A.C. No. 242-J - Tobias vs. Ericta

In 1997, Angelita Lagmay, as attorney-in-fact for her daughter Annabel Lagmay Ng, filed a complaint before the Barangay Justice of Siclong, Laur, Nueva Ecija, seeking to collect ₱350,000 from Michael Sebastian.
Annabel sent Michael the said amount to jointly invest in a truck, but after their romantic relationship ended, Michael allegedly refused to return the money.
The parties settled amicably on July 9, 1997, evidenced by a "kasunduan," by which Michael agreed to pay ₱250,000 in installments starting September 1998. The document was signed by Angelita for Annabel, Michael, and witnesses from the Pangkat ng Tagapagkasundo.

Angelita alleged the kasunduan was not repudiated within the 10-day period under the Katarungang Pambarangay Law (Local Government Code, R.A. No. 7160).
When Michael failed to comply, Angelita went back to the Barangay, but the Barangay Captain issued only a Certification to File Action instead of enforcing the kasunduan.
On January 15, 1999, Angelita filed a Motion for Execution of the kasunduan before the Municipal Circuit Trial Court (MCTC) of Laur and Gabaldon.
Michael moved to dismiss the motion, arguing procedural defects and lack of jurisdiction due to the amount exceeding the MCTC’s jurisdictional limit of ₱200,000.

On January 17, 2000, the MCTC granted the Motion for Execution, ordering Michael to pay ₱250,000 plus interest and attorney’s fees.
Michael appealed to the Regional Trial Court (RTC) of Palayan City, which, in a November 13, 2000 decision, affirmed the MCTC ruling, further increasing attorney’s fees.
Upon Michael’s Motion for Reconsideration, RTC reversed itself on March 13, 2001, citing lack of jurisdiction due to the amount exceeding MCTC’s limit and dismissed the Motion for Execution.

Angelita filed a Petition for Review with the CA, which initially dismissed the petition due to a technicality but later reinstated it.
On March 31, 2004, the CA reversed the RTC, ruling that:

The MCTC has jurisdiction to enforce the kasunduan regardless of amount.
The kasunduan was final and binding due to Michael’s failure to repudiate within the prescribed period.

Michael filed a Petition for Review on Certiorari before the Supreme Court, arguing:

The kasunduan did not comply with Katarungang Pambarangay requirements (no complaint record, no mediation notice, forged signature, no attestation, no personal appearance by Annabel).
The MCTC lacked jurisdiction over amounts exceeding ₱200,000.
The Barangay proceedings were null and void.
The kasunduan is a mere private document without the force of a final judgment.

Whether the Municipal Circuit Trial Court (MCTC) had the authority and jurisdiction to execute the kasunduan regardless of the amount involved.
Whether the kasunduan could be given the force and effect of a final judgment.
Whether the kasunduan is enforceable under the law despite alleged irregularities raised by Michael.