G.R. No. 101328. April 7, 1993 CANDIDO ET AL VS. MACAPAGAL ET AL SYLLABUS 1. REMEDIAL LAW; KATARUNGANG PAMBARANGAY (P.D. NO. 1508); SCOPE OF POWER; RULE. — From the provisions of P.D. No. 1508, it is clear that the barangay court or Lupon has jurisdiction over disputes between parties who are actual residents of barangays located in the same city or municipality or adjoining barangays of different cities or municipalities. The Lupon of the barangay ordinarily has the authority to settle amicably all types of disputes involving parties who actually reside in the same municipality, city or province. Where the complaint does not state that it is one of the excepted cases, or it does not allege prior availment of said conciliation process, or it does not have a certification that no conciliation or settlement had been reached by the parties, the case could be dismissed on motion. In the instant case, the fact that petitioners and private respondent, reside in the same municipality of Obando, Bulacan does not justify compulsory conciliation under P.D. No. 1508 where the other co-defendants reside in barangays of different municipalities, cities and provinces. D E C I S I O N NOCON, J p: This is a petition for certiorari to annul and set aside the Orders 1 dated July 10, 1991 and August 9, 1991 of the trial court dismissing the complaint of petitioners Emiliana and Francisca Candido against private respondent Mila Contreras on the ground of lack of jurisdiction for petitioners' failure to comply with the mandatory barangay conciliation process required by Presidential Decree No. 1508, otherwise known as the Katarungang Pambarangay Law. It appears on record that petitioners Emiliana and Francisca Candido are the only legitimate children of spouses Agapito Candido and Florencia Santos as shown by the certificates 2 of the latter's Record of Marriage and the petitioners' Record of Birth. However, petitioners' father eventually left his legitimate family and lived with Sagraria Lozada until his death on May 6, 1987. On May 11, 1990, Sagraria Lozada, Jorge Candido, Virginia Candido, Maximina Candido and Eduardo Candido who represented themselves to be the sole heirs of the late Agapito Candido executed a Deed of Extra-judicial Settlement of Estate with Sale 3 covering parcels of land owned by the latter and sold to private respondent Mila Contreras in whose name said properties are now registered under TCT No. T-120656-M. On November 6, 1990, petitioners instituted an action with the Regional Trial Court of Bulacan, Branch 18 in Civil Case No. 697-M-90 against Sagraria Lozada, Gorge Candido, Virginia Candido, Maximina Candido, Eduardo Candido, Register of Deeds of Bulacan and private respondent Mila Contreras to annul the Deed of Extra-judicial Settlement of Estate with Sale, to cancel TCT No. 120656-M issued in the name of private respondent and to reinstate TCT No. 223602 in the name of Agapito Candido married to Sagraria Lozada. On December 5, 1990, private respondent filed a Motion to Dismiss 4 on the ground that petitioners failed to comply with the mandatory conciliation process required under P.D. No. 1508 as she resides in the same municipality with the petitioners. On July 10, 1991, the trial court issued an Order, the dispositive portion of which reads, as follows: "WHEREFORE, as prayed for, let this case be, as it is hereby DISMISSED in so far as defendant Mila Contreras is concerned for lack of prior referral of the dispute before the Katarungang Pambarangay, without prejudice." 5 Thereafter, petitioners filed a Motion for Reconsideration 6 which was denied in an Order 7 dated August 9, 1991. Hence, this petition alleging grave abuse of discretion on the part of the respondent judge dismissing private respondent in the complaint instituted by the petitioners notwithstanding the fact that the other defendants in Civil Case No. 697-M-90 reside in different municipalities and cities. The petition is impressed with merit. Section 2 of P.D. No. 1508 provides:

"SEC. 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." Further, section 3 of the same law provides: "SEC. 3. Venue. — Disputes between or among persons actually residing in the same barangay shall be brought for amicable settlement before the Lupon of said barangay. Those involving actual residents of different barangays within the same city or municipality shall be brought in the barangay where the respondent or any of the respondents actually resides, at the election of the complainant. However, all disputes which involve real property or any interest therein shall be brought in the barangay where the real property or any part thereof is situated. "The Lupon shall have no authority over disputes: (1) involving parties who actually reside in barangays of different cities or municipalities, except where such barangays adjoin each other; . . ." From the foregoing provisions of P.D. No. 1508, it is clear that the barangay court or Lupon has jurisdiction over disputes between parties who are actual residents of barangays located in the same city or municipality or adjoining barangays of different cities or municipalities. In the instant case, petitioners alleged in their complaint that they are residents of Barrio Paliwas, Municipality of Obando, Bulacan while defendants' residences are as follows: Sagraria Lozada and Jorge Candido at Javier Compound, Bo. Sto. Niño, Taytay, Rizal; Virginia and Maximina Candido at Road 2, Doña Faustina Village, San Bartolome, Novaliches, Quezon City; Eduardo Candido at 388 Barrio Paliwas, Municipality of Obando, Bulacan; Mila Contreras at San Pascual, Municipality of Obando, Bulacan; and the Registrar of Deeds of Bulacan at his official address in Bulacan. The Lupon of the barangay ordinarily has the authority to settle amicably all types of disputes involving parties who actually reside in the same municipality, city or province. Where the complaint does not state that it is one of the excepted cases, or it does not allege prior availment of said conciliation process, or it does not have a certification that no conciliation or settlement had been reached by the parties, the case could be dismissed on motion. 8 In the instant case, the fact that petitioners and private respondent, reside in the same municipality of Obando, Bulacan does not justify compulsory conciliation under P.D. No. 1508 where the other co-defendants reside in barangays of different municipalities, cities and provinces. Petitioners can immediately file the case in court. It would not serve the purpose of the law in discouraging litigation among members of the same barangay through conciliation where the other parties reside in barangays other than the one where the Lupon is located and where the dispute arose. WHEREFORE, the petition is GRANTED and the appealed Orders of the trial court dated July 10, 1991 and August 9, 1991 dismissing Civil Case No. 697-M-90 in so far as defendant Mila Contreras is concerned are hereby annulled and set aside. The case is remanded to the Regional Trial Court of Bulacan for further proceedings and to REINSTATE private respondent Mila Contreras as defendant in Civil Case No. 697-M-90. No costs. UNIVERSAL ROBINA VS. HEIRS TEVES, 389 SCRA 316 G.R. No. 128574 September 18, 2002 Facts: Andres Abanto owned two parcels of land situated in Campuyo, Manjuyod, Negros Oriental. One lot is registered in his name and the other lot is unregistered. When he died, his heirs executed

an ―Extrajudicial Settlement of the Estate of the Deceased and Simultaneous Sale.‖ In this document, Abanto‘s heirs adjudicated unto themselves the two lots and sold the unregistered lot to the United Planters Sugar Milling Company, Inc. (UPSUMCO), and the registered lot to Angel M. Teves, for a total sum of P115,000.00. The sale was not registered. Out of respect for his uncle Montenegro, who was UPSUMCO‘s founder and president, Teves verbally allowed UPSUMCO to use the registered lot for pier and loading facilities, free of charge, subject to the condition that UPSUMCO shall shoulder the payment of real property taxes and that its occupation shall be co¬terminus with its corporate existence. UPSUMCO then built a guesthouse and pier facilities on the property. Years later, UPSUMCO‘s properties were acquired by the Philippine National Bank (PNB). Later, PNB transferred the same properties to the Asset Privatization Trust (APT) which, in turn, sold the same to the Universal Robina Sugar Milling Corporation (URSUMCO). URSUMCO then took possession of UPSUMCO‘s properties, including Teves‘ lot. Upon learning of the acquisition of his lot, Teves formally asked the corporation to turn over to him possession thereof Zor the corresponding rentals. He stated in his demand letters that he merely allowed UPSUMCO to use his property until its corporate dissolution; and that it was not mortgaged by UPSUMCO with the PNB and, therefore, not included among the foreclosed properties acquired by URSUMCO. URSUMCO refused to heed Teves‘ demand, claiming that it acquired the right to occupy the property from UPSUMCO which purchased it from Andres Abanto; and that it was merely placed in the name of Angel Teves, as shown by the ―Deed of Transfer and Waiver of Rights and Possession‖ dated November 26, 1987. Under this document, UPSUMCO transferred to URSUMCO its application for agricultural and foreshore lease. The same document partly states that the lands subject of the foreshore and agricultural lease applications are bounded on the north by the ―titled property of Andres Abanto bought by the transferor (UPSUMCO) but placed in the name of Angel Teves‖. URSUMCO further claimed that it was UPSUMCO, not Teves, which has been paying the corresponding realty taxes. Consequently, Teves filed a complaint for recovery of possession of real property with damages against URSUMCO. However, on September 4, 1992, Teves died and was substituted by his heirs. On April 6, 1994, the RTC held that URSUMCO has no personality to question the validity of the sale of the property between the heirs of Andres Abanto and Angel Teves since it is not a party thereto; that Teves‘ failure to have the sale registered with the Registry of Deeds would not vitiate his right of ownership, unless a third party has acquired the land in good faith and for value and has registered the subsequent deed; that the list of properties acquired by URSUMCO from the PNB does not include the disputed lot and, therefore, was not among those conveyed by UPSUMCO to URSUMCO. On appeal by URSUMCO, the Court of Appeals affirmed the RTC decision, holding that the transaction between Angel Teves and Andres Abanto‘s heirs is a contract of sale, not one to sell, because ownership was immediately conveyed to the purchaser upon payment of P115,000.00. On October 29, 1996, URSUMCO filed a motion for reconsideration but was denied by the Appellate Court. Hence, the instant petition for review on certiorari. Issue: Whether or not the respondents have established a cause of action against petitioner. Ruling: No. Petitioner URSUMCO contends that respondents have no cause of action because the ―Extrajudicial Settlement of the Estate of the Deceased Andres Abanto and Simultaneous Sale‖ is merely a promise to sell and not an absolute deed of sale, hence, did not transfer ownership of the disputed lot to Angel Teves. Assuming that the document is a contract of sale, the same is void for lack of consideration because the total price of P115,000.00 does not specifically refer to the registered lot making the price uncertain. Furthermore, the transaction, being unregistered, does not bind third parties. Petitioner‘s contentions lack merit. As held by the RTC and the Court of Appeals, the transaction is not merely a contract to sell but a contract of sale. In a contract of sale, title to the property passes to the vendee upon delivery of the thing sold; while in a contract to sell, ownership is, by agreement, reserved in the vendor and is not to pass to the vendee until full payment of the purchase price. In the case at bar, the subject contract, duly notarized, provides that the Abanto heirs sold to Teves the lot

covered by TCT No. H-37. There is no showing that the Abanto heirs merely promised to sell the said lot to Teves. The absolute ownership over the registered land was indeed transferred to Teves is further shown by his acts subsequent to the execution of the contract. As found by the trial court, it was Teves, not Andres Abanto‘s heirs, who allowed UPSUMCO to construct pier facilities and guesthouse on the land. When the property was erroneously included among UPSUMCO‘s properties that were transferred to petitioner URSUMCO, it was Teves, not the heirs of Andres Abanto, who informed petitioner that he owns the same and negotiated for an arrangement regarding its use. Teves even furnished petitioner documents and letters showing his ownership of the lot, such as a copy of the ―Extrajudicial Settlement of the Estate of the Deceased Andres Abanto and Simultaneous Sale‖ and a certified true copy of TCT No. H-37 covering the disputed lot. Indeed, the trial court and the Court of Appeals correctly ruled that Teves purchased the lot from the Abanto heirs. That the contract of sale was not registered does not affect its validity. Being consensual in nature, it is binding between the parties, the Abanto heirs and Teves. Article 1358 of the New Civil Code, which requires the embodiment of certain contracts in a public instrument, is only for convenience, and the registration of the instrument would merely affect third persons. Formalities intended for greater efficacy or convenience or to bind third persons, if not done, would not adversely affect the validity or enforceability of the contract between the contracting parties themselves. Thus, by virtue of the valid sale, Angel Teves stepped into the shoes of the heirs of Andres Abanto and acquired all their rights to the property. Thus, petition is denied. PASCUAL VS. PASCUAL GR 157830 On challenge via Petition for Review on Certiorari is the February 10, 2003 Order of the Regional Trial Court (RTC) of Isabela, Branch 23 at Roxas dismissing, on motion of herein respondent Marilou M. Pascual, the complaint filed against her by her brother-herein petitioner Dante M. Pascual, represented by his attorney-in-fact Reymel R. Sagario (Sagario), for non-compliance with the conciliation provision-pre condition to filing of complaint in court under R.A. 7160 (the Local Government Code). Petitioner, a permanent resident of the United States of America, appointed Sagario as his attorney-in-fact by a Special Power of Attorney (SPA) dated April 10, 2002: 1. To file a case for the cancellation of Transfer Certificate of Title No. T-271656 issued in the name of Marilou M. Pascual as well as the Deed of Sale of Registered Land (Dec. No. 639; Page No. 52; Book No. XXI; Series of 1994) and/or Reconveyance at the appropriate court; 2. To collect the monthly rentals from the tenant; 3. To enter into amicable settlement with Marilou M. Pascual or any other mode of payment/and/or dispute resolution; 4. To execute and sign any and all papers, contracts/documents which may be necessary relative to the above acts. x x x[1] Pursuant to the SPA, Sagario filed on October 14, 2002 before the Isabela RTC at Roxas a complaint entitled Dante M. Pascual, plaintiff v. Marilou M. Pascual and Register of Deeds, Defendants, docketed as Civil Case No. Br. 23-713-02, for Annulment of Transfer Certificate of Title No. T-271657 of Isabela and Deed of Absolute Sale of Registered Land and/or Reconveyance with Damages.[2]

To the Complaint the defendant-herein respondent Marilou M. Pascual filed a Motion to Dismiss[3] on two grounds one of which was non-compliance with the requirement under Section 412 of the Local Government Code,[4] she contending that there is no showing that the dispute was referred to the barangay court before the case was filed in court. By the assailed Order of February 10, 2003,[5] Branch 23 of the Isabela RTC at Roxas granted respondents Motion to Dismiss in this wise: . . . RA 7160 repealing P.D. 1508 otherwise known as the Revised Katarungang Pambarangay provides under Section 409 All disputes involving real property or any interest therein shall be brought in the barangay where the real property or the larger portion thereof is situated. Hence, the reliance of the plaintiff on Section 408 of R.A. 7160 is incorrect. When real property or any interest therein is involved, the dispute shall be filed before the barangay where the property is located, regardless of the residence of the parties. Besides, it is incorrect to say that the parties are not residents of the same place, Vira, Roxas, Isabela. The Attorney-in-fact of the plaintiff in the person of Reymel R. Sagario is a resident of Vira, Roxas, Isabela, and he substitute(sic) Dante Pascual by virtue of said Special Power of Attorney. Hence, said Attorney-in-fact should have brought the dispute before barangay Vira, Roxas, Isabela, where the property is located. In the case of Royales vs. Intermediate Appellate Court 127 SCRA 470, Ordinarily, non-compliance with the condition precedent prescribed by P.D. 1508 could affect the sufficiency of the plaintiffs cause of action and make his complaint vulnerable to dismissal on ground of lack of cause of action or prematurity.[6] (Emphasis and underscoring supplied) Petitioners Motion for Reconsideration[7] of the above-said order was denied by Order of March 24, 2003:[8] x x x Consequently, the Court is [of] the opinion that the said Attorney-in-fact shall be deemed to be the real party in interest, reading from the tenor of the provisions of the Special Power of Attorney. Being a real party in interest, the Attorney-in-fact is therefore obliged to bring this case first before the Barangay Court. Sec. 3, Rule 3 of the Rules of Court provides that Where the action is allowed to be prosecuted or defended by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed to be the real party in interest. x x x Being the real party in interest, the Attorney-in-fact may therefore bring the necessary complaint before the Lupon Tagapayapa and appear in person as if he is the owner of the land.[9](Emphasis and underscoring supplied) Hence, the present petition questioning the palpable legal errors of the RTC. Petitioner argues that since he, not his attorney-in-fact Sagario, is the real party in interest, and since he actually resides abroad, the lupon would have no jurisdiction to pass upon the dispute involving real property, he citing Agbayani v. Belen.[10] Respondent submits, on the other hand, that Section 408, paragraph (f), of the Local Government Code, is qualified by paragraph (c) of Section 409 of the same Code the latter of which provides that [a]ll disputes involving real property or any interest therein shall be brought in the barangay where the real property is located, hence, the use of the word shall makes it mandatory for the bringing of the dispute before the lupon.

That attorney-in-fact Sagario is a resident of the same barangay as that of hers, respondent argues in any event, brings the matter under the jurisdiction of the lupon, for Sagario, following Section 3 of Rule 3 of the 1997 Rules of Civil Procedure which provides: Sec. 3. Representative as parties. - Where the action is allowed to be prosecuted or defended by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed to be the real party in interest. A representative may be a trustee of an express trust, a guardian, an executor or administrator, or a party authorized by law or these Rules. An agent acting in his own name for the benefit of an undisclosed principal may sue or be sued without joining the principal except when the contract involves things belonging to the principal, being a substitute, becomes the real party-in-interest. Respondents submissions do not lie. The pertinent provisions of the Local Government Code read: SEC. 408. Subject Matter for Amicable Settlement; Exception Thereto. The lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: (a) Where one party is the government or any subdivision or instrumentality thereof; (b) Where one party is a public officer or employee, and the dispute relates to the performance of his official functions; (c) Offenses punishable by imprisonment exceeding one (1) year or a fine exceeding Five Thousand pesos (P5,000.00); (d) Offenses where there is no private offended party; (e) Where the dispute involves real properties located in different cities or municipalities unless the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (f) Disputes involving parties who actually reside in barangays of different cities or municipalities, except where such barangay units adjoin each other and the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; and (g) Such other classes of disputes which the President may determine in the interest of justice or upon the recommendation of the Secretary of Justice. The court in which non-criminal cases not falling within the authority of the lupon under this Code are filed may, at any time before trial, motu proprio refer the case to the lupon concerned for amicable settlement. (Emphasis supplied) SEC. 409. Venue. (a) Disputes between persons actually residing in the same barangay shall be brought for amicable settlement before the lupon of said barangay . (b) Those involving actual residents of different barangays within the same city or municipality shall be brought in the barangay where the respondent or any of the respondents actually resides, at the election of the complainant.

(c) All disputes involving real property or any interest therein shall be brought in the barangay where the real property or the larger portion thereof is situated. (d) Those arising at the workplace where the contending parties are employed or at the institution where such parties are enrolled for study shall be brought in the barangay where such workplace or institution is located. Objections to venue shall be raised in the mediation proceedings before the punong barangay; otherwise, the same shall be deemed waived. Any legal question which may confront the punong barangay in resolving objections to venue herein referred to may be submitted to the Secretary of Justice or his duly designated representative whose ruling thereon shall be binding. (Emphasis supplied) In the 1982 case of Tavora v. Veloso,[11] this Court held that where the parties are not actual residents in the same city or municipality or adjoining barangays, there is no requirement for them to submit their dispute to the lupon as provided for in Section 6 vis a vis Sections 2 and 3 of P.D. 1508 (Katarungang Pambarangay Law). [B]y express statutory inclusion and exclusion, the Lupon shall have no jurisdiction over disputes where the parties are not actual residents of the same city or municipality, except where the barangays in which they actually reside adjoin each other. (Underscoring supplied) In the 2000 case of Vercide v. Hernandez,[12] this Court, noting that the Tavora ruling, reiterated in other cases including the 1996 case of Agbayani[13] cited by petitioner, was decided under the provisions of P.D. No. 1508 (Katarungang Pambarangay) Law which were, except for some modifications, echoed in Sections 408-409 of the Local Government Code which took effect on January 1, 1992, held that the Tavora ruling remained. To construe the express statutory requirement of actual residency as applicable to the attorney-in-fact of the party-plaintiff, as contended by respondent, would abrogate the meaning of a real party in interest as defined in Section 2 of Rule 3[14] of the 1997 Rules of Court vis a vis Section 3 of the same Rule which was earlier quoted but misread and misunderstood by respondent. In fine, since the plaintiff-herein petitioner, the real party in interest, is not an actual resident of the barangay where the defendant-herein respondent resides, the local lupon has no jurisdiction over their dispute, hence, prior referral to it for conciliation is not a pre-condition to its filing in court. The RTC thus erred in dismissing petitioners complaint. WHEREFORE, the petition is granted. The assailed February 10, 2003 Order, as well as the March 24, 2003 Order denying reconsideration of the first, of Branch 23 of the Regional Trial Court of Isabela at Roxas is SET ASIDE. Said court is accordingly directed to reinstate Civil Case No. 23-713-02 to its docket and take appropriate action thereon with dispatch G.R. No. 169129 March 28, 2007 SPS SANTOS VS. SPS. LUMBAO Before this Court is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure seeking to annul and set aside the Decision1 and Resolution2 of the Court of Appeals in CA-G.R. CV No. 60450 entitled, Spouses Jose Lumbao and Proserfina Lumbao v. Spouses Virgilio F. Santos and Esperanza Lati, Spouses Victorino F. Santos and Lagrimas F. Santos, Ernesto F.

Santos and Tadeo F. Santos, dated 8 June 2005 and 29 July 2005, respectively, which granted the appeal filed by herein respondents Spouses Jose Lumbao and Proserfina Lumbao (Spouses Lumbao) and ordered herein petitioners Spouses Virgilio F. Santos and Esperanza Lati, Spouses Victorino F. Santos and Lagrimas F. Santos, Ernesto F. Santos and Tadeo F. Santos to reconvey to respondents Spouses Lumbao the subject property and to pay the latter attorney‘s fees and litigation expenses, thus, reversing the Decision3 of the Regional Trial Court (RTC) of Pasig City, dated 17 June 1998 which dismissed the Complaint for Reconveyance with Damages filed by respondents Spouses Lumbao for lack of merit. Herein petitioners Virgilio, Victorino, Ernesto and Tadeo, all surnamed Santos, are the legitimate and surviving heirs of the late Rita Catoc Santos (Rita), who died on 20 October 1985. The other petitioners Esperanza Lati and Lagrimas Santos are the daughters-in-law of Rita. Herein respondents Spouses Jose Lumbao and Proserfina Lumbao are the alleged owners of the 107-square meter lot (subject property), which they purportedly bought from Rita during her lifetime. The facts of the present case are as follows: On two separate occasions during her lifetime, Rita sold to respondents Spouses Lumbao the subject property which is a part of her share in the estate of her deceased mother, Maria Catoc (Maria), who died intestate on 19 September 1978. On the first occasion, Rita sold 100 square meters of her inchoate share in her mother‘s estate through a document denominated as "Bilihan ng Lupa," dated 17 August 1979.4 Respondents Spouses Lumbao claimed the execution of the aforesaid document was witnessed by petitioners Virgilio and Tadeo, as shown by their signatures affixed therein. On the second occasion, an additional seven square meters was added to the land as evidenced by a document also denominated as "Bilihan ng Lupa," dated 9 January 1981.5 After acquiring the subject property, respondents Spouses Lumbao took actual possession thereof and erected thereon a house which they have been occupying as exclusive owners up to the present. As the exclusive owners of the subject property, respondents Spouses Lumbao made several verbal demands upon Rita, during her lifetime, and thereafter upon herein petitioners, for them to execute the necessary documents to effect the issuance of a separate title in favor of respondents Spouses Lumbao insofar as the subject property is concerned. Respondents Spouses Lumbao alleged that prior to her death, Rita informed respondent Proserfina Lumbao she could not deliver the title to the subject property because the entire property inherited by her and her co-heirs from Maria had not yet been partitioned. On 2 May 1986, the Spouses Lumbao claimed that petitioners, acting fraudulently and in conspiracy with one another, executed a Deed of Extrajudicial Settlement,6 adjudicating and partitioning among themselves and the other heirs, the estate left by Maria, which included the subject property already sold to respondents Spouses Lumbao and now covered by TCT No. 817297 of the Registry of Deeds of Pasig City. On 15 June 1992, respondents Spouses Lumbao, through counsel, sent a formal demand letter8 to petitioners but despite receipt of such demand letter, petitioners still failed and refused to reconvey the subject property to the respondents Spouses Lumbao. Consequently, the latter filed a Complaint for Reconveyance with Damages9before the RTC of Pasig City. Petitioners filed their Answer denying the allegations that the subject property had been sold to the respondents Spouses Lumbao. They likewise denied that the Deed of Extrajudicial Settlement had been fraudulently executed because the same was duly published as required by law. On the contrary, they prayed for the dismissal of the Complaint for lack of cause of action because respondents Spouses Lumbao failed to comply with the Revised Katarungang Pambarangay Law under Republic Act No. 7160, otherwise known as the Local Government Code of 1991, which repealed Presidential Decree No. 150810 requiring first resort to barangay conciliation. Respondents Spouses Lumbao, with leave of court, amended their Complaint because they discovered that on 16 February 1990, without their knowledge, petitioners executed a Deed of Real Estate Mortgage in favor of Julieta S. Esplana for the sum of P30,000.00. The said Deed of Real Estate Mortgage was annotated at the back of TCT No. PT-81729 on 26 April 1991. Also, in answer to the allegation of the petitioners that they failed to comply with the mandate of the Revised

Katarungang Pambarangay Law, respondents Spouses Lumbao said that the Complaint was filed directly in court in order that prescription or the Statute of Limitations may not set in. During the trial, respondents Spouses Lumbao presented Proserfina Lumbao and Carolina Morales as their witnesses, while the petitioners presented only the testimony of petitioner Virgilio. The trial court rendered a Decision on 17 June 1998, the dispositive portion of which reads as follows: Premises considered, the instant complaint is hereby denied for lack of merit. Considering that [petitioners] have incurred expenses in order to protect their interest, [respondents spouses Lumbao] are hereby directed to pay [petitioners], to wit: 1) the amount of P30,000.00 as attorney‘s fees and litigation expenses, and 2) costs of the suit.11 Aggrieved, respondents Spouses Lumbao appealed to the Court of Appeals. On 8 June 2005, the appellate court rendered a Decision, thus: WHEREFORE, premises considered, the present appeal is hereby GRANTED. The appealed Decision dated June 17, 1998 of the Regional Trial Court of Pasig City, Branch 69 in Civil Case No. 62175 is hereby REVERSED and SET ASIDE. A new judgment is hereby entered ordering [petitioners] to reconvey 107 square meters of the subject [property] covered by TCT No. PT-81729 of the Registry of Deeds of Pasig City, Metro Manila, and to pay to [respondents spouses Lumbao] the sum of P30,000.00 for attorney‘s fees and litigation expenses. No pronouncement as to costs.12 Dissatisfied, petitioners filed a Motion for Reconsideration of the aforesaid Decision but it was denied in the Resolution of the appellate court dated 29 July 2005 for lack of merit. Hence, this Petition. The grounds relied upon by the petitioners are the following: I. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN REVERSING THE DECISION OF THE TRIAL COURT, THEREBY CREATING A VARIANCE ON THE FINDINGS OF FACTS OF TWO COURTS. II. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN ORDERING THE PETITIONERS TO RECONVEY THE SUBJECT [PROPERTY] TO THE RESPONDENTS [SPOUSES LUMBAO] AND IN NOT RULING THAT THEY ARE GUILTY OF LACHES, HENCE THEY CANNOT RECOVER THE LOT ALLEGEDLY SOLD TO THEM. III. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING HEREIN PETITIONER[S] TO BE IN GOOD FAITH IN EXECUTING THE "DEED OF EXTRAJUDICIAL SETTLEMENT" DATED [2 MAY 1986]. IV. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT PETITIONERS ARE NOT LEGALLY BOUND TO COMPLY WITH THE SUPPOSED BILIHAN NG LUPA DATED [17 AUGUST 1979] AND [9 JANUARY 1981] THAT WERE SUPPOSEDLY EXECUTED BY THE LATE RITA CATOC. V. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO‘S] ACTION FOR RECONVEYANCE WITH DAMAGES CANNOT BE SUPPORTED WITH AN UNENFORCEABLE DOCUMENTS, SUCH AS THE BILIHAN NG LUPA DATED [17 AUGUST 1979] AND [9 JANUARY 1981]. VI. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO‘S] COMPLAINT FOR RECONVEYANCE IS DISMISSABLE (SIC) FOR NON COMPLIANCE OF THE MANDATE OF [P.D. NO.] 1508, AS AMENDED BY Republic Act No. 7160. VII. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO] SHOULD BE HELD LIABLE FOR PETITIONERS‘ CLAIM FOR DAMAGES AND ATTORNEY[‗]S FEES. Petitioners ask this Court to scrutinize the evidence presented in this case, because they claim that the factual findings of the trial court and the appellate court are conflicting. They allege that the findings of fact by the trial court revealed that petitioners Virgilio and Tadeo did not witness the execution of the documents known as "Bilihan ng Lupa"; hence, this finding runs counter to the conclusion made by the appellate court. And even assuming that they were witnesses to the

aforesaid documents, still, respondents Spouses Lumbao were not entitled to the reconveyance of the subject property because they were guilty of laches for their failure to assert their rights for an unreasonable length of time. Since respondents Spouses Lumbao had slept on their rights for a period of more than 12 years reckoned from the date of execution of the second "Bilihan ng Lupa," it would be unjust and unfair to the petitioners if the respondents will be allowed to recover the subject property. Petitioners allege they are in good faith in executing the Deed of Extrajudicial Settlement because even respondents Spouses Lumbao‘s witness, Carolina Morales, testified that neither petitioner Virgilio nor petitioner Tadeo was present during the execution of the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981. Petitioners affirm that the Deed of Extrajudicial Settlement was published in a newspaper of general circulation to give notice to all creditors of the estate subject of partition to contest the same within the period prescribed by law. Since no claimant appeared to interpose a claim within the period allowed by law, a title to the subject property was then issued in favor of the petitioners; hence, they are considered as holders in good faith and therefore cannot be barred from entering into any subsequent transactions involving the subject property. Petitioners also contend that they are not bound by the documents denominated as "Bilihan ng Lupa" because the same were null and void for the following reasons: 1) for being falsified documents because one of those documents made it appear that petitioners Virgilio and Tadeo were witnesses to its execution and that they appeared personally before the notary public, when in truth and in fact they did not; 2) the identities of the properties in the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981 in relation to the subject property in litigation were not established by the evidence presented by the respondents Spouses Lumbao; 3) the right of the respondents Spouses Lumbao to lay their claim over the subject property had already been barred through estoppel by laches; and 4) the respondents Spouses Lumbao‘s claim over the subject property had already prescribed. Finally, petitioners claim that the Complaint for Reconveyance with Damages filed by respondents Spouses Lumbao was dismissible because they failed to comply with the mandate of Presidential Decree No. 1508, as amended by Republic Act No. 7160, particularly Section 412 of Republic Act No. 7160. Given the foregoing, the issues presented by the petitioners may be restated as follows: I. Whether or not the Complaint for Reconveyance with Damages filed by respondents spouses Lumbao is dismissible for their failure to comply with the mandate of the Revised Katarungang Pambarangay Law under R.A. No. 7160. II. Whether or not the documents known as "Bilihan ng Lupa" are valid and enforceable, thus, they can be the bases of the respondents spouses Lumbao‘s action for reconveyance with damages. III. Whether or not herein petitioners are legally bound to comply with the "Bilihan ng Lupa" dated 17 August 1979 and 9 January 1981 and consequently, reconvey the subject property to herein respondents spouses Lumbao. It is well-settled that in the exercise of the Supreme Court‘s power of review, the court is not a trier of facts and does not normally undertake the re-examination of the evidence presented by the contending parties during the trial of the case considering that the findings of fact of the Court of Appeals are conclusive and binding on the Court.13 But, the rule is not without exceptions. There are several recognized exceptions14 in which factual issues may be resolved by this Court. One of these exceptions is when the findings of the appellate court are contrary to those of the trial court. This exception is present in the case at bar. Going to the first issue presented in this case, it is the argument of the petitioners that the Complaint for Reconveyance with Damages filed by respondents Spouses Lumbao should be dismissed for failure to comply with the barangay conciliation proceedings as mandated by the Revised Katarungang Pambarangay Law under Republic Act No. 7160. This argument cannot be sustained. Section 408 of the aforesaid law and Administrative Circular No. 14-9315 provide that all disputes between parties actually residing in the same city or municipality are subject to barangay conciliation. A prior recourse thereto is a pre-condition before filing a complaint in court or any government offices. Non-compliance with the said condition precedent could affect the sufficiency of the plaintiff‘s cause

of action and make his complaint vulnerable to dismissal on ground of lack of cause of action or prematurity; but the same would not prevent a court of competent jurisdiction from exercising its power of adjudication over the case before it, where the defendants failed to object to such exercise of jurisdiction.16 While it is true that the present case should first be referred to the Barangay Lupon for conciliation because the parties involved herein actually reside in the same city (Pasig City) and the dispute between them involves a real property, hence, the said dispute should have been brought in the city in which the real property, subject matter of the controversy, is located, which happens to be the same city where the contending parties reside. In the event that respondents Spouses Lumbao failed to comply with the said condition precedent, their Complaint for Reconveyance with Damages can be dismissed. In this case, however, respondents Spouses Lumbao‘s non-compliance with the aforesaid condition precedent cannot be considered fatal. Although petitioners alleged in their answer that the Complaint for Reconveyance with Damages filed by respondents spouses Lumbao should be dismissed for their failure to comply with the condition precedent, which in effect, made the complaint prematurely instituted and the trial court acquired no jurisdiction to hear the case, yet, they did not file a Motion to Dismiss the said complaint. Emphasis must be given to the fact that the petitioners could have prevented the trial court from exercising jurisdiction over the case had they filed a Motion to Dismiss. However, instead of doing so, they invoked the very same jurisdiction by filing an answer seeking an affirmative relief from it. Worse, petitioners actively participated in the trial of the case by presenting their own witness and by cross-examining the witnesses presented by the respondents Spouses Lumbao. It is elementary that the active participation of a party in a case pending against him before a court is tantamount to recognition of that court‘s jurisdiction and a willingness to abide by the resolution of the case which will bar said party from later on impugning the court‘s jurisdiction.17 It is also well-settled that the non-referral of a case for barangay conciliation when so required under the law is not jurisdictional in nature and may therefore be deemed waived if not raised seasonably in a motion to dismiss.18 Hence, herein petitioners can no longer raise the defense of non-compliance with the barangay conciliation proceedings to seek the dismissal of the complaint filed by the respondents Spouses Lumbao, because they already waived the said defense when they failed to file a Motion to Dismiss. As regards the second issue, petitioners maintain that the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981 are null and void for being falsified documents as it is made to appear that petitioners Virgilio and Tadeo were present in the execution of the said documents and that the identities of the properties in those documents in relation to the subject property has not been established by the evidence of the respondents Spouses Lumbao. Petitioners also claim that the enforceability of those documents is barred by prescription of action and laches. It is the petitioners‘ incessant barking that the "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981 were falsified because it was made to appear that petitioners Virgilio and Tadeo were present in the executions thereof, and their allegation that even respondents Spouses Lumbao‘s witness Carolina Morales proved that said petitioners were not present during the execution of the aforementioned documents. This is specious. Upon examination of the aforesaid documents, this Court finds that in the "Bilihan ng Lupa," dated 17 August 1979, the signatures of petitioners Virgilio and Tadeo appeared thereon. Moreover, in petitioners‘ Answer and Amended Answer to the Complaint for Reconveyance with Damages, both petitioners Virgilio and Tadeo made an admission that indeed they acted as witnesses in the execution of the "Bilihan ng Lupa," dated 17 August 1979.19However, in order to avoid their obligations in the said "Bilihan ng Lupa," petitioner Virgilio, in his cross-examination, denied having knowledge of the sale transaction and claimed that he could not remember the same as well as his appearance before the notary public due to the length of time that had passed. Noticeably, petitioner Virgilio did not categorically deny having signed the "Bilihan ng Lupa," dated 17 August 1979 and in support thereof, his testimony in the cross-examination propounded by the counsel of the respondents Spouses Lumbao is quoted hereunder:

ATTY. CHIU: Q. Now, you said, Mr. Witness…Virgilio Santos, that you don‘t know about this document which was marked as Exhibit "A" for the [respondents spouses Lumbao]? ATTY. BUGARING: The question is misleading, your Honor. Counsel premised the question that he does not have any knowledge but not that he does not know. ATTY. CHIU: Q. Being… you are one of the witnesses of this document? [I]s it not? WITNESS: A. No, sir. Q. I am showing to you this document, there is a signature at the left hand margin of this document Virgilio Santos, will you please go over the same and tell the court whose signature is this? A. I don‘t remember, sir, because of the length of time that had passed. Q. But that is your signature? A. I don‘t have eyeglasses… My signature is different. Q. You never appeared before this notary public Apolinario Mangahas? A. I don‘t remember.20 As a general rule, facts alleged in a party‘s pleading are deemed admissions of that party and are binding upon him, but this is not an absolute and inflexible rule. An answer is a mere statement of fact which the party filing it expects to prove, but it is not evidence.21 And in spite of the presence of judicial admissions in a party‘s pleading, the trial court is still given leeway to consider other evidence presented.22 However, in the case at bar, as the Court of Appeals mentioned in its Decision, "[herein petitioners] had not adduced any other evidence to override the admission made in their [A]nswer that [petitioners Virgilio and Tadeo] actually signed the [Bilihan ng Lupa dated 17 August 1979] except that they were just misled as to the purpose of the document, x x x."23 Virgilio‘s answers were unsure and quibbled. Hence, the general rule that the admissions made by a party in a pleading are binding and conclusive upon him applies in this case. On the testimony of respondents Spouses Lumbao‘s witness Carolina Morales, this Court adopts the findings made by the appellate court. Thus - [T]he trial court gave singular focus on her reply to a question during cross-examination if the [petitioners Virgilio and Tadeo] were not with her and the vendor [Rita] during the transaction. It must be pointed out that earlier in the direct examination of said witness, she confirmed that [respondents spouses Lumbao] actually bought the lot from [Rita] ("nagkabilihan"). Said witness positively identified and confirmed the two (2) documents evidencing the sale in favor of [respondents spouse Lumbao]. Thus, her subsequent statement that the [petitioners Virgilio and Tadeo] were not with them during the transaction does not automatically imply that [petitioners Virgilio and Tadeo] did not at any time sign as witnesses as to the deed of sale attesting to their mother‘s voluntary act of selling a portion of her share in her deceased mother‘s property. The rule is that testimony of a witness must be considered and calibrated in its entirety and not by truncated portions thereof or isolated passages therein.24 Furthermore, both "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981 were duly notarized before a notary public. It is well-settled that a document acknowledged before a notary public is a public document25 that enjoys the presumption of regularity. It is a prima facie evidence of the truth of the facts stated therein and a conclusive presumption of its existence and due execution.26 To overcome this presumption, there must be presented evidence that is clear and convincing. Absent such evidence, the presumption must be upheld.27 In addition, one who denies the due execution of a deed where one‘s signature appears has the burden of proving that contrary to the recital in the jurat, one never appeared before the notary public and acknowledged the deed to be a voluntary act. Nonetheless, in the present case petitioners‘ denials without clear and convincing evidence to support their claim of fraud and falsity were not sufficient to overthrow the above-mentioned presumption; hence, the authenticity, due execution and the truth of the facts stated in the aforesaid "Bilihan ng Lupa" are upheld.

The defense of petitioners that the identities of the properties described in the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981 in relation to the subject property were not established by respondents Spouses Lumbao‘s evidence is likewise not acceptable. It is noteworthy that at the time of the execution of the documents denominated as "Bilihan ng Lupa," the entire property owned by Maria, the mother of Rita, was not yet divided among her and her co-heirs and so the description of the entire estate is the only description that can be placed in the "Bilihan ng Lupa, dated 17 August 1979 and 9 January 1981" because the exact metes and bounds of the subject property sold to respondents Spouses Lumbao could not be possibly determined at that time. Nevertheless, that does not make the contract of sale between Rita and respondents Spouses Lumbao invalid because both the law and jurisprudence have categorically held that even while an estate remains undivided, co-owners have each full ownership of their respective aliquots or undivided shares and may therefore alienate, assign or mortgage them.28 The co-owner, however, has no right to sell or alienate a specific or determinate part of the thing owned in common, because such right over the thing is represented by an aliquot or ideal portion without any physical division. In any case, the mere fact that the deed purports to transfer a concrete portion does not per se render the sale void. The sale is valid, but only with respect to the aliquot share of the selling co-owner. Furthermore, the sale is subject to the results of the partition upon the termination of the co-ownership.29 In the case at bar, when the estate left by Maria had been partitioned on 2 May 1986 by virtue of a Deed of Extrajudicial Settlement, the 107- square meter lot sold by the mother of the petitioners to respondents Spouses Lumbao should be deducted from the total lot, inherited by them in representation of their deceased mother, which in this case measures 467 square meters. The 107-square meter lot already sold to respondents Spouses Lumbao can no longer be inherited by the petitioners because the same was no longer part of their inheritance as it was already sold during the lifetime of their mother. Likewise, the fact that the property mentioned in the two "Bilihan ng Lupa" documents was described as "a portion of a parcel of land covered in Tax Declarations No. A-018-01674," while the subject matter of the Deed of Extrajudicial Settlement was the property described in Transfer Certificate of Title (TCT) No. 3216 of the Registry of Deeds of the Province of Rizal in the name of Maria is of no moment because in the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981, it is clear that there was only one estate left by Maria upon her death. And this fact was not refuted by the petitioners. Besides, the property described in Tax Declaration No. A-018-01674 and the property mentioned in TCT No. 3216 are both located in Barrio Rosario, Municipality of Pasig, Province of Rizal, and almost have the same boundaries. It is, thus, safe to state that the property mentioned in Tax Declaration No. A-018-01674 and in TCT No. 3216 are one and the same. The defense of prescription of action and laches is likewise unjustifiable. In an action for reconveyance, the decree of registration is respected as incontrovertible. What is sought instead is the transfer of the property or its title which has been wrongfully or erroneously registered in another person‘s name to its rightful or legal owner, or to the one with a better right. It is, indeed, true that the right to seek reconveyance of registered property is not absolute because it is subject to extinctive prescription. However, when the plaintiff is in possession of the land to be reconveyed, prescription cannot set in. Such an exception is based on the theory that registration proceedings could not be used as a shield for fraud or for enriching a person at the expense of another.30 In the case at bar, the right of the respondents Spouses Lumbao to seek reconveyance does not prescribe because the latter have been and are still in actual possession and occupation as owners of the property sought to be reconveyed, which fact has not been refuted nor denied by the petitioners. Furthermore, respondents Spouses Lumbao cannot be held guilty of laches because from the very start that they bought the 107-square meter lot from the mother of the petitioners, they have constantly asked for the transfer of the certificate of title into their names but Rita, during her lifetime, and the petitioners, after the death of Rita, failed to do so on the flimsy excuse that the lot had not been partitioned yet. Inexplicably, after the partition of the entire estate of Maria, petitioners still

included the 107-square meter lot in their inheritance which they divided among themselves despite their knowledge of the contracts of sale between their mother and the respondents Spouses Lumbao. Under the above premises, this Court holds that the "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981 are valid and enforceable and can be made the basis of the respondents Spouses Lumbao‘s action for reconveyance. The failure of respondents Spouses Lumbao to have the said documents registered does not affect its validity and enforceability. It must be remembered that registration is not a requirement for validity of the contract as between the parties, for the effect of registration serves chiefly to bind third persons. The principal purpose of registration is merely to notify other persons not parties to a contract that a transaction involving the property had been entered into. Where the party has knowledge of a prior existing interest which is unregistered at the time he acquired a right to the same land, his knowledge of that prior unregistered interest has the effect of registration as to him.31 Hence, the "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981, being valid and enforceable, herein petitioners are bound to comply with their provisions. In short, such documents are absolutely valid between and among the parties thereto. Finally, the general rule that heirs are bound by contracts entered into by their predecessors-in-interest applies in the present case. Article 131132 of the NCC is the basis of this rule. It is clear from the said provision that whatever rights and obligations the decedent have over the property were transmitted to the heirs by way of succession, a mode of acquiring the property, rights and obligations of the decedent to the extent of the value of the inheritance of the heirs.33 Thus, the heirs cannot escape the legal consequence of a transaction entered into by their predecessor-in-interest because they have inherited the property subject to the liability affecting their common ancestor. Being heirs, there is privity of interest between them and their deceased mother. They only succeed to what rights their mother had and what is valid and binding against her is also valid and binding as against them. The death of a party does not excuse nonperformance of a contract which involves a property right and the rights and obligations thereunder pass to the personal representatives of the deceased. Similarly, nonperformance is not excused by the death of the party when the other party has a property interest in the subject matter of the contract.34 In the end, despite the death of the petitioners‘ mother, they are still bound to comply with the provisions of the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981. Consequently, they must reconvey to herein respondents Spouses Lumbao the 107-square meter lot which they bought from Rita, petitioners‘ mother. And as correctly ruled by the appellate court, petitioners must pay respondents Spouses Lumbao attorney‘s fees and litigation expenses for having been compelled to litigate and incur expenses to protect their interest.35 On this matter, we do not find reasons to reverse the said findings. WHEREFORE, premises considered, the instant Petition is hereby DENIED. The Decision and Resolution of the Court of Appeals dated 8 June 2005 and 29 July 2005, respectively, are hereby AFFIRMED. Herein petitioners are ordered to reconvey to respondents Spouses Lumbao the subject property and to pay the latter attorney‘s fees and litigation expenses. Costs against petitioners. G.R. No. 146195 November 18, 2004 AVELINA ZAMORA et al vs. HEIRS of CARMEN IZQUIERDO. Before us is a petition for review on certiorari1 assailing the Decision2 of the Court of Appeals dated September 12, 2000 and its Resolution dated December 1, 2000 in CA-G.R. SP No. 54541, entitled "Avelina Zamora, et al., petitioners, versus Heirs of Carmen Izquierdo, represented by the executrix, Anita F. Punzalan, respondents." The records show that sometime in 1973, Carmen Izquierdo and Pablo Zamora entered into a verbal stipulation whereby the former leased to the latter one of her apartment units located at 117-B General Luna Street, Caloocan City. They agreed on the following: the rental is P3,000.00 per month; the leased premises is only for residence; and only a single family is allowed to occupy it.

After the death of Carmen (lessor) in 1996 her attorney-in-fact, Anita Punzalan, representing the heirs, herein respondents, prepared a new contract of lease wherein the rental was increased from P3,000.00 to P3,600.00 per month.3 However, petitioners refused to sign it. In January 1997, Pablo (lessee) died. His wife, Avelina Zamora, and their children (two of whom have their own families), herein petitioners, continued to reside in the apartment unit. However, they refused to pay the increased rental and persisted in operating a photocopying business in the same apartment. Meanwhile, petitioner Avelina Zamora applied with the Metropolitan Waterworks & Sewerage System (MWSS) for a water line installation in the premises. Since a written consent from the owner is required for such installation, she requested respondents' attorney-in-fact to issue it. However, the latter declined because petitioners refused to pay the new rental rate and violated the restrictions on the use of the premises by using a portion thereof for photocopying business and allowing three families to reside therein. This prompted petitioner Avelina Zamora to file with the Office of the Punong Barangay of Barangay 16, Sona 2, District I, Lungsod ng Caloocan, a complaint against Anita Punzalan (respondents' attorney-in-fact), docketed as "Usaping Bgy. Blg. 1-27-97, Ukol sa: Hindi Pagbibigay ng Pahintulot sa Pagpapakabit ng Tubig." On August 24, 1997, during the barangay conciliation proceedings, petitioner Avelina Zamora declared that she refused to sign the new lease contract because she is not agreeable with the conditions specified therein. The following day, Anita Punzalan sent Avelina a letter4 informing her that the lease is being terminated and demanding that petitioners vacate the premises within 30 days from notice. Despite several barangay conciliation sessions, the parties failed to settle their dispute amicably. Hence, the Barangay Chairman issued a Certification to File Action dated September 14, 1997.5 Consequently, on October 2, 1997, respondents, represented by Anita Punzalan, filed with the Metropolitan Trial Court (MTC), Branch 49, Caloocan City, a complaint for unlawful detainer and damages against petitioners, docketed as Civil Case No. 23702.6 Forthwith, petitioners filed a motion to dismiss7 the complaint on the ground that the controversy was not referred to the barangay for conciliation. First, they alleged that the barangay Certification to File Action "is fatally defective" because it pertains to another dispute, i.e., the refusal by respondents' attorney-in-fact to give her written consent to petitioners' request for installation of water facilities in the premises. And, second, when the parties failed to reach an amicable settlement before the Lupong Tagapamayapa, the Punong Barangay (as Lupon Chairman), did not constitute the Pangkat ng Tagapagkasundo before whom mediation or arbitration proceedings should have been conducted, in violation of Section 410(b), Chapter 7 (Katarungang Pambarangay), Title One, Book III of Republic Act No. 71608 (otherwise known as the Local Government Code of 1991), which reads: "SECTION 410. Procedure for Amicable Settlement.– (a) x x x (b) Mediation by lupon chairman – Upon receipt of the complaint, the lupon chairman9 shall, within the next working day, summon the respondent(s), with notice to the complainant(s) for them and their witnesses to appear before him for a mediation of their conflicting interests. If he fails in his mediation effort within fifteen (15) days from the first meeting of the parties before him, he shall forthwith set a date for the constitution of the pangkat in accordance with the provisions of this Chapter." (Underscoring supplied) Respondents opposed the motion to dismiss,10 the same being prohibited under Section 19 of the 1991 Revised Rule on Summary Procedure. They prayed that judgment be rendered as may be warranted by the facts alleged in the complaint, pursuant to Section 611 of the same Rule. On July 9, 1998, the MTC issued an Order12 denying petitioners' motion to dismiss and considering the case submitted for decision in view of their failure to file their answer to the complaint. Petitioners filed a motion for reconsideration,13 contending that a motion to dismiss the complaint on the ground of failure to refer the complaint to the Lupon for conciliation is allowed under Section 19 of the 1991 Revised Rule on Summary Procedure, which partly provides:

"SEC. 19. Prohibited pleadings and motions. – The following pleadings, motions, or petitions shall not be allowed in the cases covered by this Rule: (a) Motion to dismiss the complaint or to quash the complaint or information except on the ground of lack of jurisdiction over the subject matter, or failure to comply with the preceding section [referring to Section 18 on referral of the complaint to the Lupon for conciliation]; x x x." On August 26, 1998, the MTC rendered a Judgment14 in favor of respondents and against petitioners, the dispositive portion of which reads: "WHEREFORE, Judgment is hereby rendered in favor of the plaintiff and against the defendants, ordering defendants and all persons claiming right under them: 1) To vacate the leased premises located at No. 117-B General Luna Street, Caloocan City and to surrender possession thereof to the plaintiff; 2) To pay the amount of three thousand six hundred (P3,600.00) pesos per month starting January, 1997 until the premises being occupied by them is finally vacated and possession thereof is restored to the plaintiff; 3) To pay plaintiff the sum of five thousand (P5,000.00) pesos as and for attorney's fees; and 4) To pay the costs of this suit. SO ORDERED." On appeal, the Regional Trial Court (RTC), Branch 125, Caloocan City, rendered its Decision15 dated February 15, 1999 affirming the MTC Judgment. Subsequently, it denied petitioners' motion for reconsideration.16 Petitioners then filed with the Court of Appeals a petition for review, docketed as CA-G.R. SP No. 54541. On September 12, 2000, it rendered a Decision17 affirming the RTC Decision. Thereafter, petitioners filed a motion for reconsideration but was denied by the Appellate Court in its Resolution dated December 1, 2000.18 Hence, the instant petition. I The primordial objective of Presidential Decree No. 1508 (the Katarungang Pambarangay Law), now included under R.A. No. 7160 (the Local Government Code of 1991), is to reduce the number of court litigations and prevent the deterioration of the quality of justice which has been brought about by the indiscriminate filing of cases in the courts.19 To attain this objective, Section 412(a) of R.A. No. 7160 requires the parties to undergo a conciliation process before the Lupon Chairman or the Pangkat as a precondition to filing a complaint in court, thus: "SECTION 412. Conciliation. – (a) Pre-condition to Filing of Complaint in Court.– No complaint, petition, action, or proceeding involving any matter within the authority of the lupon shall be filed or instituted directly in court or any other government office for adjudication, unless there has been a confrontation between the parties before the lupon chairman or the pangkat, and that no conciliation or settlement has been reached as certified by the lupon or pangkat secretary and attested to by the lupon or pangkat chairman x x x." (Underscoring supplied) In the case at bar, the Punong Barangay, as Chairman of the Lupong Tagapamayapa, conducted conciliation proceedings to resolve the dispute between the parties herein. Contrary to petitioners' contention, the complaint does not only allege, as a cause of action, the refusal of respondents' attorney-in-fact to give her consent to the installation of water facilities in the premises, but also petitioners' violation of the terms of the lease, specifically their use of a portion therein for their photocopying business and their failure to pay the increased rental. As correctly found by the RTC: "The records show that confrontations before the barangay chairman were held on January 26, 1997, February 9, 1997, February 23, 1997, February 28, 1997, July 27, 1997, August 3, 1997, August 10, 1997, August 17, 1997 and August 24, 1997 wherein not only the issue of water installation was discussed but also the terms of the lease and the proposed execution of a written contract relative thereto. It appears, however, that no settlement was reached despite a total of nine meetings at the barangay level.

It is of no moment that the complaint was initially made by defendant-appellant Avelina Zamora because herein plaintiff-appellee was given by the Sangguniang Barangay the authority to bring her grievance to the Court for resolution. While it is true that the Sertifikasyon dated September 14, 1997 is entitled 'Ukol Sa Hindi Pagbibigay Ng Pahintulot Sa Pagpapakabit Ng Tubig', this title must not prevail over the actual issues discussed in the proceedings. Hence, to require another confrontation at the barangay level as a sine qua non for the filing of the instant case would not serve any useful purpose anymore since no new issues would be raised therein and the parties have proven so many times in the past that they cannot get to settle their differences amicably."20 We cannot sustain petitioners' contention that the Lupon conciliation alone, without the proceeding before the Pangkat ng Tagapagkasundo, contravenes the law on Katarungang Pambarangay. Section 412(a) of R.A. No. 7160, quoted earlier, clearly provides that, as a precondition to filing a complaint in court, the parties shall go through the conciliation process either before the Lupon Chairman (as what happened in the present case), or the Pangkat. Moreover, in Diu vs. Court of Appeals,21 we held that "notwithstanding the mandate in Section 410(b) of R.A. No. 7160 that the Barangay Chairman shall constitute a Pangkat if he fails in his mediation efforts," the same "Section 410(b) should be construed together with Section 412(a) of the same law (quoted earlier), as well as the circumstances obtaining in and peculiar to the case." Here, while the Pangkat was not constituted, however, the parties met nine (9) times at the Office of the Barangay Chairman for conciliation wherein not only the issue of water installation was discussed but also petitioners' violation of the lease contract. It is thus manifest that there was substantial compliance with the law which does not require strict adherence thereto.22 II We hold that petitioners' motion to dismiss the complaint for unlawful detainer is proscribed by Section 19(a) of the 1991 Revised Rule on Summary Procedure, quoted earlier. Section 19(a) permits the filing of such pleading only when the ground for dismissal of the complaint is anchored on lack of jurisdiction over the subject matter, or failure by the complainant to refer the subject matter of his/her complaint "to the Lupon for conciliation" prior to its filing with the court. This is clear from the provisions of Section 18 of the same Rule, which reads: "SEC. 18. Referral to Lupon. – Cases requiring referral to the Lupon for conciliation under the provisions of Presidential Decree No. 1508 where there is no showing of compliance with such requirement, shall be dismissed without prejudice, and may be revived only after such requirement shall have been complied with. This provision shall not apply to criminal cases where the accused was arrested without a warrant." (Underscoring supplied) As discussed earlier, the case was referred to the Lupon Chairman for conciliation. Obviously, petitioners' motion to dismiss, even if allowed, is bereft of merit. WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 54541 sustaining the Decision of the RTC which upheld the MTC Judgment is AFFIRMED. Costs against petitioners. G.R. No. 111915 September 30, 1999 LIWAYWAY VINZONS-CHATO, vs. COURT OF APPEALS and MENA EDORIA GONZAGA-REYES, J.: Before us is a Petition for Review on Certiorari seeking the reversal of the January 27, 1993 1 Decision and September 10, 1993 2 Resolution of the Court of appeals 3 in CA-G.R. SP No. 23948. The Court of Appeals (CA) set aside the Decision 4 of the Regional Trial Court (RTC) of Daet, Camarines Norte in Civil Case No. 5832, affirming that of the Municipal Trial Court (MTC) in Civil Case No. 2137 5, which ordered the ejectment of herein private respondent. The factual antecedents of this case are:

Petitioners Heirs of Vinzons are co-owners of a parcel of land in Barangay 5, Daet, of which a portion measuring 148.5 square meters is being occupied by respondent Mena Edoria as lessee since 1951. Respondent built thereon a residential house worth P40,000.00. He started paying a monthly rent of P4.00 which by 1986 had reached P13.00. Sometime in 1986, an ejectment suit was filed by petitioners several others also occupying the same lot owned by them, docketed as Civil Case No. 1923, on the ground, among others, of non-payment of rentals. After trial, however, the case was dismissed on the finding that respondent was not in arrears but was even advance in his rental payments. Both petitioner and respondent appealed from said decision to the Regional Trial Court. Sometime in 1988, while the aforesaid Case No. 1923 was pending appeal before the RTC, petitioner filed another ejectment suit, docketed as Civil Case No. 2061, against respondent and thirty-nine (39) others alleging that said defendants refused to enter into an agreement with them as tenants-lessees and refused to pay the increased rent of P1.00 per square meter per month. Respondent resisted the claim alleging, among others, lack of cause of action and pendency of the earlier ejectment case. The trial court rendered its decision dismissing the case against respondent in view of the pendency of Civil Case No. 1923 on appeal. This decision was again elevated to the RTC. While Civil Case No. 2061 was pending appeal in the RTC, petitioners again filed the instant suit for ejectment docketed as Civil Case No. 2137 on the following grounds: (a) expiration of lease contract as of 1984; (b) refusal to sign written renewal of contract of lease; and (c) non-payment of rent for one (1) year and ten (10) months. In his answer, respondent sought dismissal of the complaint on the following grounds; (a) it did not pass through barangay conciliation; (b) no prior demand was made or if there was such a demand, it was made more than one year prior to the filing of the case; (c) there was no cause of action as it was in violation of PD 20 and BP Blg. 25; (d) the case is barred by prior judgment; and (e) there is still pending appeal a similar case between the parties, Civil Case No. 2061. After trial, the MTC of Daet rendered its decision ordering respondent to vacate the premises and pay the accrued rentals. On appeal to the RTC, the said decision was affirmed in toto. The CA, however, reversed the two (2) earlier decisions by dismissing the complaint on the ground of litis pendentia, failure to comply with the Katarungang Pambarangay Law (PD 1508); and lack of evidence of prior demand to vacate before instituting the complaint. Hence, this petition on the following grounds: THAT THE COURT OF APPEALS ERRED IN REVERSING THE DECISION OF THE REGIONAL TRIAL COURT OF CAMARINES NORTE IN A WAY NOT IN ACCORD WITH LAW AND JURISPRUDENCE. THAT THE COURT OF APPEALS ERRED IN DENYING THE MOTION FOR RECONSIDERATION UPON THE GROUND THAT THE GROUNDS THEREIN AVERRED HAD ALREADY BEEN PASSED UPON IN ITS DECISION. 6 Petitioners argue that the CA was duty-bound, under the rules and jurisprudence, to give weight to the findings of fact of the MTC since the same had already been affirmed in toto by the RTC. Further, it is argued that the action is not barred by prior judgment and the principle of litis pendentia does not apply; that the petitioners complied with the requirements of PD 1508; and that demand to vacate is not necessary for judicial action in case of expiration of the lease contract. The petition is devoid of merit, we find that the MTC had improperly assumed jurisdiction over the ejectment suit. First, this case being one of unlawful detainer, it must have been filed within one year from the date of last demand with the Municipal Trial Court, otherwise it is an accion publiciana cognizable by the Regional Trial Court.7 The rule is that the one-year period provided for in Section 1, Rule 70 of the Rules of Court 8 within which a complaint for unlawful detainer can be filed should be counted from the last letter of demand to vacate. 9 Accion publiciana is the plenary action to recover the right of possession when dispossession has lasted for more than one year. 10 There is no question that the petitioners' dispossession has lasted for more than one year. In their Complaint and Position paper, petitioners alleged that the lease contract expired in 1984 11; that

thereafter, private respondent became a lessee on a month-to-month basis 12; and that before the filing of Civil Cases Nos. 1908, 1923 and 2061, demand to vacate had already been made to defendant. 13 Since Civil Case No. 1908 was instituted in 1986; Civil Case No. 1923 in 1986; and Civil Case No. 2061 in April 1988, the alleged demands to vacate to abort an implied renewal of the lease on a month-to-month basis were made between 1986 and 1988, the last one, before April 1988. Verily, the instant Complaint for ejectment filed by petitioner in October 1989, was filed more than one year from the termination of the month-to-month lease some time before April 1988. It is well-established that what determines the nature of an action and correspondingly the court which has jurisdiction over it is the allegation made by the plaintiff in his complaint. 14 Second, the challenged decision correctly dismissed the case for failure of the plaintiffs, the petitioners herein, to avail of the barangay conciliation process under PD 1508, preliminary to judicial recourse. The Court of Appeals had found that "there is no clear showing that it was brought before the Barangay Lupon or Pangkat of Barangay 5, Daet, Camarines Norte, where the parties reside and the property subject of the case is situated, as there is no barangay certification to file action attached to the complaint. 15 Paraphrasing Peñaflor vs. Panis 16, "the Lupong Barangay is with jurisdiction under PD 1508 to pass upon an ejectment controversy where the parties are residents in the same barangay or in barangays within the same city or in barangays adjoining each other." It is clearly averred in the Complaint that herein petitioners, then represented by the widow of the late Fernando Vinzons, resided in the same barangay, hence, covered by the said law. In Royales vs. Intermediate Appellate Court 17, this Court ruled that "non-compliance with the condition precedent prescribed by PD 1508 could affect the sufficiency of the plaintiff's cause of action and make his complaint vulnerable to dismissal on the ground of lack of cause of action or prematurity." Defendants, private respondents herein, objected to the failure of the parties to undergo a confrontation at the barangay level in their answer and even during the entire proceedings a quo to no avail as the trial courts merely brushed aside this issue. Hence, the Court of Appeals had to rectify this error by the trial courts. In refutation of the said findings of the Court of Appeals, petitioners submit that "it is clear in the findings of fact of the MTC of Daet, as affirmed by the RTC of Daet that before the filing of Civil Cases Nos. 1908, 1923 and 2061, demand to vacate had already been made to the defendant after efforts to settle the controversy at the barangay level had failed." 18 This is not a factual finding of the MTC, but an allegation in petitioners' Complaint. As mentioned earlier, the MTC merely brushed aside the issue of non-recourse to barangay conciliation. This allegation in petitioners' Complaint that efforts to settle the controversy at the barangay level had failed in Civil Cases Nos. 1908, 1923 and 2061, does not constitute compliance with the requirements of PD 1508 for purposes of filing the Complaint in Civil Case No. 2137. Section 6 of PD 1508 insofar as pertinent provides: 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 . . . . Referral to the Lupon Chairman or the Pangkat should be made prior to the filing of the ejectment case under PD 1508. Legal action for ejectment is barred when there is non-recourse to barangay court. 19 The Complaint for unlawful detainer, docketed as Civil Case No. 2137, should have been coursed first to the barangay court. Petitioners cannot rely on the barangay conciliation proceedings held in the other cases and consider the same as compliance with the law. Third, petitioners rely heavily on the general rule that findings of trial courts deserve to be respected and affirmed by appellate courts. Almost as well-recognized as the general rule is the exception that the factual findings of the trial court may nonetheless be reversed by the Court of Appeals if by the evidence on record or the lack of it, it appears that the trial court erred. 20 Considering that the trial courts and the Court of Appeals arrived at different factual findings, we have reviewed the evidence on record and have found as aforesaid, the improper assumption by the MTC of the case due to non-recourse to barangay conciliation and the lapse of the one-year period for bringing the case for unlawful detainer.

Having arrived at the above conclusion, the Court finds no need to discuss the other issues, specifically, those bearing on the application of the principles of litis pendentia and/or res judicata. Moreover, the records of Civil Cases Nos. 1923 and 2061 are not before us to enable us to determine the presence of the elements thereof in the instant case. WHEREFORE, the instant petition is hereby DENIED, and the assailed decision of the Court of Appeals is hereby AFFIRMED. [G.R. No. 162084. June 28, 2005] APRIL MARTINEZ, FRITZ DANIEL MARTINEZ and MARIA OLIVIA MARTINEZ, petitioners, vs. RODOLFO G. MARTINEZ, respondent. This is a petition for review on certiorari of the Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No. 59420 setting aside and reversing the decision of the Regional Trial Court (RTC) of Manila, Branch 30, in Civil Case No. 00-96962 affirming, on appeal, the decision of the Metropolitan Trial Court (MTC) of Manila in Civil Case No. 164761 (CV) for ejectment. The Antecedents The spouses Daniel P. Martinez, Sr. and Natividad de Guzman-Martinez were the owners of a parcel of land identified as Lot 18-B-2 covered by Transfer Certificate of Title (TCT) No. 54334, as well as the house constructed thereon.[2] On March 6, 1993, Daniel, Sr. executed a Last Will and Testament[3] directing the subdivision of the property into three lots, namely, Lots 18-B-2-A, 18-B-2-B and 18-B-2-C. He then bequeathed the three lots to each of his sons, namely, Rodolfo, Manolo and Daniel, Jr.; Manolo was designated as the administrator of the estate. In May 1995, Daniel, Sr. suffered a stroke which resulted in the paralysis of the right side of his body. Natividad died on October 26, 1996.[4] Daniel, Sr. passed away on October 6, 1997.[5] On September 16, 1998, Rodolfo found a deed of sale purportedly signed by his father on September 15, 1996, where the latter appears to have sold Lot 18-B-2 to Manolo and his wife Lucila.[6] He also discovered that TCT No. 237936 was issued to the vendees based on the said deed of sale.[7] Rodolfo filed a complaint[8] for annulment of deed of sale and cancellation of TCT No. 237936 against his brother Manolo and his sister-in-law Lucila before the RTC. He also filed a criminal complaint for estafa through falsification of a public document in the Office of the City Prosecutor against Manolo, which was elevated to the Department of Justice.[9] On motion of the defendants, the RTC issued an Order[10] on March 29, 1999, dismissing the complaint for annulment of deed of sale on the ground that the trial court had no jurisdiction over the action since there was no allegation in the complaint that the last will of Daniel Martinez, Sr. had been admitted to probate. Rodolfo appealed the order to the CA.[11] On October 4, 1999, Rodolfo filed a Petition with the RTC of Manila for the probate of the last will of the deceased Daniel Martinez, Sr.[12] In the meantime, the spouses Manolo and Lucila Martinez wrote Rodolfo, demanding that he vacate the property. Rodolfo ignored the letter and refused to do so. This prompted the said spouses to file a complaint for unlawful detainer against Rodolfo in the MTC of Manila. They alleged that they were the owners of the property covered by TCT No. 237936, and that pursuant to Presidential Decree (P.D.) No. 1508, the matter was referred to the barangay for conciliation and settlement, but none was reached. They appended the certification to file action executed by the barangay chairman to the complaint. In his Answer[13] to the complaint filed on October 11, 1999, Rodolfo alleged, inter alia, that the complaint failed to state a condition precedent, namely, that earnest efforts for an amicable settlement of the matter between the parties had been exerted, but that none was reached. He also pointed out that the dispute had not been referred to the barangay before the complaint was filed. On October 20, 1999, the spouses Martinez filed an Amended Complaint in which they alleged that earnest efforts toward a settlement had been made, but that the same proved futile. Rodolfo filed his opposition thereto, on the ground that there was no motion for the admission of the amended complaint. The trial court failed to act on the matter.

The spouses Martinez alleged in their position paper that earnest efforts toward a compromise had been made and/or exerted by them, but that the same proved futile.[14] No amicable settlement was, likewise, reached by the parties during the preliminary conference because of irreconcilable differences. The MTC was, thus, impelled to terminate the conference.[15] On February 21, 2000, the trial court rendered judgment in favor of the spouses Martinez. The fallo of the decision reads: WHEREFORE, premises considered, judgment is rendered in favor of plaintiff. The defendant, including any person claiming right under him, is ordered: 1) To vacate the subject premises; 2) To pay plaintiff the sum of P10,000.00 a month starting July 17, 1999, the date of last demand until he vacates the same; 3) To pay the sum of P10,000.00 as and for attorneys fees; and 4) Costs of suit. SO ORDERED.[16] The trial court declared that the spouses Martinez had substantially complied with Article 151 of the Family Code of the Philippines[17] based on the allegations of the complaint and the appended certification to file action issued by the barangay captain. Rodolfo appealed the decision to the RTC. On May 31, 2000, the RTC rendered judgment affirming the appealed decision. He then filed a petition for review of the decision with the CA, alleging that: 1. THE RTC ERRED IN AFFIRMING THE DECISION OF THE MTC WHICH FOUND WITHOUT MERIT THE DEFENSE OF PETITIONER THAT THERE IS NO ALLEGATION IN THE COMPLAINT THAT PETITIONER HAS UNLAWFULLY WITHHELD POSSESSION OF THE PROPERTY FROM RESPONDENTS A REQUIREMENT IN [AN] UNLAWFUL DETAINER SUIT. 2. THE RTC ERRED IN AFFIRMING THE DECISION OF THE MTC WHICH FOUND THAT PETITIONERS POSSESSION OF THE PROPERTY IS BY MERE TOLERANCE OF RESPONDENTS. 3. THE RTC ERRED IN AFFIRMING THE DECISION OF THE MTC WHICH FOUND THAT THE RESPONDENTS HAVE A CAUSE OF ACTION. 4. THE RTC ERRED IN AFFIRMING THE DECISION OF THE MTC WHICH DID NOT RESOLVE THE SIXTH ISSUE, TO WIT, Whether or not this Court has jurisdiction over this case considering that the allegations in the complaint makes out a case of accion publiciana. 5. THE RTC ERRED IN AFFIRMING THE DECISION OF THE MTC WHICH HAS NO JURISDICTION OVER THE CASE. 6. THE RTC ERRED IN AFFIRMING THE DECISION OF THE MTC WHICH FOUND THAT THE MANDATORY REQUIREMENT OF CONCILIATION HAS BEEN COMPLIED WITH. 7. THE RTC ERRED IN AFFIRMING THE DECISION OF THE MTC WHICH FOUND THAT THERE WAS SUBSTANTIAL COMPLIANCE WITH THE KATARUNGANG PAMBARANGAY LAW. 8. THE RTC ERRED IN AFFIRMING THE DECISION OF THE MTC WHICH FOUND THAT THE PENDENCY OF CIVIL CASE NO. 98-91147 AND SPECIAL PROCEEDINGS NO. 99-95281, INVOLVING THE PETITIONER AND RESPONDENTS AND INVOLVING THE SAME PROPERTY DID NOT DIVEST THE MTC OF AUTHORITY TO DECIDE THE CASE. 9. THE RTC ERRED IN AFFIRMING THE DECISION OF THE MTC WHICH GRANTED THE RELIEF PRAYED FOR BY THE RESPONDENTS. 10. THE RTC ERRED IN AFFIRMING THE DECISION OF THE MTC.[18] On November 27, 2003, the CA rendered judgment granting the petition and reversing the decision of the RTC. The appellate court ruled that the spouses Martinez had failed to comply with Article 151 of the Family code. The CA also held that the defect in their complaint before the MTC was not cured by the filing of an amended complaint because the latter pleading was not admitted by the trial court. Upon the denial of their motion for reconsideration of the said decision, the spouses Martinez filed the present petition for review on certiorari, in which they raise the following issues: I.

WHETHER OR NOT THE CERTIFICATION TO FILE ACTION AND THE ALLEGATIONS IN THE COMPLAINT THAT THE CASE PASSED [THROUGH] THE BARANGAY BUT NO SETTLEMENT WAS REACHED, ARE SUFFICIENT COMPLIANCE TO PROVE THAT, INDEED, EARNEST EFFORTS WERE, IN FACT, MADE BUT THE SAME HAVE FAILED PRIOR TO THE FILING OF THE COMPLAINT. II. WHETHER OR NOT THE COURT OF APPEALS GRAVELY AND SERIOUSLY ERRED IN FINDING THAT THERE WAS NON-COMPLIANCE WITH THE REQUIREMENT PROVIDED FOR UNDER ARTICLE 151 OF THE FAMILY CODE, CONSIDERING THAT ONE OF THE PARTIES TO A SUIT IN THIS CASE IS NOT A MEMBER OF THE SAME FAMILY.[19] The petitioners alleged that they substantially complied with Article 151 of the Family Code, since they alleged the following in their original complaint: 2. In compliance with P.D. 1508, otherwise known as the Katarungang Pambarangay, this case passed [through] the Barangay and no settlement was forged between plaintiffs and defendant as a result of which Certification to File Action was issued by Barangay 97, Zone 8, District I, Tondo, Manila. xxx (Underscoring supplied)[20] Further, the petitioners averred, they alleged in their position paper that they had exerted earnest efforts towards a compromise which proved futile. They also point out that the MTC resolved to terminate the preliminary conference due to irreconcilable difference between the parties. Besides, even before they filed their original complaint, animosity already existed between them and the respondent due to the latters filing of civil and criminal cases against them; hence, the objective of an amicable settlement could not have been attained. Moreover, under Article 150 of the Family Code, petitioner Lucila Martinez had no familial relations with the respondent, being a mere sister-in-law. She was a stranger to the respondent; hence, there was no need for the petitioners[21] to comply with Article 151 of the Family Code. The petition is meritorious. Article 151 of the Family Code provides: Art. 151. No suit between members of the same family shall prosper unless it should appear from the verified complaint or petition that earnest efforts toward a compromise have been made, but that the same have failed. If it is shown that no such efforts were, in fact, made, the case must be dismissed. This rule shall not apply to cases which may not be the subject of compromise under the Civil Code. The phrase members of the family must be construed in relation to Article 150 of the Family Code, to wit: Art. 150. Family relations include those: (1) Between husband and wife; (2) Between parents and children; (3) Among other ascendants and descendants; and (4) Among brothers and sisters, whether of the full or half-blood. Article 151 of the Family code must be construed strictly, it being an exception to the general rule. Hence, a sister-in-law or brother-in-law is not included in the enumeration.[22] As pointed out by the Code Commission, it is difficult to imagine a sadder and more tragic spectacle than a litigation between members of the same family. It is necessary that every effort should be made toward a compromise before a litigation is allowed to breed hate and passion in the family and it is known that a lawsuit between close relatives generates deeper bitterness than between strangers.[23] Thus, a partys failure to comply with Article 151 of the Family Code before filing a complaint against a family member would render such complaint premature. In this case, the decision of the CA that the petitioners were mandated to comply with Article 151 of the Family code and that they failed to do so is erroneous. First. Petitioner Lucila Martinez, the respondents sister-in-law, was one of the plaintiffs in the MTC. The petitioner is not a member of the same family as that of her deceased husband and the respondent:

As regards plaintiffs failure to seek a compromise, as an alleged obstacle to the present case, Art. 222 of our Civil Code provides: No suit shall be filed or maintained between members of the same family unless it should appear that earnest efforts toward a compromise have been made, but that the same have failed, subject to the limitations in Article 2035. It is noteworthy that the impediment arising from this provision applies to suits filed or maintained between members of the same family. This phrase, members of the same family, should, however, be construed in the light of Art. 217 of the same Code, pursuant to which: Family relations shall include those: (1) Between husband and wife; (2) Between parent and child; (3) Among other ascendants and their descendants; (4) Among brothers and sisters. Mrs. Gayon is plaintiffs sister-in-law, whereas her children are his nephews and/or nieces. Inasmuch as none of them is included in the enumeration contained in said Art. 217 which should be construed strictly, it being an exception to the general rule and Silvestre Gayon must necessarily be excluded as party in the case at bar, it follows that the same does not come within the purview of Art. 222, and plaintiffs failure to seek a compromise before filing the complaint does not bar the same.[24] Second. The petitioners were able to comply with the requirements of Article 151 of the Family Code because they alleged in their complaint that they had initiated a proceeding against the respondent for unlawful detainer in the Katarungang Pambarangay, in compliance with P.D. No. 1508; and that, after due proceedings, no amicable settlement was arrived at, resulting in the barangay chairmans issuance of a certificate to file action.[25] The Court rules that such allegation in the complaint, as well as the certification to file action by the barangay chairman, is sufficient compliance with article 151 of the Family Code. It bears stressing that under Section 412(a) of Republic Act No. 7160, no complaint involving any matter within the authority of the Lupon shall be instituted or filed directly in court for adjudication unless there has been a confrontation between the parties and no settlement was reached.[26] IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No. 59420 is REVERSED AND SET ASIDE. The Decision of the Metropolitan Trial Court of Manila, as affirmed on appeal by the Regional Trial Court of Manila, Branch 30, in Civil Case No. 164761(CV) is REINSTATED. No costs. G.R. No. 149266 March 17, 2006 BENJAMIN AND ROSENDA ESPINO, vs. CARMITA LEGARDA Before us is a Petition for Review on Certiorari1 assailing the Decision2 of the Court of Appeals dated May 10, 2001 and its Resolution dated July 27, 2001 in CA-G.R. CV No. 54196, entitled "CARMITA LEGARDA, plaintiff-appellee, v. JAIME ABEJA, together with all persons claiming rights under him, defendant, BENJAMIN AND ROSENDA ESPINO, defendants-appellants." On August 1, 1986, Carmita Legarda, respondent, filed with the Regional Trial Court, Manila, three separate complaints3 for accion publiciana4 against Benjamin Espino, Rosenda Espino, petitioners, and Jaime Abeja. Respondent alleged that she is the owner of three lots5 situated on Altura St., Sta. Mesa, Manila. Petitioners clandestinely entered the premises and constructed their houses thereon without the knowledge and consent of her late father, Benito F. Legarda. Despite demand, petitioners refused to vacate the premises and remove their improvements. Respondent reported the matter to Barangay Chairman Epifania Atienza, but petitioners ignored the summonses issued to them. Respondent prayed that petitioners be ordered to vacate the lots and to pay reasonable compensation for the use and occupancy of the premises. In their separate Answers, petitioners alleged that they cannot be evicted because the lots are covered by the Urban Land Reform Act and, therefore, they have priority to buy the lots; that the

complaints failed to allege the dates of respondent‘s demands to vacate; and that respondent did not resort to conciliation proceedings before the barangay prior to the filing of the complaints. After the trial, the lower court rendered a Decision against petitioners, ordering them to vacate the lots and deliver possession thereof to respondent, remove all improvements constructed thereon, and pay reasonable compensation for the use and occupancy of the premises. Aggrieved, petitioners, with the exception of Abeja, interposed their joint appeal to the Court of Appeals. On May 10, 2001, the Appellate Court promulgated its assailed Decision affirming in toto the Decision6 of the lower court, holding that: Defendants-appellants vigorously assert that the case did not undergo conciliation proceedings in violation of the provisions of Presidential Decree No. 1508 or the Katarungang Pambarangay Law. However, plaintiff-appellee presented as evidence a Certification from Barangay Chairman Epifania Atienza to prove otherwise. Hence, the act of the barangay chairman in issuing the Certification enjoys the presumption that his official duty has been regularly performed, absent any evidence to the contrary. Further, the defendants-appellants did not object to the presentation of the Certification. Neither did they question said Certification. Petitioners filed a Motion for Reconsideration but was denied by the Court of Appeals on July 27, 2001.7 Hence, this Petition for Review on Certiorari. The main issue for our resolution is whether respondent complied with the Katarungang Pambarangay Law8providing for a conciliation before any complaint, petition, action or proceeding involving any matter within the authority of the Lupon of the barangay shall be filed or instituted in court. Petitioners contend that while it is true that the complaints alleged that the barangay chairman issued a Certification to File Action (attached to the complaints), however, it was not identified or marked, and worst, not offered as evidence during the trial. Upon the other hand, respondent maintains that the Certification need not be formally offered in evidence since it was deemed admitted by petitioners when they failed to deny the same under oath in their Answer. We agree with respondent. Records show that respondent referred the dispute to the barangay for conciliation proceedings prior to the filing of the complaints with the lower court. In fact the Certification to File Action9 dated June 21, 1985 states: This is to certify that the undersigned, in her capacity as Barangay Chairman of Barangay No. 581, Zone 57, Sampaloc, Manila, exerted efforts within the last twelve (12) months to bring to an amicable settlement the controversy between Miss CARMITA LEGARDA of 1011 R. Hidalgo, Quiapo, Manila and Mrs. ROSENDA ESPINO of 618 Altura Street, Sampaloc, Manila, Mr. BENJAMIN ESPINO, also of 618 Altura Street, Sampaloc, Manila, and Mr. JAIME ABEJA of 620 Altura Street, Sampaloc, Manila, in respect to the occupancy of the three (3) last named persons of Miss LEGARDA‘s property which makes up the sites of the houses of said persons. Nevertheless, no such settlement took place or was possible in view of the repeated refusal of the same persons to meet with Miss LEGARDA or her personal representative, Mr. ANTONIO O. SINON, despite several summons issued to them by the undersigned. THIS CERTIFICATION is therefore issued to serve as a basis for the filing of the corresponding complaint or complaints by Miss CARMITA LEGARDA. (Sgd.) Epifania Atienza. As correctly observed by the Court of Appeals, petitioners did not object to the presentation of the Certification to File Action during the hearing, thus: Defendants-appellants vigorously assert that the case did not undergo conciliation proceedings in violation of the provisions of P.D. No. 1508 or the Katarungang Pambarangay Law. However, plaintiff-appellee presented as evidence a certification from Barangay Chairman Epifinia Atienza to prove otherwise. Hence, the act of the barangay chairman in issuing the certification enjoys the presumption that his official duty has been regularly performed, absent any evidence to the contrary. Further, the defendants-appellants did not object to the presentation of the certification. Neither did they question

said certification. In the separate Answer of defendants-appellants, they alleged that the owner of the property was not Don Benito Legarda but Benito Legarda Incorporated. Assuming this to be true, then barangay conciliation proceedings becomes truly unnecessary since one of the parties to the case is a judicial person. Even assuming that respondent did not refer the dispute to the barangay for conciliation, still, the trial court could take cognizance of the case considering that petitioners here did not object to such lack of conciliation during the hearing. In Junson v. Martinez,10 we ruled that non-compliance with the condition precedent under Presidential Decree No. 1508 does not prevent a court of competent jurisdiction from exercising its power of adjudication over a case where the defendants fail to object to such exercise of jurisdiction. But such objection should be seasonably made before the court first taking cognizance of the complaint,11 and must be raised in the Answer, or in such other pleading allowed under the Rules of Court.12 Evidently, respondent has satisfactorily shown that she complied with the mandate of the law by referring the dispute to the barangay for amicable settlement before filing her complaints with the court. WHEREFORE, this Court DENIES the petition.The challenged Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 54196 are AFFIRMED. Costs against petitioners. GR 153567 AQUINO VS. AURE CHICO-NAZARIO, J.: Before this Court is a Petition for Review on Certiorari[2] under Rule 45 of the Revised Rules of Court filed by petitioner Librada M. Aquino (Aquino), seeking the reversal and the setting aside of the Decision[3] dated 17 October 2001 and the Resolution[4] dated 8 May 2002 of the Court of Appeals in CA-G.R. SP No. 63733. The appellate court, in its assailed Decision and Resolution, reversed the Decision[5] of the Regional Trial Court (RTC) of Quezon City, Branch 88, affirming the Decision[6] of the Metropolitan Trial Court (MeTC) of Quezon City, Branch 32, which dismissed respondent Ernesto Aures (Aure) complaint for ejectment on the ground, inter alia, of failure to comply with barangay conciliation proceedings. The subject of the present controversy is a parcel of land situated in Roxas District, Quezon City, with an area of 449 square meters and covered by Transfer Certificate of Title (TCT) No. 205447 registered with the Registry of Deeds of Quezon City (subject property).[7] Aure and E.S. Aure Lending Investors, Inc. (Aure Lending) filed a Complaint for ejectment against Aquino before the MeTC docketed as Civil Case No. 17450. In their Complaint, Aure and Aure Lending alleged that they acquired the subject property from Aquino and her husband Manuel (spouses Aquino) by virtue of a Deed of Sale[8]executed on 4 June 1996. Aure claimed that after the spouses Aquino received substantial consideration for the sale of the subject property, they refused to vacate the same.[9] In her Answer,[10] Aquino countered that the Complaint in Civil Case No. 17450 lacks cause of action for Aure and Aure Lending do not have any legal right over the subject property. Aquino admitted that there was a sale but such was governed by the Memorandum of Agreement[11] (MOA) signed by Aure. As stated in the MOA, Aure shall secure a loan from a bank or financial institution in his own name using the subject property as collateral and turn over the proceeds thereof to the spouses Aquino. However, even after Aure successfully secured a loan, the spouses Aquino did not receive the proceeds thereon or benefited therefrom. On 20 April 1999, the MeTC rendered a Decision in Civil Case No. 17450 in favor of Aquino and dismissed the Complaint for ejectment of Aure and Aure Lending for non-compliance with the

barangay conciliation process, among other grounds. The MeTC observed that Aure and Aquino are residents of the same barangay but there is no showing that any attempt has been made to settle the case amicably at the barangay level. The MeTC further observed that Aure Lending was improperly included as plaintiff in Civil Case No. 17450 for it did not stand to be injured or benefited by the suit. Finally, the MeTC ruled that since the question of ownership was put in issue, the action was converted from a mere detainer suit to one incapable of pecuniary estimation which properly rests within the original exclusive jurisdiction of the RTC. The dispositive portion of the MeTC Decision reads: WHEREFORE, premises considered, let this case be, as it is, hereby ordered DISMISSED. [Aquinos] counterclaim is likewise dismissed.[12] On appeal, the RTC affirmed the dismissal of the Complaint on the same ground that the dispute was not brought before the Barangay Council for conciliation before it was filed in court. In a Decision dated 14 December 2000, the RTC stressed that the barangay conciliation process is a conditio sine qua non for the filing of an ejectment complaint involving residents of the same barangay, and failure to comply therewith constitutes sufficient cause for the dismissal of the action. The RTC likewise validated the ruling of the MeTC that the main issue involved in Civil Case No. 17450 is incapable of pecuniary estimation and cognizable by the RTC. Hence, the RTC ruled: WHEREFORE, finding no reversible error in the appealed judgment, it is hereby affirmed in its entirety.[13] Aures Motion for Reconsideration was denied by the RTC in an Order[14] dated 27 February 2001. Undaunted, Aure appealed the adverse RTC Decision with the Court of Appeals arguing that the lower court erred in dismissing his Complaint for lack of cause of action.Aure asserted that misjoinder of parties was not a proper ground for dismissal of his Complaint and that the MeTC should have only ordered the exclusion of Aure Lending as plaintiff without prejudice to the continuation of the proceedings in Civil Case No. 17450 until the final determination thereof. Aure further asseverated that mere allegation of ownership should not divest the MeTC of jurisdiction over the ejectment suit since jurisdiction over the subject matter is conferred by law and should not depend on the defenses and objections raised by the parties. Finally, Aure contended that the MeTC erred in dismissing his Complaint with prejudice on the ground of non-compliance with barangay conciliation process. He was not given the opportunity to rectify the procedural defect by going through the barangay mediation proceedings and, thereafter, refile the Complaint.[15] On 17 October 2001, the Court of Appeals rendered a Decision, reversing the MeTC and RTC Decisions and remanding the case to the MeTC for further proceedings and final determination of the substantive rights of the parties. The appellate court declared that the failure of Aure to subject the matter to barangay conciliation is not a jurisdictional flaw and it will not affect the sufficiency of Aures Complaint since Aquino failed to seasonably raise such issue in her Answer. The Court of Appeals further ruled that mere allegation of ownership does not deprive the MeTC of jurisdiction over the ejectment case for jurisdiction over the subject matter is conferred by law and is determined by the allegations advanced by the plaintiff in his complaint. Hence, mere assertion of ownership by the defendant in an ejectment case will not oust the MeTC of its summary jurisdiction over the same. The decretal part of the Court of Appeals Decision reads: WHEREFORE, premises considered, the petition is hereby GRANTED - and the decisions of the trial courts below REVERSED and SET ASIDE. Let the records be remanded back to the court a quo for further proceedings for an eventual decision of the substantive rights of the disputants.[16]

In a Resolution dated 8 May 2002, the Court of Appeals denied the Motion for Reconsideration interposed by Aquino for it was merely a rehash of the arguments set forth in her previous pleadings which were already considered and passed upon by the appellate court in its assailed Decision. Aquino is now before this Court via the Petition at bar raising the following issues: I. WHETHER OR NOT NON-COMPLIANCE WITH THE BARANGAY CONCILIATION PROCEEDINGS IS A JURISDICTIONAL DEFECT THAT WARRANTS THE DISMISSAL OF THE COMPLAINT. II. WHETHER OR NOT ALLEGATION OF OWNERSHIP OUSTS THE MeTC OF ITS JURISDICTION OVER AN EJECTMENT CASE. The barangay justice system was established primarily as a means of easing up the congestion of cases in the judicial courts. This could be accomplished through a proceeding before the barangay courts which, according to the conceptor of the system, the late Chief Justice Fred Ruiz Castro, is essentially arbitration in character, and to make it truly effective, it should also be compulsory. With this primary objective of the barangay justice system in mind, it would be wholly in keeping with the underlying philosophy of Presidential Decree No. 1508, otherwise known as the Katarungang Pambarangay Law, and the policy behind it would be better served if an out-of-court settlement of the case is reached voluntarily by the parties.[17] The primordial objective of Presidential Decree No. 1508 is to reduce the number of court litigations and prevent the deterioration of the quality of justice which has been brought by the indiscriminate filing of cases in the courts.[18] To ensure this objective, Section 6 of Presidential Decree No. 1508[19] requires the parties to undergo a conciliation process before the Lupon Chairman or the Pangkat ng Tagapagkasundo as a precondition to filing a complaint in court subject to certain exceptions[20] which are inapplicable to this case. The said section has been declared compulsory in nature.[21] Presidential Decree No. 1508 is now incorporated in Republic Act No. 7160, otherwise known as The Local Government Code, which took effect on 1 January 1992. The pertinent provisions of the Local Government Code making conciliation a precondition to filing of complaints in court, read: SEC. 412. Conciliation.- (a) Pre-condition to filing of complaint in court. No complaint, petition, action, or proceeding involving any matter within the authority of the lupon shall be filed or instituted directly in court or any other government office for adjudication, unless there has been a confrontation between the parties before the lupon chairman or the pangkat, and that no conciliation or settlement has been reached as certified by the lupon secretary or pangkat secretary as attested to by the lupon chairman or pangkat chairman or unless the settlement has been repudiated by the parties thereto. (b) Where parties may go directly to court. The parties may go directly to court in the following instances: (1) Where the accused is under detention;

(2) Where a person has otherwise been deprived of personal liberty calling for habeas corpus proceedings; (3) Where actions are coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property, and support pendente lite; and (4) Where the action may otherwise be barred by the statute of limitations. (c) Conciliation among members of indigenous cultural communities. The customs and traditions of indigenous cultural communities shall be applied in settling disputes between members of the cultural communities. SEC. 408. Subject Matter for Amicable Settlement; Exception Therein. The lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: (a) Where one party is the government or any subdivision or instrumentality thereof; (b) Where one party is a public officer or employee, and the dispute relates to the performance of his official functions; (c) Offenses punishable by imprisonment exceeding one (1) year or a fine exceeding Five thousand pesos (P5,000.00); (d) Offenses where there is no private offended party; (e) Where the dispute involves real properties located in different cities or municipalities unless the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (f) Disputes involving parties who actually reside in barangays of different cities or municipalities, except where such barangay units adjoin each other and the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (g) Such other classes of disputes which the President may determine in the interest of justice or upon the recommendation of the Secretary of Justice. There is no dispute herein that the present case was never referred to the Barangay Lupon for conciliation before Aure and Aure Lending instituted Civil Case No. 17450.In fact, no allegation of such barangay conciliation proceedings was made in Aure and Aure Lendings Complaint before the MeTC. The only issue to be resolved is whether non-recourse to the barangay conciliation process is a jurisdictional flaw that warrants the dismissal of the ejectment suit filed with the MeTC. Aquino posits that failure to resort to barangay conciliation makes the action for ejectment premature and, hence, dismissible. She likewise avers that this objection was timely raised during the pre-trial and even subsequently in her Position Paper submitted to the MeTC. We do not agree. It is true that the precise technical effect of failure to comply with the requirement of Section 412 of the Local Government Code on barangay conciliation (previously contained in Section 5 of Presidential Decree No. 1508) is much the same effect produced by non-exhaustion of administrative remedies -- the complaint becomes afflicted with the vice of pre-maturity; and the controversy there alleged is not ripe for judicial determination. The complaint becomes vulnerable to a motion to dismiss.[22] Nevertheless, the conciliation process is not a jurisdictional requirement, so that non-

compliance therewith cannot affect the jurisdiction which the court has otherwise acquired over the subject matter or over the person of the defendant.[23] As enunciated in the landmark case of Royales v. Intermediate Appellate Court[24]: Ordinarily, non-compliance with the condition precedent prescribed by P.D. 1508 could affect the sufficiency of the plaintiff's cause of action and make his complaint vulnerable to dismissal on ground of lack of cause of action or prematurity; but the same would not prevent a court of competent jurisdiction from exercising its power of adjudication over the case before it, where the defendants, as in this case, failed to object to such exercise of jurisdiction in their answer and even during the entire proceedings a quo. While petitioners could have prevented the trial court from exercising jurisdiction over the case by seasonably taking exception thereto, they instead invoked the very same jurisdiction by filing an answer and seeking affirmative relief from it. What is more, they participated in the trial of the case by cross-examining respondent Planas. Upon this premise, petitioners cannot now be allowed belatedly to adopt an inconsistent posture by attacking the jurisdiction of the court to which they had submitted themselves voluntarily. x x x (Emphasis supplied.) In the case at bar, we similarly find that Aquino cannot be allowed to attack the jurisdiction of the MeTC over Civil Case No. 17450 after having submitted herself voluntarily thereto. We have scrupulously examined Aquinos Answer before the MeTC in Civil Case No. 17450 and there is utter lack of any objection on her part to any deficiency in the complaint which could oust the MeTC of its jurisdcition. We thus quote with approval the disquisition of the Court of Appeals: Moreover, the Court takes note that the defendant [Aquino] herself did not raise in defense the aforesaid lack of conciliation proceedings in her answer, which raises the exclusive affirmative defense of simulation. By this acquiescence, defendant [Aquino] is deemed to have waived such objection. As held in a case of similar circumstances, the failure of a defendant [Aquino] in an ejectment suit to specifically allege the fact that there was no compliance with the barangay conciliation procedure constitutes a waiver of that defense. x x x.[25] By Aquinos failure to seasonably object to the deficiency in the Complaint, she is deemed to have already acquiesced or waived any defect attendant thereto. Consequently, Aquino cannot thereafter move for the dismissal of the ejectment suit for Aure and Aure Lendings failure to resort to the barangay conciliation process, since she is already precluded from doing so. The fact that Aquino raised such objection during the pre-trial and in her Position Paper is of no moment, for the issue of non-recourse to barangaymediation proceedings should be impleaded in her Answer. As provided under Section 1, Rule 9 of the 1997 Rules of Civil Procedure: Sec. 1. Defenses and objections not pleaded. Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter, that there is another action pending between the same parties for the same cause, or that the action is barred by a prior judgment or by statute of limitations, the court shall dismiss the claim. (Emphasis supplied.)

While the aforequoted provision applies to a pleading (specifically, an Answer) or a motion to dismiss, a similar or identical rule is provided for all other motions in Section 8 of Rule 15 of the same Rule which states: Sec. 8. Omnibus Motion. - Subject to the provisions of Section 1 of Rule 9, a motion attacking a pleading, order, judgment, or proceeding shall include all objections then available, and all objections not so included shall be deemed waived. The spirit that surrounds the foregoing statutory norm is to require the party filing a pleading or motion to raise all available exceptions for relief during the single opportunity so that single or multiple objections may be avoided.[26] It is clear and categorical in Section 1, Rule 9 of the Revised Rules of Court that failure to raise defenses and objections in a motion to dismiss or in an answer is deemed a waiver thereof; and basic is the rule in statutory construction that when the law is clear and free from any doubt or ambiguity, there is no room for construction or interpretation.[27] As has been our consistent ruling, where the law speaks in clear and categorical language, there is no occasion for interpretation; there is only room for application.[28] Thus, although Aquinos defense of non-compliance with Presidential Decree No. 1508 is meritorious, procedurally, such defense is no longer available for failure to plead the same in the Answer as required by the omnibus motion rule. Neither could the MeTC dismiss Civil Case No. 17450 motu proprio. The 1997 Rules of Civil Procedure provide only three instances when the court may motu proprio dismiss the claim, and that is when the pleadings or evidence on the record show that (1) the court has no jurisdiction over the subject matter; (2) there is another cause of action pending between the same parties for the same cause; or (3) where the action is barred by a prior judgment or by a statute of limitations. Thus, it is clear that a court may not motu propriodismiss a case on the ground of failure to comply with the requirement for barangay conciliation, this ground not being among those mentioned for the dismissal by the trial court of a case on its own initiative. Aquino further argues that the issue of possession in the instant case cannot be resolved by the MeTC without first adjudicating the question of ownership, since the Deed of Sale vesting Aure with the legal right over the subject property is simulated. Again, we do not agree. Jurisdiction in ejectment cases is determined by the allegations pleaded in the complaint. As long as these allegations demonstrate a cause of action either for forcible entry or for unlawful detainer, the court acquires jurisdiction over the subject matter. This principle holds, even if the facts proved during the trial do not support the cause of action thus alleged, in which instance the court -- after acquiring jurisdiction -- may resolve to dismiss the action for insufficiency of evidence. The necessary allegations in a Complaint for ejectment are set forth in Section 1, Rule 70 of the Rules of Court, which reads: SECTION 1. Who may institute proceedings, and when. Subject to the provisions of the next succeeding section, a person deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or other person may at any time within one (1) year after such unlawful deprivation or withholding of possession, bring an action in the proper Municipal Trial Court against the person or persons unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the restitution of such possession, together with damages and costs. In the case at bar, the Complaint filed by Aure and Aure Lending on 2 April 1997, alleged as follows:

2. [Aure and Aure Lending] became the owners of a house and lot located at No. 37 Salazar Street corner Encarnacion Street, B.F. Homes, Quezon City by virtue of a deed of absolute sale executed by [the spouses Aquino] in favor of [Aure and Aure Lending] although registered in the name of x x x Ernesto S. Aure; title to the said property had already been issued in the name of [Aure] as shown by a transfer Certificate of Title , a copy of which is hereto attached and made an integral part hereof as Annex A; 3. However, despite the sale thus transferring ownership of the subject premises to [Aure and Aure Lending] as above-stated and consequently terminating [Aquinos] right of possession over the subject property, [Aquino] together with her family, is continuously occupying the subject premises notwithstanding several demands made by [Aure and Aure Lending] against [Aquino] and all persons claiming right under her to vacate the subject premises and surrender possession thereof to [Aure and Aure Lending] causing damage and prejudice to [Aure and Aure Lending] and making [Aquinos] occupancy together with those actually occupying the subject premises claiming right under her, illegal.[29] It can be inferred from the foregoing that Aure, together with Aure Lending, sought the possession of the subject property which was never surrendered by Aquino after the perfection of the Deed of Sale, which gives rise to a cause of action for an ejectment suit cognizable by the MeTC. Aures assertion of possession over the subject property is based on his ownership thereof as evidenced by TCT No. 156802 bearing his name. That Aquino impugned the validity of Aures title over the subject property and claimed that the Deed of Sale was simulated should not divest the MeTC of jurisdiction over the ejectment case.[30] As extensively discussed by the eminent jurist Florenz D. Regalado in Refugia v. Court of Appeals[31]: As the law on forcible entry and unlawful detainer cases now stands, even where the defendant raises the question of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts nevertheless have the undoubted competence to resolve the issue of ownership albeit only to determine the issue of possession. x x x. The law, as revised, now provides instead that when the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession. On its face, the new Rule on Summary Procedure was extended to include within the jurisdiction of the inferior courts ejectment cases which likewise involve the issue of ownership. This does not mean, however, that blanket authority to adjudicate the issue of ownership in ejectment suits has been thus conferred on the inferior courts. At the outset, it must here be stressed that the resolution of this particular issue concerns and applies only to forcible entry and unlawful detainer cases where the issue of possession is intimately intertwined with the issue of ownership. It finds no proper application where it is otherwise, that is, where ownership is not in issue, or where the principal and main issue raised in the allegations of the complaint as well as the relief prayed for make out not a case for ejectment but one for recovery of ownership. Apropos thereto, this Court ruled in Hilario v. Court of Appeals[32]: Thus, an adjudication made therein regarding the issue of ownership should be regarded as merely provisional and, therefore, would not bar or prejudice an action between the same parties involving

title to the land. The foregoing doctrine is a necessary consequence of the nature of forcible entry and unlawful detainer cases where the only issue to be settled is the physical or material possession over the real property, that is, possession de facto and not possession de jure. In other words, inferior courts are now conditionally vested with adjudicatory power over the issue of title or ownership raised by the parties in an ejectment suit. These courts shall resolve the question of ownership raised as an incident in an ejectment case where a determination thereof is necessary for a proper and complete adjudication of the issue of possession.[33] WHEREFORE, premises considered, the instant Petition is DENIED. The Court of Appeals Decision dated 17 October 2001 and its Resolution dated 8 May 2002 in CA-G.R. SP No. 63733 are hereby AFFIRMED. Costs against the petitioner. G.R. No. 167261 March 2, 2007 ROSARIA LUPITAN PANG-ET, vs. CATHERINE MANACNES-DAO-AS 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 petitioner‘s 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 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, Leoncio‘s 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 latter‘s 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 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-et‘s 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-in-interest therein were not personally affixed by the latter or are falsified-which 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 King‘s 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-et‘s 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-et‘s 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. Petitioner‘s 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. G.R. No. 155713 May 5, 2006 MILAGROS G. LUMBUAN vs. ALFREDO A. RONQUILLO This petition for review on certiorari seeks to reverse and set aside the Decision1 dated April 12, 2002, of the Court of Appeals in CA-G.R. SP No. 52436 and its Resolution2 dated October 14, 2002, denying the petitioner‘s motion for reconsideration. The salient facts, as found by the Court of Appeals,3 are as follows: Petitioner Milagros G. Lumbuan is the registered owner of Lot 19-A, Block 2844 with Transfer Certificate of Title No. 193264, located in Gagalangin, Tondo, Manila. On February 20, 1995, she leased it to respondent Alfredo A. Ronquillo for a period of three years with a monthly rental of P5,000. The parties also agreed that there will be a 10% annual increase in rent for the succeeding two years, i.e., 1996 and 1997,4 and the leased premises will be used exclusively for the respondent‘s fastfood business, unless any other use is given, with the petitioner‘s prior written consent.5 While the respondent at the start operated a fastfood business, he later used the premises as residence without the petitioner‘s prior written consent. He also failed to pay the 10% annual increase in rent of P500/month starting 1996 and P1,000/month in 1997 to the present. Despite repeated verbal and written demands, the respondent refused to pay the arrears and vacate the leased premises. On November 15, 1997, the petitioner referred the matter to the Barangay Chairman‘s office but the parties failed to arrive at a settlement. The Barangay Chairman then issued a Certificate to File Action.6 On December 8, 1997, the petitioner filed against the respondent an action for Unlawful Detainer, docketed as Civil Case No. 157922-CV. It was raffled to the Metropolitan Trial Court (MeTC) of Manila, Branch 6. On December 15, 1997, the respondent received the summons and copy of the complaint. On December 24, 1997, he filed his Answer by mail. Before the MeTC could receive the respondent‘s Answer, the petitioner filed a Motion for Summary Judgment dated January 7, 1998.7 Acting upon this motion, the MeTC rendered a decision8 on January 15, 1998, ordering the respondent to vacate and surrender possession of the leased premises; to pay the petitioner the amount of P46,000 as unpaid rentals with legal interest until fully paid; and to pay the petitionerP5,000 as attorney‘s fees plus cost of the suit. The respondent then filed a Manifestation calling the attention of the MeTC to the fact that his Answer was filed on time and praying that the decision be set aside. The MeTC denied the prayer, ruling that the Manifestation was in the nature of a motion for reconsideration which is a prohibited pleading under the Rules on Summary Procedure. Upon appeal, the case was raffled to the Regional Trial Court (RTC) of Manila, Branch 38, and docketed as Civil Case No. 98-87311. On July 8, 1998, the RTC rendered its decision9 setting aside the MeTC decision. The RTC directed the parties to go back to the Lupon Chairman or Punong Barangay for further proceedings and to comply strictly with the condition that should the parties fail to reach an amicable settlement, the entire records of the case will be remanded to MeTC of Manila, Branch 6, for it to decide the case anew. The respondent sought reconsideration but the RTC denied the motion in an Order dated March 15, 1999. Thus, he sought relief from the Court of Appeals through a petition for review.10 On April 12, 2002, the appellate court promulgated a decision, reversing the decision of the RTC and ordering the dismissal of the ejectment case. The appellate court ruled that when a complaint is prematurely instituted, as when the mandatory mediation and conciliation in the barangay level had not been complied with, the court should dismiss the case and not just remand the records to the court of origin so that the parties may go through the prerequisite proceedings. The petitioner filed a motion for reconsideration, which was denied by the appellate court. Hence, this present petition.

In the meantime, while this petition was pending before this Court, the parties went through barangay conciliation proceedings as directed by the RTC of Manila, Branch 38. Again, they failed to arrive at an amicable settlement prompting the RTC to issue an Order11 remanding the case to the MeTC of Manila, Branch 6, where the proceedings took place anew. On April 25, 2000, the MeTC rendered a second decision, the dispositive portion of which reads: WHEREFORE, premises considered, judgment on the merits is hereby rendered for the plaintiff as follows: 1. Ordering defendant and all persons claiming right of possession under him to voluntarily vacate the property located at Lot 19-A Block 2844, Gagalangin, Tondo, Manila and surrender possession thereof to the plaintiff; 2. Ordering defendant to pay to plaintiff the amount of P387,512.00 as actual damages in the form of unpaid rentals and its agreed increase up to January 2000 and to pay the amount of P6,500.00 a month thereafter until the same is actually vacated; 3. Ordering the defendant to pay to plaintiff the sum of P10,000.00 as and for attorney‘s fees plus cost of the suit. SO ORDERED.12 The respondent appealed the foregoing decision.1avvphil.net The case was raffled to RTC of Manila, Branch 22, and docketed as Civil Case No. 00-98173. The RTC ruled in favor of the petitioner and dismissed the appeal. The respondent elevated the case to the Court of Appeals, where it is now pending. The sole issue for our resolution is: [WHETHER] THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE COMPLAINT FOR THE ALLEGED FAILURE OF THE PARTIES TO COMPLY WITH THE MANDATORY MEDIATION AND CONCILIATION PROCEEDINGS IN THE BARANGAY LEVEL.13 With the parties‘ subsequent meeting with the Lupon Chairman or Punong Barangay for further conciliation proceedings, the procedural defect was cured. Nevertheless, if only to clear any lingering doubt why the Court of Appeals erred in dismissing the complaint, we shall delve on the issue. The petitioner alleges that the parties have gone through barangay conciliation proceedings to settle their dispute as shown by the Certificate to File Action issued by the Lupon/Pangkat Secretary and attested by the Lupon/Pangkat Chairman. The respondent, on the other hand, contends that whether there was defective compliance or no compliance at all with the required conciliation, the case should have been dismissed. The primordial objective of the Katarungang Pambarangay Rules,14 is to reduce the number of court litigations and prevent the deterioration of the quality of justice which has been brought about by the indiscriminate filing of cases in the courts. To attain this objective, Section 412(a) of Republic Act No. 716015 requires the parties to undergo a conciliation process before the Lupon Chairman or the Pangkat as a precondition to filing a complaint in court,16 thus: SECTION 412. Conciliation. – (a) Pre-condition to Filing of Complaint in Court. – No complaint, petition, action, or proceeding involving any matter within the authority of the lupon shall be filed or instituted directly in court or any other government office for adjudication, unless there has been a confrontation between the parties before the lupon chairman or the pangkat, and that no conciliation or settlement has been reached as certified by the lupon secretary or pangkat secretary as attested to by the lupon or pangkat chairman…. Here, the Lupon/Pangkat Chairman and Lupon/Pangkat Secretary signed the Certificate to File Action stating that no settlement was reached by the parties. While admittedly no pangkat was constituted, it was not denied that the parties met at the office of the Barangay Chairman for possible settlement. The efforts of the Barangay Chairman, however, proved futile as no agreement was reached. Although no pangkat was formed, in our mind, there was substantial compliance with the law. It is noteworthy that under the aforequoted provision, the confrontation before the Lupon Chairman or the pangkat is sufficient compliance with the precondition for filing the case in court.17 This is true notwithstanding the mandate of Section 410(b) of the same law that the Barangay Chairman shall constitute a pangkat if he fails in his mediation efforts. Section 410(b) should be construed together

with Section 412, as well as the circumstances obtaining in and peculiar to the case. On this score, it is significant that the Barangay Chairman or Punong Barangay is herself the Chairman of the Lupon under the Local Government Code.18 Finally, this Court is aware that the resolution of the substantial issues in this case is pending with the Court of Appeals. While ordinarily, we would have determined the validity of the parties‘ substantial claims since to await the appellate court‘s decision will only frustrate speedy justice and, in any event, would be a futile exercise, as in all probability the case would end up with this Court, we find that we cannot do so in the instant case. It must be underscored that supervening events have taken place before the lower courts where the parties have been adequately heard, and all the issues have been ventilated. Since the records of those proceedings are with the Court of Appeals, it is in a better position to fully adjudicate the rights of the parties. To rely on the records before this Court would prevent us from rendering a sound judgment in this case. Thus, we are left with no alternative but to leave the matter of ruling on the merits to the appellate court. WHEREFORE, the petition is GRANTED. The decision and resolution of the Court of Appeals in CA-G.R. SP No. 52436 are REVERSED and SET ASIDE, and the decision of the Regional Trial Court of Manila, Branch 38, in Civil Case No. 98-87311 is AFFIRMED. The Court of Appeals is ordered to proceed with the appeal in CA – G.R. No. 73453 and decide the case with dispatch. [G.R. No. 159411. March 18, 2005] TEODORO I. CHAVEZ vs. HON. COURT OF APPEALS Assailed in this petition for review is the Decision dated April 2, 2003[1] of the Court of Appeals in CA-G.R. CV No. 59023[2] which modified the Decision dated December 15, 1997 of the Regional Trial Court (RTC) of Valenzuela City, Branch 172, in Civil Case No. 5139-V-97, as well as its Resolution dated August 8, 2003[3] which denied petitioners motion for reconsideration. The antecedent facts are as follows: In October 1994, petitioner Teodoro Chavez and respondent Jacinto Trillana entered into a contract of lease[4] whereby the former leased to the latter his fishpond at Sitio Pariahan, Taliptip, Bulacan, Bulacan, for a term of six (6) years commencing from October 23, 1994 to October 23, 2000. The rental for the whole term was two million two hundred forty thousand (P2,240,000.00) pesos, of which one million (P1,000,000.00) pesos was to be paid upon signing of the contract. The balance was payable as follows: b. That, after six (6) months and/or, on or before one (1) year from the date of signing this contract, the amount of THREE HUNDRED FORTY-FOUR THOUSAND (P344,000.00) pesos shall be paid on April 23, 1995 and/or, on or before October 23, 1995 shall be paid by the LESSEE to the LESSOR. c. That, the LESSEE, shall pay the amount of FOUR HUNDRED FORTY-EIGHT THOUSAND (P448,000.00) pesos x x x to the LESSOR on April 23, 1997 and/or, on or before October 23, 1997, and on April 23, 1998 and/or, on or before October 23, 1998 the amount of FOUR HUNDRED FORTY-EIGHT THOUSAND (P448,000.00) pesos x x x. Paragraph 5 of the contract further provided that respondent shall undertake all construction and preservation of improvements in the fishpond that may be destroyed during the period of the lease, at his expense, without reimbursement from petitioner. In August 1996, a powerful typhoon hit the country which damaged the subject fishpond. Respondent did not immediately undertake the necessary repairs as the water level was still high. Three (3) weeks later, respondent was informed by a barangay councilor that major repairs were being undertaken in the fishpond with the use of a crane. Respondent found out that the repairs were at the instance of petitioner who had grown impatient with his delay in commencing the work. In September 1996, respondent filed a complaint before the Office of the Barangay Captain of Taliptip, Bulacan, Bulacan. He complained about the unauthorized repairs undertaken by petitioner,

the ouster of his personnel from the leased premises and its unlawful taking by petitioner despite their valid and subsisting lease contract. After conciliation proceedings, an agreement was reached, viz.: K A S U N D U A N Napagkasunduan ngayong araw na to ika-17 ng Setyembre ng nagpabuwis Teodoro Chavez at bumubuwis na si G. Jay Trillana na ibabalik ni G. Chavez ang halagang P150,000.00 kay G. Trillana bilang sukli sa natitirang panahon ng buwisan. Ngunit kung maibibigay ni G. Chavez ang halagang P100,000.00 bago sumapit o pagsapit ng ika-23 ng Setyembre, taong kasalukuyan, to ay nangangahulugan ng buong kabayaran at hindi P150,000.00. Kung sakali at hindi maibigay ang P100,000.00 ang magiging kabayaran ay mananatiling P150,000.00 na may paraan ng pagbabayad ng sumusunod: Ang P50,000.00 ay ibibigay bago sumapit o pagsapit ng ika-31 ng Oktubre 1996 at ang balanseng P100,000.00 ay ibibigay sa loob ng isang taon subalit magbibigay ng promissory note si G. Chavez at kung mabubuwisang ang kanyang palaisdaan ay ibibigay lahat ni G. Chavez ang buong P150,000.00 sa lalong madaling panahon. Kung magkakaroon ng sapat at total na kabayaran si G. Chavez kay G. Trillana ang huli ay lalagda sa kasulatan bilang waiver o walang anumang paghahabol sa nabanggit na buwisan. Alleging non-compliance by petitioner with their lease contract and the foregoing Kasunduan, respondent filed a complaint on February 7, 1997 against petitioner before the RTC of Valenzuela City, docketed as Civil Case No. 5139-V-97. Respondent prayed that the following amounts be awarded him, viz.: (a) P300,000.00 as reimbursement for rentals of the leased premises corresponding to the unexpired portion of the lease contract; (b) P500,000.00 as unrealized profits; (c) P200,000.00 as moral damages; (d) P200,000.00 as exemplary damages; and, (e) P100,000.00 as attorneys fees plus P1,000.00 for each court appearance of respondents counsel. Petitioner filed his answer but failed to submit the required pretrial brief and to attend the pretrial conference. On October 21, 1997, respondent was allowed to present his evidence ex-parte before the Acting Branch Clerk of Court.[5] On the basis thereof, a decision was rendered on December 15, 1997[6] in favor of respondent, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered as follows: (1) Ordering the defendant to reimburse to the plaintiff the sum of P300,000.00 representing rental payment of the leased premises for the unused period of lease; (2) Ordering the defendant to pay plaintiff the sum of P500,000.00 representing unrealized profit as a result of the unlawful deprivation by the defendant of the possession of the subject premises; (3) Ordering the defendant to pay plaintiff the sum of P200,000.00 as moral damages; (4) Ordering the defendant to pay plaintiff the sum of P200,000.00 as exemplary damages; and (5) Ordering the defendant to pay plaintiff the sum of P100,000.00 as and for attorneys fees, plus costs of suit. Petitioner appealed to the Court of Appeals which modified the decision of the trial court by deleting the award of P500,000.00 for unrealized profits for lack of basis, and by reducing the award for attorneys fees to P50,000.00.[7] Petitioners motion for reconsideration was denied. Hence, this petition for review. Petitioner contends that the Court of Appeals erred in ruling that the RTC of Valenzuela City had jurisdiction over the action filed by respondent considering that the subject matter thereof, his alleged violation of the lease contract with respondent, was already amicably settled before the Office of the Barangay Captain of Taliptip, Bulacan, Bulacan. Petitioner argued that respondent should have followed the procedure for enforcement of the amicable settlement as provided for in the Revised Katarungang Pambarangay Law. Assuming arguendo that the RTC had jurisdiction, it cannot award more than the amount stipulated in the Kasunduan which is P150,000.00. In any event, no factual or legal basis existed for the reimbursement of alleged advance rentals for the unexpired portion of the lease contract as well as for moral and exemplary damages, and attorneys fees. Indeed, the Revised Katarungang Pambarangay Law[8] provides that an amicable settlement reached after barangay conciliation proceedings has the force and effect of a final judgment of a court

if not repudiated or a petition to nullify the same is filed before the proper city or municipal court within ten (10) days from its date.[9] It further provides that the settlement may be enforced by execution by the lupong tagapamayapa within six (6) months from its date, or by action in the appropriate city or municipal court, if beyond the six-month period.[10] This special provision follows the general precept enunciated in Article 2037 of the Civil Code, viz.: A compromise has upon the parties the effect and authority of res judicata; but there shall be no execution except in compliance with a judicial compromise. Thus, we have held that a compromise agreement which is not contrary to law, public order, public policy, morals or good customs is a valid contract which is the law between the parties themselves.[11] It has upon them the effect and authority of res judicata even if not judicially approved,[12] and cannot be lightly set aside or disturbed except for vices of consent and forgery.[13] However, in Heirs of Zari, et al. v. Santos,[14] we clarified that the broad precept enunciated in Art. 2037 is qualified by Art. 2041 of the same Code, which provides: If one of the parties fails or refuses to abide by the compromise, the other party may either enforce the compromise or regard it as rescinded and insist upon his original demand. We explained, viz: [B]efore the onset of the new Civil Code, there was no right to rescind compromise agreements. Where a party violated the terms of a compromise agreement, the only recourse open to the other party was to enforce the terms thereof. When the new Civil Code came into being, its Article 2041 x x x created for the first time the right of rescission. That provision gives to the aggrieved party the right to either enforce the compromise or regard it as rescinded and insist upon his original demand. Article 2041 should obviously be deemed to qualify the broad precept enunciated in Article 2037 that [a] compromise has upon the parties the effect and authority of res judicata. (underscoring ours) In exercising the second option under Art. 2041, the aggrieved party may, if he chooses, bring the suit contemplated or involved in his original demand, as if there had never been any compromise agreement, without bringing an action for rescission.[15] This is because he may regard the compromise as already rescinded[16] by the breach thereof of the other party. Thus, in Morales v. National Labor Relations Commission[17] we upheld the National Labor Relations Commission when it heeded the original demand of four (4) workers for reinstatement upon their employers failure to comply with its obligation to pay their monetary benefits within the period prescribed under the amicable settlement. We reiterated the rule that the aggrieved party may either (1) enforce the compromise by a writ of execution, or (2) regard it as rescinded and so insist upon his original demand upon the other partys failure or refusal to abide by the compromise. We also recognized the options in Mabale v. Apalisok,[18] Canonizado v. Benitez,[19] and Ramnani v. Court of Appeals,[20] to name a few cases. In the case at bar, the Revised Katarungang Pambarangay Law provides for a two-tiered mode of enforcement of an amicable settlement, to wit: (a) by execution by the Punong Barangay which is quasi-judicial and summary in nature on mere motion of the party entitled thereto; and (b) an action in regular form, which remedy is judicial.[21] However, the mode of enforcement does not rule out the right of rescission under Art. 2041 of the Civil Code. The availability of the right of rescission is apparent from the wording of Sec. 417[22] itself which provides that the amicable settlement may be enforced by execution by the lupon within six (6) months from its date or by action in the appropriate city or municipal court, if beyond that period. The use of the word may clearly makes the procedure provided in the Revised Katarungang Pambarangay Law directory[23] or merely optional in nature. Thus, although the Kasunduan executed by petitioner and respondent before the Office of the Barangay Captain had the force and effect of a final judgment of a court, petitioners non-compliance paved the way for the application of Art. 2041 under which respondent may either enforce the compromise, following the procedure laid out in the Revised Katarungang Pambarangay Law, or regard it as rescinded and insist upon his original demand. Respondent chose the latter option when he instituted Civil Case No. 5139-V-97 for recovery of unrealized profits and reimbursement of advance rentals, moral and exemplary damages, and attorneys fees. Respondent was not limited to

claiming P150,000.00 because although he agreed to the amount in the Kasunduan, it is axiomatic that a compromise settlement is not an admission of liability but merely a recognition that there is a dispute and an impending litigation[24] which the parties hope to prevent by making reciprocal concessions, adjusting their respective positions in the hope of gaining balanced by the danger of losing.[25] Under theKasunduan, respondent was only required to execute a waiver of all possible claims arising from the lease contract if petitioner fully complies with his obligations thereunder.[26] It is undisputed that herein petitioner did not. Having affirmed the RTCs jurisdiction over the action filed by respondent, we now resolve petitioners remaining contention. Petitioner contends that no factual or legal basis exists for the reimbursement of alleged advance rentals, moral and exemplary damages, and attorneys fees awarded by the court a quo and the Court of Appeals. The rule is that actual damages cannot be presumed, but must be proved with a reasonable degree of certainty.[27] In the case at bar, we agree with petitioner that no competent proof was presented to prove that respondent had paid P300,000.00 as advance rentals for the unexpired period of the lease contract. On the contrary, the lease contract itself provided that the remaining rentals of P448,000.00 shall be paid on April 23, 1997 and/or, on or before October 23, 1997, and on April 23, 1998 and/or, on or before October 23, 1998 the amountP448,000.00. Respondent filed his complaint on February 7, 1997. No receipt or other competent proof, aside from respondents self-serving assertion, was presented to prove that respondent paid the rentals which were not yet due. No proof was even presented by respondent to show that he had already paid P1,000,000.00 upon signing of the lease contract, as stipulated therein. Petitioner, in paragraphs 2 and 7 of his answer,[28] specifically denied that respondent did so. Courts must base actual damages suffered upon competent proof and on the best obtainable evidence of the actual amount thereof.[29] As to moral damages, Art. 2220 of the Civil Code provides that same may be awarded in breaches of contract where the defendant acted fraudulently or in bad faith. In the case at bar, respondent alleged that petitioner made unauthorized repairs in the leased premises and ousted his personnel therefrom despite their valid and subsisting lease agreement. Petitioner alleged, by way of defense, that he undertook the repairs because respondent abandoned the leased premises and left it in a state of disrepair. However, petitioner presented no evidence to prove his allegation, as he did not attend the pretrial conference and was consequently declared in default. What remains undisputed therefore is that petitioner had a valid and subsisting lease contract with respondent which he refused to honor by giving back possession of the leased premises to respondent. We therefore sustain the conclusion of both the trial court and the Court of Appeals that an award of moral damages is justified under the circumstances. We likewise sustain the award for exemplary damages considering petitioners propensity not to honor his contractual obligations, first under the lease contract and second, under the amicable settlement executed before the Office of the Barangay Captain. Since respondent was compelled to litigate and incur expenses to protect his interest on account of petitioners refusal to comply with his contractual obligations,[30] the award of attorneys fees has to be sustained. IN VIEW WHEREOF, the petition is PARTIALLY GRANTED. The assailed Decision dated April 2, 2003 of the Court of Appeals in CA-G.R. CV No. 59023 is modified by deleting the award of P300,000.00 as reimbursement of advance rentals. The assailed Decision is AFFIRMED in all other respects. G.R. No. 140959 December 21, 2004 ANA RUBENITO and BABY MACAYA vs. LOLITA LAGATA Before us is a "petition for review on certiorari" filed on December 21, 1999 which should be a petition forcertiorari under Rule 65 of the Rules of Court. It assails the Writ of Execution dated April 16, 1999, the Notice to Vacate dated May 18, 1999 and the Order of Demolition dated November 24, 1999 of the Metropolitan Trial Court (Branch 75) Marikina City (MeTC for brevity) in Civil Case No. 95-6178. The factual background of the case is as follows:

Sometime in June 1991, private respondents Lolita Lagata and Rolando Bincang, who are registered owners of a parcel of land located in Interior Balubad Street, Nangka, Marikina City and known as Lot 3-K-4-C-4 of the subdivision plan Psd-007402-023755-D, filed with the Punong Barangay of Nangka, Marikina City a complaint for ejectment against petitioners Ana Rubenito and Baby Macaya. Mediation proceedings were conducted by thePunong Barangay, Chairman of the Lupong Tagapamayapa. On June 11, 1991, a compromise agreement or amicable settlement denominated as "KASUNDUANG PAG-AAYOS" was executed by the parties and attested to by the Punong Barangay, which reads as follows: Ang may-sumbong,1 ay nagpakita ng mga dokumento at papeles at titulo, na nagpapatunay na ang lupa ay kanyang nabili, buhat sa mga Santos. At ang ipinagsumbong,2 ay walang maipakita na anumang papeles na magpapatunay na sadyang ang lupa ay hindi kanila. Kaya ang ipinag-sumbong ay inaatasan ng may-sumbong na sila ay bigyan ng palugit ng 6 na buwan, upang sila ay makahanap ng matitirikan o matitirhan, upang ang nasabing lupa ay tuluyang iwanan ng ipinag-sumbong. Ang pag-alis ng ipinag-sumbong ay sa ika-11 ng Disyembre 1991.3 Petitioners did not vacate the premises within the stipulated period. When further demands to vacate went unheeded, private respondents filed with the MeTC a complaint against petitioners for execution of the barangaycompromise agreement, docketed as Civil Case No. 95-6178.4 In their Answer, petitioners admitted the execution of the document but denied that such was a compromise agreement to vacate. They alleged that it was merely an acknowledgment that private respondents wanted to eject them and that they should vacate the premises within six months. Petitioners further questioned the propriety of the sale of the property in favor of private respondents as violative of their right of first refusal.5 In an Order dated October 20, 1995, the MeTC treated the complaint as an ordinary complaint for ejectment.6 In a Decision dated May 9, 1996, the MeTC dismissed the complaint on the ground that no prior demand to vacate was made upon petitioners.7 On appeal, the Regional Trial Court (Branch 272) of Marikina City (RTC) affirmed the MeTC‘s decision. The RTC treated the "KASUNDUANG PAG-AAYOS" as a mere contract.8 On petition for review, the Court of Appeals (CA), in a Decision dated April 16, 1998, held that private respondents‘ complaint before the MeTC was not for ejectment, as the lower courts have inadvertently treated it to be, but one for execution or enforcement of an unrepudiated amicable settlement arrived at in a barangayconciliation proceedings which by statute has the force and effect of a final judgment of a court. It added that since the complaint was filed within the proper period (Article 1144, Civil Code; Sec. 9, Rule 39, Rules of Court), it was the MeTC‘s ministerial duty to order the execution of the said amicable settlement, under which petitioners bound themselves to vacate the premises not later than December 11, 1991. Thus, the CA set aside the decision of the lower courts and directed the MeTC to order the execution of the disputed amicable settlement by ousting petitioners from the premises.9 On May 18, 1999, Sheriff III Edwin Garcia served upon petitioners a copy of the Writ of Execution,10 dated April 16, 1999, and the Notice to Vacate,11 dated May 18, 1999, directing the petitioners to vacate the premises in question within five days from receipt of the notice. Petitioners filed a Motion to Lift Writ of Execution and Notice to Vacate,12 dated May 21, 1999, on the ground that the MeTC did not acquire jurisdiction because petitioners had not yet received a copy of the decision of the CA, as such the decision is not yet final and executory and the writ of execution and notice to vacate were issued in excess or jurisdiction of without jurisdiction of the court. On November 24, 1999, upon motion of private respondents, the MeTC issued an Order of Demolition13 which petitioners claim they did not also receive. Hence, the instant petition anchored on the following assignment of errors: 1. THAT THE HONORABLE RESPONDENT COURT ACTED WITH GRAVE ABUSE OF DISCRETION AND WITHOUT JURISDICTION WHEN IT ISSUED THE WRIT OF EXECUTION, DATED APRIL 16, 1999, THE NOTICE TO VACATE, DATED MAY 18, 1999, DESPITE OF THE

FACT THAT THE RECORD DOES NOT SHOW THAT PETITIONERS OR THEIR COUNSEL RECEIVED A COPY OF THE DECISION OF THE COURT OF APPEALS. 2. THAT THE HONORABLE RESPONDENT COURT ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION WHEN IT ISSUED THE ORDER OF DEMOLITION WITHOUT FIRST RESOLVING THE MOTION TO LIFT WRIT OF EXECUTION AND NOTICE TO VACATE.14 Petitioners invoke the Court‘s appellate jurisdiction under Rule 45 of the Rules of Court in assailing the orders of the MeTC. They claim that they or their original counsel did not receive a copy of the decision of the CA, as such the said decision is not yet final and executory and the orders of the MeTC were issued with grave abuse of discretion amounting to lack of jurisdiction. Prefatorily, we note that petitioners erroneously invoke the appellate jurisdiction of this Court under Rule 45 of the Rules of Court in assailing the orders of the court a quo. The instant petition shall be treated as a petition forcertiorari under Rule 65 of the Rules of Court since the subject of the recourse, is one of jurisdiction, or the act complained of was perpetrated by a court with grave abuse of discretion amounting to lack or excess of jurisdiction.15 As enunciated by the Court in Fortich vs. Corona:16 Anent the first issue, in order to determine whether the recourse of petitioners is proper or not, it is necessary to draw a line between an error of judgment and an error of jurisdiction. An error of judgment is one which the court may commit in the exercise of its jurisdiction, and which error is reviewable only by an appeal. On the other hand, an error of jurisdiction is one where the act complained of was issued by the court, officer or a quasi-judicial body without or in excess of jurisdiction, or with grave abuse of discretion which is tantamount to lack or in excess of jurisdiction. This error is correctible [sic] only by the extraordinary writ of certiorari.17 (Emphasis supplied.) Considering that the instant petition assails the jurisdiction of the court a quo to issue the Writ of Execution, Notice to Vacate and the Order of Demolition in view of the alleged non-finality of the decision of the CA, it falls within the ambit of a special civil action for certiorari under Rule 65 of the Rules of Court. Nonetheless, petitioners‘ direct resort to this Court was in utter disregard of the hierarchy of courts. Although the Supreme Court, Regional Trial Courts and the CA have concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence does not give the petitioner unrestricted freedom of choice of court forum. As held in People vs. Cuaresma:18 This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court with Regional Trial Courts and with the Court of Appeals. This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application therefor will be directed. There is after all a hierarchy of courts. A direct invocation of the Supreme Court’s original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is established policy. It is a policy that is necessary to prevent inordinate demands upon the Court's time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Court's docket.19 In Vergara, Sr. vs. Suelto,20 the Court further elucidated: The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily perform the functions assigned to it by fundamental charter and immemorial tradition. It cannot and should not be burdened with the task of dealing with causes in the first instance. Its original jurisdiction to issue the so-called extraordinary writs should be exercised only where absolutely necessary or where serious and important reasons exist therefor. Hence, that jurisdiction should generally be exercised relative to actions or proceedings before the Court of Appeals, or before constitutional or other tribunals, bodies or agencies whose acts for some reason or another, are not controllable by the Court of Appeals. Where the issuance of an extraordinary writ is also within the competence of the Court of Appeals or a Regional Trial Court, it is in either of these courts that the specific action for the

writ's procurement must be presented. This is and should continue to be the policy in this regard, a policy that courts and lawyers must strictly observe.21 In the present case, petitioners have not offered any exceptional or compelling reason not to observe the hierarchy of courts. Thus, the petition should have been initially filed with the Regional Trial Court. In any event, petitioners‘ contention that they or their original counsel did not receive the decision of the CA is misleading. The records clearly reveal that the Decision of the CA, dated April 16, 1998, was sent by registered mail to petitioners‘ original counsel at his office address22 and received on April 24, 1998 by a certain Mylene Malano.23 The presumption that the decision was delivered to a person in his office, who was duly authorized to receive papers for him, therefore, stands.24 Petitioners have not presented evidence to overcome this presumption of regularity in the performance of official duty.25 We, therefore, hold that the decision of the CA became final and executory on May 9, 1998.26 Clearly, this is an instance where the due process routine vigorously pursued by petitioners is but a clear-cut afterthought meant to delay the settlement of an otherwise uncomplicated legal dispute. Aside from clogging court dockets, the strategy is deplorably a common curse resorted to by losing litigants in the hope of evading manifest obligations.27 The Court must state here for the petitioners, who notably filed the instant petition in their own behalf without the assistance of counsel, and on all other litigants similarly inclined to resort to the same or related scheme or stratagem that this Court cannot condone or tolerate any abuse of the judicial process. As the Court has stated in Cantelang vs. Medina,28 "this Court will ever be vigilant to nip in the bud any dilatory maneuver calculated to defeat or frustrate the ends of justice, fair play and the prompt implementation of final and executory judgments."29 Litigation must end and terminate sometime and somewhere, and it is essential to an effective and efficient administration of justice that, once a judgment has become final, the winning party be not, through a mere subterfuge, deprived of the fruits of the verdict. Courts must, therefore, guard against any scheme calculated to bring about that result. Constituted as they are to put an end to controversies, courts should frown upon any attempt to prolong them.30 There should be a greater awareness on the part of litigants that the time of the judiciary, much more so of this Court, is too valuable to be wasted or frittered away by efforts, far from commendable, to evade the operation of a decision final and executory, especially so, where, as shown in the present case, the clear and manifest absence of any right calling for vindication, is quite obvious and indisputable. Time and again the Court has left no doubt as to our disapproval of such a practice. The aim of a lawsuit is to render justice to the parties according to law. Procedural rules are precisely designed to accomplish such a worthy objective. Necessarily, therefore, any attempt to pervert the ends for which they are intended deserves condemnation. Verily, by the undue delay in the execution of a final judgment in their favor, private respondents have suffered an injustice. The Court views with disfavor the unjustified delay in the enforcement of the final orders and decision in this case. Once a judgment becomes final and executory, the prevailing party should not be denied the fruits of his victory by some subterfuge devised by the losing party.31 WHEREFORE, the instant petition is DISMISSED. Double costs against petitioners. [G.R. No. 156228. December 10, 2003] VIDAL VS. ESCUETA 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) ofMandaluyong 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 forP13,300,000.00 payable as follows: Down payment ONE MILLION FIVE HUNDRED THOUSAND (P1,500,000.00) which the HEIRS-SELLERS acknowledged receipt thereof with complete and full satisfaction; Second payment - TEN MILLION EIGHT HUNDRED THOUSAND (P10,800,000.00) after publication of the Extra-Judicial Settlement of the Estate of the late Abelardo Escueta and payment of the taxes with the Bureau of Internal Revenue by the Attorney-in-Fact; and The balance of ONE MILLION (P1,000,000.00) upon vacation of all the occupants of the subject property within SIX (6) months from date hereof.[7] The parties further agreed that: Ms. Maria Teresa Escueta shall deliver unto the BUYER the Owners Duplicate Copy of the title upon receipt of the down payment while the original copies of the Special Power of Attorney shall be delivered upon payment of the Second Payment stated above. The ATTORNEY-IN-FACT-SELLER shall be responsible for the ejectment of all the tenants in the said subject property. The ATTORNEY-IN-FACT-SELLER shall pay the estate tax, capital gains tax and documentary stamp tax including the telephone, water and Meralco bills and the publication for the Extra-Judicial Settlement of the estate of the late ABELARDO ESCUETA while the registration and transfer fees shall be shouldered by the BUYER.[8] On May 5, 1999, Escueta and Llanera, and the sub-lessees, executed an Amicable Settlement,[9] where they agreed that (a) the owners of the property would no longer collect the rentals due from the respondents therein (lessee and sub-lessees) starting May 1999, with the concomitant obligation of the respondents to vacate the property on or before December 1999; (b) time was the essence of the agreement, and that consequently, if the lessee and sub-lessees fail or refuse to vacate the property on or before December 1999, the barangay chairman was authorized without any court order to cause the eviction and removal of all the respondents on the property.[10] The amicable settlement was attested by Pangkat Chairman Jose Acong. The parties did not repudiate the amicable settlement within ten days from the execution thereof. Neither did any of the parties file any petition to repudiate the settlement. The vendees having paid the down payment and second installment of the price of the property, the vendors caused the cancellation on December 17, 1999, of TCT No. 27568 and the issuance of TCT No. 15324 to and under the names of the vendees Mary Liza Santos, Susana Lim and Johnny Lim.[11] However, Escueta and the other vendors had yet to receive the balance of the purchase price of P1,000,000.00 because the respondents were still in the property. Llanera vacated the leased premises. Later, twenty of the sub-lessees also vacated the property. By January 2000, five sub-lessees, namely, Ma. Teresa Vidal, Lulu Marquez, Marcelo Trinidad, Carlos Sobremonte,[12] and Jingkee Ang remained in the property, and requested Escueta for extensions to vacate the property. Escueta agreed, but despite the lapse of the extensions granted them, the five sub-lessees refused to vacate the property. Escueta opted not to have the sub-lessees evicted through the Punong Barangay as provided for in the amicable settlement. Neither did she file a motion with the Punong Barangay for the enforcement of the settlement. Instead, she filed on May 12, 2000, a verified Motion for Execution against the

recalcitrant 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 plaintiffs motion was premature and procedurally improper. The defendants asserted that the plaintiff must first secure a certification to file action from the barangay and thereafter, file an action for ejectment against them as required by Section 417 of the LGC. The amicable settlement of the parties before the Lupon cannot be a substitute for an action for ejectment. Finally, they averred that they had been sub-lessees for more than ten years already; hence, had the right of first refusal under Section 6 of the Urban Land Reform Law (P.D. No. 1517). For her part, the plaintiff asserted that there having been no execution of the amicable settlement on or before November 6, 1999 by the Lupon, the settlement may now be enforced by action in the proper city or municipal court. On February 22, 2001, the court issued an 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 plaintiffs motion for execution was premature. Aggrieved, the plaintiff, now the appellant, appealed the order to the RTC where she contended that: THE METROPOLITAN TRIAL COURT COMMITTED THE REVERSIBLE ERROR IN FINDING AND IN CONCLUDING THAT PLAINTIFF IS NO LONGER THE REAL PARTY-IN-INTEREST. THE METROPOLITAN TRIAL COURT COMMITTED THE REVERSIBLE ERROR IN FINDING AND IN CONCLUDING THAT DEFENDANTS CANNOT BE EJECTED AND CAN EXERCISE THE RIGHT OF FIRST REFUSAL. THE METROPOLITAN TRIAL COURT COMMITTED THE REVERSIBLE ERROR IN NOT FINDING AND IN NOT MAKING THE CONCLUSION THAT DEFENDANTS HAVE VIOLATED THE FINAL AND EXECUTORY THE WRITTEN AMICABLE SETTLEMENT BETWEEN PARTIES EXECUTED IN THEIR BARANGAY CONFRONTATION. THE METROPOLITAN TRIAL COURT COMMITTED THE REVERSIBLE ERROR IN NOT ORDERING THE EJECTMENT OF THE DEFENDANTS AND IN NOT ORDERING SAID DEFENDANTS TO PAY THEIR ARREARAGES IN RENTAL PAYMENTS FROM MAY 1999 UP TO THE DAY THEY ACTUALLY LEAVE THE PREMISES AS WELL AS ATTORNEYS FEES AND DAMAGES.[16] On August 31, 2001, the RTC rendered a decision holding that the plaintiff-appellant was still the owner of the property when the ejectment case was filed in the office of the barangay captain, and, as such, was the real party-in-interest as the plaintiff in the MTC. Moreover, under the deed of conditional sale between her and the buyers, it was stipulated therein that the purchase price of P1,000,000.00 would be delivered to the vendors only upon the vacation of all the occupants of the subject property within six (6) months from date hereof. She was duty-bound to cause the eviction of the defendant from the property; hence, the appellant, as a co-owner, had a substantial interest in the property. The MTC further held that the sale, having been executed while the appellants complaint was pending with the Lupon, the action in the MTC may be continued by the plaintiff-appellant.

As to the right of first refusal being asserted by the appellees, the court ruled that there was no showing that the land leased had been proclaimed to be within a specific Urban Land Reform Zone. In fact, the Housing and Land Use Regulatory Board had certified that the subject property was outside the area for priority development; thus, the appellees may not claim that they had been deprived of their preemptive right when no such right existed in the first place. The court did not rule on the third and fourth issues on the ground that the said issues were never raised by the parties. The decretal portion of the RTC decision reads as follows: PREMISES CONSIDERED, the appeal is GRANTED. The Order dated February 2, 2001 issued by the Metropolitan Trial Court of Mandaluyong City, Branch 60, in Civil Case No. 17520 is hereby REVERSED and SET ASIDE, and a new one is entered granting the Motion for Execution. Let the Record of this case be remanded to the court a quo for proper disposition. SO ORDERED.[17] A petition for review under Rule 42 was filed with the Court of Appeals by three of the appellees, now petitioners Ma. Teresa Vidal, Lulu Marquez and Carlos Sobremonte. The court, however, dismissed the petition on (1) procedural grounds, and (2) for lack of merit. [18] On procedural grounds, the CA ruled that the petitioners failed to indicate the specific material dates, showing that their petition was filed on time as required by the rules, and in declaring that they failed to justify their failure to do so. On the merits of the petition, the appellate court upheld the ruling of the RTC. The decretal portion of the decision of the CA reads: WHEREFORE, the instant petition is hereby DISMISSED. The assailed Decision of the Regional Trial Court of Mandaluyong City, Branch 208, rendered in Civil Case No. MC01-333-A, dated August 31, 2001 is hereby AFFIRMED. SO ORDERED.[19] In their petition at bar, the petitioners assert that the CA erred as follows: (1) in not applying the rules of procedure liberally; (2) in declaring that there was no need for the respondents to file an ejectment case for the eviction of the petitioners; (3) that the real parties-in-interest as plaintiffs in the MTC were the new owners of the property, Susana Lim, Johnny Lim and Mary Liza Santos; (4) in not finding that the Amicable Settlement was obtained through deceit and fraud; and (5) in ruling that the petitioners had no right of first refusal in the purchase and sale of the subject property under Presidential Decree No. 1517. The petition is bereft of merit. On the procedural issue, the CA dismissed the petition before it for the petitioners failure to comply with Section 2, par. 1, Rule 42 of the 1997 Rules of Civil Procedure.[20] The CA ratiocinated that there was no justification for a relaxation of the Rules, thus: Petitioners cited decisions of the Supreme Court where a relaxation of procedural rules was allowed. However, a reading of those cases shows that they are not exactly similar with the present case. In the case of Mactan Cebu International Airport Authority vs. Francisco Cuizon Mangubat, the Supreme Court allowed the late payment of docket fee by the Solicitor General on the ground that the 1997 Rules of Civil Procedure regarding payment of docket fees was still new at that time. The same cannot be said in the present case. The petition was filed on February 28, 2002, almost five years from the issuance of the 1997 Rules of Civil Procedure. The circumstances of typhoon and holiday for failure to obtain a certified true copy of the DOJs Decision, in the case of Hagonoy Market Vendor Association vs. Municipalityof 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 Luponthrough the Punong Barangay within a time line of six months, and if the settlement is not so enforced by the Lupon after the lapse of the said period, it may be enforced only by an action in the proper city or municipal court as provided for in Section 417 of the LGC of 1991, as amended, which reads: SEC. 417. Execution. The amicable settlement or arbitration award may be enforced by execution by the Lupon within six (6) months from the date of the settlement. After the lapse of such time, the settlement may be enforced by action in the proper city or municipal court. (Underlining supplied). Section 417 of the Local Government Code provides a mechanism for the enforcement of a settlement of the parties before the Lupon. It provides for a two-tiered mode of enforcement of an amicable settlement executed by the parties before the Lupon, namely, (a) by execution of the Punong Barangay which is quasi-judicial and summary in nature on mere motion of the party/parties entitled thereto;[28] and (b) by an action in regular form, which remedy is judicial. Under the first remedy, the proceedings are covered by the LGC and the Katarungang Pambarangay Implementing Rules and Regulations. The Punong Barangay is called upon during the hearing to determine solely the fact of non-compliance of the terms of the settlement and to give the defaulting party another chance at voluntarily complying with his obligation under the settlement. Under the second remedy, the proceedings are governed by the Rules of Court, as amended. The cause of action is the amicable settlement itself, which, by operation of law, has the force and effect of a final judgment. Section 417 of the LGC grants a party a period of six months to enforce the amicable settlement by the Lupon through the Punong Barangay before such party may resort to filing an action with the MTC to enforce the settlement. The raison d etre of the law is to afford the parties during the six-month time line, a simple, speedy and less expensive enforcement of their settlement before the Lupon. The time line of six months is for the benefit not only of the complainant, but also of the respondent. Going by the plain words of Section 417 of the LGC, the time line of six months should be computed from the date of settlement. However, if applied to a particular case because of its peculiar circumstance, the computation of the time line from the date of the settlement may be arbitrary and unjust and contrary to the intent of the law. To illustrate: Under an amicable settlement made by the parties before the Lupon dated January 15, 2003, the respondents were obliged to vacate the subject property on or before September 15, 2003. If the time line of six months under

Section 417 were to be strictly and literally followed, the complainant may enforce the settlement through the Lupon only up to July 15, 2003. But under the settlement, the respondent was not obliged to vacate the property on or before July 15, 2003; hence, the settlement cannot as yet be enforced. The settlement could be enforced only after September 15, 2003, when the respondent was obliged to vacate the property. By then, the six months under Section 417 shall have already elapsed. The complainant can no longer enforce the settlement through the Lupon, but had to enforce the same through an action in the MTC, in derogation of the objective of Section 417 of the LGC. The law should be construed and applied in such a way as to reflect the will of the legislature and attain its objective, and not to cause an injustice. As Justice Oliver Wendell Holmes aptly said, courts are apt to err by sticking too closely to the words of the law where these words support a policy that goes beyond them. The Court should not defer to the latter that killeth but to the spirit that vivifieth.[29] In light of the foregoing considerations, the time line in Section 417 should be construed to mean that if the obligation in the settlement to be enforced is due and demandable on the date of the settlement, the six-month period should be counted from the date of the settlement; otherwise, if the obligation to be enforced is due and demandable on a date other than the date of the settlement, the six-month period should be counted from the date the obligation becomes due and demandable. Parenthetically, the Katarungang Pambarangay Implementing Rules and Regulations, Rule VII, Section 2 provides: SECTION 2. Modes of Execution. - The amicable settlement or arbitration award may be enforced by execution by the Lupon within six [6] months from date of the settlement or date of receipt of the award or from the date the obligation stipulated in the settlement or adjudged in the arbitration award becomes due and demandable. After the lapse of such time, the settlement or award may be enforced by the appropriate local trial court pursuant to the applicable provisions of the Rules of Court . An amicable settlement reached in a case referred by the Court having jurisdiction over the case to the Lupon shall be enforced by execution by the said court. (Underlining supplied). By express provision of Section 417 of the LGC, an action for the enforcement of the settlement should be instituted in the proper municipal or city court. This is regardless of the nature of the complaint before the Lupon, and the relief prayed for therein. The venue for such actions is governed by Rule 4, Section 1 of the 1997 Rules of Civil Procedure, as amended. An action for the enforcement of a settlement is not one of those covered by the Rules on Summary Procedure in civil cases;[30] hence, the rules on regular procedure shall apply, as provided for in Section 1, Rule 5 of the Rules of Civil Procedure, as amended.[31] As to the requisite legal fees for the filing of an action in the first level court under Section 417 of the Local Government Code, indigents-litigants (a) whose gross income and that of their immediate family do not exceed ten thousand (P10,000.00) pesos a month if residing in Metro Manila, and five thousand (P5,000.00) pesos a month if residing outside Metro Manila, and (b) who do not own real property with an assessed value of more than fifty thousand (P50,000.00) pesos shall be exempt from the payment of legal fees. Section 18, Rule 141 of the Revised Rules of Court, as amended by A.M. No. 00-2-01-SC, is hereby further amended accordingly. In this case, the parties executed their Amicable Settlement on May 5, 1999. However, the petitioners were obliged to vacate the property only in January 2000, or seven months after the date of the settlement; hence, the respondent may enforce the settlement through the Punong Barangay within six months from January 2000 or until June 2000, when the obligation of the petitioners to vacate the property became due. The respondent was precluded from enforcing the settlement via an action with the MTC before June 2000. However, the respondent filed on May 12, 2000 a motion for execution with the MTC and not with the Punong Barangay. Clearly, the respondent adopted the wrong remedy. Although the MTC denied the respondents motion for a writ of execution, it was for a reason other than the impropriety of the remedy resorted to by the respondent. The RTC erred in granting the respondents motion for a writ of execution, and the CA erred in denying the petitioners petition for review. Normally, the Court would remand the case to the Punong Barangay for further proceedings. However, the Court may resolve the issues posed by the petitioners, based on the

pleadings of the parties to serve the ends of justice. It is an accepted rule of procedure for the Court to strive to settle the existing controversy in a single proceeding, leaving no root or branch to bear the seeds of future litigation.[32] In this case, there is no question that the petitioners were obliged under the settlement to vacate the premises in January 2000. They refused, despite the extensions granted by the respondent, to allow their stay in the property. For the court to remand the case to the Lupon and require the respondent to refile her motion for execution with the Lupon would be an idle ceremony. It would only unduly prolong the petitioners unlawful retention of the premises.[33] The RTC and the CA correctly ruled that the respondent is the real party-in-interest to enforce amicable settlement. Rule 3, Section 2 of the Rules of Court, as amended, reads: SEC. 2. Parties in interest. - A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party in interest. The party-in-interest applies not only to the plaintiff but also to the defendant. Interest within the meaning of the rules means material interest, an interest in issue and to be affected by the decree as distinguished from mere interest in the question involved, or a mere incidental interest.[34] A real party in interest is one who has a legal right.[35] Since a contract may be violated only by the parties thereto as against each other, in an action upon that contract, the real parties-in-interest, either as plaintiff or as defendant, must be parties to the said contract.[36] The action must be brought by the person who, by substantive law, possesses the right sought to be 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 the ground of deceit and fraud. First. The petitioners failed to repudiate the settlement within the period therefor.Second. The petitioners were benefited by the amicable settlement. They were allowed to remain in the property without any rentals therefor until December 1998. They were even granted extensions to continue in possession of the property. It was only when the respondent filed the motion for execution that the petitioners alleged for the first time that the respondents deceived them into executing the amicable settlement.[38] On the petitioners claim that they were entitled to the right of first refusal under P.D. No. 1517, we agree with the disquisition of the trial court, as quoted by the Court of Appeals: We likewise find no reversible error on the part of [the] RTC in rejecting that the petitioners have a right of first refusal in the purchase and sale of the subject property. As ratiocinated by the court: xxx. Presidential Decree No. 1517 (The Urban Land Reform Law) does not apply where there is no showing that the land leased has been proclaimed to be within a specific Urban Land Reform Zone. In the instant case, the annex attached to the Proclamation 1967 creating the areas declared as priority development and urban land reform zone ... does not indicate that the barangay where the subject property is located is included therein. This is bolstered by the certification issued by the Housing and Land Regulatory Board to the effect that the location of the property is outside the area of Priority Development. It is therefore a reversible error for the lower court to conclude that defendants-appellees were deprived of their preemptive right when no right exists in the first place. Indeed, before a preemptive right under PD 1517 can be exercised, the disputed land should be situated in an area declared to be both an APD (Areas for Priority Development) and a ULRZ (Urban Land Reform Zones). Records show, and as not disputed by the petitioners, the disputed property is not covered by the aforementioned areas and zones.[39] 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. GR 176405 WEE VS. DE CASTRO Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Revised Rules of Court filed by petitioner Leo Wee, seeking the reversal and setting aside of the Decision[2] dated 19 September 2006 and the Resolution[3] dated 25 January 2007 of the Court of Appeals in CA-G.R. SP No. 90906. The appellate court, in its assailed Decision, reversed the dismissal of Civil Case. No. 1990, an action for ejectment instituted by respondent George de Castro, on his own behalf and on behalf of Annie de Castro, Felomina de Castro Uban and Jesus de Castro[4] against petitioner, by the Municipal Trial Court (MTC) of Alaminos City, which was affirmed by the Regional Trial Court (RTC), Branch 54, Alaminos City, Pangasinan; and, ruling in favor of the respondents, ordered the petitioner to vacate the subject property. In its assailed Resolution dated 25 January 2007, the Court of Appeals refused to reconsider its earlier Decision of 19 September 2006. In their Complaint[5] filed on 1 July 2002 with the MTC of Alaminos City, docketed as Civil Case No. 1990, respondents alleged that they are the registered owners of the subject property, a two-storey building erected on a parcel of land registered under Transfer Certificate of Title (TCT) No. 16193 in the Registry of Deeds of Pangasinan, described and bounded as follows: A parcel of land (Lot 13033-D-2, Psd-01550-022319, being a portion of Lot 13033-D, Psd-018529, LRC Rec. No. ____) situated in Pob., Alaminos City; bounded on the NW. along line 1-2 by Lot 13035-D-1 of the subdivision plan; on the NE. along line 2-3 by Vericiano St.; on the SE. along line 3-4 by Lot 13033-D-2 of the subdivision plan; on the SW. along line 4-1 by Lot575, Numeriano Rabago. It is coverd by TCT No. 16193 of the Register of Deeds of Pangasinan (Alaminos City) and declared for taxation purposes per T.D. No. 2075, and assessed in the sum of P93,400.00.[6] Respondents rented out the subject property to petitioner on a month to month basis for P9,000.00 per month.[7] Both parties agreed that effective 1 October 2001, the rental payment shall be increased from P9,000.00 to P15,000.00. Petitioner, however, failed or refused to pay the corresponding increase on rent when his rental obligation for the month of 1 October 2001 became due. The rental dispute was brought to the Lupon Tagapagpamayapa of Poblacion, Alaminos, Pangasinan, in an attempt to amicably settle the matter but the parties failed to reach an agreement, resulting in the issuance by the Barangay Lupon of a Certification to file action in court on 18 January 2002. On 10 June 2002, respondent George de Castro sent a letter to petitioner terminating their lease agreement and demanding that the latter vacate and turn over the subject property to respondents.Since petitioner stubbornly refused to comply with said demand letter, respondent George de Castro, together with his siblings and co-respondents, Annie de Castro, Felomina de Castro Uban and Jesus de Castro, filed the Complaint for ejectment before the MTC. It must be noted, at this point, that although the Complaint stated that it was being filed by all of the respondents, the Verification and the Certificate of Non-Forum Shopping were signed by respondent George de Castro alone. He would subsequently attach to his position paper filed before the MTC on 28 October 2002 the Special Powers of Attorney (SPAs) executed by his sisters Annie de Castro and Felomina de Castro Uban dated 7 February 2002 and 14 March 2002 respectively, authorizing him to institute the ejectment case against petitioner. Petitioner, on the other hand, countered that there was no agreement between the parties to increase the monthly rentals and respondents demand for an increase was exorbitant. The agreed monthly rental was only for the amount of P9,000.00 and he was religiously paying the same every month. Petitioner then argued that respondents failed to comply with the jurisdictional requirement of

conciliation before the Barangay Lupon prior to the filing of Civil Case. No. 1990, meriting the dismissal of their Complaint therein. The Certification to file action issued by the Barangay Lupon appended to the respondents Complaint merely referred to the issue of rental increase and not the matter of ejectment. Petitioner asserted further that the MTC lacked jurisdiction over the ejectment suit, since respondents Complaint was devoid of any allegation that there was an unlawful withholding of the subject property by the petitioner.[8] During the Pre-Trial Conference[9] held before the MTC, the parties stipulated that in May 2002, petitioner tendered to respondents the sum of P9,000.00 as rental payment for the month of January 2002; petitioner paid rentals for the months of October 2001 to January 2002 but only in the amount of P9,000.00 per month; respondents, thru counsel, sent a letter to petitioner on 10 June 2002 terminating their lease agreement which petitioner ignored; and the Barangay Lupon did issue a Certification to file action after the parties failed to reach an agreement before it. After the submission of the parties of their respective Position Papers, the MTC, on 21 November 2002, rendered a Decision[10] dismissing respondents Complaint in Civil Case No. 1990 for failure to comply with the prior conciliation requirement before the Barangay Lupon. The decretal portion of the MTC Decision reads: WHEREFORE, premised considered, judgment is hereby rendered ordering the dismissal of this case. Costs against the [herein respondents]. On appeal, docketed as Civil Case No. A-2835, the RTC of Alaminos, Pangasinan, Branch 54, promulgated its Decision[11] dated 27 June 2005 affirming the dismissal of respondents Complaint for ejectment after finding that the appealed MTC Decision was based on facts and law on the matter. The RTC declared that since the original agreement entered into by the parties was for petitioner to pay only the sum of P9.000.00 per month for the rent of the subject property, and no concession was reached by the parties to increase such amount to P15.000.00, petitioner cannot be faulted for paying only the originally agreed upon monthly rentals. Adopting petitioners position, the RTC declared that respondents failure to refer the matter to the Barangay court for conciliation process barred the ejectment case, conciliation before the Lupon being a condition sine qua non in the filing of ejectment suits. The RTC likewise agreed with petitioner in ruling that the allegation in the Complaint was flawed, since respondents failed to allege that there was an unlawful withholding of possession of the subject property, taking out Civil Case No. 1990 from the purview of an action for unlawful detainer. Finally, the RTC decreed that respondents Complaint failed to comply with the rule that a co-owner could not maintain an action without joining all the other co-owners. Thus, according to the dispositive portion of the RTC Decision: WHEREFORE the appellate Court finds no cogent reason to disturb the findings of the court a quo. The Decision dated November 21, 2002 appealed from is hereby AFFIRMED IN TOTO.[12] Undaunted, respondents filed a Petition for Review on Certiorari[13] with the Court of Appeals where it was docketed as CA-G.R. SP No. 90906. Respondents argued in their Petition that the RTC gravely erred in ruling that their failure to comply with the conciliation process was fatal to their Complaint, since it is only respondent George de Castro who resides in Alaminos City, Pangasinan, while respondent Annie de Castro resides in Pennsylvania, United States of America (USA); respondent Felomina de Castro Uban, in California, USA; and respondent Jesus de Castro, now substituted by his wife, Martiniana, resides in Manila. Respondents further claimed that the MTC was not divested of jurisdiction over their Complaint for ejectment because of the mere absence therein of the term unlawful withholding of their subject property, considering that they had sufficiently alleged the same

in their Complaint, albeit worded differently. Finally, respondents posited that the fact that only respondent George de Castro signed the Verification and the Certificate of Non-Forum Shopping attached to the Complaint was irrelevant since the other respondents already executed Special Powers of Attorney (SPAs) authorizing him to act as their attorney-in-fact in the institution of the ejectment suit against the petitioner. On 19 September 2006, the Court of Appeals rendered a Decision granting the respondents Petition and ordering petitioner to vacate the subject property and turn over the same to respondents. The Court of Appeals decreed: WHEREFORE, premises considered, the instant petition is GRANTED. The assailed Decision dated June 27, 2005 issued by the RTC of Alaminos City, Pangasinan, Branch 54, is REVERSED and SET ASIDE. A new one is hereby rendered ordering [herein petitioner] Leo Wee to SURRENDER and VACATE the leased premises in question as well as to pay the sum of P15,000.00 per month reckoned from March, 2002 until he shall have actually turned over the possession thereof to petitioners plus the rental arrearages of P30,000.00 representing unpaid increase in rent for the period from October, 2001 to February, 2002, with legal interest at 6% per annum to be computed from June 7, 2002 until finality of this decision and 12% thereafter until full payment thereof. Respondent is likewise hereby ordered to pay petitioners the amount of P20,000.00 as and for attorneys fees and the costs of suit.[14] In a Resolution dated 25 January 2007, the appellate court denied the Motion for Reconsideration interposed by petitioner for lack of merit. Petitioner is now before this Court via the Petition at bar, making the following assignment of errors: I. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT CONCILIATION PROCESS IS NOT A JURISDICTIONAL REQUIREMENT THAT NON-COMPLIANCE THEREWITH DOES NOT AFFECT THE JURISDICTION IN EJECTMENT CASE; II. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN UPHOLDING THE SUFFICIENCY OF THE ALLEGATIONS IN THE COMPLAINT FOR EJECTMENT DESPITE THE WANT OF ALLEGATION OF UNLAWFUL WITHOLDING PREMISES (sic) QUESTIONED BY PETITIONER; III. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE FILING OF THE COMPLAINT OF RESPONDENT GEORGE DE CASTRO WITHOUT JOINING ALL HIS OTHER CO-OWNERS OVER THE SUBJECT PROPERTY IS PROPER; IV. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT APPLYING SUPREME COURT CIRCULAR NO. 10 WHICH DIRECTS A PLEADER TO INDICATE IN HIS PLEADINGS HIS OFFICIAL RECEIPT OF HIS PAYMENT OF HIS IBP DUES.[15]

Petitioner avers that respondents failed to go through the conciliation process before the Barangay Lupon, a jurisdictional defect that bars the legal action for ejectment.The Certification to file action dated 18 January 2002 issued by the Barangay Lupon, appended by the respondents to their Complaint in Civil Case No. 1990, is of no moment, for it attested only that there was confrontation between the parties on the matter of rental increase but not on unlawful detainer of the subject property by the petitioner. If it was the intention of the respondents from the very beginning to eject petitioner from the subject property, they should have brought up the alleged unlawful stay of the petitioner on the subject property for conciliation before the Barangay Lupon. The barangay justice system was established primarily as a means of easing up the congestion of cases in the judicial courts. This could be accomplished through a proceeding before the barangay courts which, according to the one who conceived of the system, the late Chief Justice Fred Ruiz Castro, is essentially arbitration in character; and to make it truly effective, it should also be compulsory. With this primary objective of the barangay justice system in mind, it would be wholly in keeping with the underlying philosophy of Presidential Decree No. 1508 (Katarungang Pambarangay Law), which would be better served if an out-of-court settlement of the case is reached voluntarily by the parties.[16] To ensure this objective, Section 6 of Presidential Decree No. 1508 requires the parties to undergo a conciliation process before the Lupon Chairman or the Pangkat ng Tagapagkasundo as a precondition to filing a complaint in court subject to certain exceptions. The said section has been declared compulsory in nature.[17] Presidential Decree No. 1508 is now incorporated in Republic Act No. 7160 (The Local Government Code), which took effect on 1 January 1992. The pertinent provisions of the Local Government Code making conciliation a precondition to the filing of complaints in court are reproduced below: SEC. 412. Conciliation.- (a) Pre-condition to filing of complaint in court. No complaint, petition, action, or proceeding involving any matter within the authority of the lupon shall be filed or instituted directly in court or any other government office for adjudication, unless there has been a confrontation between the parties before the lupon chairman or the pangkat, and that no conciliation or settlement has been reached as certified by the lupon secretary or pangkat secretary as attested to by the lupon or pangkat chairman or unless the settlement has been repudiated by the parties thereto. (b) Where parties may go directly to court. The parties may go directly to court in the following instances: (1) Where the accused is under detention; (2) Where a person has otherwise been deprived of personal liberty calling for habeas corpus proceedings; (3) Where actions are coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property, and support pendente lite; and (4) Where the action may otherwise be barred by the statute of limitations. (c) Conciliation among members of indigenous cultural communities. The customs and traditions of indigenous cultural communities shall be applied in settling disputes between members of the cultural communities.

SEC. 408. Subject Matter for Amicable Settlement; Exception Thereto. The lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: (a) Where one party is the government or any subdivision or instrumentality thereof; (b) Where one party is a public officer or employee, and the dispute relates to the performance of his official functions; (c) Offenses punishable by imprisonment exceeding one (1) year or a fine exceeding Five thousand pesos (P5,000.00); (d) Offenses where there is no private offended party; (e) Where the dispute involves real properties located in different cities or municipalities unless the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (f) Disputes involving parties who actually reside in barangays of different cities or municipalities, except where such barangay units adjoin each other and the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (g) Such other classes of disputes which the President may determine in the interest of justice or upon the recommendation of the Secretary of Justice. There is no question that the parties to this case appeared before the Barangay Lupon for conciliation proceedings. There is also no dispute that the only matter referred to the Barangay Lupon for conciliation was the rental increase, and not the ejectment of petitioner from the subject property. This is apparent from a perusal of the Certification to file action in court issued by the Barangay Lupon on 18 January 2002, to wit: CERTIFICATION TO FILE COMPLAINTS This is to certify that: 1. There was personal confrontation between parties before the barangay Lupon regarding rental increase of a commercial building but conciliation failed; 2. Therefore, the corresponding dispute of the above-entitled case may now be filed in Court/Government Office.[18] (Emphasis ours.) The question now to be resolved by this Court is whether the Certification dated 18 January 2002 issued by the Barangay Lupon stating that no settlement was reached by the parties on the matter of rental increase sufficient to comply with the prior conciliation requirement under the Katarungang Pambarangay Law to authorize the respondents to institute the ejectment suit against petitioner. The Court rules affirmatively. While it is true that the Certification to file action dated 18 January 2002 of the Barangay Lupon refers only to rental increase and not to the ejectment of petitioner from the subject property, the submission of the same for conciliation before the Barangay Lupon constitutes sufficient compliance with the

provisions of the Katarungang Pambarangay Law. Given the particular circumstances of the case at bar, the conciliation proceedings for the amount of monthly rental should logically and reasonably include also the matter of the possession of the property subject of the rental, the lease agreement, and the violation of the terms thereof. We now proceed to discuss the meat of the controversy. The contract of lease between the parties did not stipulate a fixed period. Hence, the parties agreed to the payment of rentals on a monthly basis. On this score, Article 1687 of the Civil Code provides: Art. 1687. If the period for the lease has not been fixed, it is understood to be from year to year, if the rent agreed upon is annual; from month to month, if it is monthly; from week to week, if the rent is weekly; and from day to day, if the rent is to be paid daily. However, even though a monthly rent is paid, and no period for the lease has been set, the courts may fix a longer term for the lease after the lessee has occupied the premises for over one year. If the rent is weekly, the courts may likewise determine a longer period after the lessee has been in possession for over six months. In case of daily rent, the courts may also fix a longer period after the lessee has stayed in the place for over one month. (Emphasis supplied.) The rentals being paid monthly, the period of such lease is deemed terminated at the end of each month. Thus, respondents have every right to demand the ejectment of petitioners at the end of each month, the contract having expired by operation of law. Without a lease contract, petitioner has no right of possession to the subject property and must vacate the same. Respondents, thus, should be allowed to resort to an action for ejectment before the MTC to recover possession of the subject property from petitioner. Corollarily, petitioners ejectment, in this case, is only the reasonable consequence of his unrelenting refusal to comply with the respondents demand for the payment of rental increase agreed upon by both parties. Verily, the lessors right to rescind the contract of lease for non-payment of the demanded increased rental was recognized by this Court in Chua v. Victorio[19]: The right of rescission is statutorily recognized in reciprocal obligations, such as contracts of lease. In addition to the general remedy of rescission granted under Article 1191 of the Civil Code, there is an independent provision granting the remedy of rescission for breach of any of the lessor or lessees statutory obligations. Under Article 1659 of the Civil Code, the aggrieved party may, at his option, ask for (1) the rescission of the contract; (2) rescission and indemnification for damages; or (3) only indemnification for damages, allowing the contract to remain in force. Payment of the rent is one of a lessees statutory obligations, and, upon non-payment by petitioners of the increased rental in September 1994, the lessor acquired the right to avail of any of the three remedies outlined above. (Emphasis supplied.) Petitioner next argues that respondent George de Castro cannot maintain an action for ejectment against petitioner, without joining all his co-owners. Article 487 of the New Civil Code is explicit on this point: ART. 487. Any one of the co-owners may bring an action in ejectment.

This article covers all kinds of action for the recovery of possession, i.e., forcible entry and unlawful detainer (accion interdictal), recovery of possession (accion publiciana), and recovery of ownership (accion de reivindicacion). As explained by the renowned civilist, Professor Arturo M. Tolentino[20]: A co-owner may bring such an action, without the necessity of joining all the other co-owners as co-plaintiffs, because the suit is deemed to be instituted for the benefit of all. If the action is for the benefit of the plaintiff alone, such that he claims possession for himself and not for the co-ownership, the action will not prosper. (Emphasis added.) In the more recent case of Carandang v. Heirs of De Guzman,[21] this Court declared that a co-owner is not even a necessary party to an action for ejectment, for complete relief can be afforded even in his absence, thus: In sum, in suits to recover properties, all co-owners are real parties in interest. However, pursuant to Article 487 of the Civil Code and the relevant jurisprudence, any one of them may bring an action, any kind of action for the recovery of co-owned properties. Therefore, only one of the co-owners, namely the co-owner who filed the suit for the recovery of the co-owned property, is an indispensable party thereto. The other co-owners are not indispensable parties. They are not even necessary parties, for a complete relief can be afforded in the suit even without their participation, since the suit is presumed to have been filed for the benefit of all co-owners. Moreover, respondents Annie de Castro and Felomina de Castro Uban each executed a Special Power of Attorney, giving respondent George de Castro the authority to initiate Civil Case No. 1990. A power of attorney is an instrument in writing by which one person, as principal, appoints another as his agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal. The written authorization itself is the power of attorney, and this is clearly indicated by the fact that it has also been called a letter of attorney.[22] Even then, the Court views the SPAs as mere surplusage, such that the lack thereof does not in any way affect the validity of the action for ejectment instituted by respondent George de Castro. This also disposes of petitioners contention that respondent George de Castro lacked the authority to sign the Verification and the Certificate of Non-Forum Shopping. As the Court ruled in Mendoza v. Coronel[23]: We likewise hold that the execution of the certification against forum shopping by the attorney-in-fact in the case at bar is not a violation of the requirement that the parties must personally sign the same. The attorney-in-fact, who has authority to file, and who actually filed the complaint as the representative of the plaintiff co-owner, pursuant to a Special Power of Attorney, is a party to the ejectment suit. In fact, Section 1, Rule 70 of the Rules of Court includes the representative of the owner in an ejectment suit as one of the parties authorized to institute the proceedings. (Emphasis supplied.) Failure by respondent George de Castro to attach the said SPAs to the Complaint is innocuous, since it is undisputed that he was granted by his sisters the authority to file the action for ejectment against petitioner prior to the institution of Civil Case No. 1990. The SPAs in his favor were respectively executed by respondents Annie de Castro and Felomina de Castro Uban on 7 February 2002 and 14 March 2002; while Civil Case No. 1990 was filed by respondent George de Castro on his own behalf and on behalf of his siblings only on 1 July 2002, or way after he was given by his siblings the

authority to file said action. The Court quotes with approval the following disquisition of the Court of Appeals: Moreover, records show that [herein respondent] George de Castro was indeed authorized by his sisters Annie de Castro and Felomina de Castro Uban, to prosecute the case in their behalf as shown by the Special Power of Attorney dated February 7, 2002 and March 14, 2002. That these documents were appended only to [respondent George de Castros] position paper is of no moment considering that the authority conferred therein was given prior to the institution of the complaint in July, 2002. x x x.[24] Respondent deceased Jesus de Castros failure to sign the Verification and Certificate of Non-Forum Shopping may be excused since he already executed an Affidavit[25] with respondent George de Castro that he had personal knowledge of the filing of Civil Case No. 1990. In Torres v. Specialized Packaging Development Corporation,[26] the Court ruled that the personal signing of the verification requirement was deemed substantially complied with when, as in the instant case, two out of 25 real parties-in-interest, who undoubtedly have sufficient knowledge and belief to swear to the truth of the allegations in the petition, signed the verification attached to it. In the same vein, this Court is not persuaded by petitioners assertion that respondents failure to allege the jurisdictional fact that there was unlawful withholding of the subject property was fatal to their cause of action. It is apodictic that what determines the nature of an action as well as which court has jurisdiction over it are the allegations in the complaint and the character of the relief sought. In an unlawful detainer case, the defendants possession was originally lawful but ceased to be so upon the expiration of his right to possess. Hence, the phrase unlawful withholding has been held to imply possession on the part of defendant, which was legal in the beginning, having no other source than a contract, express or implied, and which later expired as a right and is being withheld by defendant.[27] In Barba v. Court of Appeals,[28] the Court held that although the phrase unlawfully withholding was not actually used by therein petitioner in her complaint, the Court held that her allegations, nonetheless, amounted to an unlawful withholding of the subject property by therein private respondents, because they continuously refused to vacate the premises even after notice and demand. In the Petition at bar, respondents alleged in their Complaint that they are the registered owners of the subject property; the subject property was being occupied by the petitioner pursuant to a monthly lease contract; petitioner refused to accede to respondents demand for rental increase; the respondents sent petitioner a letter terminating the lease agreement and demanding that petitioner vacate and turn over the possession of the subject property to respondents; and despite such demand, petitioner failed to surrender the subject property to respondents.[29] The Complaint sufficiently alleges the unlawful withholding of the subject property by petitioner, constitutive of unlawful detainer, although the exact words unlawful withholding were not used. In an action for unlawful detainer, an allegation that the defendant is unlawfully withholding possession from the plaintiff is deemed sufficient, without necessarily employing the terminology of the law.[30] Petitioners averment that the Court of Appeals should have dismissed respondents Petition in light of the failure of their counsel to attach the Official Receipt of his updated payment of Integrated Bar of the Philippines (IBP) dues is now moot and academic, since respondents counsel has already duly complied therewith. It must be stressed that judicial cases do not come and go through the portals of a court of law by the mere mandate of technicalities.[31] Where a rigid application of the rules will

result in a manifest failure or miscarriage of justice, technicalities should be disregarded in order to resolve the case. [32] Finally, we agree in the ruling of the Court of Appeals that petitioner is liable for the payment of back rentals, attorneys fees and cost of the suit. Respondents must be duly indemnified for the loss of income from the subject property on account of petitioners refusal to vacate the leased premises. WHEREFORE, premises considered, the instant Petition is DENIED. The Decision dated 19 September 2006 and Resolution dated 25 January 2007 of the Court of Appeals in CA-G.R. SP No. 90906 are hereby AFFIRMED in toto. Costs against petitioner.