546 Phil. 124
CHICO-NAZARIO, J.:
x x x Are defendants estopped from questioning the proceedings before the Lupon Tagapamayapa concerned?Petitioner Pang-et's Motion for Reconsideration having been denied, she filed an Appeal before the RTC which reversed and set aside the Resolution of the MCTC and remanded the case to the MCTC for further proceedings. According to the RTC:
The defendants having put in issue the validity of the proceedings before the lupon concerned and the products thereof, they are not estopped. It is a hornbook rule that a null and void act could always be questioned at any time as the action or defense based upon it is imprescriptible.
The second issue: Is the agreement to Arbitrate null and void? Let us peruse the pertinent law dealing on this matter which is Section 413 of the Local Government Code of 1991 (RA 7160), to wit:"Section 413 - (a) The parties may, at any stage of the proceedings, agree in writing that they shall abide by the arbitration award of the lupon chairman or the pangkat. x x x"The foregoing should be taken together with Section 415 of the same code which provides:"Section 415. Appearance of parties in person. In all katarungang pambarangay proceedings, the parties must appear in person without the assistance of counsel or representative, except for minors and incompetents who may be assisted by their next-of-kin who are not lawyers."It is very clear from the foregoing that personal appearance of the parties in conciliation proceedings before a Lupon Tagapamayapa is mandatory. Likewise, the execution of the agreement to arbitrate must be done personally by the parties themselves so that they themselves are mandated to sign the agreement.
Unfortunately, in this case, it was not respondents-spouses [Manacnis] who signed the agreement to arbitrate as plaintiff herself admitted but another person. Thus, it is very clear that the mandatory provisos of Section 413 and 415 of RA 7160 are violated. Granting arguendo that it was Catherine who signed the agreement per instruction of her parents, will it cure the violation? The answer must still be in the negative. As provided for by the cited provisos of RA 7160, if ever a party is entitled to an assistance, it shall be done only when the party concerned is a minor or incompetent. Here, there is no showing that the spouses [Manacnis] were incompetent. Perhaps very old but not incompetent. Likewise, what the law provides is assistance, not signing of agreements or settlements.
Just suppose the spouses [Manacnis] executed a special power of attorney in favor of their daughter Catherine to attend the proceedings and to sign the agreement to arbitrate? The more that it is proscribed by the Katarungang Pambarangay Law specifically Section 415 of RA 7160 which mandates the personal appearance of the parties before the lupon and likewise prohibits the appearance of representatives.
In view of the foregoing, it could now be safely concluded that the questioned agreement to arbitrate is inefficacious for being violative of the mandatory provisions of RA 7160 particularly sections 413 and 415 thereof as it was not the respondents-spouses [Manacnis] who signed it.
The third issue: Is the Arbitration Award now sought to be enforced effective? Much to be desired, the natural flow of events must follow as a consequence. Considering that the agreement to arbitrate is inefficacious as earlier declared, it follows that the arbitration award which emanated from it is also inefficacious. Further, the Arbitration Award by itself, granting arguendo that the agreement to arbitrate is valid, will readily show that it does not also conform with the mandate of the Katarungang Pambarangay Law particularly Section 411 thereto which provides:"Sec. 411. Form of Settlement - All amicable settlements shall be in writing in a language or dialect known to the parties x x x. When the parties to the dispute do not use the same language or dialect, the settlement shall be written in the language known to them."Likewise, the implementing rules thereof, particularly Section 13 provides:"Sec. 13 - Form of Settlement and Award. - All settlements, whether by mediation, conciliation or arbitration, shall be in writing, in a language or dialect known to the parties. x x x"It is of no dispute that the parties concerned belong to and are natives of the scenic and serene community of Sagada, Mt. Province who speak the Kankanaey language. Thus, the Arbitration Award should have been written in the Kankanaey language. However, as shown by the Arbitration Award, it is written in English language which the parties do not speak and therefore a further violation of the Katarungang Pambarangay Law.
IN THE LIGHT of all the foregoing considerations, the above-entitled case is hereby dismissed.[9]
As it appears on its face, the Agreement for Arbitration in point found on page 51 of the expediente, dated Feb. 6, 1995, and attested by the Pangkat Chairman of the Office of the Barangay Lupon of Dagdag, Sagada was signed by the respondents/defendants spouses Manacnis. The representative of the Appellee in the instant case assails such Agreement claiming that the signatures of her aforesaid predecessors-in-interest therein were not personally affixed by the latter or are falsified-which in effect is an attack on the validity of the document on the ground that the consent of the defendants spouses Manacnis is vitiated by fraud. Indulging the Appellee Heirs of Manacnis its contention that such indeed is the truth of the matter, the fact still remains as borne out by the circumstances, that neither did said original defendants nor did any of such heirs effectively repudiate the Agreement in question in accordance with the procedure outlined by the law, within five (5) days from Feb. 6, 1995, on the ground as above-stated (Secs. 413 (a), 418, RA 7160; Secs. 7, 13, KP Law; Sec. 12, Rule IV, KP Rules). As mandated, such failure is deemed a waiver on the part of the defendants spouses Manacnis to challenge the Agreement for Arbitration on the ground that their consent thereto is obtained and vitiated by fraud (Sec. 12, Par. 3, KP Rules). Corollarily, the Appellee Heirs being privy to the now deceased original defendants should have not been permitted by the court a quo under the equitable principle of estoppel, to raise the matter in issue for the first time in the present case (Lopez vs. Ochoa, 103 Phil. 94).Aggrieved by the reversal of the RTC, herein respondent filed a petition before the Court of Appeals seeking to set aside the RTC Judgment. On 9 February 2005, the appellate court rendered the herein assailed Decision, to wit:
The Arbitration Award relative to Civil Case 83 (B.C. No. 07) dated May 10, 1995, written in English, attested by the Punong Barangay of Dagdag and found on page 4 of the record is likewise assailed by the Appellee as void on the ground that the English language is not known by the defendants spouses Manacnis who are Igorots. Said Appellee contends that the document should have been written in Kankana-ey, the dialect known to the party (Sec. 413 (b), RA 7160; Sec. 7, Par. 2, KP law, Sec. 11, KP Rules). On this score, the court a quo presumptuously concluded on the basis of the self-serving mere say-so of the representative of the Appellee that her predecessors did not speak or understand English. As a matter of judicial notice, American Episcopalian Missionaries had been in Sagada, Mountain Province as early as 1902 and continuously stayed in the place by turns, co-mingling with the indigenous people thereat, instructing and educating them, and converting most to the Christian faith, among other things, until the former left about twenty years ago. By constant association with the white folks, the natives too old to go to school somehow learned the King's English by ear and can effectively speak and communicate in that language. Any which way, even granting arguendo that the defendants spouses Manacnis were the exceptions and indeed totally ignorant of English, no petition to nullify the Arbitration award in issue on such ground as advanced was filed by the party or any of the Appellee Heirs with the MCTC of Besao-Sagada, within ten (10) days from May 10, 1995, the date of the document. Thus, upon the expiration thereof, the Arbitration Award acquired the force and effect of a final judgment of a court (Sec. 416, RA 7160; Sec. 11, KP Law; Sec. 13, KP Rules); conclusive upon the original defendants in Civil Case 83 (B.C. No. 07) and the Appellee Heirs herein privy to said defendants.
In the light thereof, the collateral attack of the Appellee on the Agreement for Arbitration and Arbitration Award re Civil Case 83 (B.C. No. 07) should not have in the first place been given due course by the court a quo. In which case, it would not have in the logical flow of things declared both documents "inefficacious"; without which pronouncements, said court would not have dismissed the case at bar.
Wherefore, Judgment is hereby rendered Reversing and Setting Aside the Resolution appealed from, and ordering the record of the case subject thereof remanded to the court of origin for further proceedings.[10]
After thoroughly reviewing through the record, We find nothing that would show that the spouses Manacnes were ever amenable to any compromise with respondent Pang-et. Thus, We are at a loss as to the basis of the Arbitration Award sought to be enforced by respondent Pang-et's subsequent action before the MCTC.Vehemently disagreeing with the Decision of the Court of Appeals, petitioner Pang-et filed the instant petition. Petitioner maintains that the appellate court overlooked material facts that resulted in reversible errors in the assailed Decision. According to petitioner, the Court of Appeals overlooked the fact that the original parties, as represented by their respective counsels in Civil Case No. 83, mutually agreed to submit the case for arbitration by the Lupon ng Tagapamayapa of Barangay Dagdag. Petitioner insists that the parties must be bound by the initial agreement by their counsels during pre-trial to an amicable settlement as any representation made by the lawyers are deemed made with the conformity of their clients. Furthermore, petitioner maintains that if indeed the spouses Manacnes did not want to enter into an amicable settlement, then they should have raised their opposition at the first instance, which was at the pre-trial on Civil Case No. 83 when the MCTC ordered that the case be remanded to the Lupon ng Tagapamayapa for arbitration.
There is no dispute that the proceeding in Civil Case No. 83 was suspended and the same remanded to the Lupon on account of the Agreement to Arbitrate which was allegedly not signed by the parties but agreed upon by their respective counsels during the pre-trial conference. In the meeting before the Lupon, it would seem that the agreement to arbitrate was not signed by the spouses Manacnes. More importantly, when the pangkat chairman asked the spouses Manacnes to sign or affix their thumbmarks in the agreement, they refused and insisted that the case should instead go to court. Thus, the Lupon had no other recourse but to issue a certificate to file action. Unfortunately, the case was again remanded to the Lupon to "render an arbitration award". This time, the Lupon heard the voice tape of the late Beket Padonay affirming respondent Pang-et's right to the disputed property. While Pang-et offered to pay P8,000.00 for the improvements made by the spouses Manacnes, the latter refused to accept the same and insisted on their right to the subject property. Despite this, the Lupon on May 10, 1995 issued an Arbitration award which favored respondent Pang-et.
From the time the case was first referred to the Lupon to the time the same was again remanded to it, the Spouses Manacnes remained firm in not entering into any compromise with respondent Pang-et. This was made clear in both the minutes of the Arbitration Hearing on 26 February 1995 and on 9 April 1995. With the foregoing, We find it evident that the spouses Manacnes never intended to submit the case for arbitration.
Moreover, the award itself is riddled with flaws. First of all there is no showing that the Pangkat ng Tagapagkasundo was duly constituted in accordance with Rule V of the Katarungan Pambarangay Rules. And after constituting of the Pangkat, Rule VI, thereof the Punong Barangay and the Pangkat must proceed to hear the case. However, according to the minutes of the hearing before the lupon on 9 April 1995, the pangkat Chairman and another pangkat member were absent for the hearing.
Finally, Section 13 of the same Rule requires that the Punong Barangay or the Pangkat Chairman should attest that parties freely and voluntarily agreed to the settlement arrived at. But how can this be possible when the minutes of the two hearings show that the spouses Manacnes neither freely nor voluntarily agreed to anything.
While RA 7160 and the Katarungan Pambarangay rules provide for a period to repudiate the Arbitration Award, the same is neither applicable nor necessary since the Agreement to Arbitrate or the Arbitration Award were never freely nor voluntarily entered into by one of the parties to the dispute. In short, there is no agreement validly concluded that needs to be repudiated.
With all the foregoing, estoppel may not be applied against petitioners for an action or defense against a null and void act does not prescribe. With this, We cannot but agree with the MCTC that the very agreement to arbitrate is null and void. Similarly, the arbitration award which was but the off shoot of the agreement is also void.
WHEREFORE, the RTC judgment of 2 June 2003 is REVERSED and SET ASIDE, the MCTC Resolution DISMISSING the Civil Case No. 118 for enforcement of Arbitration Award is REINSTATED.[11]
Going over the documents submitted to the court by the office of the Lupon Tagapamayapa of Dagdag, Sagada, Mountain Province, the court observed that an "Agreement for Arbitration" was executed by the parties anent the above-entitled case. However, said Lupon did not make any arbitration award as mandated by the Katarungang Pambarangay Law but instead made a finding that the case may now be brought to the court. This is violative of the KP Law, which cannot be sanctioned by the court.[14]At this juncture, it must be stressed that the object of the Katarungang Pambarangay Law is the amicable settlement of disputes through conciliation proceedings voluntarily and freely entered into by the parties.[15] Through this mechanism, the parties are encouraged to settle their disputes without enduring the rigors of court litigation. Nonetheless, the disputing parties are not compelled to settle their controversy during the barangay proceedings before the Lupon or the Pangkat, as they are free to instead find recourse in the courts[16] in the event that no true compromise is reached.