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ADR Case Digests 2 Meanwhile, the respondents executed two special

powers of attorney5 both dated August 3, 2007

Linda v. Micarez before the Consulate General of the Philippines in
Los Angeles, California, U.S.A., authorizing their
The severity of punishment is not commensurate to what
counsel, Atty. Richard C. Miguel (Atty. Miguel), to
happened in the case
file their answer in Civil Case No. 13-2007 and to
FACTS: Petitioner is of Filipino descent who represent them during the pre-trial conference and
became a naturalized American citizen after all subsequent hearings with power to enter into a
marrying an American national in 1981. She is compromise agreement. By virtue thereof, Atty.
now a permanent resident of the United States of Miguel timely filed his principals’ answer denying
America (USA). the material allegations in the complaint.

In her complaint, petitioner claimed that the After the parties had filed their respective pre-trial
residential lot in Panabo City, which she briefs, and the issues in the case had been joined,
purchased in 1982, was clandestinely and the RTC explored the possibility of an amicable
fraudulently conveyed and transferred by her settlement among the parties by ordering the
parents, respondent spouses Alvaro and Paz referral of the case to the Philippine Mediation
Micarez (Spouses Micarez), in favor of her Center (PMC). On March 1, 2008, Mediator
youngest brother, respondent Dionesio Micarez Esmeraldo O. Padao, Sr. (Padao) issued a
(Dionesio), to her prejudice and detriment. Mediator’s Report6 and returned Civil Case No.
13-2007 to the RTC allegedly due to the non-
Aware that there would be difficulty in registering appearance of the respondents on the scheduled
a real property in her name, she being married to conferences before him. Acting on said Report,
an American citizen, she arranged to pay for the the RTC issued an order on May 29, 2009
purchase price of the residential lot and register it, allowing petitioner to present her evidence ex
in the meantime, in the names of Spouses Micarez parte.
under an implied trust. The title thereto shall be
transferred in her name in due time. Later, Padao clarified, through a Manifestation,8
dated July 15, 2008, that it was petitioner,
Thus, on October 20, 1982, a deed of absolute represented by Atty. Benjamin Utulle (Atty.
sale was executed between Spouses Micarez and Utulle), who did not attend the mediation
the owner, Abundio Panganiban, for the 328 proceedings set on March 1, 2008, and not Atty.
square meter residential lot covered by Transfer Miguel, counsel for the respondents and their
Certificate of Title (TCT) No. T-25833. Petitioner authorized representative. Padao explained that
sent the money which was used for the payment Atty. Miguel inadvertently affixed his signature for
of the lot. TCT No. T-25833 was cancelled upon attendance purposes on the column provided for
the registration of the deed of sale before the the plaintiff’s counsel in the mediator’s report
Registry of Deeds of Davao del Norte. In lieu
thereof, TCT No. T-38635 was issued in the RTC Ruling: Dismissed the case of petitioner for
names of Spouses Micarez on January 31, 1983. failure to appear in the mediation proceedings.
This was affirmed by the court and denied
Sometime in 2005, she learned from Manalang petitioner’s motion for reconsideration
that Spouses Micarez sold the subject lot to
Dionesio on November 22, 2001 and that ISSUE: Whether RTC erred in dismissing the
consequently, TCT T-172286 was issued in her complaint
brother’s name on January 21, 2002.
RULING: YES, RTC erred in their decision
A.M. No. 01-10-5-SC-PHILJA regards mediation Assuming arguendo that the trial court correctly
as part of pre-trial where parties are encouraged to construed the absence of Manalang on March 1,
personally attend the proceedings. The personal 2008 as a deliberate refusal to comply with its
non-appearance, however, of a party may be Order or to be dilatory, it cannot be said that the
excused only when the representative, who court was powerless and virtually without
appears in his behalf, has been duly authorized to recourse. Indeed, there are other available
enter into possible amicable settlement or to remedies to the court a quo under A.M. No. 01-
submit to alternative modes of dispute resolution. 10-5-SC-PHILJA, apart from immediately
To ensure the attendance of the parties, A.M. No. ordering the dismissal of the case. If Manalang’s
01-10-5-SC-PHILJA specifically enumerates the absence upset the intention of the court a quo to
sanctions that the court can impose upon a party promptly dispose the case, a mere censure or
who fails to appear in the proceedings which reprimand would have been sufficient for
includes censure, reprimand, contempt, and even petitioner’s representative and her counsel so as to
dismissal of the action in relation to Section 5, be informed of the court’s intolerance of tardiness
Rule 18 of the Rules of Court.15 The respective and laxity in the observation of its order.
lawyers of the parties may attend the proceedings
and, if they do so, they are enjoined to cooperate It bears emphasis that the subject matter of the
with the mediator for the successful amicable complaint is a valuable parcel of land measuring
settlement of disputes16 so as to effectively 328 square meters and that petitioner had allegedly
reduce docket congestion. spent a lot of money not only for the payment of
the docket and other filing fees but also for the
Although the RTC has legal basis to order the extra-territorial service of the summons to the
dismissal of Civil Case No. 13-2007, the Court respondents who are now permanent residents of
finds this sanction too severe to be imposed on the U.S.A. Certainly, petitioner stands to lose
the petitioner where the records of the case is heavily on account of technicality. Even if the
devoid of evidence of willful or flagrant disregard dismissal is without prejudice, the refiling of the
of the rules on mediation proceedings. There is no case would still be injurious to petitioner because
clear demonstration that the absence of she would have to pay again all the litigation
petitioner’s representative during mediation expenses which she previously paid for. The Court
proceedings on March 1, 2008 was intended to should afford party-litigants the amplest
perpetuate delay in the litigation of the case. opportunity to enable them to have their cases
Neither is it indicative of lack of interest on the justly determined, free from constraints of
part of petitioner to enter into a possible amicable technicalities.18 Technicalities should take a
settlement of the case. backseat against substantive rights and should give
way to the realities of the situation. Besides, the
The Court notes that Manalang was not entirely at petitioner has manifested her interest to pursue
fault for the cancellation and resettings of the the case through the present petition. At any rate,
conferences. Let it be underscored that it has not been shown that a remand of the case
respondents’ representative and counsel, Atty. for trial would cause undue prejudice to
Miguel, came late during the January 19 and respondents.
February 9, 2008 conferences which resulted in
their cancellation and the final resetting of the Real Bank v. Samsung Mabuhay
mediation proceedings to March 1, 2008.
Considering the circumstances, it would be most Illustrative case of an excusable reason for non-appearance
unfair to penalize petitioner for the neglect of her in mediation
FACTS: Plaintiff SAMSUNG MABUHAY Branch after stamping at the back of the checks
ELECTRONIC CORPORATION is a joint the usual endorsements: "ALL PRIOR
venture corporation between SAMSUNG ENDORSEMENT and/or LACK OF
corporation duly organized and existing under Trading’s account with the drawee bank, UCPB,
Korean laws, and plaintiff MABUHAY was eventually debited for the value of the three
ELECTRONICS CORPORATION, a (3) checks and Mabuhay Electronics Company’s
corporation organized and existing under account with defendant [Real Bank] was credited
Philippine laws for the same amount although it was not the payee
nor the person authorized by the payee.
As a result of the Joint Venture Agreement,
Samsung Mabuhay Electronics Corporation Despite plaintiffs’ [Samsung Mabuhay
became the exclusive distributor for Samsung Corporation’s] demands, defendant [Real Bank]
products in the Philippines. ignored and refused to reimburse them with the
value of the three (3) checks. Thus, plaintiffs were
Sometime in December of 1996, Conpinco constrained to hire the legal services of the law
Trading, a regular dealer of [respondent] Samsung firm of V.E. Del Rosario and Partners.
Mabuhay Corporation in Davao City, issued five
(5) postdated [United Coconut Planters Bank] On 7 March 2001, the trial court issued an Order
UCPB checks payable to the order of Samsung dated 17 March 2001 requiring both petitioner
Mabuhay Corporation Real Bank, Inc. and respondent Samsung to
appear in a mediation proceeding set on 3 April
These five (5) checks were picked-up by Reynaldo 2001.15 This Order of the trial court was sent to
Senson, former Collection Supervisor of Samsung respondent Samsung’s former counsel, V.E. Del
Mabuhay Corporation for Visayas and Mindanao, Rosario and Partners which had at that time
at Conpinco Trading’s place of business already filed a notice of withdrawal of
Two (2) of the five (5) checks picked-up by
Reynaldo Senson were remitted to Samsung The mediation proceedings took place as
Mabuhay Corporation. However, the three (3) scheduled on 3 April 2001 and Mediator Tammy
remaining UCPB checks, i.e., check nos. 1869863, Ann C. Reyes, who handled the mediation
1869864, and 1869865 amounting to proceedings submitted her report to the Court
P1,563,750.00, were not remitted by Reynaldo stating therein that no action was taken on the
Senson to Samsung Mabuhay Corporation. case referred for mediation because respondent
Instead, Reynaldo Senson, using an alias name, Samsung failed to appear.
Edgardo Bacea, opened an account with
defendant Real Bank, Malolos, Bulacan branch RTC Ruling: Dismissed the case for failure of
under the account name of one Mabuhay respondent Samsung to appear
Electronics Company, a business entity in no way
related to plaintiff Mabuhay Electronics CA Ruling: Reversed the decision of RTC and
Corporation. Mabuhay Electronics Company is a ruled: [R]espondent judge did not even peruse or
single proprietorship owned and managed by verify the records of the case. Has she done so,
Reynaldo Senson, alias Edgardo Bacea. she would have discovered that the former
counsel of petitioner to whom she sent the Notice
Defendant [Real Bank] then sent the three (3) of the order had already withdrawn and that a new
checks for clearing and for payment through Far counsel for petitioner had already entered their
East Bank and Trust Company, Malolos, Bulacan appearance. Likewise, she should have discovered
that at that time the Order dated March 7, 2001 constitute a panacea or a solution to the
was issued by RTC Br. 9, petitioner was no longer congestion of court dockets; while they lend a
holding office at its given address. This fact is deceptive aura of efficiency to records of
clearly indicated in the Order of March 7, 2001 individual judges, they merely postpone the
itself. Clearly, therefore, respondent judge ultimate reckoning between the parties. In the
committed grave abuse of discretion amounting to absence of clear lack of merit or intention to
excess or lack of jurisdiction delay, justice is better served by a brief
continuance, trial on the merits, and final
ISSUE: Whether RTC did not commit any disposition of cases before the court.
grave abuse of discretion
LM Power Engineer v. Capitol Industrial
RULING: NO, it committed grave abuse of Construction Groups
discretion, CA was proper in reversing RTC
order Submission to arbitration: CIAC Jurisdiction

It being daylight clear that the withdrawal of FACTS: On February 22, 1983, Petitioner LM
respondent Samsung’s original counsel was Power Engineering Corporation and Respondent
sufficient as the same carried the stamp of Capitol Industrial Construction Groups Inc.
approval of the client, the notice of mediation sent entered into a Subcontract Agreement involving
to respondent Samsung’s original counsel was electrical work at the Third Port of Zamboanga.[5]
ineffectual as the same was sent at the time when
such counsel had already validly withdrawn its On April 25, 1985, respondent took over some of
representation. Corollarily, the absence of the work contracted to petitioner.[6] Allegedly, the
respondent Samsung during the scheduled latter had failed to finish it because of its inability
mediation conference was excusable and justified. to procure materials.[7]
Therefore, the trial court erroneously dismissed
Upon completing its task under the Contract,
Civil Case No. 97-86265.
petitioner billed respondent in the amount of
The calendar of hearings document the fact that P6,711,813.90.[8] Contesting the accuracy of the
respondent Samsung has been willing and able to amount of advances and billable accomplishments
prosecute its case. Except for the lone instance, listed by the former, the latter refused to pay.
reasonable as already shown, of absence during Respondent also took refuge in the termination
the scheduled mediation conference on 3 April clause of the Agreement.[9] That clause allowed it
2001, respondent Samsung had, till then, promptly to set off the cost of the work that petitioner had
and religiously attended the hearings set by the failed to undertake -- due to termination or take-
RTC. In fact, respondent Samsung exhibited over -- against the amount it owed the latter.
diligence and dispatch in prosecuting its case
Because of the dispute, petitioner filed with the
against petitioner Real Bank, Inc. by immediately
Regional Trial Court (RTC) of Makati (Branch
moving to set the case for pre-trial after it had
141) a Complaint[10] for the collection of the
filed its reply and momently filing a motion for
amount representing the alleged balance due it
reconsideration of the RTC Order dismissing Civil
under the Subcontract. Instead of submitting an
Case No. 97-86265.
Answer, respondent filed a Motion to Dismiss,[11]
While not at the fore of this case, it may be stated alleging that the Complaint was premature,
that the state of the court docket cannot justify because there was no prior recourse to arbitration.
injudicious case dismissals. Inconsiderate
dismissals, even without prejudice, do not
In its Order[12] dated September 15, 1987, the petitioner? (3) How much were the advances and
RTC denied the Motion on the ground that the billable accomplishments?
dispute did not involve the interpretation or the
implementation of the Agreement and was, The resolution of the foregoing issues lies in the
therefore, not covered by the arbitral clause interpretation of the provisions of the Agreement.

CA ruling: Reversed the decision of RTC and Under the present Rules of Procedure, for a
ordered the referral of the case to arbitration. The particular construction contract to fall within the
appellate court held as arbitrable the issue of jurisdiction of CIAC, it is merely required that the
whether respondents take-over of some work parties agree to submit the same to voluntary
items had been intended to be a termination of arbitration Unlike in the original version of
the original contract under Letter K of the Section 1, as applied in the Tesco case, the law as
Subcontract. it now stands does not provide that the parties
should agree to submit disputes arising from their
ISSUE: Whether the case is premature agreement specifically to the CIAC for the latter
to acquire jurisdiction over the same. Rather, it is
RULING: YES, the case is premature, it plain and clear that as long as the parties agree to
should have been arbitrated first according to submit to voluntary arbitration, regardless of what
their agreement forum they may choose, their agreement will fall
within the jurisdiction of the CIAC, such that,
We side with respondent. Essentially, the dispute
even if they specifically choose another forum, the
arose from the parties ncongruent positions on
parties will not be precluded from electing to
whether certain provisions of their Agreement
submit their dispute before the CIAC because this
could be applied to the facts. The instant case
right has been vested upon each party by law, i.e.,
involves technical discrepancies that are better left
E.O. No. 1008.
to an arbitral body that has expertise in those
areas. In any event, the inclusion of an arbitration The arbitral clause in the Agreement is a
clause in a contract does not ipso facto divest the commitment on the part of the parties to submit
courts of jurisdiction to pass upon the findings of to arbitration the disputes covered therein.
arbitral bodies, because the awards are still Because that clause is binding, they are expected
judicially reviewable under certain conditions. to abide by it in good faith.[35] And because it
covers the dispute between the parties in the
Clearly, the resolution of the dispute between the
present case, either of them may compel the other
parties herein requires a referral to the provisions
to arbitrate.
of their Agreement. Within the scope of the
arbitration clause are discrepancies as to the Trinidad v. Ombudsman
amount of advances and billable
accomplishments, the application of the provision Criminal actions are not the subject matter of compromise
on termination, and the consequent set-off of agreements
FACTS: The Office of the Ombudsman in fact
A review of the factual allegations of the parties filed two Informations against petitioner with the
reveals that they differ on the following questions: Sandiganbayan, docketed as Criminal Case Nos.
(1) Did a take-over/termination occur? (2) May 28089 and 28093.
the expenses incurred by respondent in the take-
over be set off against the amounts it owed In Criminal Case No. 28089, petitioner, as DOTC
Assistant Secretary and member of the DOTC
Pre-qualifications, Bids and Awards Committee to PBAC Bulletin No. 3, as they relate to other
for the NAIA IPT III Project (PBAC), was applicable laws and rules.
charged with knowingly pre-qualifying Paircargo
Consortium3 (later incorporated into Philippine In assessing the financial capability of the
International Air Terminals Co., Inc. or PIATCO) PAIRCARGO Consortium, and in declaring such
on September 24, 1996 despite its failure to meet as pre-qualified, the PBAC used the entire net
the financial capability standards set by law. worth of companies comprising the
PAIRCARGO Consortium, including Security
During the pendency of the petition, the Bank. In so doing, the PBAC deliberately closed
Sandiganbayan found no probable cause to its eyes on, and consciously disregarded, the
proceed with the trial in, and thus dismissed provisions of the General Banking Act and the
Criminal Case No. 28093 by Resolution of Manual of Regulations for Banks which set a
September 7, 2006, and denied the prosecution’s limitation on the amount which certain types of
motion for reconsideration by Resolution of banks can invest in any one enterprise.
February 28, 2007.7 The petition insofar as it
concerns Criminal Case No. 28093 is thus Petitioner contends, however, that AEDC is
effectively mooted, the issues raised therein barred from filing a criminal complaint against
having ceased to present a justiciable controversy him due to the dismissal on April 30, 1999 by the
such that a determination thereof would be of no Regional Trial Court of Pasig City, Branch 261 of
practical use and value. Civil Case No. 66213, a case filed by the AEDC
for declaration of nullity of proceedings,
In Criminal Case No. 28089, petitioner is charged mandamus, and injunction which sought to
with violation of Section 3(j) of the Anti-Graft disqualify the Paircargo Consortium and to award
and Corrupt Practices Act which punishes the act the NAIA IPT III Project to AEDC. The case
of "[k]nowingly approving or granting any license, was dismissed upon the parties’ joint motion with
permit, privilege or benefit in favor of any person a mutual quitclaim and waiver.
not qualified for or not legally entitled to such
license, permit, privilege or advantage ISSUE: Whether the case should be dismissed
due to the mutual quitclaim executed between
In compliance with this Court’s Resolution of AEDC and petitioner herein
December 14, 2004, private respondent Asia’s
Emerging Dragon Corporation (AEDC), and the RULING: NO, it should not be dismissed
Office of the Solicitor General (OSG) on behalf
It is a firmly recognized rule, however, that
of public respondents, respectively filed on
criminal liability cannot be the subject of a
February 24, 2005 and April 20, 2005 their
compromise.25 For a criminal case is committed
comments5 on the petition, to which petitioner
against the People, and the offended party may
filed a reply.
not waive or extinguish the criminal liability that
Respondent PBAC Chairman Primitivo Cal, Vice- the law imposes for its commission. And that
Chairman Francisco Atayde, and Member explains why a compromise is not one of the
Wilfredo Trinidad and Technical Committee grounds prescribed by the Revised Penal Code for
Chairman Pantaleon Alvarez knowingly pre- the extinction of criminal liability.26
qualified PAIRCARGO despite its obvious failure
Even a complaint for misconduct, malfeasance or
to meet the financial capability standards set by
misfeasance against a public officer or employee
Paragraph c, Section 5.4 of the 1994
cannot just be withdrawn at any time by the
Implementing Rules of the BOT Law in relation
complainant. This is because there is a need to
maintain the faith and confidence of the people in Petitioner did not cause the case to be set for pre-
the government and its agencies and trial.6 For about six (6) months thereafter,
instrumentalities.27 discussions between petitioner and respondents
Magwin Marketing Corporation, Nelson Tiu,
The ineluctable conclusion, therefore, is that the Benito Sy and Anderson Uy, as parties in Civil
order dismissing the above-mentioned civil case Case No. 99-518, were undertaken to restructure
does not bar petitioner’s criminal prosecution. the indebtedness of respondent Magwin
Marketing Corporation.7 On 9 May 2000
Petitioner’s reliance on Republic v.
petitioner approved a debt payment scheme for
Sandiganbayan28 is misplaced. In that case, the
the corporation which on 15 May 2000 was
Court dismissed the criminal case following the
communicated to the latter by means of a letter
forging of a compromise agreement by the
dated 10 May 2000 for the conformity of its
accused and the Presidential Commission on
officers, i.e., respondent Nelson Tiu as
Good Government (PCGG) which gave the
President/General Manager of Magwin Marketing
accused absolute immunity from criminal and civil
Corporation and respondent Benito Sy as Director
prosecutions. As correctly distinguished by the
thereof.8 Only respondent Nelson Tiu affixed his
OSG, that case involved the PCGG which, unlike
signature on the letter to signify his agreement to
AEDC, is a government agency expressly
the terms and conditions of the restructuring.
authorized by law to grant civil and criminal
immunity. On 31 July 2000 petitioner moved for
reconsideration of the Order (dismissing their
RCBC v. Magwin [Magulin]
case) by informing the trial court of respondents'
Non-submission of compromise agreement is not a proper unremitting desire to settle the case amicably
ground for refusal to continue the case through a loan restructuring program.11 On 22
August 2000 petitioner notified the trial court of
FACTS: On 4 March 1999 petitioner Rizal the acquiescence thereto of respondent Nelson
Commercial Banking Corporation (RCBC) filed a Tiu as an officer of Magwin Marketing
complaint for recovery of a sum of money with Corporation and defendant in the civil case.12
prayer for a writ of preliminary attachment against
respondents Magwin Marketing Corporation, On 8 September 2000 the court a quo issued an
Nelson Tiu, Benito Sy and Anderson Uy.1 On 26 Order reconsidering the dismissal without
April 1999, the trial court issued a writ of prejudice of Civil Case No. 99-518;
attachment.2 On 4 June 1999 the writ was
Acting on plaintiff's "Motion for
returned partially satisfied since only a parcel of
Reconsideration" of the Order dated 20
land purportedly owned by defendant Benito Sy
July 2000 dismissing this case for failure
was attached.3 In the meantime, summons was
to prosecute, it appearing that there was
served on each of the defendants, respondents
already conformity to the restructuring of
herein, who filed their respective answers, except
defendants' indebtedness with plaintiff by
for defendant Gabriel Cheng who was dropped
defendant Nelson Tiu, President of
without prejudice as party-defendant as his
defendant corporation per "Manifestation
whereabouts could not be located.4 On 21
and Motion" filed by plaintiff on 22
September 1999 petitioner moved for an alias writ
August 2000, there being probability of
of attachment which on 18 January 2000 the court
settlement among the parties, as prayed
a quo denied.
for, the Order dated 20 July 2000 is
hereby set aside.
Plaintiff is directed to submit the forge a compromise with the other parties within
compromise agreement within 15 days fifteen (15) days from notice of the order to do so
from receipt hereof. Failure on the part of and held -
plaintiff to submit the said agreement
shall cause the imposition of payment of Since there is nothing in the Rules that
the required docket fees for re-filing of imposes the sanction of dismissal for
this case. failing to submit a compromise
agreement, then it is obvious that the
On 27 July 2000 petitioner filed in Civil Case No. dismissal of the complaint on the basis
99-518 a Manifestation and Motion to Set Case thereof amounts no less to a gross
for Pre-Trial Conference alleging that "[t]o date, procedural infirmity assailable by
only defendant Nelson Tiu had affixed his certiorari. For such submission could at
signature on the May 10, 2000 letter which most be directory and could not result in
informed the defendants that plaintiff [herein throwing out the case for failure to effect
petitioner] already approved defendant Magwin a compromise. While a compromise is
Marketing Corporations request for restructuring encouraged, very strongly in fact, failure
of its loan obligations to plaintiff but subject to to consummate one does not warrant any
the terms and conditions specified in said letter." procedural sanction, much less an
authority to jettison a civil complaint
The trial court, in an undated Order (although a worth P4,000,000.00 . . . Plainly,
date was later inserted in the Order), denied submission of a compromise agreement is
petitioner's motion to calendar Civil Case No. 99- never mandatory, nor is it required by any
518 for pre-trial stating that for failure of the rule.
plaintiff to submit a compromise agreement
pursuant to the Order dated 8 September 2000 As also explained therein, the proper course of
plaintiff's motion to set case for pre-trial action that should have been taken by the court a
conference is hereby denied. quo, upon manifestation of the parties of their
willingness to discuss a settlement, was to suspend
In the main, petitioner argued that the court a quo the proceedings and allow them reasonable time
had no authority to compel the parties in Civil to come to terms (a) If willingness to discuss a
Case No. 99-518 to enter into an amicable possible compromise is expressed by one or both
settlement nor to deny the holding of a pre-trial parties; or (b) If it appears that one of the parties,
conference on the ground that no compromise before the commencement of the action or
agreement was turned over to the court a quo. proceeding, offered to discuss a possible
compromise but the other party refused the offer,
ISSUE: Whether the parties can be compelled
pursuant to Art. 2030 of the Civil Code. If despite
to enter into a compromise agreement before
efforts exerted by the trial court and the parties
setting the case to pre-trial
the negotiations still fail, only then should the
RULING: NO, the parties cannot be action continue as if no suspension had taken
compelled as a condition precedent for the place.
continuation of the case
Ostensibly, while the rules allow the trial court to
In Goldloop Properties, Inc., we reversed the suspend its proceedings consistent with the policy
action of the trial court in dismissing the to encourage the use of alternative mechanisms of
complaint for failure of the plaintiff to prosecute dispute resolution, in the instant case, the trial
its case, which was in turn based on its inability to court only gave the parties fifteen (15) days to
conclude a deal. This was, to say the least, a On February 22, 2000, petitioner filed before the
passive and paltry attempt of the court a quo in its Metropolitan Trial Court of Makati City, a
task of persuading litigants to agree upon a complaint for damages against respondents. Based
reasonable concession.34 Hence, if only to inspire on the Sheriff’s Return of Service, summons
confidence in the pursuit of a middle ground remained unserved on respondent Suspine,5 while
between petitioner and respondents, we must not it was served on respondent corporation and
interpret the trial court's Orders as dismissing the received by Samuel D. Marcoleta of its Receiving
action on its own motion because the parties, Section on April 3, 2000.6
specifically petitioner, were anxious to litigate their
case as exhibited in their several manifestations On May 19, 2000, petitioner filed a Motion to
and motions. Declare Defendants in Default; however, on June
28, 2000, respondent corporation filed an
We reject respondent Uy's contention that Omnibus Motion (And Opposition to Plaintiff’s
Goldloop Properties, Inc. v. Court of Appeals is Motion to Declare Defendant in Default) alleging
irrelevant to the case at bar on the dubious that summons was improperly served upon it
reasoning that the complaint of petitioner was because it was made to a secretarial staff who was
dismissed for failure to prosecute and not for the unfamiliar with court processes; and that the
non-submission of a compromise agreement summons was received by Mr. Armando C.
which was the bone of contention in that case, Ordoñez, President and General Manager of
and that the dismissal imposed in the instant case respondent corporation only on June 24, 2000.
was without prejudice, in contrast to the dismissal Respondent corporation asked for an extension of
with prejudice decreed in the cited case. To begin 15 days within which to file an Answer.
with, whether the dismissal is with or without
prejudice if grievously erroneous is detrimental to MTC ruling: On July 26, 2000, respondent
the cause of the affected party; Goldloop corporation filed a Motion to Admit Answer
Properties, Inc. does not tolerate a wrongful alleging honest mistake and business reverses that
dismissal just because it was without prejudice. prevented them from hiring a lawyer until July 10,
More importantly, the facts in Goldloop 2000, as well as justice and equity. The Answer
Properties, Inc. involve, as in the instant case, a with Counterclaim specifically denied liability,
dismissal for failure to prosecute on the ground of averred competency on the part of respondent
the parties' inability to come up with a Suspine, and due selection and supervision of
compromise agreement within fifteen (15) days employees on the part of respondent corporation,
from notice of the court's order therein. All told, and argued that it was Maximo Mata who was at
the parallelism between them is unmistakable. fault.

Paramount v. AC Ordonez RTC ruling: Reversed the ruling of MTC

FACTS: Petitioner Paramount Insurance Corp. is CA ruling: Reversed the ruling of RTC and
the subrogee of Maximo Mata, the registered reinstated MTC order
owner of a Honda City sedan involved in a
Petitioner argued, among other things, that the
vehicular accident with a truck mixer owned by
court erred in not calling the parties to mediation
respondent corporation and driven by respondent
Franklin A. Suspine on September 10, 1997, at ISSUE: Whether the parties should be called
Brgy. Panungyanan, Gen. Trias, Cavite. to mediation
RULING: NO, there is a need for written on the right side of the caption of the initial
request before it is submitted to mediation pleading (under the case number), that the case is
mediatable. Further, any party who is interested to
Finally, the decision to refer a case to mediation have the appealed case mediated may also submit
involves judicial discretion. Although Sec. 9 B, a "written request in any form to the Court of
Rule 141 of the Rules of Court, as amended by A. Appeals." In the instant case, petitioner failed to
M. No. 04-2-04-SC, requires the payment of write or stamp the notation "mediatable" on its
P1,000.00 as mediation fee upon the filing of a Memorandum of Appeal. Moreover, it failed to
mediatable case, petition, special civil action, submit any written request for mediation.
comment/answer to the petition or action, and
the appellee’s brief, the final decision to refer a Agbayani v. CA
case to mediation still belongs to the ponente,
subject to the concurrence of the other members Barangay conciliation
of the division.
FACTS: Agbayani and Genabe were both
As clarified by A. M. No. 04-3-15 (Revised employees of the Regional Trial Court (RTC),
Guidelines for the Implementation of Mediation Branch 275 of Las Piñas City, working as Court
in the Court of Appeals) dated March 23, 2004: Stenographer and Legal Researcher II,
respectively. On December 29, 2006, Agbayani
II. SELECTION OF CASES filed a criminal complaint for grave oral
defamation against Genabe before the Office of
Division Clerks of Court, with the the City Prosecutor of Las Piñas City, docketed as
assistance of the Philippine Mediation I.S. No. 07-0013, for allegedly uttering against her,
Center (PMC), shall identify the pending in the presence of their fellow court employees
cases to be referred to mediation for the and while she was going about her usual duties at
approval either of the Ponente for work, the following statements, to wit:
completion of records, or, the Ponente
for decision. Henceforth, the petitioner or "ANG GALING MO LETY, SINABI
appellant shall specify – by writing or by MO NA TINAPOS MO YUNG
stamping on the right side of the caption MARVILLA CASE, ANG GALING
of the initial pleading (under the case MO. FEELING LAWYER KA KASI,
number) that the case is mediatable. BAKIT DI KA MAGDUTY NA LANG,
Any party who is interested to have the appealed KA NA LANG, ANG GALING MO,
case mediated may also submit a written request in FEELING LAWYER KA TALAGA.
any form to the Court of Appeals. If the case is NAGBEBENTA KA NG KASO,
eligible for mediation, the Ponente, with the TIRADOR KA NG JUDGE. SIGE
concurrence of the other members of the HIGH BLOOD DIN KA, MAMATAY
Division, shall refer the case to the PMC. KA SANA SA HIGH BLOOD MO."3
(Emphasis ours)
In a Resolution4 rendered on February 12, 2007,
Thus, for cases pending at the time the said the Office of the City Prosecutor of Las Piñas
guidelines were issued, the Division Clerks of City5 found probable cause for the filing of the
Court, with the assistance of the Philippine Information for grave oral defamation against
Mediation Center, shall identify the cases to be Genabe.
referred to mediation. Thereafter, the petitioner or
appellant shall specify, by writing or by stamping
However, upon a petition for review filed by I. All disputes are subject to Barangay conciliation
Genabe, the DOJ Undersecretary Ernesto L. pursuant to the Revised Katarungang
Pineda (Pineda) found that (among other things) Pambarangay Law [formerly P.D. 1508, repealed
the instant case should nonetheless be dismissed and now replaced by Secs. 399-422, Chapter VII,
for non-compliance with the provisions of Book Title I, Book III, and Sec. 515, Title I, Book IV,
III, Title I, Chapter 7 (Katarungang R.A. 7160, otherwise known as the Local
Pambarangay), of Republic Act No. 7160 (The Government Code of 1991], and prior recourse
Local Government Code of 1991). As shown by thereto is a pre-condition before filing a complaint
the records, the parties herein are residents of Las in court or any government offices, except in the
Piñas City. following disputes:

The complaint-affidavit, however, failed to show [1] Where one party is the government, or
that the instant case was previously referred to the any subdivision or instrumentality
barangay for conciliation in compliance with thereof;
Sections 408 and 409, paragraph (d), of the Local
Government Code, which provides [2] Where one party is a public officer or
employee and the dispute relates to the
Section 408. Subject Matter for Amicable performance of his official functions;
Settlement; Exception Thereto. – The
lupon of each barangay shall have [3] Where the dispute involves real
authority to bring together the parties properties located in different cities and
actually residing in the same city or municipalities, unless the parties thereto
municipality for amicable settlement of all agree to submit their difference to
disputes except: xxx amicable settlement by an appropriate
Section 409. Venue. x x x (d) Those
arising at the workplace where the [4] Any complaint by or against
contending parties are employed or xxx corporations, partnerships or juridical
shall be brought in the barangay where entities, since only individuals shall be
such workplace or institution is located. parties to Barangay conciliation
proceedings either as complainants or
The records of the case likewise show that the respondents [Sec. 1, Rule VI,
instant case is not one of the exceptions Katarungang Pambarangay Rules];
enumerated under Section 408 of the Local
Government Code. Hence, the dismissal of the [5] Disputes involving parties who
instant petition is proper. actually reside in barangays of different
cities or municipalities, except where such
CA ruling: Affirmed that there was no grave abuse barangay units adjoin each other and the
of discretion parties thereto agree to submit their
differences to amicable settlement by an
ISSUE: Whether the case should have appropriate Lupon;
undergone barangay conciliation
[6] Offenses for which the law prescribes
RULING: YES, it should have undergone a maximum penalty of imprisonment
such compulsory conciliation, failure warrants exceeding one [1] year or a fine of over
the dismissal of the case five thousand pesos ([₱]5,000.00);
[7] Offenses where there is no private [12] Actions to annul judgment upon a
offended party; compromise which may be filed directly
in court [See Sanchez vs. [Judge] Tupaz,
[8] Disputes where urgent legal action is 158 SCRA 459]."
necessary to prevent injustice from being
committed or further continued, The compulsory process of arbitration is a pre-
specifically the following: condition for the filing of the complaint in court.
Where the complaint (a) did not state that it is one
[a] Criminal cases where accused of excepted cases, or (b) it did not allege prior
is under police custody or availment of said conciliation process, or (c) did
detention [See Sec. 412(b)(1), not have a certification that no conciliation had
Revised Katarungang been reached by the parties, the case should be
Pambarangay Law]; dismissed.27
[b] Petitions for habeas corpus by Here, petitioner Agbayani failed to show that the
a person illegally deprived of his instant case is not one of the exceptions
rightful custody over another or a enumerated above. Neither has she shown that
person illegally deprived of or on the oral defamation caused on her was so grave as
acting in his behalf; to merit a penalty of more than one year.
[c] Actions coupled with Positos v. Chua
provisional remedies such as
preliminary injunction, FACTS: Petitioner had since 1980 been
attachment, delivery of personal occupying a portion of a parcel of land covered by
property and support during the Transfer Certificate of Title No. T-2316862
pendency of the action; and situated in Leon Garcia St., Davao City. The land
was likewise occupied by members of the Sto.
[d] Actions which may be barred Tomas de Villanueva Settlers Association (the
by the Statute of Limitations. Association), of which petitioner was a member.
On December 26, 1994, the registered owner of
[9] Any class of disputes which the
the land, Ansuico, Inc., transferred its rights and
President may determine in the interest of
interests thereover to respondent.1awphi1
justice or upon the recommendation of
the Secretary of Justice; The Association thereupon filed a complaint
against respondent for prohibitory injunction
[10] Where the dispute arises from the
before the RTC of Davao City. A compromise
Comprehensive Agrarian Reform Law
agreement was thereafter forged and approved by
(CARL) [Secs. 46 & 47, R. A. 6657];
the trial court wherein the Association agreed to
[11] Labor disputes or controversies vacate the premises provided respondent extends
arising from employer-employee relations financial assistance to its members.
[Montoya vs. Escayo, 171 SCRA 442; Art.
Petitioner refused to abide by the compromise
226, Labor Code, as amended, which
agreement, however, prompting respondent to
grants original and exclusive jurisdiction
send her a demand letter to vacate the premises
over conciliation and mediation of
within fifteen (15) days from receipt thereof.
disputes, grievances or problems to
certain offices of the Department of
Labor and Employment];
The conflict was referred for conciliation before
the Lupon following Republic Act No. 7160 (R.A.
7160), "The Local Government Code."
Respondent did not appear during the
proceedings but sent a representative on his
behalf. No settlement having been reached,
respondent filed a complaint against petitioner for
Unlawful Detainer with prayer for damages and
attorney’s fees before the Municipal Trial Court in
Cities (MTCC), Davao City.

In her Answer to the complaint, petitioner alleged

that the failure of respondent to appear personally
during the proceedings is equivalent to non-
compliance with R.A. 7160 to thus render the
complaint dismissible

During the preliminary conference before the

MTCC, the parties stipulated on respondent’s
failure to personally appear during conciliation,
the due existence of the Certificate to File Action
issued by the barangay captain, and the lack of
lessor-lessee relationship between the parties.

MTC to CA: Ruled in favour of respondent herein

on the ground that he was represented by counsel
during the barangay conciliation proceeding

ISSUE: Whether the case should be dismissed

due to failure of respondent to appear before
the barangay conciliation

RULING: NO, the case should not be


As reflected above, respondent’s complaint was

dismissed for failure to comply with the
conciliation process. Non-compliance affected the
sufficiency of his cause of action and rendered the
complaint susceptible, as in fact it resulted to
dismissal on the ground of prematurity.

A dismissal without prejudice does not operate as

a judgment on the merits, for there is no
unequivocal determination of the rights and
obligations of the parties with respect to the cause
of action and subject matter thereof.