Petitioner Vs Vs Respondent: Third Division
Petitioner Vs Vs Respondent: Third Division
Petitioner Vs Vs Respondent: Third Division
DECISION
CHICO-NAZARIO, J : p
Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil
Procedure, assailing the Decision 1 of the Court of Appeals in CA-G.R. SP No. 78019, dated
9 February 2005, which reversed and set aside the Judgment 2 of the Regional Trial Court
(RTC), Branch 36, Bontoc, Mountain Province, and reinstated the Resolution 3 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 Action 4 for recovery of possession of
real property situated in Sitio Abatan, Barrio Dagdag, Sagada led 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 Certi cation 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 Certi cation, 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. CIAacS
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. . . ."
The foregoing should be taken together with Section 415 of the same code which
provides:
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.
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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 speci cally Section 415 of RA 7160 which mandates the
personal appearance of the parties before the lupon and likewise prohibits the
appearance of representatives.
Petitioner Pang-et's Motion for Reconsideration having been denied, she led 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
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page 51 of the expediente, dated Feb. 6, 1995, and attested by the Pangkat
Chairman of the O ce 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 falsi ed-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 ve (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 rst 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 led 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 nal 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 rst place been given due course by the court a quo. In which case, it
would not have in the logical ow of things declared both documents
"ine cacious"; without which pronouncements, said court would not have
dismissed the case at bar.
Wherefore, Judgment is hereby rendered Reversing and Setting Aside the
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Resolution appealed from, and ordering the record of the case subject thereof
remanded to the court of origin for further proceedings. 1 0
Aggrieved by the reversal of the RTC, herein respondent led 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 nd 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 a x 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 certi cate to le 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 a rming 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 rst referred to the Lupon to the time the same
was again remanded to it, the Spouses Manacnes remained rm 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 nd it evident that the spouses Manacnes never intended to
submit the case for arbitration.
Moreover, the award itself is riddled with aws. 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.
Vehemently disagreeing with the Decision of the Court of Appeals, petitioner Pang-
et led 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 rst 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 re ected in the Minutes 1 2 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 Certi cation to File Action on 26 February 1995
due to the refusal of the Manacnes spouses. Indicated in said Certi cation 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. 1 3 Nevertheless, upon receipt of said certi cation 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 o ce 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
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as mandated by the Katarungang Pambarangay Law but instead made a nding
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
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.
Footnotes
1. Penned by Associate Justice Rosmari D. Carandang with Associate Justices Remedios
Salazar-Fernando and Monina Arevalo-Zenarosa, concurring; rollo, pp. 29-36.
2. Penned by Judge Artemio B. Marrero, dated 2 June 2003 in Civil Case No. 1090; id. at 37-
40.
3. Penned by Presiding Judge James P. Kibitin, dated 20 August 2002 in Civil Case No.
118; records, pp. 52-55.
4. Docketed as Civil Case No. 83.
5. The Revised Katarungang Pambarangay Law, Sections 399-422, Chapter 7; Title One,
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Book III, Republic Act No. 7160, otherwise known as the Local Government Code of 1991.
6. Docketed as Barangay Case No. 7.
7. Leoncio Manacnes died on 10 May 1995; records, p. 39.
8. Florentina Manacnes also died sometime after the issuance of the Notice of Execution;
id. at 2
9. MCTC Resolution, pp. 2-4, records, pp. 53-55.
10. RTC Judgment, pp. 3-4; rollo, pp. 39-40.
11. CA Decision, pp. 5-8; id. at 33-36.
12. CA rollo, p. 66.
13. Id. at 67.
14. Id. at 68.
15. Preamble, Presidential Decree No. 1293, otherwise known as the Katarungang
Pambarangay Law.
16. Revised Katarungang Pambarangay Law, Section 412 (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 filled 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.
17. Section 413, Revised Katarungang Pambarangay Law.
18. CA rollo, p. 68.
19. Ramos v. Court of Appeals, G.R. No. 132196, 9 December 2005, 477 SCRA 85, 99.