SECOND DIVISION

NENA GIMENA SOLWAY, A.M. No. P-07-2327

Complainant, [Formerly OCA-I.P.I. No. 04-1934-P]
Present:

- versus - QUISUMBING, J.,

Chairperson,
CARPIO,
CARPIO MORALES,
TINGA, and
ARIEL R. PASCASIO, Sheriff III, VELASCO, JR., JJ.
MTCC, Branch 5, Olongapo City,
MICHAEL P. UCLARAY, Sheriff Promulgated:
III, MTCC-OCC-Olongapo City and
BENJAMIN M. TULIO, Sheriff III, July 12, 2007
MTCC-OCC-Olongapo City,
Respondents.

x----------------------------------------------------------------------------x

RESOLUTION

TINGA, J.:

This administrative matter pertains to a complaint[1] dated 5 April 2004 filed by

Nena Gimena Solway (complainant) against Ariel R. Pascasio (Pascasio), Michael
P. Uclaray (Uclaray) and Benjamin M. Tulio (Tulio), charging them with Abuse of
Authority and Harassment before the Office of the Court Administrator (OCA).
Pascasio holds the position of Sheriff III, Municipal Trial Court in Cities (MTCC)
Branch 5, Olongapo City, while Uclaray and Tulio are both employed as Sheriff III
of MTCC-OCC.

The complaint, couched in Tagalog, recites the antecedents, thus:

 Ely Palenzuela (Palenzuela) is the owner of a building in Baloy Beach, Bo.
Barretto, Olongapo City. She leased it to complainant, who opened at the premises
an establishment called Mynes Inn and Restaurant.Complainant paid a monthly
rental of P13,200.00. Prior to the expiration of the lease contract on 1 August 2003,
the parties agreed on its renewal for five (5) years with a ten percent (10%)
increase in rentals or P15,000.00 monthly, but no formal contract was executed
because Palenzuela had left for Hawaii. Upon Palenzuelas return, she increased the
monthly rental to P25,000.00 and shortened the period of lease to one year. The
parties failed to reach an agreement. Hence, the matter was referred to the Office of
the Lupong Tagapamayapa (Lupon) of Barangay Barretto.

Before the Lupon, the parties signed an Amicable Settlement[2] dated 28

January 2004, wherein it was agreed that the monthly rental is P20,000.00; that
complainant will pay P240,000.00 as rental for one year after the finalization of the
contract, and; that the contract will be renewed yearly.

On 9 February 2004, Palenzuela went to complainants restaurant. She produced a

copy of a Notice of Execution[3] signed by Barangay Chairman Carlito A. Baloy,
who turned out to be Palenzuelas brother, and forced complainant to sign the
same. Complainant refused to do so. The following day, Pascasio and Uclaray,
with the same copy of the Notice of Execution in tow, also forced and threatened
complainant to sign. Out of fear, complainant relented and signed the Notice of
Execution.

In the morning of 20 February 2004, Pascasio and Uclaray, accompanied by

Isagani Saludo and Tulio, returned to complainants restaurant. They introduced
themselves as sheriffs and ordered complainant to take all her properties out of the
restaurant. The latter refused, insisting that there was no court order authorizing the
execution and that an agreement for the renewal of the lease contract had already
been reached.[4] At around 3:00 p.m. on the same day, the barangay chairman
ordered respondents to take complainants stuff out of the restaurant and into the
street. Respondents complied. Thereafter, respondents padlocked all the rooms and
ordered all customers to get out of the establishment.[5]
In her complaint, complainant questioned the presence of respondents in the
premises, considering that there was no court order to eject her.[6]

On 25 May 2004, the Court Administrator endorsed the complaint to respondents

for their comment.[7]

In their Joint Comment/explanation,[8] respondents admitted their presence in

complainants establishment. According to them, they were there to provide
assistance in securing compliance with the Amicable Settlement. Professing
innocence of any act of harassment or abuse of authority, they further claimed that
they were instructed by Clerk of Court and City Sheriff Alexander Rimando to
observe the implementation of the arbitration award. They were thus mere
witnesses to complainants refusal to comply with the settlement process which was
under the control and supervision of the barangay chairman. Respondents
accordingly prayed for the dismissal of the complaint.

On 13 December 2004, the OCA submitted a Report[9] finding that respondents

exceeded their functions when they participated in the execution of the Amicable
Settlement. Nevertheless, the OCA observed that there was no showing that
respondents profited from their participation in the exercise and on that basis
recommended the dismissal of the complaint for lack of merit.[10]

In the Resolution[11] dated 7 February 2005, the parties were required to manifest
within ten (10) days from notice, if they are willing to submit the case for
resolution based on the pleadings filed. On 10 March 2005, complainant made a
manifestation to that effect[12] while respondents submitted a similar manifestation
on 9 February 2007.[13]

Respondents are liable.

The Amicable Settlement reached by the parties before the Barangay Lupon
is susceptible to legal enforcement. However, the Local Government Code
mandates that it is the Lupon itself which is tasked to enforce by execution the
amicable settlement or arbitration award within six (6) months from the date of
settlement. Upon the lapse of such time, the settlement may only be enforced by
filing an action before the appropriate court.Section 417 of the Local Government
Code reads:

SEC. 417. Execution.The amicable settlement or arbitration award

may be enforced by execution by the [L]upon 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.

Clearly, the implementation of the Notice of Execution was then outside the
legitimate concern of the MTCC, of any of its officers or of any other judicial
officer. The barangay chairmans letter to the MTCC seeking assistance in the
enforcement of the Amicable Settlement is not by any measure the court action
contemplated by law as it does not confer jurisdiction on the MTCC over the
instant dispute. Such could be accomplished only through the initiation of the
appropriate adversarial proceedings in court in accordance with Section 417 of the
Local Government Code. The OCA correctly stated that there is no justiciable case
filed before the MTCC that could have prompted respondents to act accordingly.

Mere presence of a sheriff in a place of execution where the court has no

business is frowned upon. Such act elicits the appearance of
impropriety.[14] Participation or intervention in the process is a more grievous act
which exacts a more stringent sanction. And whether it is unexplained presence or
active participation, the act gives rise to the impression that the execution of the
Amicable Settlement is upon lawful order of the court.

The situation at bar did not involve any court order. The execution was
undertaken only under the authority of the barangay chairman, not even that of the
Lupon. Even if it was done under the auspices of the Lupon, the presence of
respondents would still not be warranted. Both the barangay chairman and the
Lupon are components of the local government unit which, in turn, is subsumed
under the executive branch of government. As the intended execution of the
settlement in this instance was inherently executive in nature and, therefore,
extrajudicial, it necessarily follows that judicial officers cannot participate in the
exercise. The misdeeds of respondents unnecessarily put the integrity of the court
to which they are assigned and the dignity of the institution that is the judiciary on
the line.

The fact of willful participation is penalized especially when the acts of the
judicial officer concerned are not within his or her legal authority. Complainant
alleged that respondents actually participated in the execution of the Amicable
Settlement and the OCA observed that these allegations were not sufficiently
refuted by respondents.[15] More tellingly, the defense of respondents that they
were acting under the order of the Clerk of Court is belied by the
directive[16] issued by the latter directing respondents to explain their presence at
the site of the implementation of the Notice of Execution.

Furthermore, the functions of sheriffs, such as respondents, are enumerated

under the 2002 Revised Manual for Clerks of Court, as follows:

2.2.4.1 serves and/or executes writs and processes addressed and/or

assigned to him by the Court and prepares and submits returns of his
proceedings;

2.2.4.2 keeps custody of attached properties or goods;

2.2.4.3 maintains his own record books on writs of execution, writs of

attachment, writs of replevin, writs of injunction, and all other processes
executed by him; and

2.2.4.4 performs such other duties as may be assigned by the Executive

Judge, Presiding Judge and/or Branch Clerk of Court.

Nothing in this Rule justifies their participation in the implementation of the

Notice of Execution. Clearly, respondents were not acting within their authority.
This further lends credence to complainants claim that their presence was only
meant to instill fear on her to make her sign the Notice of Execution.

Respondents have exceeded their mandated duties when they interfered with
functions that should have been exercised only by barangay officials. Their actions
run counter to the Code of Conduct of Court Personnel which provides that court
personnel shall expeditiously enforce rules and implement orders of the court
within the limits of their authority. As we have so reiterated in a previous ruling,
a court employee is expected to do no more than what duty demands and no less
than what privilege permits. Though he may be of great help to specific
individuals, but when that help frustrates and betrays the publics trust in the
system, it cannot and should not remain unchecked.[17]

Sheriffs play an important role in the administration of justice since they are
called upon to serve court writs, execute all processes, and carry into effect the
orders of the court with due care and utmost diligence. As officers of the court,
sheriffs are duty-bound to use reasonable skill and diligence in the performance of
their duties, and conduct themselves with propriety and decorum and act above
suspicion.[18]

In the instant case, respondents failed to uphold the standard of integrity and
prudence ought to be exercised by officers of the court. Based on the foregoing, we
are constrained to reverse the recommendation of the OCA in dismissing the
complaint.

We find that respondents unjustified presence in the implementation of the

Amicable Settlement despite the absence of an order from the court in tandem with
its lack of jurisdiction over the matter constitutes misconduct.Misconduct is
defined as any unlawful conduct on the part of the person concerned in the
administration of justice prejudicial to the rights of parties or to the right
determination of the cause. It generally means wrongful, improper, unlawful
conduct motivated by a premeditated, obstinate or intentional
[19]
purpose. Respondents impropriety subjected the image of the court to public
suspicion and distrust. Thus, they are guilty of simple misconduct.[20]

Under the Civil Service Rules,[21] simple misconduct is punishable by

suspension of one (1) month and one (1) day to six (6) months.

WHEREFORE, respondents Ariel R. Pascasio, Sheriff III, Branch 5,

MTCC, Olongapo City, Michael P. Uclaray, Sheriff III, MTCC-OCC, and
Benjamin M. Tulio, Sheriff III, MTCC-OCC, Olongapo City, are found GUILTY
of misconduct and are hereby SUSPENDED for a period of three (3) months
without pay, with a STERN WARNING that a repetition of the same or similar act
will be dealt with more severely.

SO ORDERED.
 [G.R. No. 158901. March 9, 2004]

PROCESO QUIROS and LEONARDA VILLEGAS, petitioners, vs.

MARCELO ARJONA, TERESITA BALARBAR, JOSEPHINE
ARJONA, and CONCHITA ARJONA, respondents.

DECISION
YNARES-SANTIAGO, J.:

Assailed in this petition for review is the decision of the Court of Appeals in
an action for the execution/enforcement of amicable settlement between
petitioners Proceso Quiros and Leonarda Villegas and respondent Marcelo
Arjona.Appellate court reversed the decision of the Regional Trial Court of
Dagupan City-Branch 44 and reinstated the decision of the Municipal Trial
Court of San Fabian-San Jacinto, Pangasinan.
On December 19, 1996, petitioners Proceso Quiros and Leonarda Villegas
filed with the office of the barangay captain of Labney, San Jacinto,
Pangasinan, a complaint for recovery of ownership and possession of a parcel
of land located at Labney, San Jacinto, Pangasinan. Petitioners sought to
recover from their uncle Marcelo Arjona, one of the respondents herein, their
lawful share of the inheritance from their late grandmother Rosa Arjona Quiros
alias Doza, the same to be segregated from the following parcels of land:

a) A parcel of land (Lot 1, plan Psu-189983, L.R. Case No. D-614, LRC
Record No. N- 22630), situated in the Barrio of Labney, Torud,
Municipality of San Jacinto, Province of Pangasinan x x x Containing an
area of Forty Four Thousand Five Hundred and Twenty (44,520) square
meters, more or less, covered by Tax Decl. No. 607;

b) A parcel of Unirrig. riceland situated at Brgy. Labney, San Jacinto, San

Jacinto, Pangasinan with an area of 6450 sq. meters, more or less
declared under Tax Decl. No. 2066 of the land records of San Jacinto,
Pangasinan assessed at P2390.00 x x x;

c) A parcel of Unirrig. riceland situated at Brgy. Labney, San Jacinto,

Pangasinan with an area of 6450 sq. meters, more or less, declared under
Tax Declaration No. 2047 of the land records of San Jacinto, Pangasinan
assessed at P1700.00 x x x
 d) A parcel of Unirrig. riceland situated at Brgy. Labney, San Jacinto,
Pangasinan assessed at P5610.00 x x x;

e) A parcel of Cogon land situated at Brgy. Labney, San Jacinto, Pangasinan,

with an area of 14133 sq. meters, more or less declared under Tax
Declaration No. 14 of the land records of San Jacinto, Pangasinan
assessed at P2830.00 x x x. [1]

On January 5, 1997, an amicable settlement was reached between the

parties. By reason thereof, respondent Arjona executed a document
denominated as PAKNAAN (Agreement, in Pangasinan dialect), which reads:

AGREEMENT

I, MARCELO ARJONA, of legal age, resident of Barangay Sapang, Buho, Palayan

City, Nueva Ecija, have a land consisting of more or less one (1) hectare which I gave
to Proceso Quiros and Leonarda Villegas, this land was inherited by Doza that is why
I am giving the said land to them for it is in my name, I am affixing my signature on
this document for this is our agreement besides there are witnesses on the 5 th day
(Sunday) of January 1997.

Signed in the presence of:

(Sgd) Avelino N. De la Masa, Jr.

(Sgd) Marcelo Arjona

Witnesses:

1) (Sgd.) Teresita Balarbar

2) (Sgd.) Josephine Arjona
3) (Sgd.) Conchita Arjona

On the same date, another PAKNAAN was executed by Jose Banda, as

follows:

AGREEMENT

I, JOSE BANDA, married to Cecilia L. Banda, of legal age, and resident of Sitio
Torrod, Barangay Labney, San Jacinto, Pangasinan. There is a land in which they
entrusted to me and the same land is situated in Sitio Torrod, Brgy. Labney, San
Jacinto, Pangasinan, land of Arjona family.
I am cultivating/tilling this land but if ever Leonarda Villegas and Proceso Quiros
would like to get this land, I will voluntarily surrender it to them.

In order to attest to the veracity and truthfulness of this agreement, I affixed (sic) my
signature voluntarily below this document this 5th day (Sunday) of January 1997.

(Sgd.) Jose Banda

Signed in the presence of:

(Sgd) Avelino N. de la Masa, Sr.

Barangay Captain
Brgy. Labney, San Jacinto
Pangasinan

Witnesses:

1) Irene Banda
(sgd.)
2) Jose (illegible) x x x

Petitioners filed a complaint with the Municipal Circuit Trial Court with
prayer for the issuance of a writ of execution of the compromise agreement
which was denied because the subject property cannot be determined with
certainty.
The Regional Trial Court reversed the decision of the municipal court on
appeal and ordered the issuance of the writ of execution.
Respondents appealed to the Court of Appeals, which reversed the
decision of the Regional Trial Court and reinstated the decision of the
Municipal Circuit Trial Court. [2]

Hence, this petition on the following errors:

I

THE PAKNAAN BEING A FINAL AND EXECUTORY JUDGMENT UNDER

THE LAW IS AN IMMUTABLE JUDGMENT CAN NOT BE ALTERED,
MODIFIED OR CHANGED BY THE COURT INCLUDING THE HIGHEST
COURT; and

II
THE SECOND PAKNAAN ALLEGEDLY EXECUTED IN CONJUNCTION WITH
THE FIRST PAKNAAN WAS NEVER ADDUCED AS EVIDENCE BY EITHER
OF THE PARTIES, SO IT IS ERROR OF JURISDICTION TO CONSIDER THE
SAME IN THE DECISION MAKING.

The pivotal issue is the validity and enforceability of the amicable

settlement between the parties and corollary to this, whether a writ of
execution may issue on the basis thereof.
In support of their stance, petitioners rely on Section 416 of the Local
Government Code which provides that an amicable settlement shall have the
force and effect of a final judgment upon the expiration of 10 days from the
date thereof, unless repudiated or nullified by the proper court. They argue
that since no such repudiation or action to nullify has been initiated, the
municipal court has no discretion but to execute the agreement which has
become final and executory.
Petitioners likewise contend that despite the failure of the Paknaan to
describe with certainty the object of the contract, the evidence will show that
after the execution of the agreement, respondent Marcelo Arjona
accompanied them to the actual site of the properties at Sitio Torod, Labney,
San Jacinto, Pangasinan and pointed to them the 1 hectare property referred
to in the said agreement.
In their Comment, respondents insist that respondent Arjona could not
have accompanied petitioners to the subject land at Torrod, Labney because
he was physically incapacitated and there was no motorized vehicle to
transport him to the said place.
The Civil Code contains salutary provisions that encourage and favor
compromises and do not even require judicial approval. Thus, under Article
2029 of the Civil Code, the courts must endeavor to persuade the litigants in a
civil case to agree upon some fair compromise. Pursuant to Article 2037 of the
Civil Code, a compromise has upon the parties the effect and authority of res
judicata, and this is true even if the compromise is not judicially
approved. Articles 2039 and 2031 thereof also provide for the suspension of
pending actions and mitigation of damages to the losing party who has shown
a sincere desire for a compromise, in keeping with the Codes policy of
encouraging amicable settlements. [3]

Cognizant of the beneficial effects of amicable settlements,

the Katarungang Pambarangay Law (P.D. 1508) and later the Local
Government Code provide for a mechanism for conciliation where party-
litigants can enter into an agreement in the barangay level to reduce the
deterioration of the quality of justice due to indiscriminate filing of court
cases. Thus, under Section 416 of the said Code, an amicable settlement
shall have the force and effect of a final judgment of the court upon the
expiration of 10 days from the date thereof, unless repudiation of the
settlement has been made or a petition to nullify the award has been filed
before the proper court
Petitioners submit that since the amicable settlement had not been
repudiated or impugned before the court within the 10-day prescriptive period
in accordance with Section 416 of the Local Government Code, the
enforcement of the same must be done as a matter of course and a writ of
execution must accordingly be issued by the court.
Generally, the rule is that where no repudiation was made during the 10-
day period, the amicable settlement attains the status of finality and it
becomes the ministerial duty of the court to implement and enforce it.
However, such rule is not inflexible for it admits of certain
exceptions. In Santos v. Judge Isidro, the Court observed that special and
[4]

exceptional circumstances, the imperatives of substantial justice, or facts that

may have transpired after the finality of judgment which would render its
execution unjust, may warrant the suspension of execution of a decision that
has become final and executory. In the case at bar, the ends of justice would
be frustrated if a writ of execution is issued considering the uncertainty of the
object of the agreement. To do so would open the possibility of error and
future litigations.
The Paknaan executed by respondent Marcelo Arjona purports to convey
a parcel of land consisting of more or less 1 hectare to petitioners Quiros and
Villegas. Another Paknaan, prepared on the same date, and executed by one
Jose Banda who signified his intention to vacate the parcel of land he was
tilling located at Torrod, Brgy. Labney, San Jacinto, Pangasinan, for and in
behalf of the Arjona family. On ocular inspection however, the municipal trial
court found that the land referred to in the second Paknaan was different from
the land being occupied by petitioners. Hence, no writ of execution could be
issued for failure to determine with certainty what parcel of land respondent
intended to convey.
In denying the issuance of the writ of execution, the appellate court ruled
that the contract is null and void for its failure to describe with certainty the
object thereof. While we agree that no writ of execution may issue, we take
exception to the appellate courts reason for its denial.
Since an amicable settlement, which partakes of the nature of a contract,
is subject to the same legal provisions providing for the validity, enforcement,
rescission or annulment of ordinary contracts, there is a need to ascertain
whether the Paknaan in question has sufficiently complied with the requisites
of validity in accordance with Article 1318 of the Civil Code. [5]

There is no question that there was meeting of the minds between the
contracting parties. In executing the Paknaan,the respondent undertook to
convey 1 hectare of land to petitioners who accepted. It appears that while
the Paknaan was prepared and signed by respondent Arjona, petitioners
acceded to the terms thereof by not disputing its contents and are in fact now
seeking its enforcement. The object is a 1-hectare parcel of land representing
petitioners inheritance from their deceased grandmother. The cause of the
contract is the delivery of petitioners share in the inheritance. The inability of
the municipal court to identify the exact location of the inherited property did
not negate the principal object of the contract. This is an error occasioned by
the failure of the parties to describe the subject property, which is correctible
by reformation and does not indicate the absence of the principal object as to
render the contract void. It cannot be disputed that the object is determinable
as to its kind, i.e.1 hectare of land as inheritance, and can be determined
without need of a new contract or agreement. Clearly, the Paknaan has all
[6]

the earmarks of a valid contract.

Although both parties agreed to transfer one-hectare real property, they
failed to include in the written document a sufficient description of the property
to convey. This error is not one for nullification of the instrument but only for
reformation.
Article 1359 of the Civil Code provides:

When, there having been a meeting of the minds of the parties to a contract, their true
intention is not expressed in the instrument purporting to embody the agreement by
reason of mistake, fraud, inequitable conduct or accident, one of the parties may ask
for the reformation of the instrument to the end that such true intention may be
expressed.

If mistake, fraud, inequitable conduct, or accident has prevented a meeting of the

minds of the parties, the proper remedy is not reformation of the instrument but
annulment of the contract.

Reformation is a remedy in equity whereby a written instrument is made or

construed so as to express or conform to the real intention of the parties
where some error or mistake has been committed. In granting reformation,
[7]

the remedy in equity is not making a new contract for the parties, but
establishing and perpetuating the real contract between the parties which,
under the technical rules of law, could not be enforced but for such
reformation.
In order that an action for reformation of instrument as provided in Article
1359 of the Civil Code may prosper, the following requisites must concur: (1)
there must have been a meeting of the minds of the parties to the contract; (2)
the instrument does not express the true intention of the parties; and (3) the
failure of the instrument to express the true intention of the parties is due to
mistake, fraud, inequitable conduct or accident.[8]

When the terms of an agreement have been reduced to writing, it is

considered as containing all the terms agreed upon and there can be,
between the parties and their successors in interest, no evidence of such
terms other than the contents of the written agreement, except when it fails to
express the true intent and agreement of the parties thereto, in which case,
one of the parties may bring an action for the reformation of the instrument to
the end that such true intention may be expressed. [9]

Both parties acknowledge that petitioners are entitled to their inheritance,

hence, the remedy of nullification, which invalidates the Paknaan, would
prejudice petitioners and deprive them of their just share of the inheritance.
Respondent can not, as an afterthought, be allowed to renege on his legal
obligation to transfer the property to its rightful heirs. A refusal to reform
the Paknaan under such circumstances would have the effect of penalizing
one party for negligent conduct, and at the same time permitting the other
party to escape the consequences of his negligence and profit thereby. No
person shall be unjustly enriched at the expense of another.
WHEREFORE, in view of the foregoing, the petition is DENIED. The
Decision dated March 21, 2003 of the Court of Appeals, which reversed the
decision of the Regional Trial Court and reinstated the decision of the
Municipal Trial Court, is AFFIRMED. This is without prejudice to the filing by
either party of an action for reformation of the Paknaan executed on January
5, 1997.
SO ORDERED.
 THIRD DIVISION

ROSARIA LUPITAN PANG-ET, G.R. No. 167261

Petitioner,

Present:

- versus -
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,

CALLEJO, SR.,*

CATHERINE MANACNES-DAO-AS, Heir CHICO-NAZARIO, and

of LEONCIO MANACNES and
NACHURA, JJ.
FLORENTINA MANACNES,

Respondent.
Promulgated:

March 2, 2007

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:
 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 petitioners 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 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 Luponfailed to issue an Arbitration Award as provided under
the Katarungang Pambarangay Law, so that, the case must be returned to
the Lupon until an Arbitration Award is rendered.

In compliance with the MCTC Order, the Lupon rendered an Arbitration

Award on 10 May 1995 ordering herein petitioner to retrieve the land upon
payment to the spouses Manacnes of the amount of P8,000.00 for the
improvements on the land. Aggrieved, Leoncios widow,[7] Florentina Manacnes,
repudiated the Arbitration Award but her repudiation was rejected by the
Lupon. Thereafter, the MCTC was furnished with copies of the Arbitration Award.

On 1 June 1995, herein petitioner filed with the Lupon a Motion for
Execution of the Arbitration Award. On the other hand, Florentina Manacnes filed
a Motion with the MCTC for the resumption of the proceedings in the original
case for recovery of possession and praying that the MCTC consider her
repudiation of the Arbitration Award issued by the Lupon.

Subsequently, the MCTC heard the Motion

of Florentina Manacnes notwithstanding the latters failure to appear before the
court despite notice. The MCTC denied Florentina Manacnes Motion to repudiate
the Arbitration Award elucidating that since the movant failed to take any action
within the 10-day reglementary period provided for under
the Katarungang Pambarangay Law, the arbitration award has become final
and executory. Furthermore, upon motion of herein petitioner Pang-et, the MCTC
issued an Order remanding the records of the case to the Lupon for the execution
of the Arbitration Award. On 31 August 1995, the then
incumbent Punong Barangay of Dagdag issued a Notice of Execution of the
Award.

Said Notice of Execution was never implemented. Thus, on 16 October

2001, herein petitioner Pang-et filed with the MCTC an action for enforcement of
the Arbitration Award which was sought to be dismissed by the heir of
the Manacnes spouses.[8] The heir of the Manacnes spouses 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 KatarungangPambarangay Law
specifically Section 415 of RA 7160 which mandates the personal appearance of the
parties before the lupon and likewise prohibits the appearance of representatives.

In view of the foregoing, it could now be safely concluded that the questioned
agreement to arbitrate is inefficacious for being violative of the mandatory provisions of
RA 7160 particularly sections 413 and 415 thereof as it was not the respondents-
spouses [Manacnis] who signed it.

The third issue: Is the Arbitration Award now sought to be enforced

effective? Much to be desired, the natural flow of events must follow as a
consequence. Considering that the agreement to arbitrate is inefficacious as earlier
declared, it follows that the arbitration award which emanated from it is also
inefficacious. Further, the Arbitration Award by itself, granting arguendo that the
agreement to arbitrate is valid, will readily show that it does not also conform with the
 mandate of the Katarungang Pambarangay Law particularly Section 411 thereto which
provides:

Sec. 411. Form of Settlement All amicable settlements shall be in writing

in a language or dialect known to the parties x x x. When the parties to
the dispute do not use the same language or dialect, the settlement
shall be written in the language known to them.

Likewise, the implementing rules thereof, particularly Section 13 provides:

Sec. 13 Form of Settlement and Award. All settlements, whether by

mediation, conciliation or arbitration, shall be in writing, in a language
or dialect known to the parties. x x x

It is of no dispute that the parties concerned belong to and are natives of the
scenic and serene community of Sagada, Mt. Province who speak
the Kankanaey language. Thus, the Arbitration Award should have been written in
the Kankanaey language. However, as shown by the Arbitration Award, it is written in
English language which the parties do not speak and therefore a further violation of
the Katarungang Pambarangay Law.

IN THE LIGHT of all the foregoing considerations, the above-entitled case is

hereby dismissed.[9]

Petitioner Pang-ets Motion for Reconsideration having been denied, she

filed an Appeal before the RTC which reversed and set aside the Resolution of the
MCTC and remanded the case to the MCTC for further proceedings. According to
the RTC:
 As it appears on its face, the Agreement for Arbitration in point found on page
51 of the expediente, dated Feb. 6, 1995, and attested by the Pangkat Chairman of the
Office of the Barangay Lupon of Dagdag, Sagada was signed by the
respondents/defendants spouses Manacnis. The representative of the Appellee in the
instant case assails such Agreement claiming that the signatures of her aforesaid
predecessors-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 Appelleecontends 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 Provinceas early as
1902 and continuously stayed in the place by turns, co-mingling with the indigenous
people thereat, instructing and educating them, and converting most to the Christian
faith, among other things, until the former left about twenty years ago. By constant
association with the white folks, the natives too old to go to school somehow learned
the Kings English by ear and can effectively speak and communicate in that
language. Any which way, even granting arguendo that the defendants
spouses Manacnis were the exceptions and indeed totally ignorant of English, no
petition to nullify the Arbitration award in issue on such ground as advanced was filed
by the party or any of the Appellee Heirs with the MCTC of Besao-Sagada, within ten
 (10) days from May 10, 1995, the date of the document.Thus, upon the expiration
thereof, the Arbitration Award acquired the force and effect of a final judgment of a
court (Sec. 416, RA 7160; Sec. 11, KP Law; Sec. 13, KP Rules); conclusive upon the
original defendants in Civil Case 83 (B.C. No. 07) and the Appellee Heirs herein privy to
said defendants.

In the light thereof, the collateral attack of the Appellee on the Agreement for
Arbitration and Arbitration Award re Civil Case 83 (B.C. No. 07) should not have in the
first place been given due course by the court a quo. In which case, it would not have in
the logical flow of things declared both documents inefficacious; without which
pronouncements, said court would not have dismissed the case at bar.

Wherefore, Judgment is hereby rendered Reversing and Setting Aside the

Resolution appealed from, and ordering the record of the case subject thereof
remanded to the court of origin for further proceedings.[10]

Aggrieved by the reversal of the RTC, herein respondent filed a petition

before the Court of Appeals seeking to set aside the RTC Judgment. On 9 February
2005, the appellate court rendered the herein assailed Decision, to wit:

After thoroughly reviewing through the record, We find nothing that would
show that the spouses Manacneswere ever amenable to any compromise with
respondent Pang-et. Thus, We are at a loss as to the basis of the Arbitration Award
sought to be enforced by respondent Pang-ets subsequent action before the MCTC.

There is no dispute that the proceeding in Civil Case No. 83 was suspended and
the same remanded to the Lupon on account of the Agreement to Arbitrate which was
allegedly not signed by the parties but agreed upon by their respective counsels during
the pre-trial conference. In the meeting before the Lupon, it would seem that the
agreement to arbitrate was not signed by the spouses Manacnes. More importantly,
when the pangkat chairman asked the spouses Manacnes to sign or affix
their thumbmarks in the agreement, they refused and insisted that the case should
instead go to court. Thus, the Lupon had no other recourse but to issue a certificate to
file action.Unfortunately, the case was again remanded to the Lupon to render an
arbitration award. This time, the Lupon heard the voice tape of the
late Beket Padonay affirming respondent Pang-ets right to the disputed property. While
Pang-et offered to pay P8,000.00 for the improvements made by the
spouses Manacnes, the latter refused to accept the same and insisted on their right to
the subject property. Despite this, the Lupon on May 10, 1995 issued an Arbitration
award which favored respondent Pang-et.

From the time the case was first referred to the Lupon to the time the same was
again remanded to it, the Spouses Manacnes remained firm in not entering into any
compromise with respondent Pang-et. This was made clear in both the minutes of the
Arbitration Hearing on 26 February 1995 and on 9 April 1995. With the foregoing, We
find it evident that the spouses Manacnes never intended to submit the case for
arbitration.

Moreover, the award itself is riddled with flaws. First of all there is no showing
that the Pangkat ng Tagapagkasundo was duly constituted in accordance with Rule V of
the Katarungan Pambarangay Rules. And after constituting of the Pangkat, Rule VI,
thereof the Punong Barangay and the Pangkat must proceed to hear the case.However,
according to the minutes of the hearing before the lupon on 9 April 1995,
the pangkat Chairman and another pangkat member were absent for the hearing.

Finally, Section 13 of the same Rule requires that the Punong Barangay or
the Pangkat Chairman should attest that parties freely and voluntarily agreed to the
settlement arrived at. But how can this be possible when the minutes of the two
hearings show that the spouses Manacnes neither freely nor voluntarily agreed to
anything.

While RA 7160 and the Katarungan Pambarangay rules provide for a period to
repudiate the Arbitration Award, the same is neither applicable nor necessary since the
Agreement to Arbitrate or the Arbitration Award were never freely nor voluntarily
entered into by one of the parties to the dispute. In short, there is no agreement validly
concluded that needs to be repudiated.
 With all the foregoing, estoppel may not be applied against petitioners for an
action or defense against a null and void act does not prescribe. With this, We cannot
but agree with the MCTC that the very agreement to arbitrate is null and void. Similarly,
the arbitration award which was but the off shoot of the agreement is also void.

WHEREFORE, the RTC judgment of 2 June 2003 is REVERSED and SET ASIDE, the
MCTC Resolution DISMISSING the Civil Case No. 118 for enforcement of Arbitration
Award is REINSTATED.[11]

Vehemently disagreeing with the Decision of the Court of Appeals,

petitioner Pang-et filed the instant petition. Petitioner maintains that the
appellate court overlooked material facts that resulted in reversible errors in the
assailed Decision. According to petitioner, the Court of Appeals overlooked the
fact that the original parties, as represented by their respective counsels in Civil
Case No. 83, mutually agreed to submit the case for arbitration by the Lupon ng
Tagapamayapa of Barangay Dagdag. Petitioner insists that the parties must be
bound by the initial agreement by their counsels during pre-trial to an amicable
settlement as any representation made by the lawyers are deemed made with
the conformity of their clients. Furthermore, petitioner maintains that if indeed
the spouses Manacnes did not want to enter into an amicable settlement, then
they should have raised their opposition at the first instance, which was at the
pre-trial on Civil Case No. 83 when the MCTC ordered that the case be remanded
to the Lupon ng Tagapamayapa for arbitration.

We do not agree with the petitioner.

First and foremost, in order to resolve the case before us, it is pivotal to
stress that, during the initial hearing before the Lupon ng Tagapamayapa, the
spouses Manacnes declined to sign the Agreement for Arbitration and were
adamant that the proceedings before the MCTC in Civil Case No. 83 must
continue. As reflected in the Minutes[12] 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.[13]Nevertheless, 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 PambarangayLaw 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.[15]Through 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 barangayproceedings before the Lupon or the Pangkat, as they are free to
instead find recourse in the courts[16] in the event that no true compromise is
reached.

The key in achieving the objectives of an effective amicable settlement

under the KatarungangPambarangay 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 Pangkatmay be filed before a court is that there has been personal
confrontation between the parties but despite earnest efforts to conciliate, there
was a failure to amicably settle the dispute. It should be emphasized that while
the spouses Manacnes appeared before the Lupon during the initial hearing for
the conciliation proceedings, they refused to sign the Agreement for Arbitration
form, which would have signified their consent to submit the case for
arbitration. Therefore, upon certification by the Lupon ng Tagapamayapa that
the confrontation before the Pangkat failed because the
spouses Manacnes refused to submit the case for arbitration and insisted that
the case should go to court, the MCTC should have continued with the
proceedings in the case for recovery of possession which it suspended in order
to give way for the possible amicable resolution of the case through arbitration
before the Lupon ng Tagapamayapa.

Petitioners assertion that the parties must be bound by their respective

counsels agreement to submit the case for arbitration and thereafter enter into
an amicable settlement is imprecise. What was agreed to by the parties
respective counsels was the remand of the case to the Lupon ng
Tagapamayapa for conciliation proceedings and not the actual amicable
settlement of the case. As stated earlier, the parties may only be compelled to
appear before the Lupon ng Tagapamayapa for the necessary confrontation, but
not to enter into any amicable settlement, or in the case at bar, to sign the
Agreement for Arbitration. Thus, when the Manacnesspouses personally
appeared during the initial hearing before the Lupon ng Tagapamayapa, they had
already complied with the agreement during the pre-trial to submit the case for
conciliation proceedings. Their presence during said hearing is already their
acquiescence to the order of the MCTC remanding the case to the Lupon for
conciliation proceedings, as there has been an actual confrontation between the
parties despite the fact that no amicable settlement was reached due to the
spouses Manacnes refusal to sign the Agreement for Arbitration.

Furthermore, the MCTC should not have persisted in ordering the Lupon ng
Tagapamayapa to render an arbitration award upon the refusal of the
spouses Manacnes to submit the case for arbitration since such arbitration award
will not bind the spouses. As reflected in Section 413 of the
Revised Katarungang Pambarangay Law, in order that a party may be bound by
an arbitration award, said party must have agreed in writing that they shall abide
by the arbitration award of the Lupon or the Pangkat. Like in any other contract,
parties who have not signed an agreement to arbitrate will not be bound by said
agreement since it is axiomatic that a contract cannot be binding upon and
cannot be enforced against one who is not a party to it.[19] In view of the fact that
upon verification by the Pangkat Chairman, in order to settle the issue of whether
or not they intend to submit the matter for arbitration, the
spouses Manacnes refused to affix their signature or thumb mark on the
Agreement for Arbitration Form, the Manacnes spouses cannot be bound by the
Agreement for Arbitration and the ensuing arbitration award since they never
became privy to any agreement submitting the case for arbitration by
the Pangkat.

WHEREFORE, premises considered, the instant petition is

hereby DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 78019 is
hereby AFFIRMED. The Municipal Circuit Trial Court of Besao-
Sagada, Mountain Province, is hereby ORDERED to proceed with the trial of Civil
Case No. 83 for Recovery of Possession of Real Property, and the immediate
resolution of the same with deliberate dispatch. No costs.

SO ORDERED.