FIRST DIVISION

August 7, 2017
G.R. No. 211966
JOSE AUDIE ABAGATNAN, JOSEPHINE A. PARCE, JIMMY ABAGATNAN,
JOHN ABAGATNAN, JENALYN A.DELEON, JOEY ABAGATNAN, JOJIE
ABAGATNAN, and JOY ABAGATNAN, Petitioners,
vs.
SPOUSES JONATHAN CLARITO and ELSA CLARITO, Respondents,
DECISION
DEL CASTILLO, J.:

We resolve the Petition for Review on Certiorari under Rule 45 of the Rules of
Court, assailing the June 20, 2013 Decision1 and the February 3, 2014
Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 03283 which
dismissed, albeit without prejudice, the Complaint for Unlawful Detainer and
Damages3 filed by petitioners Jose Audie Abagatnan, Josephine A. Paree, Jimmy
Abagatnan, John Abagatnan, Jenalyn A. De Leon, Joey Abagatnan, Jojie
Abagatnan and Joy Abagatnan against respondents spouses Jonathan Clarito and
Elsa Clarito, for failure to comply with the mandatory requirement of resorting to
prior barangay conciliation, as required under Section 412 of Republic Act No.
7160, or the Local Government Code (LGC).

The Antecedent Facts

Wenceslao Abagatnan (Wenceslao) and his late wife, Lydia Capote (Lydia),
acquired a parcel ofland designated as Lot 1472-B, with a total land of 5,046
square meters, and located at Barangay Cogon, Roxas City from Mateo Ambrad
(Mateo) and Soterafia Clarito (Soterafia), by virtue of a Deed of Absolute Sale 4
executed on August 1, 1967.5

On October 4, 1999, Lydia died, leaving her children, who are copetitioners in this
case, to succeed into the ownership of her conjugal share of said property. 6

In 1990, respondents allegedly approached Wenceslao and asked for permission

to construct a residential house made oflight materials on a 480-square meter
portion of Lot 1472-B (subject property). Because respondent Jonathan Clarito
(Jonathan) is a distant relative, Wenceslao allowed them to do so subject to the
condition that respondents will vacate the subject property should he need the
same for his own use.7
In September 2006, petitioners decided to sell portions of Lot 14 72-B, including
the subject property which was then still being occupied by respondents. They
offered to sell said portion to respondents, but the latter declined.8

Consequently, petitioners sent respondents a Demand Letter 9 dated October 2,

2006 requiring the latter to vacate the subject property within fifteen (15) days from
receipt of the letter. The respondents, however, refused to heed such demand. 10

On November 10, 2006, petitioners filed a Complaint for Unlawful Detainer and
Damages11 against respondents before the Municipal Trial Court in Cities (MTCC),
Branch 2, Roxas City, where they claimed to have been unlawfully deprived of the
use and possession of a portion of their land.

Notably, the Complaint alleged that prior barangay conciliation proceedings are
not required as a pre-condition for the filing of the case in court, given that not all
petitioners are residents of Roxas City. Specifically, petitioner Jimmy C. Abagatnan
(Jimmy) resided in Laguna, while petitioner Jenalyn A. De Leon (Jenalyn) resided
in Pasig City.12

In their Answer with Counterclaim,13 respondents argued that prior barangay

conciliation is a mandatory requirement that cannot be dispensed with, considering
that Jimmy and J enalyn had already executed a Special Power of
Attomey14 (SPA) in favor of their co-petitioner and sister, Josephine A. Paree
(Josephine), who is a resident of Roxas City.15

Respondents also insisted that Lot 14 72-B is only a portion of Lot 1472 which is
covered by its mother title, Original Certificate of Title (OCT) No. 9882, under the
name of Nicolas Clarita, et al., Jonathan's predecessors-in-interest. Unfortunately,
said title was lost or destroyed during the war, but a copy of the owner's duplicate
copy was presented before the trial court and made part of the records.16

The Municipal Trial Court in Cities Ruling

In its Decision17 dated August 17, 2007, the MTCC rendered judgment in favor of
petitioners and ordered respondents to remove the structures they erected on the
subject property and to vacate the same. It also directed respondents to pay
petitioners the amount of ₱500.00 per month as reasonable compensation for the
use and occupancy of the subject property from the date of the filing of the action
up to and until the structures on the property have been removed, as well as the
cost of suit.18

The MTCC ruled that by preponderance of evidence, petitioners have a better right
of material possession over the subject property.1âwphi1 It gave merit to
petitioners' proof of purchase of Lot 1472-B from Mateo and Soterafia, the Demand
Letter dated October 2, 2006 that they sent to respondents, and respondents'
refusal to vacate the property.19

Respondents thereafter appealed the MTCC Decision to the Regional Trial Court
(RTC), Branch 19, Roxas City.1âwphi1

The Regional Trial Court Ruling

In its Decision20 dated January 15, 2008, the RTC denied the appeal for lack of
merit. It ruled that since the parties raised the issue of ownership to justify their
claims of possession, and the evidence of ownership is preponderant on
petitioners, the MTCC was justified in ruling the case in the latter's favor.21

The RTC, too, held that the lack of barangay conciliation proceedings cannot be
brought on appeal because it was not made an issue in the Pre-Trial Order.22

Following the denial, respondents filed a Petition for Review23 before the CA,
assailing the RTC's January 15, 2008 Decision.

The Court of Appeals Ruling

In its Decision dated June 20, 2013, the CA ruled that the findings of fact of both
the MTCC and the RTC are supported by the evidence on record. It gave more
probative value to the tax declarations and the Deed of Absolute Sale submitted
by petitioners, considering that only a copy of OCT No. 9882 was presented by
respondents in court and said copy contained clouded and blurred characters. The
name of the alleged registered owner, Francisco Clarito (Jonathan's father), is also
not decipherable on the title.24

Nevertheless, the CA granted the Petition and dismissed the petitioners'

Complaint, albeit without prejudice, for lack of prior referral to the Katarungang
Pambarangay.25 It pointed out that majority of petitioners actually resided
in Barangay Cogon, Roxas City, while the two non-residents of Roxas City already
executed an SP A in favor of Josephine, whom they authorized, among others, to
enter into an amicable settlement with respondents. Since respondents also reside
in the same barangay, the dispute between the parties is clearly within the ambit
of the Lupon Tagapamayapa's (Lupon) authority.26

The CA thus concluded that petitioners' Complaint had been prematurely filed with
the MTCC, as it should have been first brought before the Lupon for mandatory
conciliation to accord the parties the chance for amicable settlement. 27
Petitioners moved for reconsideration, but the CA denied the motion in its
Resolution dated February 3, 2014. As a consequence, petitioners filed the present
Petition for Review on Certiorari before the Court on April 14, 2014, assailing the
CA's June 20, 2013 Decision and February 3, 2014 Resolution.

The Issue

Petitioners raise the sole issue of whether the CA correctly dismissed the
Complaint for failure to comply with the prior barangay conciliation requirement
under Section 412 of the LGC, despite the fact that not all real parties in interest
resided in the same city or municipality.28

The Court's Ruling

The Petition is impressed with merit.

x x x Section 412(a) of the LGC requires the parties to undergo a conciliation

process before the LuponChairman or the Pangkat as a pre-condition to the filing
of a complaint in court, thus:

SECTION 412. Conciliation - (a) Pre-condition to Filing of Complaint in Court.

No complaint, petition, action, or proceeding involving any matter within the
authority of the lupon shall be filed or instituted directly in court or any other
government office for adjudication, unless there has been a confrontation
between the parties before the lupon chairman or the pangkat, and that no
conciliation or settlement has been reached as certified by the
lupon or pangkat secretary and attested to by the lupon or pangkat chairman
[or unless the settlement has been repudiated by the parties thereto. x x
x]29 (Emphasis supplied)

The LGC further provides that "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," subject to certain exceptions enumerated in
the law.30

One such exception is in cases where the dispute involves parties who actually
reside in barangays of different cities or municipalities, unless said barangay
units adjoin each other and the parties thereto agree to submit their differences to
amicable settlement by an appropriate lupon.31

Thus, parties who do not actually reside in the same city or municipality or
adjoining barangays are not required to submit their dispute to the lupon as a pre-
condition to the filing of a complaint in court.
In Pascual v. Pascual,32 the Court ruled that the express statutory requirement of
actual residency in the LGC pertains specifically to the real parties in interest in the
case. It further explained that said requirement cannot be construed to apply to the
attorney-in-fact of the party-plaintiff, as doing so would abrogate the meaning of a
"real party in interest" as defined in Section 2, 33 in relation to Section 3, of Rule 3
of the Rules of Court.

The same ruling was reiterated in Banting v. Spouses Maglapuz34 where the Court
held that "the requirement under Section 412 of the [LGC] that a case be referred
for conciliation before the Lupon as a precondition to its filing in court applies only
to those cases where the real parties-in-interest actually reside in the same
city or municipality."

In the present case, the Complaint filed before the MTCC specifically alleged that
not all the real parties in interest in the case actually reside in Roxas City:35 Jimmy
resided in Poblacion, Siniloan, Laguna, while Jenalyn resided in Brgy. de La Paz,
Pasig City.36 As such, the lupon has no jurisdiction over their dispute, and
prior referral of the case for barangay conciliation is not a precondition to its
filing in court.

This is true regardless of the fact that Jimmy and Jenalyn had already authorized
their sister and co-petitioner, Josephine, to act as their attorney-in-fact in the
ejectment proceedings before the MTCC. As previously explained, the residence
of the attorney-in-fact of a real party in interest is irrelevant in so far as the "actual
residence" requirement under the LGC for prior barangay conciliation is
concerned.

Besides, as the RTC correctly pointed out, the lack of barangay conciliation
proceedings cannot be brought on appeal because it was not included in the
Pre-Trial Order, which only enumerates the following issues to be resolved during
the trial:

The following issues to be resolved by plaintiffs:

1. Whether or not the defendants have unlawfully withheld the portion of Lot
1472 over which were occupied by them, particularly Lot 1472-B;
2. Whether or not the defendants can be lawfully ejected from that portion of
Lot 1472-B which are occupied by them.
3. Whether or not the prevailing parties can recover damages.

For the defendants, the issues to be resolved are as follows:

 1. Whether or not the plaintiffs have a cause of action for unlawful detainer
against the defendants; and,
2. Whether or not the prevailing parties are entitled to an award of damages. 37

On this point, it is important to stress that the issues to be tried between parties in
a case is limited to those defined in the pre-trial order38 as well as those which
may be implied from those written in the order or inferred from those listed
by necessary implication.39

In this case, a cursory reading of the issues listed in the Pre-Trial Order easily
shows that the parties never agreed, whether expressly or impliedly, to include the
lack of prior barangay conciliation proceedings in the list of issues to be resolved
before the MTCC.

In effect, the non-inclusion of this issue in the Pre-Trial Order barred its
consideration during the trial. This is but consistent with the rule that parties are
bound by the delimitation of issues that they agreed upon during the pre-trial
proceedings.40

WHEREFORE, we GRANT the Petition for Review on Certiorari. The Decision

dated June 20, 2013 and the Resolution dated February 3, 2014 of the Court of
Appeals in CA-G.R. SP No. 03283 are REVERSED and SETASIDE. The Decision
dated January 15, 2008 of the Regional Trial Court, Branch 19, Roxas City in Civil
Case No. V-47-07 is REINSTATED.

SO ORDERED.
Footnotes
1
Rollo, pp. 158-171; penned by Associate Justice Carmelita Salandanan-
Manahan and concurred in by Associate Justices Ramon Paul L. Hernando
and Ma. Luisa C. Quijano-Padilla.
2
Id. at 178-180.
3
Id. at 28-33.
4
Id. at 37.
5
Id.
6
Id. at 159.
7
Id.
8
Id. at 159-160.
9
Id. at 38.
10
Id. at 160.
11
Id. at 28-32.
12
Id. at 28-29.
13
Id. at 40-44
14
Id. at 34-35.
15
Id. at40.
16
Id. at41.
17
Id. at 80-89; penned by Presiding Judge Elias A. Conlu.
18
Id. at 89.
19
Id. at 87-88.
20
Id. at 110-113; penned by Presiding Judge Esperanz.a Isabele E. Poco-
Deslate.
21
Id. at 113.
22
ld. at 112.
23
Id.atll5-127.
24
Id. at 165.
25
Id. at 170-171.
26
Id. at 170.
27
Id.
28
Id. at 15-17.
29
Zamora v. Heirs of Izquierdo, 485 Phil. 416, 423 (2004).
30
LOCAL GOVERNMENT CODE of 1991, Section 408.
31
LOCAL GOVERNMENT CODE of1991, Section408(f).
32
511 Phil. 700, 706-707 (2005).
33
Section 2 of the Rules of Court provides:
SEC. 2. Parties in interest. - A real party in interest is the party who
stands to be benefited or injured by the judgment in the suit, or the party
entitled to the avails of the suit. x x x
34
531 Phil. 101, 115 (2006).
35
Rollo, p. 29.
36
Id. at 28.
37
Id. at 65-66.
38
See RULES OF COURT, Rule 18, Section 7.
39
See LICOMCEN, Inc. v. Engr. Abainza, 704 Phil. 166, 174 (2013), citing
Villanueva v. Court of Appeals, 471Phil.394, 407 (2004).
40
Id.