THIRD DIVISION

[G.R. NO. 157830 November 17, 2005]

DANTE M. PASCUAL, represented by REYMEL R. SAGARIO, Petitioner, v. MARILOU M.

PASCUAL, Respondent.

DECISION

CARPIO MORALES, J.:

On challenge via Petition for Review on Certiorari is the February 10, 2003 Order of the Regional Trial Court
(RTC) of Isabela, Branch 23 at Roxas dismissing, on motion of herein respondent Marilou M. Pascual, the
complaint filed against her by her brother-herein petitioner Dante M. Pascual, represented by his attorney-
in-fact Reymel R. Sagario (Sagario), for non-compliance with the conciliation provision-pre condition to filing
of complaint in court under R.A. 7160 (the Local Government Code).

Petitioner, a permanent resident of the United States of America, appointed Sagario as his attorney-in-fact
by a Special Power of Attorney (SPA) dated April 10, 2002:

1. To file a case for the cancellation of Transfer Certificate of Title No. T-271656 issued in the name of
Marilou M. Pascual as well as the Deed of Sale of Registered Land (Dec. No. 639; Page No. 52; Book No.
XXI; Series of 1994) and/or Reconveyance at the appropriate court;

2. To collect the monthly rentals from the tenant;

3. To enter into amicable settlement with Marilou M. Pascual or any other mode of payment/and/or dispute
resolution;

4. To execute and sign any and all papers, contracts/documents which may be necessary relative to the
above acts.

x x x1

Pursuant to the SPA, Sagario filed on October 14, 2002 before the Isabela RTC at Roxas a complaint entitled
"Dante M. Pascual, plaintiff v. Marilou M. Pascual and Register of Deeds, Defendants," docketed as Civil Case
No. Br. 23-713-02, for Annulment of Transfer Certificate of Title No. T-271657 of Isabela and Deed of
Absolute Sale of Registered Land and/or Reconveyance with Damages.2

To the Complaint the defendant-herein respondent Marilou M. Pascual filed a Motion to Dismiss3 on two
grounds one of which was non-compliance with the requirement under Section 412 of the Local Government
Code,4 she contending that there is no showing that the dispute was referred to the barangay court before
the case was filed in court.

By the assailed Order of February 10, 2003,5 Branch 23 of the Isabela RTC at Roxas granted respondent's
Motion to Dismiss in this wise:

. . . RA 7160 repealing P.D. 1508 otherwise known as the Revised Katarungang Pambarangay provides
under Section 409 "All disputes involving real property or any interest therein shall be brought in the
barangay where the real property or the larger portion thereof is situated." Hence, the reliance of the
plaintiff on Section 408 of R.A. 7160 is incorrect. When real property or any interest therein is involved, the
dispute shall be filed before the barangay where the property is located,regardless of the residence of
the parties. Besides, it is incorrect to say that the parties are not residents of the same place, Vira, Roxas,
Isabela. The Attorney-in-fact of the plaintiff in the person of Reymel R. Sagario is a resident of
Vira, Roxas, Isabela, and he substitute (sic)Dante Pascual by virtue of said Special Power of
Attorney. Hence, said Attorney-in-fact should have brought the dispute before barangay Vira, Roxas,
Isabela, where the property is located. In the case of Royales v. Intermediate Appellate Court 127 SCRA
470, "Ordinarily, non-compliance with the condition precedent prescribed by P.D. 1508 could affect the
sufficiency of the plaintiff's cause of action and make his complaint vulnerable to dismissal on ground of lack
of cause of action or prematurity."6 (Emphasis and underscoring supplied) Ï‚rαlαωlιbrαrÿ

Petitioner's Motion for Reconsideration7 of the above-said order was denied by Order of March 24, 2003:8

xxx

Consequently, the Court is [of] the opinion that the said Attorney-in-fact shall be deemed to be the
real party in interest, reading from the tenor of the provisions of the Special Power of Attorney.Being a
real party in interest, the Attorney-in-fact is therefore obliged to bring this case first before the Barangay
Court. Sec. 3, Rule 3 of the Rules of Court provides that "Where the action is allowed to be prosecuted or
defended by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in
the title of the case and shall be deemed to be the real party in interest.

xxx

Being the real party in interest, the Attorney-in-fact may therefore bring the necessary complaint before the
Lupon Tagapayapa and appear in person as if he is the owner of the land.9 (Emphasis and
underscoring supplied) ςrαlαωlιbrαrÿ

Hence, the present petition questioning "the palpable legal errors" of the RTC.

Petitioner argues that since he, not his attorney-in-fact Sagario, is the real party in interest, and since he
actually resides abroad, the lupon would have no jurisdiction to pass upon the dispute involving real
property, he citing Agbayani v. Belen.10

Respondent submits, on the other hand, that Section 408, paragraph (f), of the Local Government Code, is
qualified by paragraph (c) of Section 409 of the same Code the latter of which provides that "[a]ll disputes
involving real property or any interest therein shall be brought in the barangay where the real property is
located," hence, the use of the word "shall" makes it mandatory for the bringing of the dispute before
the lupon.

That attorney-in-fact Sagario is a resident of the same barangay as that of hers, respondent argues in any
event, brings the matter under the jurisdiction of the lupon, for Sagario, following Section 3 of Rule 3 of the
1997 Rules of Civil Procedure which provides:

Sec. 3. Representative as parties. - Where the action is allowed to be prosecuted or defended by a

representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the
case and shall be deemed to be the real party in interest. A representative may be a trustee of an express
trust, a guardian, an executor or administrator, or a party authorized by law or these Rules. An agent acting
in his own name for the benefit of an undisclosed principal may sue or be sued without joining the principal
except when the contract involves things belonging to the principal, being a substitute, becomes the real
party-in-interest.

Respondent's submissions do not lie.

The pertinent provisions of the Local Government Code read:

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:

(a) Where one party is the government or any subdivision or instrumentality thereof;

(b) Where one party is a public officer or employee, and the dispute relates to the performance of his official
functions;
(c) Offenses punishable by imprisonment exceeding one (1) year or a fine exceeding Five Thousand pesos
(P5,000.00);

(d) Offenses where there is no private offended party;

(e) Where the dispute involves real properties located in different cities or municipalities unless the parties
thereto agree to submit their differences to amicable settlement by an appropriate lupon;

(f) 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; and cralawlibrary

(g) Such other classes of disputes which the President may determine in the interest of justice or upon the
recommendation of the Secretary of Justice.

The court in which non-criminal cases not falling within the authority of the lupon under this Code are filed
may, at any time before trial, motu proprio refer the case to the lupon concerned for amicable settlement.
(Emphasis supplied) ςrαlαωlιbrαrÿ

SEC. 409. Venue. '(a) Disputes between persons actually residing in the same barangay shall be brought
for amicable settlement before the lupon of said barangay .

(b) Those involving actual residents of different barangays within the same city or municipality shall be
brought in the barangay where the respondent or any of the respondents actually resides, at the election of
the complainant.

(c) All disputes involving real property or any interest therein shall be brought in the barangay where the
real property or the larger portion thereof is situated.

(d) Those arising at the workplace where the contending parties are employed or at the institution where
such parties are enrolled for study shall be brought in the barangay where such workplace or institution is
located.

Objections to venue shall be raised in the mediation proceedings before the punong barangay; otherwise,
the same shall be deemed waived. Any legal question which may confront the punong barangay in resolving
objections to venue herein referred to may be submitted to the Secretary of Justice or his duly designated
representative whose ruling thereon shall be binding. (Emphasis supplied) ςrαlαωlιbrαrÿ

In the 1982 case of Tavora v. Veloso,11 this Court held that where the parties are not actual residents in
the same city or municipality or adjoining barangays, there is no requirement for them to submit their
dispute to the lupon as provided for in Section 6 vis a vis Sections 2 and 3 of P.D. 1508 (Katarungang
Pambarangay Law).

[B]y express statutory inclusion and exclusion, the Lupon shall have no jurisdiction over disputes
where the parties are not actual residents of the same city or municipality, except where the barangays in
which they actually reside adjoin each other. (Underscoring supplied) ςrαlαωlιbrαrÿ

In the 2000 case of Vercide v. Hernandez,12 this Court, noting that the Tavora ruling, reiterated in other
cases including the 1996 case of Agbayani13 cited by petitioner, was decided under the provisions of P.D. No.
1508 (Katarungang Pambarangay) Law which were, except for some modifications, echoed in Sections 408-
409 of the Local Government Code which took effect on January 1, 1992, held that the Tavora  ruling
remained.

To construe the express statutory requirement of actual residency as applicable to the attorney-in-fact of

the party-plaintiff, as contended by respondent, would abrogate the meaning of a "real party in interest" as
defined in Section 2 of Rule 314 of the 1997 Rules of Court vis a vis Section 3 of the same Rule which was
earlier quoted but misread and misunderstood by respondent.
In fine, since the plaintiff-herein petitioner, the real party in interest, is not an actual resident of the
barangay where the defendant-herein respondent resides, the local lupon has no jurisdiction over their
dispute, hence, prior referral to it for conciliation is not a pre-condition to its filing in court.

The RTC thus erred in dismissing petitioner's complaint.

WHEREFORE, the petition is granted. The assailed February 10, 2003 Order, as well as the March 24, 2003
Order denying reconsideration of the first, of Branch 23 of the Regional Trial Court of Isabela at Roxas
is SET ASIDE. Said court is accordingly directed to reinstate Civil Case No. 23-713-02 to its docket and take
appropriate action thereon with dispatch.

SO ORDERED.

Endnotes:

 Original Records at 7.
1

 Id. at 1.
2

 Id. at 15-16.
3

4
 Sec. 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 secretary or pangkat secretary as attested to by the lupon chairman or pangkat
chairman or unless the settlement has been repudiated by the parties thereto.

(b) Where parties may go directly to court. -  The parties may go directly to court in the following instances:

(1) Where the accused is under detention;

(2) Where a person has otherwise been deprived of personal liberty calling for habeas corpus proceedings;

(3) Where actions are coupled with provisional remedies such as preliminary injunction, attachment,
delivery of personal property, and support pendent lite;  and

(4) Where the action may otherwise be barred by the statute of limitations.

(c) Conciliation among members of indigenous cultural communities. -  The customs and traditions of
indigenous cultural communities shall be applied in settling disputes between members of the cultural
communities.

 Original Records at 23-24.

5

 Ibid.
6

 Id. at 25-31.
7
 Id. at 35-36.
8

 Ibid.
9

10
 145 SCRA 635 (1996).

11
 117 SCRA 613 (1982).

12
 330 SCRA 49 (2000).

13
 Supra note 10.

14
 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. Unless otherwise authorized by law or
these Rules, every action must be prosecuted or defended in the name of the real party in interest.