Case Summary (G.R. No. 164594)
Factual Background and Initial Settlement
In 1997, Angelita filed a complaint before the Barangay Justice seeking repayment. On July 9, 1997, parties entered into an amicable settlement (kasunduan), whereby Michael agreed to pay P250,000.00 in two installments starting September 1998. Angelita claimed that Michael did not repudiate the settlement within the ten-day period as mandated by the Katarungang Pambarangay Law under the Local Government Code (R.A. No. 7160).
Proceedings in Barangay and Municipal Circuit Trial Court (MCTC)
When Michael failed to comply, Angelita sought enforcement through the Barangay, but the Barangay Captain issued a Certification to File Action instead. Subsequently, on January 15, 1999, Angelita filed a Motion for Execution of the kasunduan in the MCTC of Laur and Gabaldon, Nueva Ecija. Michael moved to dismiss the motion, arguing a violation of the 1997 Rules of Civil Procedure and jurisdictional issues.
MCTC Decision
On January 17, 2000, the MCTC ruled in favor of Annabel, ordering Michael to pay P250,000.00 with legal interest, attorneys’ fees of P15,000.00, and costs of suit. It recognized Michael’s obligation based on the kasunduan, treating the motion for execution as a proper enforcement mechanism under R.A. No. 7160.
Regional Trial Court (RTC) Ruling
Michael appealed to the RTC, which upheld the MCTC decision on November 13, 2000, finding Michael liable for the amount and legal interest, and increasing attorney’s fees to P50,000.00. The RTC concluded that Michael failed to challenge the validity of the kasunduan or raise any evidence disputing the claim.
RTC Reconsideration and Jurisdictional Dismissal
Michael filed a motion for reconsideration, arguing that (i) enforcement of an amicable settlement outside the six-month period should be by ordinary civil action, not by a motion for execution; and (ii) that the MCTC lacked jurisdiction since the amount exceeded its P200,000.00 limit. The RTC granted the motion on March 13, 2001, dismissed Angelita's motion for execution, and set aside earlier decisions, ruling the MCTC had no jurisdiction. Angelita’s motion for reconsideration was denied.
Court of Appeals (CA) Ruling
Angelita filed a Petition for Review with the CA. After initial dismissal on technical grounds, the CA granted reconsideration and, on March 31, 2004, reversed the RTC decision. The CA held that the appropriate local trial court referenced in Section 2, Rule VII of the Implementing Rules of R.A. No. 7160 includes municipal trial courts regardless of the amount involved. The CA also ruled that Michael’s failure to repudiate the kasunduan within the ten-day period rendered the kasunduan final and binding, barring him from contesting it on grounds of forgery. Michael’s motion for reconsideration was denied by the CA on July 15, 2004.
Issues for Resolution
- Whether the MCTC has authority and jurisdiction to enforce the kasunduan regardless of amount;
- Whether the kasunduan possesses the force and effect of a final judgment;
- Whether the kasunduan is enforceable.
Court’s Analysis on Enforcement and Jurisdiction
The Court noted the two-tiered enforcement scheme under Section 417 of the Local Government Code: (a) enforcement by the Lupon (Barangay council) within six months through execution; (b) enforcement by action in the municipal or city court after six months. Angelita chose the second mode by filing a motion for execution in the MCTC over one and a half years after the settlement.
The Court held that the motion for execution, although captioned as such, contained all material allegations to be treated as an original action under the Rules of Court and was a proper remedy for enforcing the settlement. However, Angelita must pay appropriate docket fees consistent with such classification.
Force and Finality of the Kasunduan
Under Section 416 of the Local Government Code, an amicable settlement not repudiated within ten days is deemed final and has the force of a final judgment. Section 14, Rule VI of the Katarungang Pambarangay Implementing Rules also deems failure to repudiate as a waiver of defenses such as fraud or forgery. Michael did not repudiate the kasunduan timely; hence, it is final and enforceable.
Jurisdiction of the Municipal Circuit Trial Court
The Court emphasized that Section 417 of the Local Government Code vests jurisdiction on “appropriate city or municipal court” to enforce settlements after six mont
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Case Syllabus (G.R. No. 164594)
759 Phil. 54, G.R. No. 164594, April 22, 2015, Second Division
Facts and Background
- 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 the return of ₱350,000.00 allegedly sent by Annabel to Michael Sebastian.
- The complaint was based on a prior romantic relationship and an alleged agreement to jointly invest money to purchase a truck, with funds sent by Annabel while working in Hong Kong.
- Michael allegedly refused to return the money after their relationship ended.
- On July 9, 1997, the parties signed an amicable settlement ("kasunduan"), where Michael agreed to pay Annabel ₱250,000.00 in two installments starting September 1998. The kasunduan was signed by Angelita (for Annabel), Michael, and barangay officials acting as mediators ("pangkat ng tagapagkasundo").
- Angelita claimed that the kasunduan was not repudiated within ten (10) days as mandated by the Katarungang Pambarangay Law under R.A. No. 7160 and its implementing rules.
- When Michael failed to comply, Angelita returned to the Barangay, but the Barangay Captain could not enforce the kasunduan and instead issued a Certification to File Action.
- After approximately one and a half years, on January 15, 1999, Angelita filed a Motion for Execution of the kasunduan before the Municipal Circuit Trial Court (MCTC) of Laur and Gabaldon, Nueva Ecija.
Procedural History
- The MCTC ruled in favor of Annabel (represented by Angelita), ordering Michael to pay ₱250,000.00 with interest, attorney’s fees, and costs.
- Michael appealed to the Regional Trial Court (RTC) of Palayan City, which affirmed the MCTC decision imposing financial obligations on him with 12% interest per annum from September 1998, plus attorney’s fees of ₱50,000.00.
- Michael filed a Motion for Reconsideration before RTC, raising primarily: (i) that an amicable settlement or arbitration award enforcement was subject to jurisdictional limits and procedure, requiring ordinary civil action beyond six months, not a mere motion for execution, and (ii) that the MCTC lacked jurisdiction as the amount exceeded its ₱200,000.00 limit.
- The RTC overturned its prior decision, dismissed the Motion for Execution, and ruled it lacked jurisdiction.
- Angelita filed for reconsideration which was denied. She then filed a Petition for Review with the Court of Appeals (CA).
- The CA initially dismissed the petition for failure to attach an Affidavit of Service but eventually granted reconsideration and reversed the RTC’s dismissal. It held that the MCTC had jurisdiction regardless of amount and that the kasunduan was final and executory since Michael failed to repudiate within the prescribed period. It denied Michael’s motion for reconsideration of its ruling.
- Michael elevated the ca