LINDA M.

CHAN KENT, represented by ROSITA MANALANG, Petitioner,

vs.
DIONESIO C. MICAREZ, SPOUSES ALVARO E. MICAREZ & PAZ MICAREZ, and THE REGISTRY OF
DEEDS, DAVAO DEL NORTE, Respondents.
The Facts
This petition draws its origin from a complaint for recovery of real property and annulment of title filed by
petitioner, before the RTC. Petitioner a naturalized American citizen. She is now a permanent resident of
the United States of America (USA).
petitioner claimed that a lot was fraudulently conveyed by her parents, respondent spouses Micarez , in
favor of her youngest brother,. After the parties had filed their pre-trial briefs, and the issues in the case
had been joined, the RTC ordered the referral of the case to the Philippine Mediation Center (PMC). the
Mediator issued a Mediators Report6 and returned the Case 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 allowing petitioner to present her evidence ex parte.7
Later, the mediator clarified, that it was petitioner, who did not attend the mediation proceedings. the RTC
issued the assailed Order9 \ dismissing Civil Case
Petitioner, through her counsel, filed a motion for reconsideration 10 to set aside the order of dismissal,
invoking the relaxation of the rule on non-appearance in the mediation proceedings in the interest of
justice and equity. the RTC ruled that it was not proper for the petitioner to invoke liberality inasmuch as
the dismissal of the civil action was due to her own fault.
The denial prompted the petitioner to file this petition directly with this Court
ISSUES
The pivotal issue in this case is whether the RTC erred in dismissing Civil Case No. 13-2007 due to
the failure of petitioners duly authorized representative, Manalang, and her counsel to attend the
mediation proceedings under the provisions of A.M. No. 01-10-5-SC-PHILJA and 1997 Rules on
Civil Procedure.
Petitioner claims that the dismissal of the case was unjust because her representative, Manalang, and her
counsel, Atty. Etulle, did not deliberately snub the mediation proceedings. In fact, Manalang and Atty.
Etulle twice attended the mediation conferences. On both occasions, Manalang was present but was not
made to sign the attendance sheet and was merely at the lobby waiting to be called by Atty. Etulle upon
arrival of Atty. Miguel. Manalang and Atty. Etulle only left when Atty. Miguel had not yet arrived. 13
Petitioner, however, admits that her representative and counsel indeed failed to attend the last scheduled
conference, when they had to attend some urgent matters. 14
In the interest of justice, the Court grants the petition.
A.M. No. 01-10-5-SC-PHILJA dated October 16, 2001, otherwise known as the Second Revised
Guidelines for the Implementation of Mediation Proceedings, was issued pursuant to par. (5), Section 5,

Article VII of the 1987 Constitution mandating this Court to promulgate rules providing for a simplified and
inexpensive procedure for the speedy disposition of cases. Also, Section 2(a), Rule 18 of the 1997 Rules
of Civil Procedure, as amended, requires the courts to consider the possibility of an amicable settlement
or of submission to alternative modes of resolution for the early settlement of disputes so as to put an end
to litigations.
To reiterate, 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.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 the case, the Court finds this sanction too severe
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 petitioners representative
during mediation proceedings on the last day 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.1avvphi1
Assuming that the trial court correctly construed the absence of Manalang 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. 01-10-5-SC-PHILJA, apart from immediately ordering the dismissal of the case. a mere
censure or reprimand would have been sufficient for petitioners representative and her counsel
so as to be informed of the courts intolerance of tardiness. Unless the conduct of the party is so
negligent, irresponsible, contumacious, or dilatory as for non-appearance to provide substantial
grounds for dismissal, the courts should consider lesser sanctions which would still achieve the
desired end.
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. Technicalities should take a backseat against substantive
rights and should give way to the realities of the situation. WHEREFORE, the petition is GRANTED.
SO ORDERED.

REAL BANK, INC.,

- versus - SAMSUNG MABUHAY CORPORATION,

respondent Samsung filed a Complaint[3] for damages against petitioner Real Bank,
Inc.. In its complaint, respondent Samsung alleged:

As a result of the Joint Venture Agreement, Samsung Mabuhay

Electronics Corporation became the exclusive distributor for Samsung products
in the Philippines.[4]
xxxx
2.1. 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,
2.1.1. All of the five (5) checks were denominated to the PAYEES
ACCOUNT only, the payee being Mabuhay Electronics Corporation although the
proceeds of the checks were actually intended for Samsung Mabuhay
Corporation. After the Joint Venture Agreement, Samsung dealers were duly
requested by Samsung Mabuhay Corporation to make all checks payable to the
order of Samsung Mabuhay Corporation instead of Mabuhay Electronics
Corporation. Nevertheless, some dealers, like Conpinco Trading, still made out
checks payable to Mabuhay Electronics Corporation.
FEBTC accepted for deposit into Samsung Mabuhay Corporations
account therein all checks payable to Mabuhay Electronics Corporation.
2.2. Two (2) of the five (5) checks picked-up by Reynaldo Senson were
remitted to Samsung Mabuhay Corporation.
2.3. However, the three (3) remaining UCPB checks, were not remitted
by Reynaldo Senson to Samsung Mabuhay Corporation. Instead, Reynaldo
Senson, using an alias name, , opened an account with defendant Real Bank,
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.

2.5. Reynaldo Senson, indorsed the checks and then deposited all the
three (3) checks in the account of Mabuhay Electronics Company under Savings
Account
2.7. Subsequently, Reynaldo Senson, alias Edgardo Bacea was able to
withdraw the amount of P1,563,750.00. The value of the three (3) checks were
negligently credited by defendant [Real Bank] to the account of Mabuhay
Electronics Company, a single proprietorship, although the check was payable
only to Mabuhay Electronics Corporation, a juridical entity, and to no one else.
xxxx
[Real Bank] ignored and refused to reimburse them with the value of the
three (3) checks.
Petitioner Real Bank, Inc. filed its Answer[6] on 23 February 1998, to which a Reply[7] was
filed by respondent Samsung on 5 March 1998.

petitioner Real Bank, Inc. filed a the Third Party Complaint.

respondent Samsung filed a Motion to Dismiss the Third Party Complaint for failure of
petitioner Real Bank, Inc. to prosecute its case and Motion to Set the Case for Pre-Trial. [12] On
the other hand, petitioner Real Bank, Inc. filed a Motion to Serve Summons by Publication on
the third-party defendant Reynaldo A. Senson alias Edgardo Bacea.

the trial court issued an Order requiring both petitioner Real Bank, Inc. and respondent
Samsung to appear in a mediation proceeding.[15] This Order of the trial court was sent to
respondent Samsungs 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 and Mediator 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.[17]
the new counsel of respondent Samsung (entered its appearance.
an Order was issued dismissing the complaint of respondent Samsung for failure to appear at
the mediation conference previously scheduled by the trial judge
Respondent Samsungs new counsel challenged the Order in a Motion for
Reconsideration alleging that the dismissal is improper and inappropriate as it was not notified
of the scheduled mediation conference. Besides, the notice of the scheduled mediation was
sent to the previous counsel of respondent Samsung who had already withdrawn and not to the
new lawyers.[21]

Judge Umali denied the Motion for Reconsideration of respondent Samsung

Respondent Samsung then filed before the Court of Appeals a petition
for certiorari under Rule 65 of the Rules of Court docketed as CA-G.R. SP No. 73188. The
Court of Appeals rendered a decision in favor of respondent Samsung
Petitioner Real Bank, Inc.s Motion for Reconsideration was denied by the Court of
Appeals in a Resolution
Hence, this petition.
Petitioner Real Bank, Inc. submits the following issues for our resolution.

In this petition, it is petitioner Real Bank, Inc.s position that RTC acted properly in
dismissing Civil Case No. 97-86265 for failure on the part of respondent Samsung to appear on
the scheduled mediation conference.
In Senarlo v. Judge Paderanga,[27] this Court accentuated that mediation is part of pretrial and failure of the plaintiff to appear thereat merits sanction on the part of the absent
party. This court held:
A.M. No. 01-10-5-SC-PHILJA dated 16 October 2001, otherwise known
as the Second Revised Guidelines for the Implementation of Mediation
Proceedings and Section 5, Rule 18 of the Rules of Court grant judges the
discretion to dismiss an action for failure of the plaintiff to appear at mediation
proceedings.
A.M. No. 01-10-5-SC-PHILJA considers mediation a part of pre-trial and
provides sanctions for the absent party:
12. Sanctions.
Since mediation is part of Pre-Trial, the trial court shall impose the
appropriate sanction including but not limited to censure, reprimand,
contempt and such sanctions as are provided under the Rules of Court
for failure to appear for pre-trial, in case any or both of the parties absent
himself/themselves, or for abusive conduct during mediation proceedings.
Under Rule 18, Section 5 of the Rules of Court, failure of the plaintiff to
appear at pre-trial shall be cause for dismissal of the action:
Sec. 5. Effect of failure to appear. The failure of the plaintiff to
appear when so required pursuant to the next preceding section shall be
cause for dismissal of the action. The dismissal shall be with prejudice,
unless otherwise ordered by the court. A similar failure on the part of the

defendant shall be cause to allow the plaintiff to present his evidence ex

parte and the court to render judgment on the basis thereof.[28]
However, the ruling in Senarlo will not resolve the present case where the basic issue is
whether or not respondents Samsung non-appearance at the mediation proceedings is
justifiable from the records.
We sustain the ruling of the Court of Appeals.
Rule 138, section 26 of the Rules of Court outlines the procedure in case of withdrawal
of counsel.
Under the first sentence of Section 26, the withdrawal of counsel with the conformity of
the client is completed once the same is filed in court. No further action thereon by the court is
needed other than the mechanical act of the Clerk of Court of entering the name of the new
counsel in the docket and of giving written notice thereof to the adverse party.[29]
In this case, it is uncontroverted that the withdrawal of respondent Samsungs original
counsel, was with the clients consent. Thus, no approval thereof by the trial court was required
because a courts approval is indispensable only if the withdrawal is without the clients consent.
[30]

It being daylight clear that the withdrawal of respondent Samsungs original counsel was
sufficient as the same carried the stamp of approval of the client, the notice of mediation sent to
respondent Samsungs 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.

Herein respondent Samsung instituted Civil Case No. 97-86265 before the RTC, to
recover the amount it claims to have lost due to the negligence of petitioner Real Bank, Inc.,
clearly a property right. The substantive right of respondent Samsung to recover a due and
demandable obligation cannot be diminished by an unwarranted strictness in the application of
a rule of procedure.[32]
In Calalang v. Court of Appeals,[33] this Court underscored that unless a partys conduct
is so negligent, irresponsible, contumacious or dilatory as to provide substantial grounds for
dismissal for non-appearance, the court should consider lesser sanctions which would still
amount into achieving the desired end.

WHEREFORE, premises considered, the instant petition is DENIED

LM POWER ENGINEERING CORPORATION, petitioner, vs. CAPITOL INDUSTRIAL

CONSTRUCTION GROUPS, INC.,respondent.
The Facts
Petitioner LM Power Engineering Corporation and Respondent Capitol Industrial
Construction Groups Inc. entered into a Subcontract Agreement involving electrical work
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.[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 take-over -- against the amount it owed the latter.
Because of the dispute, petitioner filed with the Regional Trial Court (RTC) a
Complaint[10] for the collection of the amount representing the alleged balance due it. 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.
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.
[13]

the RTC[14] ruled that the take-over of some work items by respondent was not equivalent to
a termination, but a mere modification, of the Subcontract. The latter was ordered to give full
payment for the work completed by petitioner.
Ruling of the Court of Appeals
On appeal, the CA reversed the 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. Hence, this Petition.[16]
The Issues

In its Memorandum, petitioner raises the following issues for the Courts consideration:
A
Whether or not there exist[s] a controversy/dispute between petitioner and respondent
regarding the interpretation and implementation of the Sub-Contract Agreement dated February
22, 1983 that requires prior recourse to voluntary arbitration;
B
In the affirmative, whether or not the requirements provided in Article III [1] of CIAC Arbitration
Rules regarding request for arbitration ha[ve] been complied with[.][17]
The Courts Ruling
The Petition is unmeritorious.
First Issue:
Whether Dispute Is Arbitrable
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.[18]
From the subcontract 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 take-over be set off against the amounts it owed petitioner? (3) How much were the
advances and billable accomplishments?
The resolution of the foregoing issues lies in the interpretation of the provisions of the
Agreement.
Being an inexpensive, speedy and amicable method of settling disputes,[24] arbitration -along with mediation, conciliation and negotiation -- is encouraged by the Supreme
Court. Aside from unclogging judicial dockets, arbitration also hastens the resolution of
disputes, especially of the commercial kind.[25] It is thus regarded as the wave of the future in

international civil and commercial disputes.[26] Brushing aside a contractual agreement calling for
arbitration between the parties would be a step backward.[27]
Consistent with the above-mentioned policy of encouraging alternative dispute resolution
methods, courts should liberally construe arbitration clauses. Provided such clause is
susceptible of an interpretation that covers the asserted dispute, an order to arbitrate should be
granted.[28] Any doubt should be resolved in favor of arbitration.[29]
Second Issue:
Prior Request for Arbitration
According to petitioner, assuming arguendo that the dispute is arbitrable, the failure to file a
formal request for arbitration with the Construction Industry Arbitration Commission (CIAC)
precluded the latter from acquiring jurisdiction over the question. We are not persuaded.
Section 1 of Article II of the old Rules of Procedure Governing Construction Arbitration
indeed required the submission of a request for arbitration.
On the other hand, Section 1 of Article III of the new Rules of Procedure Governing
Construction Arbitration has dispensed with this requirement and recourse to the CIAC may now
be availed of whenever a contract contains a clause for the submission of a future controversy
to arbitration
The foregoing amendments in the Rules were formalized by CIAC Resolution Nos. 2-91
and 3-93.[31]
The difference in the two provisions was clearly explained in China Chang Jiang Energy
Corporation (Philippines) v. Rosal Infrastructure Builders et al.[32] from which we quote thus:
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. 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.[34]
The arbitral clause in the Agreement is a commitment on the part of the parties to submit to
arbitration the disputes covered therein. Since petitioner has already filed a Complaint with the
RTC without prior recourse to arbitration, the proper procedure to enable the CIAC to decide on the

dispute is to request the stay or suspension of such action, as provided under RA 876 [the
Arbitration Law].[37]
WHEREFORE, the Petition is DENIED

WILFREDO M. TRINIDAD,
- versus -

OFFICE OF THE OMBUDSMAN THRU THE OMBUDSMAN SIMEON V. MARCELO AND DEPUT
OMBUDSMAN VICTOR C. FERNANDEZ, ASIAS EMERGING DRAGON CORPORATION, AND TH
SANDIGANBAYAN PEOPLE OF THE PHILIPPINES,

Challenged via petition for certiorari and prohibition are the Resolution of September 16,
2004 and Order of November 9, 2004 of the Office of the Ombudsman which found probable
cause to hale into court petitioner WilfredoM. Trinidad, inter alia, for violation of Section 3(j) and
Section 3(e) of the Anti-Graft and Corrupt Practices Act[2]

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 Consortium[3](later incorporated into Philippine
International Air Terminals Co., Inc. or PIATCO) despite its failure to meet the financial capability
standards set by law.
In Criminal Case No. 28093, petitioner, as DOTC Secretary in an officer-in-charge
capacity, was charged with having granted PIATCO undue benefit and advantage through the
execution Third Supplement to the Amended and Restated Concession Agreement [4] covering
the NAIA IPT III Project.
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 The petition insofar as it
concerns Criminal Case No. 28093 is thus effectively mooted.
What is thus left for resolution is only that part of the petition affecting Criminal Case No.
28089 which this Court finds to be bereft of merit.

In Criminal Case No. 28089, petitioner is charged with violation of Section 3(j) of the
Anti-Graft and Corrupt Practices Act
Petitioner contends, however, that AEDC is barred from filing a criminal complaint against
him due to the dismissal by the Regional Trial Court of Pasig City, of 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.[24]
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 petitioners criminal prosecution.
Petitioners reliance on Republic v. Sandiganbayan[28] 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.[29]
WHEREFORE, the petition is DISMISSED.

RIZAL COMMERCIAL BANKING CORPORATION, petitioner, vs. MAGWIN MARKETING

CORPORATION, NELSON TIU, BENITO SY and ANDERSON UY, respondents.
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,etc. .[1] Later, petitioner approved a debt payment scheme for the corporation was
communicated to the latter for the conformity of its officers, i. [8] Only respondent Nelson Tiu
affixed his signature on the letter to signify his agreement to the terms and conditions of the
restructuring.[9]
petitioner filed in Civil Case No. 99-518 a Manifestation and Motion to Set Case for PreTrial Conference alleging that only defendant Nelson Tiu had affixed his signature on the letter
which informed the defendants that plaintiff [herein petitioner] already approved defendant
Magwin Marketing Corporations request for restructuring of its loan obligations. [14] This motion
was followed by petitioners Supplemental Motion affirming that petitioner could not submit a
compromise agreement because only defendant Nelson Tiu had affixed his signature The trial
court, denied petitioners motion to calendar Civil Case for pre-trial for failure of the plaintiff to
submit a compromise agreement.
petitioner elevated the Orders of the RTC denying the notice of appeals from the denial for
pre-trial to the Court of Appeals.[19] In the main, petitioner argued that the court a quo had no
authority to compel the parties 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.[20]
the appellate court promulgated its Decision dismissing the petition for lack of merit and
affirming the assailedOrders of the trial court

The petition of Rizal Commercial Banking Corporation is meritorious.

As explained in Goldloop Properties, Inc., , 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.
[33]

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
courts 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.
Clearly, another creative remedy was available to the court a quo to attain a speedy
disposition of Civil Case No. 99-518 without sacrificing the course of justice. Since the failure of
petitioner to submit a compromise agreement was the refusal of just one of herein respondents,
i.e., Benito Sy, to sign his name on the conforme of the loan restructure documents, and the
common concern of the courts a quo was dispatch in the proceedings, the holding of a pre-trial
conference was the best-suited solution to the problem as this stage in a civil action is where
issues are simplified and the dispute quickly and genuinely reconciled. By means of pre-trial,
the trial court is fully empowered to sway the litigants to agree upon some fair compromise.
Dismissing the civil case and compelling petitioner to re-file its complaint is a dangerous,
costly and circuitous route that may end up aggravating, not resolving, the
disagreementWHEREFORE, the Petition for Review is GRANTED.

PARAMOUNT INSURANCE CORP v. A.C. ORDOEZ CORPORATION

and FRANKLIN SUSPINE,
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.
petitioner filed before the Metropolitan Trial Court, a complaint for damages against
respondents.

the Metropolitan Trial Court

issued an Order admitting the answer and setting the case

for pre-trial
Petitioner moved for reconsideration but it was denied. Thus, it filed a petition for
certiorari and mandamus with prayer for preliminary injunction and temporary restraining order
before the Regional Trial Court of Makati City.
the Regional Trial Court granted the petition

the Court of Appeals REVERSED and SET ASIDE the judgment.

SO ORDERED.
Petitioners motion for reconsideration was denied.
III.
WHETHER THIS COURT ERRED IN NOT CALLING THE PARTIES
INTO MEDIATION.

The petition lacks merit.

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 appellees 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) datedMarch 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.
WHEREFORE, the petition is DENIED.

LETICIA B. AGBAYANI,
Petitioner,
- versus COURT OF APPEALS, DEPARTMENT OF JUSTICE and LOIDA MARCELINA J. GENABE,
Respondents.
Antecedent Facts
Agbayani and Genabe were both employees of the Regional Trial Court working as
Court Stenographer and Legal Researcher II, respectively. Agbayani filed a criminal complaint
for grave oral defamation against Genabe

the Office of the City Prosecutor of Las Pias City[5] found probable cause.
However, upon a petition for review filed by Genabe, the DOJ Undersecretary Ernesto L.
Pineda (Pineda) found that:

Contrary to the findings in the assailed resolution, we find that the subject
utterances of respondent constitute only slight oral defamation.
Notwithstanding the foregoing, we believe that 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 Pias City. x x x
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. The DOJ directed
for the withdrawal of the information for grave oral defamation filed.

The

petitioner

filed

a motion

for

reconsideration,

which

was

denied

in

[9]

Resolution dated June 25, 2007.

Consequently, Agbayani filed a petition for certiorari with the CA alleging that the DOJ
committed grave abuse of discretion in setting aside the Resolution
the CA dismissed the petition after finding no grave abuse of discretion on the part of the
DOJ.
On motion for reconsideration by the petitioner, the CA denied the same in its
Resolution. Hence, the instant petition.

Assignment of Errors
Maintaining her stance, Agbayani raised the following, to wit:

III. RESPONDENT COURT GRAVELY ERRED IN AFFIRMING RESPONDENT

DOJ'S DISMISSAL OF THE COMPLAINT DUE TO NON-COMPLIANCE
WITH THE PROVISIONS OF THE LOCAL GOVERNMENT CODE OF 1991.

Ruling and Discussions

the CA held that the DOJ committed no grave abuse of discretion in causing the
dismissal thereof on the ground of non-compliance with the provisions of the Local Government
Code of 1991, on the Katarungang Pambarangay conciliation procedure.
Undeniably, both petitioner Agbayani and respondent Genabe are residents of Las Pias
City and both work at the RTC, and the incident which is the subject matter of the case
happened

in

their

workplace.[25] Agbayanis

complaint

should

have

undergone

the

mandatory barangay conciliation for possible amicable settlement with respondent Genabe,
pursuant to Sections 408 and 409 of Republic Act No. 7160 or the Local Government Code of
1991 which provide:

Sec. 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: x x x
Sec. 409. Venue. x x x (d) Those arising at the workplace where the
contending parties are employed or x x x shall be brought in the barangay where
such workplace or institution is located.
The compulsory process of arbitration is a pre-condition 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]
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.

All told, we find that the CA did not commit reversible error in upholding the Resolution
dated May 17, 2007 of the DOJ as we, likewise, find the same to be in accordance with law and
jurisprudence.
WHEREFORE, premises considered, the petition for review is hereby DENIED.

RIZALINA P. POSITOS,
Petitioner,
- versus JACOB M. CHUA,

Petitioner had since 1980 been occupying a portion of a parcel of land. The land was
likewise occupied by members of the Sto. Tomas de Villanueva Settlers Association (the

Association), of which petitioner was a member. the registered owner of the land, Ansuico, Inc.,
transferred its rights and interests thereover to respondent.
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.
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 attorneys fees.
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;
the MTCC rendered judgment in favor of respondent,
Petitioner appealed to the RTC of Davao City.
Davao City RTC, acting on petitioners appeal, affirmed the MTCC decision, [7] it holding
that since respondent was duly represented in the conciliation proceedings by an attorney-infact, the Local Government Code was substantially complied with.
Petitioner elevated the case to the Court of Appeals which issued the challenged Decision
dismissing without prejudice respondents complaint for unlawful detainer on the ground of lack
of cause of action, he having failed to comply with the barangay conciliation procedure.
Petitioner filed a motion for reconsideration of the appellate courts decision which was
denied. Hence, the present petition for review on certiorari.

the petition just the same fails.

As reflected above, respondents 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.
WHEREFORE, the petition is DENIED.