Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No.

L-62339 October 27, 1983 SPOUSES MARIA LUISA P. MORATA AND JULIUS MORATA, petitioners, vs. SPOUSES VICTOR GO and FLORA C. GO and HON. VALERIANO P. TOMOL, JR., Judge, Court of First Instance of Cebu, Branch XI, respondents. Amado G. Olis for petitioners. Paul G. Gorres for private respondents.

On the basis of the allegation in the complaint that the parties-litigants are all residents of Cebu City, petitioners filed a motion to dismiss, citing as grounds therefor, the failure of the complaint to allege prior availment by the plaintiffs of the barangay conciliation process required by P.D. 1508, as well as the absence of a certification by the Lupon or Pangkat Secretary that no conciliation or settlement had been reached by the parties. The motion was opposed by private respondents. On September 2, 1982, respondent judge issued an order denying the motion to dismiss. Petitioners filed a motion for reconsideration, but the same was denied in an order dated October 3, 1982, as follows: Considering the specific reference to City or Municipal Courts in the provisions of Sections 11 and 12 of P.D. No. 1508, as the Courts to which the dispute settled or arbitrated by the Lupon Chairman or the Pangkat, shall be elevated for nullification of the award or for execution of the same, and considering that from the provision of Section 14 of the same law, the pre- condition to the filing of a complaint as provided for in Section 6 thereof, is specifically referred to, it is the considered opinion of this Court that the provision of Section 6 of the law applies only to cases cognizable by the inferior courts mentioned in Sections 11 and 12 of the law. In view of the foregoing, the motion for reconsideration filed by the defendants, of the order of September 2. 1982, denying their motion to dismiss, is hereby denied. [Annex 'G', p. 36, Rollo]. From this order, petitioners came to Us thru this petition. In a resolution dated December 2, 1982, We required respondents to file an answer, and likewise granted a temporary restraining order enjoining respondent judge from requiring petitioners to file their answer and enter into trial in Civil Case No. R-22154. We find the petition impressed with merit. Section 6 of P.D. 1508 reads as follows: SECTION 6. Conciliation pre-condition to filing of complaint. No complaint, petition, action for proceeding

ESCOLIN., J.: In this petition for certiorari and prohibition with prayer for writ of preliminary injunction, the Court is called upon to determine the classes of actions which fall within the coverage of Presidential Decree No. 1508, 1 otherwise known as Katarungang Pambarangay Law. This law requires the compulsory process of arbitration at the Barangay level as a pre-condition for filing a complaint in court, Petitioners contend that said legislation is so broad and all-embracing as to apply to actions cognizable not only by the city and municipal courts, now known as the metropolitan trial courts and municipal trial courts, but also by the courts of first instance, now the regional trial courts. Upon the other hand, respondents would limit its coverage only to those cases falling within the exclusive jurisdiction of the metropolitan trial courts and municipal trial courts. The antecedent facts are not disputed. On August 5, 1982, respondents Victor Go and Flora D. Go filed in the defunct Court of First Instance of Cebu, presided by respondent Judge Valeriano P. Tomol, Jr., a complaint against petitioners Julius Morata and Ma. Luisa Morata for recovery of a sum of money plus damages amounting to P49,400.00. The case was docketed as Civil Case No. R-22154.

involving any matter within the authority of the Lupon as provided in Section 2 hereof shall be filed or instituted in court or any other government office for adjudication unless there has been a confrontation of the parties before the Lupon Chairman or the Pangkat and no conciliation or settlement has been reached as certified by the Lupon Secretary or the Pangkat Secretary attested by the Lupon or Pangkat Chairman, or unless the settlement has been repudiated. However, the parties may go directly to court in the following cases: [1] Where the accused is under detention; [2] Where a person has otherwise been deprived of personal liberty calling for habeas corpus proceedings; [3] Actions coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property and support pendente lite; and [4] Where the action may otherwise be barred by the Statute of Limitations Section 2 of the law defines the scope of authority of the Lupon thus: SECTION 2. Subject matters for amicable settlement. The Lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: [1] Where one party is the government ,or any subdivision or instrumentality thereof; [2] Where one party is a public officer or employee, and the dispute relates to the performance of his official functions; [3] Offenses punishable by imprisonment exceeding 30 days, or a fine exceeding P200.00;

[4] Offenses where there is no private offended party; [5] Such other classes of disputes which the Prime Minister may in the interest of justice determine upon recommendation of the Minister of Justice and the Minister of Local Government. Thus, except in the instances enumerated in sections 2 and 6 of the law, the Lupon has the authority to settle amicably all types of disputes involving parties who actually reside in the same city or municipality. The law, as written, makes no distinction whatsoever with respect to the classes of civil disputes that should be compromised at the barangay level, in contradistinction to the limitation imposed upon the Lupon by paragraph (3), section 2 thereof as regards its authority over criminal cases. In fact, in defining the Lupon's authority, Section 2 of said law employed the universal and comprehensive term "all", to which usage We should neither add nor subtract in consonance with the rudimentary precept in statutory construction that "where the law does not distinguish, We should not distinguish. 2 By compelling the disputants to settle their differences through the intervention of the barangay leader and other respected members of the barangay, the animosity generated by protracted court litigations between members of the same political unit, a disruptive factor toward unity and cooperation, is avoided. It must be borne in mind that the conciliation process at the barangay level is likewise designed to discourage indiscriminate filing of cases in court in order to decongest its clogged dockets and, in the process, enhance the quality of justice dispensed by it. Thus, to say that the authority of the Lupon is limited to cases exclusively cognizable by the inferior courts is to lose sight of this objective. Worse, it would make the law a self-defeating one. For what would stop a party, say in an action for a sum of money or damages, as in the instant case, from bloating up his claim in order to place his case beyond the jurisdiction of the inferior court and thereby avoid the mandatory requirement of P.D. 1508? And why, indeed, should the law seek to ease the congestion of dockets only in inferior courts and not in the regional trial courts where the log-jam of cases is much more serious? Indeed, the lawmakers could not have intended such halfmeasure and self-defeating legislation. The objectives of the law are set forth in its preamble thus: WHEREAS, the perpetuation and official recognition of the time-honored tradition of amicably settling disputes among family and barangay level without judicial resources would promote the speedy administration of

justice and implement the constitutional mandate to preserve and develop Filipino culture and to strengthen the family as a basic social institution; WHEREAS, the indiscriminate filing of cases in the courts of justice contributes heavily and unjustifiably to the congestion of court dockets, thus causing a deterioration in the quality of justice; WHEREAS, in order to help relieve the courts of such docket congestion and thereby enhance the quality of justice dispensed by the courts, it is deemed desirable to formally organize and institutionalize a system of amicably settling disputes at the barangay level. There can be no question that when the law conferred upon the Lupon "the authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes, ... ," its obvious intendment was to grant to the Lupon as broad and comprehensive an authority as possible as would bring about the optimum realization of the aforesaid objectives. These objectives would only be half-met and easily thwarted if the Lupon's authority is exercised only in cases falling within the exclusive jurisdiction of inferior courts. Moreover, if it is the intention of the law to restrict its coverage only to cases cognizable by the inferior courts, then it would not have provided in Section 3 thereof the following rule on Venue, to wit: Section 3. Venue. ... However, all disputes which involve real property or any interest therein shall be brought in the Barangay where the real property or and part thereof is situated. for it should be noted that, traditionally and historically, jurisdiction over cases involving real property or any interest therein, except forcible entry and detainer cases, has always been vested in the courts of first instance [now regional trial court]. But it is pointed out by the respondent judge that Sections 11, 3 12, 4 and 14, 5 of the law speak of the city and/or municipal courts as the forum for the nullification or execution of the settlement or arbitration award issued by the Lupon. We hold that this circumstance cannot be construed as a limitation of the scope of authority of the Lupon. As heretofore stated, the

authority of the Lupon is clearly established in Section 2 of the law; whereas Sections 11, 12 and 14, relied upon by respondent judge, deal with the nullification or execution of the settlement or arbitration awards obtained at the barangay level. These sections conferred upon the city and municipal courts the jurisdiction to pass upon and resolve petitions or actions for nullification or enforcement of settlement/arbitration awards issued by the Lupon, regardless of the amount involved or the nature of the original dispute. But there is nothing in the context of said sections to justify the thesis that the mandated conciliation process in other types of cases applies exclusively to said inferior courts. Any doubt on the issue before Us should be dispelled by Circular No. 22 issued by Chief Justice Enrique M. Fernando, 6 the full text of which is quoted as follows: TO: ALL JUDGES OF THE COURTS OF FIRST INSTANCE, CIRCUIT CRIMINAL COURTS, JUVENILE AND DOMESTIC RELATIONS COURTS, COURTS OF AGRARIAN RELATIONS, CITY COURTS, MUNICIPAL COURTS AND THEIR CLERKS OF COURT SUBJECT: Implementation of the Katarungang Pambarangay Law. Effective upon your receipt of the certification by the Minister of Local Government and Community Development that all the barangays within your respective jurisdictions have organized their Lupons provided for in Presidential Decree No. 1508, otherwise known as the Katarungang Pambarangay Law, in implementation of the barangay system of settlement of disputes, you are hereby directed to desist from receiving complaints, petitions, actions or proceedings in cases falling within the authority of said Lupons. Circular No. 12 dated October 20, 1978, issued by the late Chief Justice Fred Ruiz Castro is to that extent modified. This Circular takes effect immediately. It is significant that the above-quoted circular embodying the directive "to desist from receiving complaints, petitions, actions and proceedings in

cases falling within the authority of said Lupons," has been addressed not only to judges of city and municipal courts, but also to all the judges of the courts of first instance, circuit criminal courts, juvenile and domestic courts and courts of agrarian relations, now known as regional trial courts under B.P. No. 129. The said circular was noted by president Ferdinand E. Marcos in a Letter of Implementation, dated November 12, 1979, the first paragraph of which reads as follows: "with the view to easing up the log-jam of cases and solving the backlogs in the case of dockets of all government offices involved in the investigation, trial and adjudication of cases, it is hereby ordered that immediate implementation be made by all government officials and offices concerned of the system of amicably settling disputes at the barangay level as provided for in the Katarungang Pambarangay Law [Presidential Decree No. 1508]." Therefore, for the guidance of the bench and the bar, We now declare that the conciliation process at the barangay level, prescribed by P.D. 1508 as a pre-condition for filing a complaint in court, is compulsory not only for cases falling under the exclusive competence of the metropolitan and municipal trial courts, but for actions cognizable by the regional trial courts as well. ACCORDINGLY, the petition is granted, and the order of respondent judge denying petitioners' motion to dismiss is hereby set aside. Respondent judge is restrained from conducting further proceedings in Civil Case No. R-22154, except to dismiss the case. No costs. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 167261 March 2, 2007

court. On 8 March 1995, the Certification, as well as the records of the case, were forwarded to the MCTC. An Order was issued by the MCTC on 7 April 1995, once more remanding the matter for conciliation by the Lupon and ordering the Lupon to render an Arbitration Award thereon. According to the MCTC, based on the records of the case, an Agreement for Arbitration was executed by the parties concerned; however, the Lupon failed to issue an Arbitration Award as provided under the Katarungang Pambarangay Law, so that, the case must be returned to the Lupon until an Arbitration Award is rendered. In compliance with the MCTC Order, the Lupon rendered an Arbitration Award on 10 May 1995 ordering herein petitioner to retrieve the land upon payment to the spouses Manacnes of the amount of P8,000.00 for the improvements on the land. Aggrieved, Leoncios widow,7 Florentina Manacnes, repudiated the Arbitration Award but her repudiation was rejected by the Lupon. Thereafter, the MCTC was furnished with copies of the Arbitration Award. On 1 June 1995, herein petitioner filed with the Lupon a Motion for Execution of the Arbitration Award. On the other hand, Florentina Manacnes filed a Motion with the MCTC for the resumption of the proceedings in the original case for recovery of possession and praying that the MCTC consider her repudiation of the Arbitration Award issued by the Lupon. Subsequently, the MCTC heard the Motion of Florentina Manacnes notwithstanding the latters failure to appear before the court despite notice. The MCTC denied Florentina Manacnes Motion to repudiate the Arbitration Award elucidating that since the movant failed to take any action within the 10-day reglementary period provided for under the Katarungang Pambarangay Law, the arbitration award has become final and executory. Furthermore, upon motion of herein petitioner Pang-et, the MCTC issued an Order remanding the records of the case to the Lupon for the execution of the Arbitration Award. On 31 August 1995, the then incumbent Punong Barangay of Dagdag issued a Notice of Execution of the Award. Said Notice of Execution was never implemented. Thus, on 16 October 2001, herein petitioner Pang-et filed with the MCTC an action for enforcement of the Arbitration Award which was sought to be dismissed by the heir of the Manacnes spouses.8 The heir of the Manacnes spouses

ROSARIA LUPITAN PANG-ET, Petitioner, vs. CATHERINE MANACNES-DAO-AS, Heir of LEONCIO MANACNES and FLORENTINA MANACNES, Respondent. DECISION CHICO-NAZARIO, J.: Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure, assailing the Decision1 of the Court of Appeals in CA-G.R. SP No. 78019, dated 9 February 2005, which reversed and set aside the Judgment2 of the Regional Trial Court (RTC), Branch 36, Bontoc, Mountain Province, and reinstated the Resolution3 of the Municipal Circuit Trial Court (MCTC) of Besao-Sagada, Mountain Province dismissing herein petitioners action for Enforcement of Arbitration Award and Damages. The instant petition draws its origin from an Action4 for recovery of possession of real property situated in Sitio Abatan, Barrio Dagdag, Sagada filed by herein petitioner before the MCTC of Besao-Sagada, Mountain Province on 9 November 1994, against the spouses Leoncio and Florentina Manacnes, the predecessors-in-interest of herein respondent. On 23 February 1995, during the course of the pre-trial, the parties, through their respective counsels, agreed to refer the matter to the Barangay Lupon (Lupon) of Dagdag, Sagada for arbitration in accordance with the provisions of the Katarungang Pambarangay Law.5 Consequently, the proceedings before the MCTC were suspended, and the case was remanded to the Lupon for resolution.6 Thereafter, the Lupon issued a Certification to File Action on 26 February 1995 due to the refusal of the Manacnes spouses to enter into an Agreement for Arbitration and their insistence that the case should go to

argues that the Agreement for Arbitration and the Arbitration Award are void, the Agreement for Arbitration not having been personally signed by the spouses Manacnes, and the Arbitration Award having been written in English a language not understood by the parties. In its Resolution dated 20 August 2002, the MCTC dismissed the Petition for Enforcement of Arbitration Award in this wise: x x x Are defendants estopped from questioning the proceedings before the Lupon Tagapamayapa concerned? The defendants having put in issue the validity of the proceedings before the lupon concerned and the products thereof, they are not estopped. It is a hornbook rule that a null and void act could always be questioned at any time as the action or defense based upon it is imprescriptible. The second issue: Is the agreement to Arbitrate null and void? Let us peruse the pertinent law dealing on this matter which is Section 413 of the Local Government Code of 1991 (RA 7160), to wit: "Section 413 (a) The parties may, at any stage of the proceedings, agree in writing that they shall abide by the arbitration award of the lupon chairman or the pangkat. x x x" The foregoing should be taken together with Section 415 of the same code which provides: "Section 415. Appearance of parties in person. In all katarungang pambarangay proceedings, the parties must appear in person without the assistance of counsel or representative, except for minors and incompetents who may be assisted by their next-of-kin who are not lawyers." It is very clear from the foregoing that personal appearance of the parties in conciliation proceedings before a Lupon Tagapamayapa is mandatory. Likewise, the execution of the agreement to arbitrate must be done personally by the parties themselves so that they themselves are mandated to sign the agreement. Unfortunately, in this case, it was not respondents-spouses [Manacnis] who signed the agreement to arbitrate as plaintiff herself admitted but another person. Thus, it is very clear that the mandatory provisos of Section 413 and 415 of RA 7160 are violated. Granting arguendo that it

was Catherine who signed the agreement per instruction of her parents, will it cure the violation? The answer must still be in the negative. As provided for by the cited provisos of RA 7160, if ever a party is entitled to an assistance, it shall be done only when the party concerned is a minor or incompetent. Here, there is no showing that the spouses [Manacnis] were incompetent. Perhaps very old but not incompetent. Likewise, what the law provides is assistance, not signing of agreements or settlements. Just suppose the spouses [Manacnis] executed a special power of attorney in favor of their daughter Catherine to attend the proceedings and to sign the agreement to arbitrate? The more that it is proscribed by the Katarungang Pambarangay Law specifically Section 415 of RA 7160 which mandates the personal appearance of the parties before the lupon and likewise prohibits the appearance of representatives. In view of the foregoing, it could now be safely concluded that the questioned agreement to arbitrate is inefficacious for being violative of the mandatory provisions of RA 7160 particularly sections 413 and 415 thereof as it was not the respondents-spouses [Manacnis] who signed it. The third issue: Is the Arbitration Award now sought to be enforced effective? Much to be desired, the natural flow of events must follow as a consequence. Considering that the agreement to arbitrate is inefficacious as earlier declared, it follows that the arbitration award which emanated from it is also inefficacious. Further, the Arbitration Award by itself, granting arguendo that the agreement to arbitrate is valid, will readily show that it does not also conform with the mandate of the Katarungang Pambarangay Law particularly Section 411 thereto which provides: "Sec. 411. Form of Settlement All amicable settlements shall be in writing in a language or dialect known to the parties x x x. When the parties to the dispute do not use the same language or dialect, the settlement shall be written in the language known to them." Likewise, the implementing rules thereof, particularly Section 13 provides: "Sec. 13 Form of Settlement and Award. All settlements, whether by mediation, conciliation or arbitration, shall be in writing, in a language or dialect known to the parties. x x x" It is of no dispute that the parties concerned belong to and are natives of the scenic and serene community of Sagada, Mt. Province who speak

the Kankanaey language. Thus, the Arbitration Award should have been written in the Kankanaey language. However, as shown by the Arbitration Award, it is written in English language which the parties do not speak and therefore a further violation of the Katarungang Pambarangay Law. IN THE LIGHT of all the foregoing considerations, the above-entitled case is hereby dismissed.9 Petitioner Pang-ets Motion for Reconsideration having been denied, she filed an Appeal before the RTC which reversed and set aside the Resolution of the MCTC and remanded the case to the MCTC for further proceedings. According to the RTC: As it appears on its face, the Agreement for Arbitration in point found on page 51 of the expediente, dated Feb. 6, 1995, and attested by the Pangkat Chairman of the Office of the Barangay Lupon of Dagdag, Sagada was signed by the respondents/defendants spouses Manacnis. The representative of the Appellee in the instant case assails such Agreement claiming that the signatures of her aforesaid predecessors-ininterest therein were not personally affixed by the latter or are falsifiedwhich in effect is an attack on the validity of the document on the ground that the consent of the defendants spouses Manacnis is vitiated by fraud. Indulging the Appellee Heirs of Manacnis its contention that such indeed is the truth of the matter, the fact still remains as borne out by the circumstances, that neither did said original defendants nor did any of such heirs effectively repudiate the Agreement in question in accordance with the procedure outlined by the law, within five (5) days from Feb. 6, 1995, on the ground as above-stated (Secs. 413 (a), 418, RA 7160; Secs. 7, 13, KP Law; Sec. 12, Rule IV, KP Rules). As mandated, such failure is deemed a waiver on the part of the defendants spouses Manacnis to challenge the Agreement for Arbitration on the ground that their consent thereto is obtained and vitiated by fraud (Sec. 12, Par. 3, KP Rules). Corollarily, the Appellee Heirs being privy to the now deceased original defendants should have not been permitted by the court a quo under the equitable principle of estoppel, to raise the matter in issue for the first time in the present case (Lopez vs. Ochoa, 103 Phil. 94). The Arbitration Award relative to Civil Case 83 (B.C. No. 07) dated May 10, 1995, written in English, attested by the Punong Barangay of Dagdag and found on page 4 of the record is likewise assailed by the Appellee as void on the ground that the English language is not known by the defendants spouses Manacnis who are Igorots. Said Appellee contends that the document should have been written in Kankana-ey, the dialect

known to the party (Sec. 413 (b), RA 7160; Sec. 7, Par. 2, KP law, Sec. 11, KP Rules). On this score, the court a quo presumptuously concluded on the basis of the self-serving mere say-so of the representative of the Appellee that her predecessors did not speak or understand English. As a matter of judicial notice, American Episcopalian Missionaries had been in Sagada, Mountain Province as early as 1902 and continuously stayed in the place by turns, co-mingling with the indigenous people thereat, instructing and educating them, and converting most to the Christian faith, among other things, until the former left about twenty years ago. By constant association with the white folks, the natives too old to go to school somehow learned the Kings English by ear and can effectively speak and communicate in that language. Any which way, even granting arguendo that the defendants spouses Manacnis were the exceptions and indeed totally ignorant of English, no petition to nullify the Arbitration award in issue on such ground as advanced was filed by the party or any of the Appellee Heirs with the MCTC of Besao-Sagada, within ten (10) days from May 10, 1995, the date of the document. Thus, upon the expiration thereof, the Arbitration Award acquired the force and effect of a final judgment of a court (Sec. 416, RA 7160; Sec. 11, KP Law; Sec. 13, KP Rules); conclusive upon the original defendants in Civil Case 83 (B.C. No. 07) and the Appellee Heirs herein privy to said defendants. In the light thereof, the collateral attack of the Appellee on the Agreement for Arbitration and Arbitration Award re Civil Case 83 (B.C. No. 07) should not have in the first place been given due course by the court a quo. In which case, it would not have in the logical flow of things declared both documents "inefficacious"; without which pronouncements, said court would not have dismissed the case at bar. Wherefore, Judgment is hereby rendered Reversing and Setting Aside the Resolution appealed from, and ordering the record of the case subject thereof remanded to the court of origin for further proceedings.10 Aggrieved by the reversal of the RTC, herein respondent filed a petition before the Court of Appeals seeking to set aside the RTC Judgment. On 9 February 2005, the appellate court rendered the herein assailed Decision, to wit: After thoroughly reviewing through the record, We find nothing that would show that the spouses Manacnes were ever amenable to any compromise with respondent Pang-et. Thus, We are at a loss as to the basis of the Arbitration Award sought to be enforced by respondent Pang-ets subsequent action before the MCTC.

There is no dispute that the proceeding in Civil Case No. 83 was suspended and the same remanded to the Lupon on account of the Agreement to Arbitrate which was allegedly not signed by the parties but agreed upon by their respective counsels during the pre-trial conference. In the meeting before the Lupon, it would seem that the agreement to arbitrate was not signed by the spouses Manacnes. More importantly, when the pangkat chairman asked the spouses Manacnes to sign or affix their thumbmarks in the agreement, they refused and insisted that the case should instead go to court. Thus, the Lupon had no other recourse but to issue a certificate to file action. Unfortunately, the case was again remanded to the Lupon to "render an arbitration award". This time, the Lupon heard the voice tape of the late Beket Padonay affirming respondent Pang-ets right to the disputed property. While Pang-et offered to pay P8,000.00 for the improvements made by the spouses Manacnes, the latter refused to accept the same and insisted on their right to the subject property. Despite this, the Lupon on May 10, 1995 issued an Arbitration award which favored respondent Pang-et. From the time the case was first referred to the Lupon to the time the same was again remanded to it, the Spouses Manacnes remained firm in not entering into any compromise with respondent Pang-et. This was made clear in both the minutes of the Arbitration Hearing on 26 February 1995 and on 9 April 1995. With the foregoing, We find it evident that the spouses Manacnes never intended to submit the case for arbitration. Moreover, the award itself is riddled with flaws. First of all there is no showing that the Pangkat ng Tagapagkasundo was duly constituted in accordance with Rule V of the Katarungan Pambarangay Rules. And after constituting of the Pangkat, Rule VI, thereof the Punong Barangay and the Pangkat must proceed to hear the case. However, according to the minutes of the hearing before the lupon on 9 April 1995, the pangkat Chairman and another pangkat member were absent for the hearing. Finally, Section 13 of the same Rule requires that the Punong Barangay or the Pangkat Chairman should attest that parties freely and voluntarily agreed to the settlement arrived at. But how can this be possible when the minutes of the two hearings show that the spouses Manacnes neither freely nor voluntarily agreed to anything. While RA 7160 and the Katarungan Pambarangay rules provide for a period to repudiate the Arbitration Award, the same is neither applicable nor necessary since the Agreement to Arbitrate or the Arbitration Award were never freely nor voluntarily entered into by one of the parties to the

dispute. In short, there is no agreement validly concluded that needs to be repudiated. With all the foregoing, estoppel may not be applied against petitioners for an action or defense against a null and void act does not prescribe. With this, We cannot but agree with the MCTC that the very agreement to arbitrate is null and void. Similarly, the arbitration award which was but the off shoot of the agreement is also void. WHEREFORE, the RTC judgment of 2 June 2003 is REVERSED and SET ASIDE, the MCTC Resolution DISMISSING the Civil Case No. 118 for enforcement of Arbitration Award is REINSTATED.11 Vehemently disagreeing with the Decision of the Court of Appeals, petitioner Pang-et filed the instant petition. Petitioner maintains that the appellate court overlooked material facts that resulted in reversible errors in the assailed Decision. According to petitioner, the Court of Appeals overlooked the fact that the original parties, as represented by their respective counsels in Civil Case No. 83, mutually agreed to submit the case for arbitration by the Lupon ng Tagapamayapa of Barangay Dagdag. Petitioner insists that the parties must be bound by the initial agreement by their counsels during pre-trial to an amicable settlement as any representation made by the lawyers are deemed made with the conformity of their clients. Furthermore, petitioner maintains that if indeed the spouses Manacnes did not want to enter into an amicable settlement, then they should have raised their opposition at the first instance, which was at the pre-trial on Civil Case No. 83 when the MCTC ordered that the case be remanded to the Lupon ng Tagapamayapa for arbitration. We do not agree with the petitioner. First and foremost, in order to resolve the case before us, it is pivotal to stress that, during the initial hearing before the Lupon ng Tagapamayapa, the spouses Manacnes declined to sign the Agreement for Arbitration and were adamant that the proceedings before the MCTC in Civil Case No. 83 must continue. As reflected in the Minutes12 of the Arbitration Hearing held on 26 February 1995, the legality of the signature of Catherine Manacnes, daughter of the Manacnes spouses, who signed the Agreement for Arbitration on behalf of her parents, was assailed on the ground that it should be the spouses Manacnes themselves who should have signed such agreement. To resolve the issue, the Pangkat Chairman then asked the spouses Manacnes that if they wanted the arbitration proceedings to continue, they must signify their intention in the

Agreement for Arbitration form. However, as stated earlier, the Manacnes spouses did not want to sign such agreement and instead insisted that the case go to court. Consequently, the Lupon issued a Certification to File Action on 26 February 1995 due to the refusal of the Manacnes spouses. Indicated in said Certification are the following: 1) that there was personal confrontation between the parties before the Punong Barangay but conciliation failed and 2) that the Pangkat ng Tagapagkasundo was constituted but the personal confrontation before the Pangkat failed likewise because respondents do not want to submit this case for arbitration and insist that said case will go to court.13Nevertheless, upon receipt of said certification and the records of the case, the MCTC ordered that the case be remanded to the Lupon ng Tagapamayapa and for the latter to render an arbitration award, explaining that: Going over the documents submitted to the court by the office of the Lupon Tagapamayapa of Dagdag, Sagada, Mountain Province, the court observed that an "Agreement for Arbitration" was executed by the parties anent the above-entitled case. However, said Lupon did not make any arbitration award as mandated by the Katarungang Pambarangay Law but instead made a finding that the case may now be brought to the court. This is violative of the KP Law, which cannot be sanctioned by the court.14 At this juncture, it must be stressed that the object of the Katarungang Pambarangay Law is the amicable settlement of disputes through conciliation proceedings voluntarily and freely entered into by the parties.15Through this mechanism, the parties are encouraged to settle their disputes without enduring the rigors of court litigation. Nonetheless, the disputing parties are not compelled to settle their controversy during the barangay proceedings before the Lupon or the Pangkat, as they are free to instead find recourse in the courts16 in the event that no true compromise is reached. The key in achieving the objectives of an effective amicable settlement under the Katarungang Pambarangay Law is the free and voluntary agreement of the parties to submit the dispute for adjudication either by the Lupon or the Pangkat, whose award or decision shall be binding upon them with the force and effect of a final judgment of a court.17 Absent this voluntary submission by the parties to submit their dispute to arbitration under the Katarungang Pambarangay Law, there cannot be a binding settlement arrived at effectively resolving the case. Hence, we fail to see why the MCTC further remanded the case to the Lupon ng

Tagapamayapa and insisted that the arbitration proceedings continue, despite the clear showing that the spouses Manacnes refused to submit the controversy for arbitration. It would seem from the Order of the MCTC, which again remanded the case for arbitration to the Lupon ng Tagapamayapa, that it is compulsory on the part of the parties to submit the case for arbitration until an arbitration award is rendered by the Lupon. This, to our minds, is contrary to the very nature of the proceedings under the Katarungang Pambarangay Law which espouses the principle of voluntary acquiescence of the disputing parties to amicable settlement. What is compulsory under the Katarungang Pambarangay Law is that there be a confrontation between the parties before the Lupon Chairman or the Pangkat and that a certification be issued that no conciliation or settlement has been reached, as attested to by the Lupon or Pangkat Chairman, before a case falling within the authority of the Lupon may be instituted in court or any other government office for adjudication. 18 In other words, the only necessary pre-condition before any case falling within the authority of the Lupon or the Pangkat may be filed before a court is that there has been personal confrontation between the parties but despite earnest efforts to conciliate, there was a failure to amicably settle the dispute. It should be emphasized that while the spouses Manacnes appeared before the Lupon during the initial hearing for the conciliation proceedings, they refused to sign the Agreement for Arbitration form, which would have signified their consent to submit the case for arbitration. Therefore, upon certification by the Lupon ng Tagapamayapa that the confrontation before the Pangkat failed because the spouses Manacnes refused to submit the case for arbitration and insisted that the case should go to court, the MCTC should have continued with the proceedings in the case for recovery of possession which it suspended in order to give way for the possible amicable resolution of the case through arbitration before the Lupon ng Tagapamayapa. Petitioners assertion that the parties must be bound by their respective counsels agreement to submit the case for arbitration and thereafter enter into an amicable settlement is imprecise. What was agreed to by the parties respective counsels was the remand of the case to the Lupon ng Tagapamayapa for conciliation proceedings and not the actual amicable settlement of the case. As stated earlier, the parties may only be compelled to appear before the Lupon ng Tagapamayapa for the necessary confrontation, but not to enter into any amicable settlement, or in the case at bar, to sign the Agreement for Arbitration. Thus, when the

Manacnes spouses personally appeared during the initial hearing before the Lupon ng Tagapamayapa, they had already complied with the agreement during the pre-trial to submit the case for conciliation proceedings. Their presence during said hearing is already their acquiescence to the order of the MCTC remanding the case to the Lupon for conciliation proceedings, as there has been an actual confrontation between the parties despite the fact that no amicable settlement was reached due to the spouses Manacnes refusal to sign the Agreement for Arbitration. Furthermore, the MCTC should not have persisted in ordering the Lupon ng Tagapamayapa to render an arbitration award upon the refusal of the spouses Manacnes to submit the case for arbitration since such arbitration award will not bind the spouses. As reflected in Section 413 of the Revised Katarungang Pambarangay Law, in order that a party may be bound by an arbitration award, said party must have agreed in writing that they shall abide by the arbitration award of the Lupon or the Pangkat. Like in any other contract, parties who have not signed an agreement to arbitrate will not be bound by said agreement since it is axiomatic that a contract cannot be binding upon and cannot be enforced against one who is not a party to it.19 In view of the fact that upon verification by the Pangkat Chairman, in order to settle the issue of whether or not they intend to submit the matter for arbitration, the spouses Manacnes refused to affix their signature or thumb mark on the Agreement for Arbitration Form, the Manacnes spouses cannot be bound by the Agreement for Arbitration and the ensuing arbitration award since they never became privy to any agreement submitting the case for arbitration by the Pangkat. WHEREFORE, premises considered, the instant petition is hereby DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 78019 is hereby AFFIRMED. The Municipal Circuit Trial Court of Besao-Sagada, Mountain Province, is hereby ORDERED to proceed with the trial of Civil Case No. 83 for Recovery of Possession of Real Property, and the immediate resolution of the same with deliberate dispatch. No costs. SO ORDERED.

MORATA v. GO (1983)1
FACTS: Spouses Victor and Flora Go filed a complaint against spouses Julius and Ma. Luisa Morata for recovery of a sum of money plus damages amounting to P49,400.00 in CFI Cebu. On the basis of the allegation in the complaint that the parties-litigants are all residents of Cebu City, the Moratas filed a motion to dismiss, citing as grounds therefor, the failure of the complaint to allege prior availment by the Gos of the barangay conciliation process required by P.D. 1508, as well as the absence of a certification by the Lupon or Pangkat Secretary that no conciliation or settlement had been reached by the parties. The motion was opposed by the Gos. The judge denied the motion to dismiss, ruling that the provision of Sec 6 of the law applies only to cases cognizable by the inferior courts mentioned in Secs 11 and 12 of the law. ISSUE: WON the complaint should be dismissed for failure to comply with PD 1508 HELD/RATIO: YES. The nature of the case at bar does not fall under the exceptions cited in Sections 22 and 63 of P.D. 1508. Since the law does not distinguish, this case/dispute should have been first settled amicably
1

by the Lupon. Furthermore, there is no showing that that the intention of the law is to restrict its coverage only to cases cognizable by the inferior courts for it would not have included the rule on venue provided in Section 3 (pertaining to land disputes which are traditionally cognizable by CFIs/RTCs) thereof. This is further supported by Circular No. 22 issued by then CJ Fernando which gave notice to all CFIs to recognize the Katarungang Pambarangay Law and desist from acting upon cases falling within the authority of the Lupons. This circular was noted by President Marcos. Hence, the Court declared that the conciliation process at the barangay level, prescribed by P.D. 1508 as a precondition for filing a complaint in court, is compulsory not only for cases falling under the exclusive competence of the metropolitan and municipal trial courts, but for actions cognizable by the regional trial courts as well. Purpose of the Law. By compelling the disputants to settle their differences through the intervention of the barangay leader and other respected members of the barangay, the animosity generated by protracted court litigations between members of the same political unit, a disruptive factor toward unity and cooperation, is avoided. It must be borne in mind that the conciliation process at the barangay level is likewise designed to discourage indiscriminate filing of cases in court in order to decongest its clogged dockets and, in the process, enhance the quality of justice dispensed by it. Thus, to say that the authority of the Lupon is limited to cases exclusively cognizable by the inferior courts is to lose sight of this objective. Worse, it would make the law a self-defeating one. For what would stop a party, say in an action for a sum of money or damages, as in the instant case, from bloating up his claim in order to place his case beyond the jurisdiction of the inferior court and thereby avoid the mandatory requirement of P.D. 1508? And why, indeed, should the law seek to ease the congestion of dockets only in inferior courts and not in the regional trial courts where the log-jam of cases is much more serious? Indeed, the lawmakers could not have intended such halfmeasure and self-defeating legislation.

Lou Macabodbod

SECTION 2. Subject matters for amicable settlement.The Lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: [1] Where one party is the government ,or any subdivision or instrumentality thereof; [2] Where one party is a public officer or employee, and the dispute relates to the performance of his official functions; [3] Offenses punishable by imprisonment exceeding 30 days, or a fine exceeding P200.00; [4] Offenses where there is no private offended party; [5] Such other classes of disputes which the Prime Minister may in the interest of justice determine upon recommendation of the Minister of Justice and the Minister of Local Government.
3

SECTION 6. Conciliation pre-condition to filing of complaint. No complaint, petition, action for proceeding involving any matter within the authority of the Lupon as provided in Section 2 hereof shall be filed or instituted in court or any other government office for adjudication unless there has been a confrontation of the parties before the Lupon Chairman or the Pangkat and no conciliation or settlement has been reached as certified by the Lupon Secretary or the Pangkat Secretary attested by the Lupon or Pangkat Chairman, or unless the settlement has been repudiated. However, the parties may go directly to court in the following cases: [1] Where the accused is under detention; [2] Where a person has otherwise been deprived of personal liberty calling for habeas corpus proceedings; [3] Actions coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property and support pendente lite; and [4] Where the action may otherwise be barred by the Statute of Limitations

PANG-ET V. MANACNES-DAO-AS (REM) BARANGAY CONCILIATION

What is compulsory under the Katarungang Pambarangay Law is that there be CONFRONTATION between the parties before aLupon and that a certification be issued that NO CONCILIATION OR SETTLEMENT HAS BEEN REACHED, before a case falling within the authority of the Lupon may be instituted in court or any other government office for adjudication. The only other precondition before any case may be filed before a court is that there has been personal confrontation between parties but despite earnest efforts to conciliate, THERE WAS A FAILURE TO AMICABLY SETTLE THE DISPUTE. While spouses Manacnes appeared before the Lupon, they refused to sign the Agreement for Arbitration form, which would have signified their consent to submit the case for arbitration.