SELLER shall be responsible for the ejectment of all the tenants in the said subject property.
The ATTORNEY-IN-FACT-SELLER shall pay the estate tax, capital gains tax and documentary stamp tax including the
telephone, water and Meralco bills and the publication for the Extra-Judicial Settlement of the estate of the late ABELARDO
ESCUETA while the registration and transfer fees shall be shouldered by the BUYER."8
On May 5, 1999, Escueta and Llanera, and the sub-lessees, executed an "Amicable Settlement,"9 where they agreed that (a)
the owners of the property would no longer collect the rentals due from the respondents therein (lessee and sub-lessees)
starting May 1999, with the concomitant obligation of the respondents to vacate the property on or before December 1999;
(b) time was the essence of the agreement, and that consequently, if the lessee and sub-lessees fail or refuse to vacate the
property on or before December 1999, the barangay chairman was authorized without any court order to cause the eviction
and removal of all the respondents on the property. 10 The amicable settlement was attested by Pangkat Chairman Jose Acong.
The parties did not repudiate the amicable settlement within ten days from the execution thereof. Neither did any of the
parties file any petition to repudiate the settlement.
The vendees having paid the down payment and second installment of the price of the property, the vendors caused the
cancellation on December 17, 1999, of TCT No. 27568 and the issuance of TCT No. 15324 to and under the names of the
vendees Mary Liza Santos, Susana Lim and Johnny Lim. 11 However, Escueta and the other vendors had yet to receive the
balance of the purchase price of P1,000,000.00 because the respondents were still in the property.
Llanera vacated the leased premises. Later, twenty of the sub-lessees also vacated the property. By January 2000, five sub-
lessees, namely, Ma. Teresa Vidal, Lulu Marquez, Marcelo Trinidad, Carlos Sobremonte, 12 and Jingkee Ang remained in
the property, and requested Escueta for extensions to vacate the property. Escueta agreed, but despite the lapse of the
extensions granted them, the five sub-lessees refused to vacate the property.
Escueta opted not to have the sub-lessees evicted through the Punong Barangay as provided for in the amicable settlement.
Neither did she file a motion with the Punong Barangay for the enforcement of the settlement. Instead, she filed on May 12,
2000, a verified "Motion for Execution" against the recalcitrant sub-lessees with the MTC for the enforcement of the
amicable settlement and the issuance of a writ of execution. The pleading was docketed as Civil Case No. 17520, with
Teresa Escueta as plaintiff, and the sub-lessees as defendants. 13
The defendants opposed the motion 14 alleging that they were enveigled into executing the amicable settlement despite the
fact that they had not violated any of the terms and conditions of the verbal lease of the property; they were coerced and
forced to enter into such amicable settlement as it was the only way of prolonging their stay in the leased premises; and that
they had been paying faithfully and religiously the monthly rentals in advance.
They also contended that the plaintiff came to court with unclean hands, as the property had been sold by the co-owners
thereof on June 8, 1999, without notifying them. The real parties-in-interest as plaintiffs, would be the new owners of the
property, and not the Escuetas. The defendants further asserted that the amicable settlement was not elevated to or approved
by the MTC as required by Section 419 of the Local Government Code (LGC), nor approved by a competent court; hence,
there was no judgment to enforce by a new motion for a writ of execution. As such, the plaintiff’s motion was premature
and procedurally improper. The defendants asserted that the plaintiff must first secure a certification to file action from the
barangay and thereafter, file an action for ejectment against them as required by Section 417 of the LGC. The amicable
settlement of the parties before the Lupon cannot be a substitute for an action for ejectment. Finally, they averred that they
had been sub-lessees for more than ten years already; hence, had the right of first refusal under Section 6 of the Urban Land
Reform Law (P.D. No. 1517). For her part, the plaintiff asserted that there having been no execution of the amicable
settlement on or before November 6, 1999 by the Lupon, the settlement may now be enforced by action in the proper city
or municipal court.
On February 22, 2001, the court issued an Order 15 denying the "Motion for Execution." The court held that the plaintiff was
not the real party-in-interest as the subject property had already been sold and titled to Susana Lim, Johnny Lim and Mary
Liza Santos. Only the vendees had the right to demand the ejectment of the defendants from the said property. The court
further ruled that the defendants had the right of first refusal to purchase the property under Presidential Decree No. 1517.
The MTC, however, did not rule on the issue of whether or not the plaintiff’s motion for execution was premature.
Aggrieved, the plaintiff, now the appellant, appealed the order to the RTC where she contended that:
THE METROPOLITAN TRIAL COURT COMMITTED THE REVERSIBLE ERROR IN FINDING AND IN
CONCLUDING THAT PLAINTIFF IS NO LONGER THE REAL PARTY-IN-INTEREST.
THE METROPOLITAN TRIAL COURT COMMITTED THE REVERSIBLE ERROR IN FINDING AND IN
CONCLUDING THAT DEFENDANTS CANNOT BE EJECTED AND CAN EXERCISE THE RIGHT OF FIRST
REFUSAL.
THE METROPOLITAN TRIAL COURT COMMITTED THE REVERSIBLE ERROR IN NOT FINDING AND IN NOT
MAKING THE CONCLUSION THAT DEFENDANTS HAVE VIOLATED THE FINAL AND EXECUTORY THE
WRITTEN AMICABLE SETTLEMENT BETWEEN PARTIES EXECUTED IN THEIR BARANGAY
CONFRONTATION.
THE METROPOLITAN TRIAL COURT COMMITTED THE REVERSIBLE ERROR IN NOT ORDERING THE
EJECTMENT OF THE DEFENDANTS AND IN NOT ORDERING SAID DEFENDANTS TO PAY THEIR
ARREARAGES IN RENTAL PAYMENTS FROM MAY 1999 UP TO THE DAY THEY ACTUALLY LEAVE THE
PREMISES AS WELL AS ATTORNEY’S FEES AND DAMAGES. 16
On August 31, 2001, the RTC rendered a decision holding that the plaintiff-appellant was still the owner of the property
when the ejectment case was filed in the office of the barangay captain, and, as such, was the real party-in-interest as the
plaintiff in the MTC. Moreover, under the deed of conditional sale between her and the buyers, it was stipulated therein that
the purchase price of ₱1,000,000.00 would be delivered to the vendors only "upon the vacation of all the occupants of the
subject property within six (6) months from date hereof." She was duty-bound to cause the eviction of the defendant from
the property; hence, the appellant, as a co-owner, had a substantial interest in the property. The MTC further held that the
sale, having been executed while the appellant’s complaint was pending with the Lupon, the action in the MTC may be
continued by the plaintiff-appellant.
As to the right of first refusal being asserted by the appellees, the court ruled that there was no showing that the land leased
had been proclaimed to be within a specific Urban Land Reform Zone. In fact, the Housing and Land Use Regulatory Board
had certified that the subject property was outside the area for priority development; thus, the appellees may not claim that
they had been deprived of their preemptive right when no such right existed in the first place. The court did not rule on the
third and fourth issues on the ground that the said issues were never raised by the parties. The decretal portion of the RTC
decision reads as follows:
PREMISES CONSIDERED, the appeal is GRANTED. The Order dated February 2, 2001 issued by the Metropolitan Trial
Court of Mandaluyong City, Branch 60, in Civil Case No. 17520 is hereby REVERSED and SET ASIDE, and a new one is
entered granting the Motion for Execution.
Let the Record of this case be remanded to the court a quo for proper disposition.
SO ORDERED. 17
A petition for review under Rule 42 was filed with the Court of Appeals by t hree of the appellees, now petitioners Ma.
Teresa Vidal, Lulu Marquez and Carlos Sobremonte. The court, however, dismissed the petition on (1) procedural grounds,
and (2) for lack of merit. 18
On procedural grounds, the CA ruled that the petitioners failed to indicate the specific material dates, showing that their
petition was filed on time as required by the rules, and in declaring that they failed to justify their failure to do so.
On the merits of the petition, the appellate court upheld the ruling of the RTC. The decretal portion of the decision of the
CA reads:
WHEREFORE, the instant petition is hereby DISMISSED. The assailed Decision of the Regional Trial Court of
Mandaluyong City, Branch 208, rendered in Civil Case No. MC01-333-A, dated August 31, 2001 is hereby AFFIRMED.
SO ORDERED. 19
In their petition at bar, the petitioners assert that the CA erred as follows: (1) in not applying the rules of procedure liberally;
(2) in declaring that there was no need for the respondents to file an ejectment case for the eviction of the petitioners; (3)
that the real parties-in-interest as plaintiffs in the MTC were the new owners of the property, Susana Lim, Johnny Lim and
Mary Liza Santos; (4) in not finding that the Amicable Settlement was obtained through deceit and fraud; and (5) in ruling
that the petitioners had no right of first refusal in the purchase and sale of the subject property under Presidential Decree
No. 1517.
The petition is bereft of merit.
On the procedural issue, the CA dismissed the petition before it for the petitioners’ failure to comply with Section 2, par. 1,
Rule 42 of the 1997 Rules of Civil Procedure. 20 The CA ratiocinated that there was no justification for a relaxation of the
Rules, thus:
Petitioners cited decisions of the Supreme Court where a relaxation of procedural rules was allowed. However, a reading of
those cases shows that they are not exactly similar with the present case. In the case of Mactan Cebu International Airport
Authority vs. Francisco Cuizon Mangubat, the Supreme Court allowed the late payment of docket fee by the Solicitor
General on the ground that the 1997 Rules of Civil Procedure regarding payment of docket fees was still new at that time.
The same cannot be said in the present case. The petition was filed on February 28, 2002, almost five years from the issuance
of the 1997 Rules of Civil Procedure. The circumstances of typhoon and holiday for failure to obtain a certified true copy
of the DOJ’s Decision, in the case of Hagonoy Market Vendor Association vs. Municipality of Hagonoy, Bulacan, were
present in the instant petition. The case of Salazar vs. Court of Appeals is also not similar with the present case. 21
The petitioners aver in this case that the failure of their counsel to include the material dates in their petition with the CA
was, as stated in their Amended Manifestation, because the said counsel was suffering from a slight heart attack. The Court
finds the petitioners’ pretext flimsy. If the petitioners’ counsel was able to prepare their petition despite her condition, there
was no valid reason why she failed to include the material dates required under the Rules of Court. Besides, the petitioners
stated in their petition that they had appended a copy of their Amended Manifestation, but failed to do so. If the rules were
to be applied strictly, the CA could not be faulted for dismissing the petition.
However, in order to promote their objective of securing a just, speedy and inexpensive dispensation of every action and
proceedings, the Rules are to be liberally construed. 22 Rules of procedure are intended to promote, not to defeat substantial
justice and, therefore, should not be applied in a very rigid and technical sense. This Court ruled in Buenaflor vs. Court of
Appeals, et al.23 that appeal is an essential part of our judicial system and trial courts and the Court of Appeals are advised
to proceed with caution so as not to deprive a party of the right to appeal and that every party litigant should be afforded the
amplest opportunity for the proper and just disposition of his cause, free from the constraints of technicalities. The Court
has given due course to petitions where to do so would serve the demands of substantial justice and in the exercise of its
equity jurisdiction. 24 In this case, the Court opts to apply the rules liberally to enable it to delve into and resolve the cogent
substantial issues posed by the petitioners.
We agree with the contention of the petitioners that under Section 416 of the LGC, the amicable settlement executed by the
parties before the Lupon on the arbitration award has the force and effect of a final judgment of a court upon the expiration
of ten (10) days from the date thereof, unless the settlement is repudiated within the period therefor, where the consent is
vitiated by force, violence or intimidation, or a petition to nullify the award is filed before the proper city or municipal
court. 25 The repudiation of the settlement shall be sufficient basis for the issuance of a certification to file a complaint. 26
We also agree that the Secretary of the Lupon is mandated to transmit the settlement to the appropriate city or municipal
court within the time frame under Section 418 of the LGC and to furnish the parties and the Lupon Chairman with copies
thereof. 27 The amicable settlement which is not repudiated within the period therefor may be enforced by execution by the
Lupon through the Punong Barangay within a time line of six months, and if the settlement is not so enforced by the Lupon
after the lapse of the said period, it may be enforced only by an action in the proper city or municipal court as provided for
in Section 417 of the LGC of 1991, as amended, which reads:
SEC. 417. Execution. – The amicable settlement or arbitration award may be enforced by execution by the Lupon within
six (6) months from the date of the settlement. After the lapse of such time, the settlement may be enforced by action in the
proper city or municipal court. (Underlining supplied).
Section 417 of the Local Government Code provides a mechanism for the enforcement of a settlement of the parties before
the Lupon. It provides for a two-tiered mode of enforcement of an amicable settlement executed by the parties before the
Lupon, namely, (a) by execution of the Punong Barangay which is quasi-judicial and summary in nature on mere motion of
the party/parties entitled thereto;28 and (b) by an action in regular form, which remedy is judicial. Under the first remedy,
the proceedings are covered by the LGC and the Katarungang Pambarangay Implementing Rules and Regulations. The
Punong Barangay is called upon during the hearing to determine solely the fact of non -compliance of the terms of the
settlement and to give the defaulting party another chance at voluntarily complying with his obligation under the settlement.
Under the second remedy, the proceedings are governed by the Rules of Court, as amended. The cause of action is the
amicable settlement itself, which, by operation of law, has the force and effect of a final judgment.
Section 417 of the LGC grants a party a period of six months to enforce the amicable settlement by the Lupon through the
Punong Barangay before such party may resort to filing an action with the MTC to enforce the settlement. The raison d’
etre of the law is to afford the parties during the six-month time line, a simple, speedy and less expensive enforcement of
their settlement before the Lupon.
The time line of six months is for the benefit not only of the complainant, but also of the respondent. Going by the plain
words of Section 417 of the LGC, the time line of six months should be computed from the date of settlement. However, if
applied to a particular case because of its peculiar circumstance, the computation of the time line from the date of the
settlement may be arbitrary and unjust and contrary to the intent of the law. To illustrate: Under an amicable settlement
made by the parties before the Lupon dated January 15, 2003, the respondents were obliged to vacate the subject property
on or before September 15, 2003. If the time line of six months under Section 417 were to be strictly and literally followed,
the complainant may enforce the settlement through the Lupon only up to July 15, 2003. But under the settlement, the
respondent was not obliged to vacate the property on or before July 15, 2003; hence, the settlement cannot as yet be enforced.
The settlement could be enforced only after September 15, 2003, when the respondent was obliged to vacate the property.
By then, the six months under Section 417 shall have already elapsed. The complainant can no longer enforce the settlement
through the Lupon, but had to enforce the same through an action in the MTC, in derogation of the objective of Section 417
of the LGC. The law should be construed and applied in such a way as to reflect the will of the legislature and attain its
objective, and not to cause an injustice. As Justice Oliver Wendell Holmes aptly said, "courts are apt to err by sticking too
closely to the words of the law where these words support a policy that goes beyond them. The Court should not defer to
the latter that killeth but to the spirit that vivifieth."29
In light of the foregoing considerations, the time line in Section 417 should be construed to mean that if the obligation in
the settlement to be enforced is due and demandable on the date of the settlement, the six-month period should be counted
from the date of the settlement; otherwise, if the obligation to be enforced is due and demandable on a date other than the
date of the settlement, the six-month period should be counted from the date the obligation becomes due and demandable.
Parenthetically, the Katarungang Pambarangay Implementing Rules and Regulations, Rule VII, Section 2 provides:
SECTION 2. Modes of Execution. - The amicable settlement or arbitration award may be enforced by execution by the
Lupon within six [6] months from date of the settlement or date of receipt of the award or from the date the obligation
stipulated in the settlement or adjudged in the arbitration award becomes due and demandable. After the lapse of such time,
the settlement or award may be enforced by the appropriate local trial court pursuant to the applicable provisions of the
Rules of Court . An amicable settlement reached in a case referred by the Court having jurisdiction over the case to the
Lupon shall be enforced by execution by the said court. (Underlining supplied).
By express provision of Section 417 of the LGC, an action for the enforcement of the settlement should be instituted in the
proper municipal or city court. This is regardless of the nature of the complaint before the Lupon, and the relief prayed for
therein. The venue for such actions is governed by Rule 4, Section 1 of the 1997 Rules of Civil Procedure, as amended. An
action for the enforcement of a settlement is not one of those covered by the Rules on Summary Procedure in civil
cases;30 hence, the rules on regular procedure shall apply, as provided for in Section 1, Rule 5 of the Rules of Civil Procedure,
as amended. 31
As to the requisite legal fees for the filing of an action in the first level court under Section 417 of the Local Government
Code, indigents-litigants (a) whose gross income and that of their immediate family do not exceed ten thousand (P10,000.00)
pesos a month if residing in Metro Manila, and five thousand (P5,000.00) pesos a month if residing outside Metro Manila,
and (b) who do not own real property with an assessed value of more than fifty thousand (P50,000.00) pesos shall be exempt
from the payment of legal fees. Section 18, Rule 141 of the Revised Rules of Court, as amended by A.M. No. 00-2-01-SC,
is hereby further amended accordingly.
In this case, the parties executed their Amicable Settlement on May 5, 1999. However, the petitioners were obliged to vacate
the property only in January 2000, or seven months after the date of the settlement; hence, the respondent may enforce the
settlement through the Punong Barangay within six months from January 2000 or until June 2000, when the obligation of
the petitioners to vacate the property became due. The respondent was precluded from enforcing the settlement via an action
with the MTC before June 2000. However, the respondent filed on May 12, 2000 a motion for execution with the MTC and
not with the Punong Barangay. Clearly, the respondent adopted the wrong remedy. Although the MTC denied the
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. 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.
Normally, the Court would remand the case to the Punong Barangay for further proceedings. However, the Court may
resolve the issues posed by the petitioners, based on the pleadings of the parties to serve the ends of justice. It is an accepted
rule of procedure for the Court to strive to settle the existing controversy in a single proceeding, leaving no root or branch
to bear the seeds of future litigation. 32
In this case, there is no question that the petitioners were obliged under the settlement to vacate the premises in January
2000. They refused, despite the extensions granted by the respondent, to allow their stay in the property. For the court to
remand the case to the Lupon and require the respondent to refile her motion for execution with the Lupon would be an idle
ceremony. It would only unduly prolong the petitioners’ unlawful retention of the premises. 33
The RTC and the CA correctly ruled that the respondent is the real party-in-interest to enforce amicable settlement. Rule 3,
Section 2 of the Rules of Court, as amended, reads:
SEC. 2. Parties in interest. - A real party in interest is the party who stands to be benefited or injured by the judgment in the
suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every action must be
prosecuted or defended in the name of the real party in interest.
The party-in-interest applies not only to the plaintiff but also to the defendant.1âwphi1 "Interest" within the meaning of the
rules means material interest, an interest in issue and to be affected by the decree as distinguished from m ere interest in the
question involved, or a mere incidental interest. 34 A real party in interest is one who has a legal right. 35 Since a contract may
be violated only by the parties thereto as against each other, in an action upon that contract, the real parties-in-interest, either
as plaintiff or as defendant, must be parties to the said contract. 36 The action must be brought by the person who, by
substantive law, possesses the right sought to be enforced. 37 In this case, the respondent was the party in the amicable
settlement. She is the real party-in-interest to enforce the terms of the settlement because unless the petitioners vacate the
property, the respondent and the other vendors should not be paid the balance of P1,000,000.00 of the purchase price of the
property under the Deed of Conditional Sale.
The petitioners are estopped from assailing the amicable settlement on th e ground of deceit and fraud. First. The petitioners
failed to repudiate the settlement within the period therefor. Second. The petitioners were benefited by the amicable
settlement. They were allowed to remain in the property without any rentals therefor until December 1998. They were even
granted extensions to continue in possession of the property. It was only when the respondent filed the motion for execution
that the petitioners alleged for the first time that the respondents deceived them into executing the amicable settlement. 38
On the petitioners’ claim that they were entitled to the right of first refusal under P.D. No. 1517, we agree with the
disquisition of the trial court, as quoted by the Court of Appeals:
We likewise find no reversible error on the part of [the] RTC in rejecting that the petitioners have a right of first refusal in
the purchase and sale of the subject property. As ratiocinated by the court:
"xxx. Presidential Decree No. 1517 (The Urban Land Reform Law) does not apply where there is no showing that the land
leased has been proclaimed to be within a specific Urban Land Reform Zone. In the instant case, the annex attached to the
Proclamation 1967 creating the areas declared as priority development and urban land reform zone ... does not indicate that
the barangay where the subject property is located is included therein. This is bolstered by the certification issued by the
Housing and Land Regulatory Board to the effect that the location of the property is outside the area of Priority
Development. It is therefore a reversible error for the lower court to conclude that defendants-appellees were deprived of
their preemptive right when no right exists in the first place."
Indeed, before a preemptive right under PD 1517 can be exercised, the disputed land should be situated in an area declared
to be both an APD (Areas for Priority Development) and a ULRZ (Urban Land Reform Zones).1âwphi1 Records show, and
as not disputed by the petitioners, the disputed property is not covered by the aforementioned areas and zones. 39
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The petitioners and all those acting for and in their behalf
are directed to vacate, at their own expense, the property covered by Transfer Certificate of Title No. 15324 of the Register
of Deeds of Muntinlupa City and deliver possession of the property to the vendees Mary Liza Santos, Susana Lim and
Johnny Lim. This is without prejudice to the right of the vendees to recover from the petitioners reasonable compensation
for their possession of the property from January 2000 until such time that they vacate the property. Costs against the
petitioners.
SO ORDERED.

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ALTERNATIVE DISPUTE RESOLUTION: KATARUNGANG PAMBARANGAY CASES Page 1 of 19

1G.R. No. 82211-12 March 21, 1989

TERESITA MONTOYA, petitioner,

The chronology of events leading to the present controversy is as follows:

SEC. 6. Conciliation pre-condition to filing of complaint. No complaint, petition, action or proceeding

(1) Where the accused is under detention;

These "WHEREAS" clauses state:

WHEREFORE, the petition is DISMISSED. Costs against the petitioner.

2G.R. No. 76690 February 29, 1988

CLAUDIA RIVERA SANCHEZ, petitioner,

On March 26,1982, the City Court of Davao rendered a "Judgment by Compromise."

Hence, the instant petition (Ibid., pp. 3-7).

On August 25,1987, petitioner filed her Memorandum (Ibid., pp. 109-115).

Petitioner raised two (2) issues, to wit:

1. WHETHER OR NOT THE JUDGMENT BY COMPROMISE IS NULL AND VOID; AND

This contention is impressed with merit.

3G.R. No. 79404 January 27, 1989

SPOUSES FELICIANO BEJER and GLORIA BEJER, petitioners,

xxx xxx xxx

(d) Register all new members of the barangay;'

xxx xxx xxx

4G.R. No. L-65629 November 24, 1986

TERESITA E. AGBAYANI and LUCAS F. AGBAYANI, petitioners,

The Order is incorrect and win have to be reversed.

1) where one party is the government or any subdivision or instrumentality thereof;

3) involving "offenses punishable by imprisonment exceeding 30 days or a fine exceeding P200.00," or

6) involving real property located in different municipalities. 11

5G.R. No. L-69334 July 28, 1986

SERVILLANO ALINSUGAY, petitioner,

We hold for petitioner Alinsugay.

Rule VI, Section 7 of the Katarungang Pambarangay Rules provides:

Case remanded. Costs against the respondents.

6G.R. No. 156228 December 10, 2003

MA. TERESA VIDAL, LULU MARQUEZ, and CARLOS SOBREMONTE, petitioners,

The petition at bar stemmed from the following antecedents:

The parties further agreed that:

The petition is bereft of merit.

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