THIRD DIVISION
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ROSARIA
LUPITAN PANG-ET, Petitioner, - versus - CATHERINE MANACNES-DAO-AS, Heir of LEONCIO MANACNES and FLORENTINA
MANACNES, Respondent. |
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G.R.
No. 167261 Present: YNARES-SANTIAGO, J., Chairperson, AUSTRIA-MARTINEZ,
CALLEJO, SR.,*
CHICO-NAZARIO, and NACHURA, JJ. Promulgated: |
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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 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 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
Thereafter, the Lupon issued
a Certification to File Action on
An Order was issued by the MCTC on
In compliance with the MCTC Order, the Lupon rendered an
Arbitration Award on 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
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
Said Notice of Execution was never implemented. Thus, on
In its Resolution dated
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,
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
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,
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
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
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
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
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
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
Going over the documents
submitted to the court by the office of the Lupon Tagapamayapa of Dagdag, Sagada,
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 barangay
proceedings 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 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,
SO ORDERED.
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MINITA V. CHICO-NAZARIO Associate Justice |
WE
CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
Associate Justice
Associate Justice
ANTONIO EDUARDO B. NACHURA
Associate Justice
ATTESTATION
I attest that the conclusions
in the above Decision were reached in consultation before the case was assigned
to the writer of the opinion of the Court’s Division.
CONSUELO YNARES-SANTIAGO
Associate
Justice
Chairperson, Third Division
CERTIFICATION
Pursuant
to Section 13, Article VIII of the Constitution, and the Division Chairperson’s
Attestation, it is hereby certified that the conclusions in the above Decision
were reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
REYNATO
S. PUNO
Chief Justice
* On leave.
[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
[3] Penned by Presiding Judge James P.
Kibitin, dated
[4] Docketed as Civil Case No. 83.
[5] The Revised Katarungang Pambarangay Law, Sections 399-422, Chapter 7; Title One, 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
[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]
[14]
[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,