UY vs ESTATE OF VIPA FERNANDEZ

RAFAEL C. UY vs ESTATE OF VIPA FERNANDEZ

G.R No. 200612
April 5, 2017

FACTS:

Vipa Fernandez Lahaylahay is the registered owner of a parcel of land situated in Jaro, Iloilo City.
Vipa and her husband Levi Lahaylahay have two children, Grace Joy and Jill Frances.

In 1990, a contract of lease was executed between Vipa and Rafael Uy over the subject property
and the improvements thereon to which Rafael bound himself to pay the amount of P 3,000/mo
with provision for a 10% every year thereafter.

On 1995, Vipa died leaving no will or testament whatsoever, Grace Joy became the de facto
administrator of the estate of Vipa. In 1998, Rafael stopped paying the monthly rents.
Consequently, the estate of Vipa filed a complaint for unlawful detainer with MTCC against Rafael.
Accordingly, at the time of the filing of the complaint, unpaid rents amounted to P271,150.00.

MTCC rendered a decision ordering Rafael to vacate the premises and to pay the amount of
unpaid rents with 12% interest per annum.

On appeal, RTC reversed the decision of MTCC and dismiss the complaint for unlawful detainer.
According the RTC, Grace was the plaintiff not the estate and it had failed to the bring the dispute
to the barangay conciliation; that the property is part of conjugal property and after Vipa’s death
the conjugal partnership was terminated. Levi sold his property to Rafael, thus making him co-
owner of the property.

Estate filed a petition for review to CA and reinstated the decision of MTCC.

Issue:

Whether or not the CA erred in reversing the RTC’s decision?

Ruling:

The petition is partly granted.

Complainants by and against corporations, partnerships, or other juridical entities may not filed
with, received or acted upon by the barangay for conciliation. The Estate of Vipa, which is the
complainant below, is a juridical entity that has a personality, separate and distinct from that of
Grace Joy. Thus, there is no necessity to bring the dispute to the barangay conciliation prior to
filing of the complaint for unlawful detainer with MTCC.

On the issue of ownership of Rafael, Levi had the right to freely dispose of his undivided interest.
Thus the sale by Levi of his one-half undivided share in the subject property was not necessarily
void, for his right as a co-owner thereof was effectively transferred, making the buyer Rafael, a co-
owner of the subject property. Accordingly, Rafael could no-longer be directed to vacate the
subject property since he is already a co-owner thereof. Nevertheless, Rafael is still bound to pay
unpaid rentals from 1998 to 2003.

ABAGATNAN V. SPOUSES CLARITO, G.R. NO. 211966, [AUGUST 7, 2017]

FACTS: Wenceslao Abagatnan (Wenceslao) and his late wife, Lydia Capote (Lydia), acquired a parcel of
land designated as Lot 1472-B, with a total land area of 5,046 square meters, and located at Barangay
Cogon, Roxas City from Mateo Ambrad (Mateo) and Soteraña Clarito (Soteraña), by virtue of a Deed
of Absolute Sale executed on August 1, 1967. On October 4, 1999, Lydia died, leaving her children,
who are co-petitioners in this case, to succeed into the ownership of her conjugal share of said
property.
In 1990, respondents allegedly approached Wenceslao and asked for permission to construct a
residential house made of light materials on a 480-square meter portion of Lot 1472-B (subject
property). Because respondent Jonathan Clarito (Jonathan) is a distant relative, Wenceslao allowed
them to do so subject to the condition that respondents will vacate the subject property should he
need the same for his own use.

In September 2006, petitioners decided to sell portions of Lot 1472-B, including the subject property
which was then still being occupied by respondents. They offered to sell said portion to respondents,
but the latter declined.

Consequently, petitioners sent respondents a Demand Letter dated October 2, 2006 requiring the
latter to vacate the subject property within fifteen (15) days from receipt of the letter. The
respondents, however, refused to heed such demand.

On November 10, 2006, petitioners filed a Complaint for Unlawful Detainer and Damages against
respondents before the Municipal Trial Court in Cities (MTCC), Branch 2, Roxas City, where they
claimed to have been unlawfully deprived of the use and possession of a portion of their land.

Notably, the Complaint alleged that prior barangay conciliation proceedings are not required as a pre-
condition for the filing of the case in court, given that not all petitioners are residents of Roxas City.
Specifically, petitioner Jimmy C. Abagatnan (Jimmy) resided in Laguna, while petitioner Jenalyn A. De
Leon (Jenalyn) resided in Pasig City.

In their Answer with Counterclaim, respondents argued that prior barangay conciliation is a
mandatory requirement that cannot be dispensed with, considering that Jimmy and Jenalyn had
already executed a Special Power of Attorney (SPA) in favor of their co-petitioner and sister,
Josephine A. Parce (Josephine), who is a resident of Roxas City.

Respondents also insisted that Lot 1472-B is only a portion of Lot 1472 which is covered by its mother
title, Original Certificate of Title (OCT) No. 9882, under the name of Nicolas Clarito, et al., Jonathan’s
predecessors-in-interest. Unfortunately, said title was lost or destroyed during the war, but a copy of
the owner’s duplicate copy was presented before the trial court and made part of the records.

ISSUE: WON THE PRIOR REFERRAL TO BARANGAY IS REQUIRED IN THIS CASE.

HELD: NO. Section 412(a) of the LGC requires the parties to undergo a conciliation process before the
Lupon Chairman or the Pangkat as a pre-condition to the filing of a complaint in court, thus:

SECTION 412. Conciliation. — (a) Pre-condition to Filing of Complaint in Court. No complaint, petition,
action, or proceeding involving anymatter within the authority of the lupon shall be filed or instituted
directly in court or any other government office for adjudication, unless there has been a
confrontation between the parties before the lupon chairman or the pangkat, and that no conciliation
or settlement has been reached as certified by the lupon or pangkat secretary and attested to by the
lupon or pangkat chairman [or unless the settlement has been repudiated by the parties thereto. x x
x] (Emphasis supplied)

The LGC further provides that “the lupon of each barangay shall have authority to bring together the
parties actually residing in the same city or municipality for amicable settlement of all disputes,”
subject to certain exceptions enumerated in the law.

One such exception is in cases where the dispute involves parties who actually reside in barangays of
different cities or municipalities, unless saidbarangay units adjoin each other and the parties thereto
agree to submit their differences to amicable settlement by an appropriate lupon.

Thus, parties who do not actually reside in the same city or municipality or adjoining barangays are
not required to submit their dispute to the lupon as a pre-condition to the filing of a complaint in
court.

In Pascual v. Pascual, the Court ruled that the express statutory requirement of actual residency in the
LGC pertains specifically to the real parties in interestin the case. It further explained that said
requirement cannot be construed to apply to the attorney-in-fact of the party-plaintiff, as doing so
would abrogate the meaning of a “real party in interest” as defined in Section 2, in relation to Section
3, of Rule 3 of the Rules of Court.

The same ruling was reiterated in Banting v. Spouses Maglapuz where the Court held that “the
requirement under Section 412 of the [LGC] that a case be referred for conciliation before the Lupon
as a precondition to its filing in court applies only to those cases where the real parties-in-interest
actually reside in the same city or municipality.”

In the present case, the Complaint filed before the MTCC specifically alleged that not all the real
parties in interest in the case actually reside in Roxas City: Jimmy resided in Poblacion, Siniloan,
Laguna, while Jenalyn resided in Brgy. de La Paz, Pasig City. As such, the lupon has no jurisdiction over
their dispute, and prior referral of the case for barangay conciliation is not a pre-condition to its filing
in court.

This is true regardless of the fact that Jimmy and Jenalyn had already authorized their sister and co-
petitioner, Josephine, to act as their attorney-in-fact in the ejectment proceedings before the MTCC.
As previously explained, the residence of the attorney-in-fact of a real party in interest is irrelevant in
so far as the “actual residence” requirement under the LGC for prior barangay conciliation is
concerned.

Besides, as the RTC correctly pointed out, the lack of barangay conciliation proceedings cannot be
brought on appeal because it was not included in the Pre-Trial Order, which only enumerates the
following issues to be resolved during the trial. On this point, it is important to stress that the issues
to be tried between parties in a case is limited to those defined in the pre-trial order as well as those
which may be implied from those written in the order or inferred from those listed by necessary
implication.

In this case, a cursory reading of the issues listed in the Pre-Trial Order easily shows that the parties
never agreed, whether expressly or impliedly, to include the lack of prior barangay conciliation
proceedings in the list of issues to be resolved before the MTCC.

In effect, the non-inclusion of this issue in the Pre-Trial Order barred its consideration during the trial.
This is but consistent with the rule that parties are bound by the delimitation of issues that they
agreed upon during the pre-trial proceedings.

August 7, 2017
G.R. No. 211966
Abagatnan et. al. vs. Spouses Clarito

FACTS

Wenceslao Abagatnan and his late wife acquired a parcel of land designated as Lot 1472-B
located at Barangay Cogon, Roxas City by virtue of a Deed of Absolute Sale executed on August 1,
1967. In 1990, respondents allegedly approached Wenceslao and asked for permission to construct a
residential house on a 480-square meter portion of the said lot. Wenceslao allowed them to do so
provided that respondents will vacate the subject property should he need the same for his own use.
In September 2006, petitioners decided to sell portions of Lot 1472-B, including the subject
property which was then still being occupied by respondents. They offered to sell said portion to
respondents, but the latter declined. Petitioners then sent respondents a Demand Letter requiring
them to vacate the subject property, but was ignored. Thus, petitioners filed a Complaint for Unlawful
Detainer and Damages against respondents in the MTCC.
Petitioners alleged that prior barangay conciliation proceedings are not required as a pre-
condition for the filing of the case in court, given that two of the petitioners are not residents of Roxas
City. Respondents argued that prior barangay conciliation is a mandatory requirement that cannot be
dispensed with, considering that the non-resident petitioners had already executed a SPA in favor of
their co-petitioner and sister who is a resident of Roxas City.
The MTCC ruled against respondents ordering them to vacate the property and pay rent. The
RTC denied respondents’ appeal. At the CA however, respondents’ appeal was granted and the
petitioners’ complaint was dismissed without prejudice for lack of prior referral to the Katarungang
Pambarangay. CA denied petitioners’ MR, hence this petition for review.

ISSUE: Whether or not barangay conciliation is a pre-condition to the filing of the complain

HELD
Yes. The Local Government Code requires the parties to undergo a conciliation process
before the Lupon Chairman or the Pangkat as a pre-condition to the filing of a complaint in court. The
LGC further provides that "the lupon of each barangay shall have authority to bring together the
parties actually residing in the same city or municipality for amicable settlement of all disputes,”
subject to certain exceptions enumerated in the law. One such exception is in cases where the dispute
involves parties who actually reside in barangays of different cities or municipalities, unless said
barangay units adjoin each other and the parties thereto agree to submit their differences to amicable
settlement by an appropriate lupon.
The express statutory requirement of actual residency in the LGC pertains specifically to the
real parties in interest in the case. Said requirement cannot be construed to apply to the attorney-in-
fact of the party-plaintiff. Thus, the fact that two of the petitioners who do not reside in Roxas City
had already authorized their sister and co-petitioner to act as their attorney-in-fact is immaterial. The
residence of the attorney-in-fact of a real party in interest is irrelevant in so far as the "actual
residence" requirement under the LGC for prior barangay conciliation is concerned.

G.R. No. 164594               April 22, 2015

MICHAEL SEBASTIAN, Petitioner,
vs.
ANNABEL LAGMAY NG, represented by her Attorney-in-fact, ANGELITA
LAGMAY, Respondent.

DECISION

BRION, J.:

We resolve the petition for review on certiorari,  filed by petitioner Michael Sebastian
1

(Michael), assailing the March 31, 2004 Decision,  and the July 15, 2004 Resolution  of
2 3

the Court of Appeals (CA) in CA-G.R. SP No. 65450.

The CA decision reversed and set aside the decision of the Regional Trial Court (RTC) of
Palayan City, Branch 40, in SP. Proc. Case No. 0096-P.

Factual Background

Sometime in 1997, Angelita Lagmay (Angelita), acting as representative and attorney-in-

fact of her daµghter Annabel Lagmay Ng (Annabel), filed a complaint before the
Barangay Justice of Siclong, Laur, Nueva Ecija. She sought to collect from Michael the
sum of ₱350,000.00 that Annabel sent to Michael. She claimed that Annabel and Michael
were once sweethearts, and that they agreed to jointly invest their financial resources to
buy a truck. She alleged that while Annabel was working in Hongkong, Annabel sent
Michael the amount of ₱350,000.00 to purchase the truck. However, after Annabel and
Michael’s relationship has ended, Michael allegedly refused to return the money to
Annabel, prompting the latter to bring the matter before the Barangay Justice.

On July 9, 1997, the parties entered into an amicable settlement, evidenced by a

document denominated as "kasunduan"  wherein Michael agreed to pay Annabel the
4

amount of ₱250,000.00 on specific dates. The kasunduan was signed by Angelita (on
behalf of Annabel), Michael, and the members of the pangkat ng tagapagkasundo. The
kasunduanreads: KASUNDUAN

Nagkasundo ang dalawang panig napagkayari ng labing apat na buwan (14 months)
simula ngayong July 9, 1997 hanggang September 1998 ay kailangan ng maibigay ni Mr.
Sebastian ang pera ni Ms. Anabelle Lagmay.

At napagkasunduan ay dalawang hulog ang halagang ₱250,000.00 na pera ni

Ms.Lagmay at simula ng pagbibigay ni Mr. Sebastian ay sa buwan ng September 1998.

At upang may katunayan ang lahat ng napag usapan ay lumagda sa ibaba nito at sa
harap ng mga saksi ngayong ika-9 ng Hulyo, 1997

Mrs. Angelita Lagmay – (Lagda)

Mr. Michael Sebastian – (Lagda)

Saksi: Kagawad Rolando Mendizabal – (Lagda)

Hepe Quirino Sapon – (Lagda)

Benjamin Sebastian – (Lagda)

Jun Roxas - (Lagda)

Angelita alleged that the kasunduan was not repudiated within a period of ten (10) days
from the settlement, in accordance with the Katarungang Pambarangay Law embodied in
the Local Government Code of 1991 [Republic Act (R.A.) No. 7160], and Section 14 of its
Implementing Rules. When Michael failed to honor the kasunduan, Angelita brought the
matter back to the Barangay, but the Barangay Captain failed to enforce the kasunduan,
and instead, issued a Certification to File Action.

After about one and a half years from the date of the execution of the kasunduan or on
January 15, 1999, Angelita filed with the Municipal Circuit Trial Court (MCTC) of Laur and
Gabaldon, Nueva Ecija, a Motion for Execution of the kasunduan.

Michael moved for the dismissal of the Motion for Execution, citing as a ground Angelita’s
alleged violation of Section 15, Rule 13 of the 1997 Rules of Civil Procedure.

On January 17, 2000, the MCTC rendered a decision  in favor of Annabel, the dispositive
5

portion of which reads, as follows:

WHEREFORE, the plaintiff through counsel has satisfactorily proven by preponderance

of evidence based on Exhibits "A," "B," "C," "D," and "F," that defendant has obligation to
the plaintiff in the amount of ₱250,000.00.
IN VIEW OF THE FOREGOING, the Motion for Execution filed by the plaintiff is hereby
granted based on Sec. 2, Rule 7 of the Implementing Rules and Regulations of Republic
Act No. 7160, and therefore, defendant is hereby ordered within 15 days upon receipt of
this decision to pay the plaintiff the amount of ₱250,000.00 as evidenced by the
Kasunduan (Exhibit "C") with legal interests from July 9, 1997 until said obligation is fully
paid, and to pay attorney’s fees for the plaintiff’s counsel in the amount of ₱15,000.00
and to pay the cost of the suit.

SO ORDERED.

Michael filed an appeal with the RTC arguing that the MCTC committed grave abuse of
discretion in prematurely deciding the case. Michael also pointed out that a hearing was
necessary for the petitioner to establish the genuineness and due execution of the
kasunduan. The Regional Trial Court’s Ruling

In its November 13, 2000 Decision,  the RTC, Branch 40 of Palayan City upheld the
6

MCTC decision, finding Michael liable to pay Annabel the sum of ₱250,000.00. It held
that Michael failed to assail the validity of the kasunduan, or to adduce any evidence to
dispute Annabel’s claims or the applicability of the Implementing Rules and Regulations
of R.A. No. 7160. The dispositive portion of the decision reads:

WHEREFORE, the assailed Decision and Order of the lower court is hereby MODIFIED
in that the appellant is ordered to pay the appellee the amount of Two hundred Fifty
Thousand pesos (₱250,000.00) plus twelve percent interest(12%) per annum from
September,1998 up to the time it is actually paid and fifty Thousand Pesos(₱50,000.00)
representing attorney's fees.

Michael filed a Motion for Reconsideration arguing that: (i) an amicable settlement or
arbitration award can be enforced by the Lupon within six (6) months from date of
settlement or after the lapse of six (6) months, by ordinary civil action in the appropriate
City or Municipal Trial Court and not by a mere Motion for execution; and (ii) the MCTC
does not have jurisdiction over the case since the amount of ₱250,000.00 (as the subject
matter of the kasunduan) is in excess of MCTC’s jurisdictional amount of ₱200,000.00. 7

In its March 13, 2001 Order, the RTC granted Michael’s Motion for Reconsideration, and
ruled that there is merit in the jurisdictional issue he raised. It dismissed Angelita’s Motion
for Execution, and set aside the MCTC Decision. The dispositive portion of the said
Order reads: WHEREFORE, the Motion for Reconsideration is GRANTED. The Decision
of the Court dated November 13, 2000 is hereby SET ASIDE. The Decision of the
Municipal Trial Court of Laur, Nueva Ecija dated January 17, 2000 is likewise SET ASIDE
and the Motion for Execution of Kasunduan is DISMISSED, the said court having had no
jurisdiction to hear and decide the matter. 8

Angelita moved for the reconsideration of the March 13, 2001 Order, but the motion was
subsequently denied. Aggrieved, she filed a Petition for Review 9with the CA.

The Court of Appeal’s Ruling

On August 2, 2001, the CA initially dismissed the petition for review on a mere technical
ground of failure to attach the Affidavit of Service. Angelita moved for reconsideration,
attaching in her motion the Affidavit of Service. The CA granted the motion.

On March 31, 2004, the CA rendered its decision granting the petition, and reversing the
RTC’s decision. The CA declared that the "appropriate local trial court" stated in Section
2, Rule VII of the Implementing Rules of R.A. No. 7160 refers to the municipal trial courts.
Thus, contrary to Michael’s contention, the MCTC has jurisdiction to enforce any
settlement or arbitration award, regardless of the amount involved.

The CA also ruled that Michael’s failure to repudiate the kasunduan in accordance with
the procedure prescribed under the Implementing Rules of R.A. No. 7160, rendered the
kasunduan final. Hence, Michael can no longer assail the kasunduan on the ground of
forgery.

Michael moved to reconsider this decision, but the CA denied his motion in its resolution
dated July 15, 2004. Hence, this petition.

The Petition

In the present petition for review on certiorari, Michael alleges that the kasunduan cannot
be given the force and effect of a final judgment because it did not conform to the
provisions of the Katarungang Pambarangay law embodied in Book III, Title One,
Chapter 7 of R.A. No. 7160. He points out the following irregularities in the kasunduan’s
execution, and claims that the agreement forged between him and Angelita was fictitious
and simulated:

(1) there was no record of the complaint in the Barangay;

(2) there was no notice of mediation sent to him;

(3) there was no constitution of the Pangkat Ng Tagapagasundo;

(4) the parties were never called upon to choose the three (3) members from among the
Lupon members;

(5) he had no participation in the execution of the kasunduan;

(6) his signature in the kasunduan was forged;

(7) he did not personally appear before the Barangay;

(8) there was no attestation clause;

(9) the kasunduan was neither reported nor filed before the MCTC; and

(10) Annabel, the real party in interest, did not personally appear before the Barangay as
required by the law.

Michael additionally claims that the kasunduan is merely in the nature of a private
document. He also reiterates that since the amount of ₱250,000.00 – the subject matter
of the kasunduan – is in excess of MCTC’s jurisdictional amount of ₱200,000.00, the
kasunduan is beyond the MCTC’s jurisdiction to hear and to resolve. Accordingly, the
proceedings in the Barangay are all nullity.

The Issues

The issues to be resolved in the present petition are:

1. Whether or not the MCTC has the authority and jurisdiction to execute the kasunduan
regardless of the amount involved;
2. Whether or not the kasunduan could be given the force and effect of a final judgment;
and

3. Whether or not the kasunduan can be enforced.

The Court’s Ruling

We deny the petition.

A perusal of the body of the motion for

execution shows that it is actually in the
nature of an action for execution; hence, it
was a proper remedy;

We note at the outset that Michael raised – in his brief before the CA – the issue of wrong
remedy. He alleged that Angelita’s recourse should have been to file a civil action, not a
mere motion for execution, in a regular court. However, the CA failed to address this
issue and only ruled on the issues of the kasunduan’s irregularities and the MCTC’s
jurisdiction.

A simple reading of Section 417 of the Local Government Code readily discloses the two-
tiered mode of enforcement of an amicable settlement. The provision reads:

Section 417. Execution.- The amicable settlement or arbitration award may be enforced
by execution by the lupon within six (6) months from the date of the settlement. After the
lapse of such time, the settlement may be enforced by action in the appropriate city or
municipal court. [Emphasis ours.]

Under this provision, an amicable settlement or arbitration award that is not repudiated
within a period of ten (10) days from the settlement may be enforced by: first, execution
by the Lupon within six (6) months from the date of the settlement; or second, by an
action in the appropriate city or municipal trial court if more than six (6) months from the
date of settlement has already elapsed.

Under the first mode of enforcement, the execution of an amicable settlement could be
done on mere motion of the party entitled thereto before the Punong Barangay.  The 10

proceedings in this case are summary in nature and are governed by the Local
Government Code and the Katarungang Pambarangay Implementing Rules and
Regulations.

The second mode of enforcement, on the other hand, is judicial in nature and could only
be resortedto through the institution of an action in a regular form before the proper
City/Municipal Trial Court.  The proceedings shall be governed by the provisions of the
11

Rules of Court. Indisputably, Angelita chose to enforce the kasunduan under the second
mode and filed a motion for execution, which was docketed as Special Proceedings No.
45-99. The question for our resolution is: Whether the MCTC, through Angelita’s motion
for execution, is expressly authorized to enforce the kasunduan under Section 417 of the
Local Government Code?

The Court rules in the affirmative.

It is undisputed that what Angelita filed before the MCTC was captioned "motion for
execution," rather than a petition/complaint for execution.
A perusal of the motion for execution, however, shows that it contains the material
requirements of an initiatory action.

First, the motion is sufficient in form  and substance.  It is complete with allegations of
12 13

the ultimate facts constituting the cause of action; the names and residences of the
plaintiff and the defendant; it contains the prayer for the MCTC to order the execution of
the kasunduan; and there was also a verification and certification against forum
shopping.

Furthermore, attached to the motion are: 1) the authenticated special power of attorney
of Annabel, authorizing Angelita to file the present action on her behalf; and 2) the copy
of the kasunduan whose contents were quoted in the body of the motion for execution.

It is well-settled that what are controlling in determining the nature of the pleading are the
allegations in the body and not the caption. 14

Thus, the motion for execution that Angelita filed was intended to be an initiatory pleading
or an original action that is compliant with the requirement under Section 3, Rule 6 of the
Rules of Court that the complaint should allege the plaintiff’s cause of action and the
names and residences of the plaintiff and the defendant.

Angelita’s motion could therefore be treated as an original action, and not merely as a
motion/special proceeding. For this reason, Annabel has filed the proper remedy
prescribed under Section 417 of the Local Government Code.

However, Angelita should pay the proper docket fees corresponding to the filing of an
action for execution. The docket fees shall be computed by the Clerk of Court of the
MCTC, with due consideration, of course, of what Angelita had already paid when her
motion for execution was docketed as a special proceeding.

The kasunduan has the force and effect of a final judgment.

Under Section 416 of the Local Government Code, the amicable settlement and
arbitration award shall have the force and effect of a final judgment of a court upon the
expiration of ten (10) days from the date of its execution, unless the settlement or award
has been repudiated or a petition to nullify the award has been filed before the proper city
or municipal court.

Moreover, Section 14, Rule VI of the Katarungang Pambarangay Implementing Rules

states that the party’s failure to repudiate the settlement within the period of ten (10) days
shall be deemed a waiver of the right to challenge the settlement on the ground that
his/her consent was vitiated by fraud, violence or intimidation.

In the present case, the records reveal that Michael never repudiated the kasunduan
within the period prescribed by the law.  Hence, the CA correctly ruled that the
1âwphi1

kasunduan has the force and effect of a final judgment that is ripe for execution.

Furthermore, the irregularities in the kasunduan’s execution, and the claim of forgery are
deemed waived since Michael never raised these defenses in accordance with the
procedure prescribed under the Local Government Code. Thus, we see no reason to
discuss these issues in the present case.

The MCTC has the authority and jurisdiction

to enforce the kasunduan regardless of the amount involved.

The Court also finds that the CA correctly upheld the MCTC’s jurisdiction to enforce any
settlement or arbitration award issued by the Lupon.

We again draw attention to the provision of Section 417 of the Local Government Code
that after the lapse of the six (6) month period from the date of the settlement, the
agreement may be enforced by action in the appropriate city or municipal court.

The law, as written, unequivocally speaks of the "appropriate city or municipal court" as
the forum for the execution of the settlement or arbitration award issued by the Lupon.
Notably, in expressly conferring authority over these courts, Section 417 made no
distinction with respect to the amount involved or the nature of the issue involved. Thus,
there can be no question that the law’s intendment was to grant jurisdiction over the
enforcement of settlement/arbitration awards to the city or municipal courts the
regardless of the amount. A basic principle of interpretation is that words must be given
their literal meaning and applied without attempted interpretation where the words of a
statute are clear, plain and free from ambiguity.
15

WHEREFORE, premises considered, we hereby DENY the petitioner's petition for review
on certiorari, and AFFIRM the March 31, 2004 Decision of the Court of Appeals in CA-
G.R. SP No. 65450.

Angelita Lagmay is ORDERED to pay the proper docket fees to be computed by the
Clerk of Court of the Municipal Circuit Trial Court of Laur and Gabaldon, Nueva Ecija,
with due consideration of what she had paid when her motion for execution was docketed
as a special proceeding.

SO ORDERED.
G.R. No. L-20568      December 28, 1964

RAMON A. GONZALES, petitioner-appellant,
vs.
THE PROVINCIAL AUDITOR OF ILOILO, respondent-appellee.

Ramon A. Gonzales in his own behalf as petitioner-appellant.

Provincial Fiscal A. B. Baguio and Assistant Provincial Fiscal S. A. Barranco for
respondent-appellee.

ZALDIVAR, J.:

This is an appeal from the decision of the Court of First Instance of Iloilo dismissing the
petition for mandamus in the above-entitled case.

The petitioner Ramon Gonzales was appointed Assistant on Complaints and

Investigation, Office of the Governor, by Governor Jose C. Zulueta of Iloilo, effective July
1, 1961, with compensation at the rate of P250.00 a month. At the time of his
appointment the petitioner was holding the office of Municipal Councilor of Lambunao,
Iloilo, and he had not resigned from said office to accept the appointment in the Office of
the Governor.

On July 31, 1961, the petitioner presented a voucher covering his salary as Assistant on
Complaints and Investigation for July 1961 in the amount of P250.00 to the respondent
Provincial Auditor of Iloilo for audit, but said respondent refused to pass in audit the said
voucher for the reason that the petitioner continued to hold office as Councilor of
Lambunao and so he may not be legally appointed Assistant in the Office of the
Governor with compensation payable from the provincial funds. The respondent
Provincial Auditor reasoned out that said appointment was in violation of the provisions of
Sec. 2175 of the Revised Administrative Code as construes by the Secretary of Justice in
his Opinion No. 121, Series of 1951.

On August 2, 1961 petitioner appealed to the Auditor General from the action of the
respondent Provincial Auditor denying to pass in audit his salary voucher for the month of
July 1961. On November 26, 1961, the Auditor General uphold the action of the
respondent in denying to pass in audit the above-mentioned salary voucher of the
petitioner.

Meanwhile the petitioner, in spite of the stand taken by the respondent regarding the non-
audit of his salary voucher for July 1961 on the ground that his appointment to the office
of Assistant on Complaints and Investigation was illegal, continued to serve as such
Assistant until December 31, 1961, when he resigned. Upon his resignation, the
petitioner prepared a salary voucher for P1,500.00 covering his salary for six months
From July 1, 1961 to December 31, 1961 and presented to the respondent the said
voucher but the respondent verbally informed the petitioner that he (respondent) would
deny audit of the voucher for the same reason that he denied audit of the salary voucher
for P250.00 covering the salary for July 1961.

On August 11, 1961, while acting as such Assistant in the Office of the Governor, the
petitioner obtained a cash advance of P200.00 from the office of the Provincial Treasurer
for travelling expenses within the province in connection with his duties. When the
petitioner sought the liquidation of the said cash advance by submitting a voucher for per
diems the respondent Provincial Auditor, on June 5, 1962, again refused to pass said
voucher in audit on the same ground that he refused to pass in audit the salary vouchers
aforementioned. Because of the refusal by the respondent Provincial Auditor to pass in
audit the voucher covering the per diems and settlement of the cash advance, the
Provincial Treasurer also refused to pay the claim of the petitioner for per diems.

Instead of appealing to the Office of the President of the Philippines for the decision of
the Auditor General upholding the action of the respondent Provincial Auditor denying to
pass in audit his salary voucher for July 1961, the petitioner filed a petition
for mandamus in the Court of First Instance of Iloilo on August 31, 1962 against the
respondent herein. In his petition the petitioner prayed that the respondent be ordered to
pass in audit the vouchers of said petitioner covering his salary for P1,500.00 and per
diems to liquidate the cash advance of P200.00. The petitioner alleged that the
respondent Provincial Auditor in refusing to pass in audit the said vouchers for salaries
and per diems, although those vouchers had been approved by the Provincial Governor
under the available appropriations, was in reality unlawfully neglecting the performance
of an act which the law specifically enjoins as a duty resulting from his office. Petitioner
further alleged that he had no other speedy and adequate remedy in the ordinary course
of law except the petition for mandamus which he had filed in the present case.

The Provincial Fiscal of Iloilo in representation of the respondent Provincial Auditor filed
an answer, and by way of affirmative and special defenses alleged, among others, that
the petitioner had not exhausted all administrative remedies available under the law
before filing his petition for mandamus, hence the petition was premature and could not
legally be entertained by the court. The Provincial Fiscal further alleged that petitioner
being a duly elected municipal councilor of Lambunao, Iloilo, and, acting as such from
July 1, 1961 to December 31, 1961, he could not at the same time, legally assume the
office of Assistant on Complaints and Investigation in the Office of the Provincial
Governor of Iloilo without violating Section 2175 of the Revised Administrative Code, and
consequently the petitioner was not entitled to collect his salary as such Assistant in the
Office of the Governor.

After the respondent Provincial Auditor had filed his answer the petitioner moved for
judgment on the pleadings. Over the objection of counsel for the respondent, the lower
court granted the petitioner's motion for judgment on the pleadings.

On October 25, 1962 the Court of First Instance of Iloilo, in a decision handed down by
Judge Pantaleon A. Pelayo, denied the petition for mandamus. The pertinent portion of
the decision reads as follows:

Section 653 of the Revised Administrative Code of the Philippines reads:

Any person aggrieved by the action or by any decision of a provincial or city auditor in the
settlement of an account or claim may within one year appeal to the Auditor General and
any person similarly aggrieved by the action or decision of the Auditor General may
likewise within one year appeal to the President of the Philippines.

From a decision adversely affecting the interest of the Government the appeal may be
taken by the proper Head of Department, or in case of provinces and municipalities, or
other form of local government, by the head of the office or branch of the Government
immediately concerned.

Said legal provision was modified by Commonwealth Act No. 324, approved, June 18,
1938. According to section 2 thereof the party aggrieved by the final decision of the
Auditor General in the settlement of any account or claim may, within 30 days from
receipt of the decision, take an appeal in writing to the President of the Philippine or to
the Supreme Court of the Philippine if the appellant is a private person or entity.
According to Section 656 of the said Revised Administrative Code the action of the
President shall be final.

In a recent case decided by the Supreme Court, said tribunal said:

Appellant, by his petition for mandamus, is, in effect, appealing from the decision of the
Auditor General denying his claim for gratuity. Such appeal should have been made to
this Court within 30 days from notice of the decision. As the law now stands, the decision
of the Auditor General in cases affecting an executive department, bureau, or office of
the Government may be appealed directly to the President whose action shall be final;
while those where the aggrieved party is a private person or entity are appealable to the
Supreme Court. (Com. Act No. 327; Rule 45, Rules of Court; Radiowealth v. Agregado,
47 Off. Gaz., Supp. December, 1951; Stiver v. Fizon, 76 Phil. 725; Abad Santos v.
Auditor General, 79 Phil. 176; Rosario v. Auditor General, G. R. No. L-11817, April 30,
1958.) (See Gaudencio Lacson v. Auditor General, et al., April 29, 1960, Off. Gaz., Vol.
58, No. 14, pp. 2916-2917).

It is evident that the action is unwarranted. It does not come within the purview or
operation of the law. In other words, the facts described in the petition do not constitute a
cause of action. The Court is not authorized to grant the relief therein sought for.
Petitioner has knocked at the wrong door. What he is in search of cannot be found here,
but elsewhere. So, the action is dismissed with costs against him.

From the decision of the Court of First Instance of Iloilo the petitioner brought the present
appeal to this Court.

In his appeal, the petitioner makes the following assignment of errors:

1. That the lower court erred in holding that the petitioner has no cause of action for
failure to appeal to the Supreme Court;

2. That the lower court erred in not declaring that the respondent Provincial Auditor has
no authority to declare petitioner's appointment as Governor's assistant as illegal and
void;

3. That assuming that said respondent has such authority the lower court erred in not
declaring that petitioner's appointment as Governor's assistant is valid and legal;

4. That assuming that aid appointment is invalid, the lower court erred in not declaring
that petitioner is a de facto officer under a defective appointment, hence entitled to
compensation.

The matter to be resolved in this appeal is whether or not the lower court had correctly
dismissed the petition for mandamus.

Regarding the first assignment of error, the decision of the lower court does not suggest
at all that the petition was dismissed because the petitioner had not appealed to the
Supreme Court from the decision of the Auditor General. The lower court simply cited the
law and a decision which have bearing on the rule regarding the exhaustion of other
remedies before a resort to a court action such as the one taken by the petitioner. What
the decision pointed out was that the petitioner should not have gone to court on a
petition for mandamus because he had other recourse and adequate remedy under the
law. Sections 2 and 3 of Article XI of the Constitution provide:
SEC. 2. The Auditor General shall examine ...; and audit, in accordance with law and
administrative regulations, all expenditures of fund or property pertaining to or held in
trust by the Government or the provinces and municipalities thereof ... .

SEC. 3. The decision of the Auditor General shall be rendered within the time fixed by
law, and the same may be appealed to the President whose action shall be final. When
the aggrieved party is a private person or entity, an appeal from the decision of the
Auditor General may be taken directly to a court of record in the manner provided by law.

Section 2 of Commonwealth Act No. 327 provides:

SEC. 2. The party aggrieved by the final decision of the Auditor General in the settlement
of an account or claim may, within thirty days from receipt of the decision, take appeal in
writing:

(a) ...

(b) To the President of the Philippines;

(c) To the Supreme Court of the Philippines if the appellant is a private person or entity.

xxx      xxx      xxx

The petitioner was a person in the government service when he claimed for payment of
his salary. When the respondent Provincial Auditor refused to pass in audit his salary
voucher, the petitioner appealed to the Auditor General The matter of passing in audit a
salary voucher is not a ministerial function. The Auditor General exercises a discretion or
a quasi-judicial power when he acts on whether to pass a salary voucher in audit or not.
Certainly the Auditor General has the power to look into the question of whether the
person claiming salary payment is entitled to the salary or not. The Auditor General may
err. The decision of the Auditor General is appealable to the President of the, Philippines.
When the Auditor General sustained the action of the respondent Provincial Auditor of
Iloilo in refusing to pass in audit the salary voucher of the petitioner, what he should have
done, being then a government employee, was to appeal to the President from the
decision of the Auditor General. This the petitioner did not do. Instead he filed the present
action for mandamus in the Court of First Instance of Iloilo. The step taken by the
petitioner was not in accordance with the procedure provided by law. The petitioner had
still a recourse open to him, and that was to appeal to the President of the Philippines.
And the Constitution and the law empower the President to grant relief to him.

The rule, that no recourse to court can be had until all administrative remedies had been
exhausted and that special civil actions against administrative officer should not be
entertained if superior administrative officers could grant relief, is squarely applicable to
the present case (Bartolome vs. Auditor General, 94 Phil. 718; Primo Panti vs. Provincial
Board, etc., G.R. No. 1,14047, Jan. 30, 1960; and Lazaro Booc vs. Sergio Osmeña, Jr.
etc., G.R. No. L-14810, May 31, 1961.)

In the case of Perfecta de la Cruz vs. Josefa de la Paz, G.R. No. L-17440, December 26,
1963, We held:

When an adequate remedy may be had within the Executive Department of the
government, but nevertheless, a litigant fails or refuses to avail himself of the same the
judiciary shall decline to interfere. This traditional attitude of the courts is based not only
on convenience but likewise on respect: convenience of the party litigants and respect for
a co-equal office in the government. If a remedy is available within the administrative
machinery, this should be resorted to before resort can be made to the courts, not only to
give the administrative agency opportunity to decide the matter by itself correctly, but
also to prevent unnecessary and premature resort to courts. This has been a consistent
ruling in a chain of cases decided by us. (See Jao Igco vs. Shuster, 10 Phil. 448; Lamb
vs. Phipps, 22 Phil. 456; Miguel vs. Reyes, G. R. No L-4851, July 31, 1963; Arnedo vs.
Aldanese, 63 Phil. 768; Tuan Kay vs. Import Control Commission, G.R. No. L-4427, April
31, 1952; Veloso vs. Board of Accountancy, G.R. No. 1,5760, April 20, 1953; Lubugan, et
al. vs. Castrillo and Mainay, G.R. No. L-10521, May 29, 1957.)

The decision of the lower court dismissing the petition for mandamus is in accordance
with the law and the applicable decisions of this Court. After declaring that the decision of
the lower court is correct, and We have thereby disposed of the first assignment of error,
We do not consider it necessary to pass upon the other questions raised by the petitioner
in the other errors that be had assigned in this appeal.

WHEREFORE, the decision appealed from is affirmed, with costs against the petitioner-
appellant.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon,
Regala, Makalintal and Bengzon, J.P., JJ., concur.

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