Adr Case Digests 2.docx

ADR Case Digests 2 Linda v. Micarez The severity of punishment is not commensurate to what happened in the case FACTS: Petitioner is of Filipino descent who became a naturalized American citizen after marrying an American national in 1981. She is now a permanent resident of the United States of America (USA). In her complaint, petitioner claimed that the residential lot in Panabo City, which she purchased in 1982, was clandestinely and fraudulently conveyed and transferred by her parents, respondent spouses Alvaro and Paz Micarez (Spouses Micarez), in favor of her youngest brother, respondent Dionesio Micarez (Dionesio), to her prejudice and detriment. Aware that there would be difficulty in registering a real property in her name, she being married to an American citizen, she arranged to pay for the purchase price of the residential lot and register it, in the meantime, in the names of Spouses Micarez under an implied trust. The title thereto shall be transferred in her name in due time. Thus, on October 20, 1982, a deed of absolute sale was executed between Spouses Micarez and the owner, Abundio Panganiban, for the 328 square meter residential lot covered by Transfer Certificate of Title (TCT) No. T-25833. Petitioner sent the money which was used for the payment of the lot. TCT No. T-25833 was cancelled upon the registration of the deed of sale before the Registry of Deeds of Davao del Norte. In lieu thereof, TCT No. T-38635 was issued in the names of Spouses Micarez on January 31, 1983. Sometime in 2005, she learned from Manalang that Spouses Micarez sold the subject lot to Dionesio on November 22, 2001 and that consequently, TCT T-172286 was issued in her brother’s name on January 21, 2002.

Meanwhile, the respondents executed two special powers of attorney5 both dated August 3, 2007 before the Consulate General of the Philippines in Los Angeles, California, U.S.A., authorizing their counsel, Atty. Richard C. Miguel (Atty. Miguel), to file their answer in Civil Case No. 13-2007 and to represent them during the pre-trial conference and all subsequent hearings with power to enter into a compromise agreement. By virtue thereof, Atty. Miguel timely filed his principals’ answer denying the material allegations in the complaint. After the parties had filed their respective pre-trial briefs, and the issues in the case had been joined, the RTC explored the possibility of an amicable settlement among the parties by ordering the referral of the case to the Philippine Mediation Center (PMC). On March 1, 2008, Mediator Esmeraldo O. Padao, Sr. (Padao) issued a Mediator’s Report6 and returned Civil Case No. 13-2007 to the RTC allegedly due to the nonappearance of the respondents on the scheduled conferences before him. Acting on said Report, the RTC issued an order on May 29, 2009 allowing petitioner to present her evidence ex parte. Later, Padao clarified, through a Manifestation,8 dated July 15, 2008, that it was petitioner, represented by Atty. Benjamin Utulle (Atty. Utulle), who did not attend the mediation proceedings set on March 1, 2008, and not Atty. Miguel, counsel for the respondents and their authorized representative. Padao explained that Atty. Miguel inadvertently affixed his signature for attendance purposes on the column provided for the plaintiff’s counsel in the mediator’s report RTC Ruling: Dismissed the case of petitioner for failure to appear in the mediation proceedings. This was affirmed by the court and denied petitioner’s motion for reconsideration ISSUE: Whether RTC erred in dismissing the complaint RULING: YES, RTC erred in their decision

A.M. No. 01-10-5-SC-PHILJA regards mediation as part of pre-trial where parties are encouraged to personally attend the proceedings. The personal non-appearance, however, of a party may be excused only when the representative, who appears in his behalf, has been duly authorized to enter into possible amicable settlement or to submit to alternative modes of dispute resolution. To ensure the attendance of the parties, A.M. No. 01-10-5-SC-PHILJA specifically enumerates the sanctions that the court can impose upon a party who fails to appear in the proceedings which includes censure, reprimand, contempt, and even dismissal of the action in relation to Section 5, Rule 18 of the Rules of Court.15 The respective lawyers of the parties may attend the proceedings and, if they do so, they are enjoined to cooperate with the mediator for the successful amicable settlement of disputes16 so as to effectively reduce docket congestion. Although the RTC has legal basis to order the dismissal of Civil Case No. 13-2007, the Court finds this sanction too severe to be imposed on the petitioner where the records of the case is devoid of evidence of willful or flagrant disregard of the rules on mediation proceedings. There is no clear demonstration that the absence of petitioner’s representative during mediation proceedings on March 1, 2008 was intended to perpetuate delay in the litigation of the case. Neither is it indicative of lack of interest on the part of petitioner to enter into a possible amicable settlement of the case. The Court notes that Manalang was not entirely at fault for the cancellation and resettings of the conferences. Let it be underscored that respondents’ representative and counsel, Atty. Miguel, came late during the January 19 and February 9, 2008 conferences which resulted in their cancellation and the final resetting of the mediation proceedings to March 1, 2008. Considering the circumstances, it would be most unfair to penalize petitioner for the neglect of her lawyer.

Assuming arguendo that the trial court correctly construed the absence of Manalang on March 1, 2008 as a deliberate refusal to comply with its Order or to be dilatory, it cannot be said that the court was powerless and virtually without recourse. Indeed, there are other available remedies to the court a quo under A.M. No. 0110-5-SC-PHILJA, apart from immediately ordering the dismissal of the case. If Manalang’s absence upset the intention of the court a quo to promptly dispose the case, a mere censure or reprimand would have been sufficient for petitioner’s representative and her counsel so as to be informed of the court’s intolerance of tardiness and laxity in the observation of its order. It bears emphasis that the subject matter of the complaint is a valuable parcel of land measuring 328 square meters and that petitioner had allegedly spent a lot of money not only for the payment of the docket and other filing fees but also for the extra-territorial service of the summons to the respondents who are now permanent residents of the U.S.A. Certainly, petitioner stands to lose heavily on account of technicality. Even if the dismissal is without prejudice, the refiling of the case would still be injurious to petitioner because she would have to pay again all the litigation expenses which she previously paid for. The Court should afford party-litigants the amplest opportunity to enable them to have their cases justly determined, free from constraints of technicalities.18 Technicalities should take a backseat against substantive rights and should give way to the realities of the situation. Besides, the petitioner has manifested her interest to pursue the case through the present petition. At any rate, it has not been shown that a remand of the case for trial would cause undue prejudice to respondents. Real Bank v. Samsung Mabuhay Illustrative case of an excusable reason for non-appearance in mediation

FACTS: Plaintiff SAMSUNG MABUHAY ELECTRONIC CORPORATION is a joint venture corporation between SAMSUNG ELECTRONICS CO. LTD., a foreign corporation duly organized and existing under Korean laws, and plaintiff MABUHAY ELECTRONICS CORPORATION, a corporation organized and existing under Philippine laws As a result of the Joint Venture Agreement, Samsung Mabuhay Electronics Corporation became the exclusive distributor for Samsung products in the Philippines. Sometime in December of 1996, Conpinco Trading, a regular dealer of [respondent] Samsung Mabuhay Corporation in Davao City, issued five (5) postdated [United Coconut Planters Bank] UCPB checks payable to the order of Samsung Mabuhay Corporation These five (5) checks were picked-up by Reynaldo Senson, former Collection Supervisor of Samsung Mabuhay Corporation for Visayas and Mindanao, at Conpinco Trading’s place of business Two (2) of the five (5) checks picked-up by Reynaldo Senson were remitted to Samsung Mabuhay Corporation. However, the three (3) remaining UCPB checks, i.e., check nos. 1869863, 1869864, and 1869865 amounting to P1,563,750.00, were not remitted by Reynaldo Senson to Samsung Mabuhay Corporation. Instead, Reynaldo Senson, using an alias name, Edgardo Bacea, opened an account with defendant Real Bank, Malolos, Bulacan branch under the account name of one Mabuhay Electronics Company, a business entity in no way related to plaintiff Mabuhay Electronics Corporation. Mabuhay Electronics Company is a single proprietorship owned and managed by Reynaldo Senson, alias Edgardo Bacea. Defendant [Real Bank] then sent the three (3) checks for clearing and for payment through Far East Bank and Trust Company, Malolos, Bulacan

Branch after stamping at the back of the checks the usual endorsements: "ALL PRIOR ENDORSEMENT and/or LACK OF ENDORSEMENT GUARANTEED." Conpinco Trading’s account with the drawee bank, UCPB, was eventually debited for the value of the three (3) checks and Mabuhay Electronics Company’s account with defendant [Real Bank] was credited for the same amount although it was not the payee nor the person authorized by the payee. Despite plaintiffs’ [Samsung Mabuhay Corporation’s] demands, defendant [Real Bank] ignored and refused to reimburse them with the value of the three (3) checks. Thus, plaintiffs were constrained to hire the legal services of the law firm of V.E. Del Rosario and Partners. On 7 March 2001, the trial court issued an Order dated 17 March 2001 requiring both petitioner Real Bank, Inc. and respondent Samsung to appear in a mediation proceeding set on 3 April 2001.15 This Order of the trial court was sent to respondent Samsung’s former counsel, V.E. Del Rosario and Partners which had at that time already filed a notice of withdrawal of appearance.16 The mediation proceedings took place as scheduled on 3 April 2001 and Mediator Tammy Ann C. Reyes, who handled the mediation proceedings submitted her report to the Court stating therein that no action was taken on the case referred for mediation because respondent Samsung failed to appear. RTC Ruling: Dismissed the case for failure of respondent Samsung to appear CA Ruling: Reversed the decision of RTC and ruled: [R]espondent judge did not even peruse or verify the records of the case. Has she done so, she would have discovered that the former counsel of petitioner to whom she sent the Notice of the order had already withdrawn and that a new counsel for petitioner had already entered their appearance. Likewise, she should have discovered

that at that time the Order dated March 7, 2001 was issued by RTC Br. 9, petitioner was no longer holding office at its given address. This fact is clearly indicated in the Order of March 7, 2001 itself. Clearly, therefore, respondent judge committed grave abuse of discretion amounting to excess or lack of jurisdiction ISSUE: Whether RTC did not commit any grave abuse of discretion RULING: NO, it committed grave abuse of discretion, CA was proper in reversing RTC order It being daylight clear that the withdrawal of respondent Samsung’s original counsel was sufficient as the same carried the stamp of approval of the client, the notice of mediation sent to respondent Samsung’s original counsel was ineffectual as the same was sent at the time when such counsel had already validly withdrawn its representation. Corollarily, the absence of respondent Samsung during the scheduled mediation conference was excusable and justified. Therefore, the trial court erroneously dismissed Civil Case No. 97-86265. The calendar of hearings document the fact that respondent Samsung has been willing and able to prosecute its case. Except for the lone instance, reasonable as already shown, of absence during the scheduled mediation conference on 3 April 2001, respondent Samsung had, till then, promptly and religiously attended the hearings set by the RTC. In fact, respondent Samsung exhibited diligence and dispatch in prosecuting its case against petitioner Real Bank, Inc. by immediately moving to set the case for pre-trial after it had filed its reply and momently filing a motion for reconsideration of the RTC Order dismissing Civil Case No. 97-86265. While not at the fore of this case, it may be stated that the state of the court docket cannot justify injudicious case dismissals. Inconsiderate dismissals, even without prejudice, do not

constitute a panacea or a solution to the congestion of court dockets; while they lend a deceptive aura of efficiency to records of individual judges, they merely postpone the ultimate reckoning between the parties. In the absence of clear lack of merit or intention to delay, justice is better served by a brief continuance, trial on the merits, and final disposition of cases before the court. LM Power Engineer v. Capitol Industrial Construction Groups Submission to arbitration: CIAC Jurisdiction FACTS: On February 22, 1983, Petitioner LM Power Engineering Corporation and Respondent Capitol Industrial Construction Groups Inc. entered into a Subcontract Agreement involving electrical work at the Third Port of Zamboanga.[5] On April 25, 1985, respondent took over some of the work contracted to petitioner.[6] Allegedly, the latter had failed to finish it because of its inability to procure materials.[7] Upon completing its task under the Contract, petitioner billed respondent in the amount of P6,711,813.90.[8] Contesting the accuracy of the amount of advances and billable accomplishments listed by the former, the latter refused to pay. Respondent also took refuge in the termination clause of the Agreement.[9] That clause allowed it to set off the cost of the work that petitioner had failed to undertake -- due to termination or takeover -- against the amount it owed the latter. Because of the dispute, petitioner filed with the Regional Trial Court (RTC) of Makati (Branch 141) a Complaint[10] for the collection of the amount representing the alleged balance due it under the Subcontract. Instead of submitting an Answer, respondent filed a Motion to Dismiss,[11] alleging that the Complaint was premature, because there was no prior recourse to arbitration.

In its Order[12] dated September 15, 1987, the RTC denied the Motion on the ground that the dispute did not involve the interpretation or the implementation of the Agreement and was, therefore, not covered by the arbitral clause

petitioner? (3) How much were the advances and billable accomplishments?

CA ruling: Reversed the decision of RTC and ordered the referral of the case to arbitration. The appellate court held as arbitrable the issue of whether respondents take-over of some work items had been intended to be a termination of the original contract under Letter K of the Subcontract.

Under the present Rules of Procedure, for a particular construction contract to fall within the jurisdiction of CIAC, it is merely required that the parties agree to submit the same to voluntary arbitration Unlike in the original version of Section 1, as applied in the Tesco case, the law as it now stands does not provide that the parties should agree to submit disputes arising from their agreement specifically to the CIAC for the latter to acquire jurisdiction over the same. Rather, it is plain and clear that as long as the parties agree to submit to voluntary arbitration, regardless of what forum they may choose, their agreement will fall within the jurisdiction of the CIAC, such that, even if they specifically choose another forum, the parties will not be precluded from electing to submit their dispute before the CIAC because this right has been vested upon each party by law, i.e., E.O. No. 1008.

ISSUE: Whether the case is premature RULING: YES, the case is premature, it should have been arbitrated first according to their agreement We side with respondent. Essentially, the dispute arose from the parties ncongruent positions on whether certain provisions of their Agreement could be applied to the facts. The instant case involves technical discrepancies that are better left to an arbitral body that has expertise in those areas. In any event, the inclusion of an arbitration clause in a contract does not ipso facto divest the courts of jurisdiction to pass upon the findings of arbitral bodies, because the awards are still judicially reviewable under certain conditions. Clearly, the resolution of the dispute between the parties herein requires a referral to the provisions of their Agreement. Within the scope of the arbitration clause are discrepancies as to the amount of advances and billable accomplishments, the application of the provision on termination, and the consequent set-off of expenses. A review of the factual allegations of the parties reveals that they differ on the following questions: (1) Did a take-over/termination occur? (2) May the expenses incurred by respondent in the takeover be set off against the amounts it owed

The resolution of the foregoing issues lies in the interpretation of the provisions of the Agreement.

The arbitral clause in the Agreement is a commitment on the part of the parties to submit to arbitration the disputes covered therein. Because that clause is binding, they are expected to abide by it in good faith.[35] And because it covers the dispute between the parties in the present case, either of them may compel the other to arbitrate. Trinidad v. Ombudsman Criminal actions are not the subject matter of compromise agreements FACTS: The Office of the Ombudsman in fact filed two Informations against petitioner with the Sandiganbayan, docketed as Criminal Case Nos. 28089 and 28093. In Criminal Case No. 28089, petitioner, as DOTC Assistant Secretary and member of the DOTC

Pre-qualifications, Bids and Awards Committee for the NAIA IPT III Project (PBAC), was charged with knowingly pre-qualifying Paircargo Consortium3 (later incorporated into Philippine International Air Terminals Co., Inc. or PIATCO) on September 24, 1996 despite its failure to meet the financial capability standards set by law. During the pendency of the petition, the Sandiganbayan found no probable cause to proceed with the trial in, and thus dismissed Criminal Case No. 28093 by Resolution of September 7, 2006, and denied the prosecution’s motion for reconsideration by Resolution of February 28, 2007.7 The petition insofar as it concerns Criminal Case No. 28093 is thus effectively mooted, the issues raised therein having ceased to present a justiciable controversy such that a determination thereof would be of no practical use and value. In Criminal Case No. 28089, petitioner is charged with violation of Section 3(j) of the Anti-Graft and Corrupt Practices Act which punishes the act of "[k]nowingly approving or granting any license, permit, privilege or benefit in favor of any person not qualified for or not legally entitled to such license, permit, privilege or advantage In compliance with this Court’s Resolution of December 14, 2004, private respondent Asia’s Emerging Dragon Corporation (AEDC), and the Office of the Solicitor General (OSG) on behalf of public respondents, respectively filed on February 24, 2005 and April 20, 2005 their comments5 on the petition, to which petitioner filed a reply. Respondent PBAC Chairman Primitivo Cal, ViceChairman Francisco Atayde, and Member Wilfredo Trinidad and Technical Committee Chairman Pantaleon Alvarez knowingly prequalified PAIRCARGO despite its obvious failure to meet the financial capability standards set by Paragraph c, Section 5.4 of the 1994 Implementing Rules of the BOT Law in relation

to PBAC Bulletin No. 3, as they relate to other applicable laws and rules. In assessing the financial capability of the PAIRCARGO Consortium, and in declaring such as pre-qualified, the PBAC used the entire net worth of companies comprising the PAIRCARGO Consortium, including Security Bank. In so doing, the PBAC deliberately closed its eyes on, and consciously disregarded, the provisions of the General Banking Act and the Manual of Regulations for Banks which set a limitation on the amount which certain types of banks can invest in any one enterprise. Petitioner contends, however, that AEDC is barred from filing a criminal complaint against him due to the dismissal on April 30, 1999 by the Regional Trial Court of Pasig City, Branch 261 of Civil Case No. 66213, a case filed by the AEDC for declaration of nullity of proceedings, mandamus, and injunction which sought to disqualify the Paircargo Consortium and to award the NAIA IPT III Project to AEDC. The case was dismissed upon the parties’ joint motion with a mutual quitclaim and waiver. ISSUE: Whether the case should be dismissed due to the mutual quitclaim executed between AEDC and petitioner herein RULING: NO, it should not be dismissed It is a firmly recognized rule, however, that criminal liability cannot be the subject of a compromise.25 For a criminal case is committed against the People, and the offended party may not waive or extinguish the criminal liability that the law imposes for its commission. And that explains why a compromise is not one of the grounds prescribed by the Revised Penal Code for the extinction of criminal liability.26 Even a complaint for misconduct, malfeasance or misfeasance against a public officer or employee cannot just be withdrawn at any time by the complainant. This is because there is a need to

maintain the faith and confidence of the people in the government and its agencies and instrumentalities.27 The ineluctable conclusion, therefore, is that the order dismissing the above-mentioned civil case does not bar petitioner’s criminal prosecution. Petitioner’s reliance on Republic v. Sandiganbayan28 is misplaced. In that case, the Court dismissed the criminal case following the forging of a compromise agreement by the accused and the Presidential Commission on Good Government (PCGG) which gave the accused absolute immunity from criminal and civil prosecutions. As correctly distinguished by the OSG, that case involved the PCGG which, unlike AEDC, is a government agency expressly authorized by law to grant civil and criminal immunity. RCBC v. Magwin [Magulin] Non-submission of compromise agreement is not a proper ground for refusal to continue the case FACTS: On 4 March 1999 petitioner Rizal Commercial Banking Corporation (RCBC) filed a complaint for recovery of a sum of money with prayer for a writ of preliminary attachment against respondents Magwin Marketing Corporation, Nelson Tiu, Benito Sy and Anderson Uy.1 On 26 April 1999, the trial court issued a writ of attachment.2 On 4 June 1999 the writ was returned partially satisfied since only a parcel of land purportedly owned by defendant Benito Sy was attached.3 In the meantime, summons was served on each of the defendants, respondents herein, who filed their respective answers, except for defendant Gabriel Cheng who was dropped without prejudice as party-defendant as his whereabouts could not be located.4 On 21 September 1999 petitioner moved for an alias writ of attachment which on 18 January 2000 the court a quo denied.

Petitioner did not cause the case to be set for pretrial.6 For about six (6) months thereafter, discussions between petitioner and respondents Magwin Marketing Corporation, Nelson Tiu, Benito Sy and Anderson Uy, as parties in Civil Case No. 99-518, were undertaken to restructure the indebtedness of respondent Magwin Marketing Corporation.7 On 9 May 2000 petitioner approved a debt payment scheme for the corporation which on 15 May 2000 was communicated to the latter by means of a letter dated 10 May 2000 for the conformity of its officers, i.e., respondent Nelson Tiu as President/General Manager of Magwin Marketing Corporation and respondent Benito Sy as Director thereof.8 Only respondent Nelson Tiu affixed his signature on the letter to signify his agreement to the terms and conditions of the restructuring. On 31 July 2000 petitioner moved for reconsideration of the Order (dismissing their case) by informing the trial court of respondents' unremitting desire to settle the case amicably through a loan restructuring program.11 On 22 August 2000 petitioner notified the trial court of the acquiescence thereto of respondent Nelson Tiu as an officer of Magwin Marketing Corporation and defendant in the civil case.12 On 8 September 2000 the court a quo issued an Order reconsidering the dismissal without prejudice of Civil Case No. 99-518; Acting on plaintiff's "Motion for Reconsideration" of the Order dated 20 July 2000 dismissing this case for failure to prosecute, it appearing that there was already conformity to the restructuring of defendants' indebtedness with plaintiff by defendant Nelson Tiu, President of defendant corporation per "Manifestation and Motion" filed by plaintiff on 22 August 2000, there being probability of settlement among the parties, as prayed for, the Order dated 20 July 2000 is hereby set aside.

Plaintiff is directed to submit the compromise agreement within 15 days from receipt hereof. Failure on the part of plaintiff to submit the said agreement shall cause the imposition of payment of the required docket fees for re-filing of this case. On 27 July 2000 petitioner filed in Civil Case No. 99-518 a Manifestation and Motion to Set Case for Pre-Trial Conference alleging that "[t]o date, only defendant Nelson Tiu had affixed his signature on the May 10, 2000 letter which informed the defendants that plaintiff [herein petitioner] already approved defendant Magwin Marketing Corporations request for restructuring of its loan obligations to plaintiff but subject to the terms and conditions specified in said letter." The trial court, in an undated Order (although a date was later inserted in the Order), denied petitioner's motion to calendar Civil Case No. 99518 for pre-trial stating that for failure of the plaintiff to submit a compromise agreement pursuant to the Order dated 8 September 2000 plaintiff's motion to set case for pre-trial conference is hereby denied. In the main, petitioner argued that the court a quo had no authority to compel the parties in Civil Case No. 99-518 to enter into an amicable settlement nor to deny the holding of a pre-trial conference on the ground that no compromise agreement was turned over to the court a quo. ISSUE: Whether the parties can be compelled to enter into a compromise agreement before setting the case to pre-trial RULING: NO, the parties cannot be compelled as a condition precedent for the continuation of the case In Goldloop Properties, Inc., we reversed the action of the trial court in dismissing the complaint for failure of the plaintiff to prosecute its case, which was in turn based on its inability to

forge a compromise with the other parties within fifteen (15) days from notice of the order to do so and held Since there is nothing in the Rules that imposes the sanction of dismissal for failing to submit a compromise agreement, then it is obvious that the dismissal of the complaint on the basis thereof amounts no less to a gross procedural infirmity assailable by certiorari. For such submission could at most be directory and could not result in throwing out the case for failure to effect a compromise. While a compromise is encouraged, very strongly in fact, failure to consummate one does not warrant any procedural sanction, much less an authority to jettison a civil complaint worth P4,000,000.00 . . . Plainly, submission of a compromise agreement is never mandatory, nor is it required by any rule. As also explained therein, the proper course of action that should have been taken by the court a quo, upon manifestation of the parties of their willingness to discuss a settlement, was to suspend the proceedings and allow them reasonable time to come to terms (a) If willingness to discuss a possible compromise is expressed by one or both parties; or (b) If it appears that one of the parties, before the commencement of the action or proceeding, offered to discuss a possible compromise but the other party refused the offer, pursuant to Art. 2030 of the Civil Code. If despite efforts exerted by the trial court and the parties the negotiations still fail, only then should the action continue as if no suspension had taken place. Ostensibly, while the rules allow the trial court to suspend its proceedings consistent with the policy to encourage the use of alternative mechanisms of dispute resolution, in the instant case, the trial court only gave the parties fifteen (15) days to

conclude a deal. This was, to say the least, a passive and paltry attempt of the court a quo in its task of persuading litigants to agree upon a reasonable concession.34 Hence, if only to inspire confidence in the pursuit of a middle ground between petitioner and respondents, we must not interpret the trial court's Orders as dismissing the action on its own motion because the parties, specifically petitioner, were anxious to litigate their case as exhibited in their several manifestations and motions. We reject respondent Uy's contention that Goldloop Properties, Inc. v. Court of Appeals is irrelevant to the case at bar on the dubious reasoning that the complaint of petitioner was dismissed for failure to prosecute and not for the non-submission of a compromise agreement which was the bone of contention in that case, and that the dismissal imposed in the instant case was without prejudice, in contrast to the dismissal with prejudice decreed in the cited case. To begin with, whether the dismissal is with or without prejudice if grievously erroneous is detrimental to the cause of the affected party; Goldloop Properties, Inc. does not tolerate a wrongful dismissal just because it was without prejudice. More importantly, the facts in Goldloop Properties, Inc. involve, as in the instant case, a dismissal for failure to prosecute on the ground of the parties' inability to come up with a compromise agreement within fifteen (15) days from notice of the court's order therein. All told, the parallelism between them is unmistakable. Paramount v. AC Ordonez FACTS: Petitioner Paramount Insurance Corp. is the subrogee of Maximo Mata, the registered owner of a Honda City sedan involved in a vehicular accident with a truck mixer owned by respondent corporation and driven by respondent Franklin A. Suspine on September 10, 1997, at Brgy. Panungyanan, Gen. Trias, Cavite.

On February 22, 2000, petitioner filed before the Metropolitan Trial Court of Makati City, a complaint for damages against respondents. Based on the Sheriff’s Return of Service, summons remained unserved on respondent Suspine,5 while it was served on respondent corporation and received by Samuel D. Marcoleta of its Receiving Section on April 3, 2000.6 On May 19, 2000, petitioner filed a Motion to Declare Defendants in Default; however, on June 28, 2000, respondent corporation filed an Omnibus Motion (And Opposition to Plaintiff’s Motion to Declare Defendant in Default) alleging that summons was improperly served upon it because it was made to a secretarial staff who was unfamiliar with court processes; and that the summons was received by Mr. Armando C. Ordoñez, President and General Manager of respondent corporation only on June 24, 2000. Respondent corporation asked for an extension of 15 days within which to file an Answer. MTC ruling: On July 26, 2000, respondent corporation filed a Motion to Admit Answer alleging honest mistake and business reverses that prevented them from hiring a lawyer until July 10, 2000, as well as justice and equity. The Answer with Counterclaim specifically denied liability, averred competency on the part of respondent Suspine, and due selection and supervision of employees on the part of respondent corporation, and argued that it was Maximo Mata who was at fault. RTC ruling: Reversed the ruling of MTC CA ruling: Reversed the ruling of RTC and reinstated MTC order Petitioner argued, among other things, that the court erred in not calling the parties to mediation ISSUE: Whether the parties should be called to mediation

RULING: NO, there is a need for written request before it is submitted to mediation Finally, the decision to refer a case to mediation involves judicial discretion. Although Sec. 9 B, Rule 141 of the Rules of Court, as amended by A. M. No. 04-2-04-SC, requires the payment of P1,000.00 as mediation fee upon the filing of a mediatable case, petition, special civil action, comment/answer to the petition or action, and the appellee’s brief, the final decision to refer a case to mediation still belongs to the ponente, subject to the concurrence of the other members of the division. As clarified by A. M. No. 04-3-15 (Revised Guidelines for the Implementation of Mediation in the Court of Appeals) dated March 23, 2004: II. SELECTION OF CASES Division Clerks of Court, with the assistance of the Philippine Mediation Center (PMC), shall identify the pending cases to be referred to mediation for the approval either of the Ponente for completion of records, or, the Ponente for decision. Henceforth, the petitioner or appellant shall specify – by writing or by stamping on the right side of the caption of the initial pleading (under the case number) that the case is mediatable. Any party who is interested to have the appealed case mediated may also submit a written request in any form to the Court of Appeals. If the case is eligible for mediation, the Ponente, with the concurrence of the other members of the Division, shall refer the case to the PMC. (Emphasis ours) Thus, for cases pending at the time the said guidelines were issued, the Division Clerks of Court, with the assistance of the Philippine Mediation Center, shall identify the cases to be referred to mediation. Thereafter, the petitioner or appellant shall specify, by writing or by stamping

on the right side of the caption of the initial pleading (under the case number), that the case is mediatable. Further, any party who is interested to have the appealed case mediated may also submit a "written request in any form to the Court of Appeals." In the instant case, petitioner failed to write or stamp the notation "mediatable" on its Memorandum of Appeal. Moreover, it failed to submit any written request for mediation. Agbayani v. CA Barangay conciliation FACTS: Agbayani and Genabe were both employees of the Regional Trial Court (RTC), Branch 275 of Las Piñas City, working as Court Stenographer and Legal Researcher II, respectively. On December 29, 2006, Agbayani filed a criminal complaint for grave oral defamation against Genabe before the Office of the City Prosecutor of Las Piñas City, docketed as I.S. No. 07-0013, for allegedly uttering against her, in the presence of their fellow court employees and while she was going about her usual duties at work, the following statements, to wit: "ANG GALING MO LETY, SINABI MO NA TINAPOS MO YUNG MARVILLA CASE, ANG GALING MO. FEELING LAWYER KA KASI, BAKIT DI KA MAGDUTY NA LANG, STENOGRAPHER KA MAGSTENO KA NA LANG, ANG GALING MO, FEELING LAWYER KA TALAGA. NAGBEBENTA KA NG KASO, TIRADOR KA NG JUDGE. SIGE HIGH BLOOD DIN KA, MAMATAY KA SANA SA HIGH BLOOD MO."3 In a Resolution4 rendered on February 12, 2007, the Office of the City Prosecutor of Las Piñas City5 found probable cause for the filing of the Information for grave oral defamation against Genabe.

However, upon a petition for review filed by Genabe, the DOJ Undersecretary Ernesto L. Pineda (Pineda) found that (among other things) the instant case should nonetheless be dismissed for non-compliance with the provisions of Book III, Title I, Chapter 7 (Katarungang Pambarangay), of Republic Act No. 7160 (The Local Government Code of 1991). As shown by the records, the parties herein are residents of Las Piñas City.

I. All disputes are subject to Barangay conciliation pursuant to the Revised Katarungang Pambarangay Law [formerly P.D. 1508, repealed and now replaced by Secs. 399-422, Chapter VII, Title I, Book III, and Sec. 515, Title I, Book IV, R.A. 7160, otherwise known as the Local Government Code of 1991], and prior recourse thereto is a pre-condition before filing a complaint in court or any government offices, except in the following disputes:

The complaint-affidavit, however, failed to show that the instant case was previously referred to the barangay for conciliation in compliance with Sections 408 and 409, paragraph (d), of the Local Government Code, which provides

[1] Where one party is the government, or any subdivision or instrumentality thereof;

Section 408. Subject Matter for Amicable Settlement; Exception Thereto. – 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 except: xxx Section 409. Venue. x x x (d) Those arising at the workplace where the contending parties are employed or xxx shall be brought in the barangay where such workplace or institution is located. The records of the case likewise show that the instant case is not one of the exceptions enumerated under Section 408 of the Local Government Code. Hence, the dismissal of the instant petition is proper. CA ruling: Affirmed that there was no grave abuse of discretion ISSUE: Whether the case should have undergone barangay conciliation RULING: YES, it should have undergone such compulsory conciliation, failure warrants the dismissal of the case

[2] Where one party is a public officer or employee and the dispute relates to the performance of his official functions; [3] Where the dispute involves real properties located in different cities and municipalities, unless the parties thereto agree to submit their difference to amicable settlement by an appropriate Lupon; [4] Any complaint by or against corporations, partnerships or juridical entities, since only individuals shall be parties to Barangay conciliation proceedings either as complainants or respondents [Sec. 1, Rule VI, Katarungang Pambarangay Rules]; [5] Disputes involving parties who actually reside in barangays of different cities or municipalities, except where such barangay units adjoin each other and the parties thereto agree to submit their differences to amicable settlement by an appropriate Lupon; [6] Offenses for which the law prescribes a maximum penalty of imprisonment exceeding one [1] year or a fine of over five thousand pesos ([₱]5,000.00);

[7] Offenses where there is no private offended party; [8] Disputes where urgent legal action is necessary to prevent injustice from being committed or further continued, specifically the following:

[12] Actions to annul judgment upon a compromise which may be filed directly in court [See Sanchez vs. [Judge] Tupaz, 158 SCRA 459]."

[a] Criminal cases where accused is under police custody or detention [See Sec. 412(b)(1), Revised Katarungang Pambarangay Law];

The compulsory process of arbitration is a precondition for the filing of the complaint in court. Where the complaint (a) did not state that it is one of excepted cases, or (b) it did not allege prior availment of said conciliation process, or (c) did not have a certification that no conciliation had been reached by the parties, the case should be dismissed.27

[b] Petitions for habeas corpus by a person illegally deprived of his rightful custody over another or a person illegally deprived of or on acting in his behalf;

Here, petitioner Agbayani failed to show that the instant case is not one of the exceptions enumerated above. Neither has she shown that the oral defamation caused on her was so grave as to merit a penalty of more than one year.

[c] Actions coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property and support during the pendency of the action; and

Positos v. Chua

[d] Actions which may be barred by the Statute of Limitations. [9] Any class of disputes which the President may determine in the interest of justice or upon the recommendation of the Secretary of Justice; [10] Where the dispute arises from the Comprehensive Agrarian Reform Law (CARL) [Secs. 46 & 47, R. A. 6657]; [11] Labor disputes or controversies arising from employer-employee relations [Montoya vs. Escayo, 171 SCRA 442; Art. 226, Labor Code, as amended, which grants original and exclusive jurisdiction over conciliation and mediation of disputes, grievances or problems to certain offices of the Department of Labor and Employment];

FACTS: Petitioner had since 1980 been occupying a portion of a parcel of land covered by Transfer Certificate of Title No. T-2316862 situated in Leon Garcia St., Davao City. The land was likewise occupied by members of the Sto. Tomas de Villanueva Settlers Association (the Association), of which petitioner was a member. On December 26, 1994, the registered owner of the land, Ansuico, Inc., transferred its rights and interests thereover to respondent.1awphi1 The Association thereupon filed a complaint against respondent for prohibitory injunction before the RTC of Davao City. A compromise agreement was thereafter forged and approved by the trial court wherein the Association agreed to vacate the premises provided respondent extends financial assistance to its members. Petitioner refused to abide by the compromise agreement, however, prompting respondent to send her a demand letter to vacate the premises within fifteen (15) days from receipt thereof.

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 noncompliance 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 dismissed 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.