Consummated

This case shows the importance of a barangay government particularly the Lupon ng Tagapamayapa under the Katarungan Pambarangay Law that settles disputes as an alternative to court litigation. This is the case between Hilda and Alipio.

The case started when Hilda hired Alipio, a geodetic engineer to conduct a relocation survey and the consolidation-subdivision of her properties including that of her sister. After completing the survey and being paid his fee, Alipio failed to return the Transfer Certificates of Title (TCT) of said properties despite demands by Hilda.

Instead after the lapse of one year, he was able to prevail upon Hilda and her husband to sign a document which was supposedly needed to facilitate the consolidation-subdivision and the issuance of separate TCTs over the properties. Relying on this representation, Hilda and her husband signed the document only to discover later on that it was a Deed of Absolute Sale.

When confronted, Alipio tried to convince Hilda to accept the sum of P400,000 later increased to P500,000 as purchase price of the lot. Hilda agreed and initially received P480,000  but only as partial payment considering that its fair market value was more than double that amount. Again she was made to sign a receipt and other papers which were made to appear that she accepted the P480,000 as full and final payment for the lot.

Realizing that she could no longer recover her property, Hilda asked Alipio to pay the fair market value of the lot. When Alipio refused, the dispute was referred to the Punong Barangay and the Lupon. The minutes of the barangay proceeding showed that after a lengthy deliberation before the Barangay Captain, both parties agreed that Alipio will pay the additional amount of P75,000 aside from the P480,000 he had already paid. Since he had in possession only P70,000, he handed the said amount to Hilda as evidenced by an acknowledgment receipt attested by the Lupon Chairman and witnessed by some barangay officials. The remaining balance of P5,000 was to be paid the following day. So the Barangay proceedings was continued the next day.

The following day however, Hilda had a change of mind. She refused to accept the P5,000 handed over by Alipio saying it was not enough and insisted that the case be filed in court but at the same time refusing to return the P70,000 already paid by Alipio pursuant to their agreement before the Barangay.

Thereafter Hilda filed a complaint before the Municipal Trial Court (MTC) after the Barangay Captain issued a certification to file action. But the MTC dismissed her complaint. The MTC said that the Barangay Captain was able to successfully mediate the dispute between Hilda and Alipio and the latter had already substantially complied with it by paying P70,000. According to the MTC there was no clear repudiation of said agreement by Hilda because she refused to return the P70,000 when she changed her mind. Was the MTC correct?

Yes. Both parties agreed during the Barangay conciliation proceedings for Alipio to pay the additional amount of P75,000 (the subject matter of the amicable settlement) to the initial amount already paid by Alipio as purchase price of the subject lot in order to put an end to their dispute (the cause or reason of the amicable settlement). Thus it is evident that the parties had entered into a compromise agreement during the barangay conciliation proceedings. A compromise agreement or contract where the parties make reciprocal concessions to avoid litigation or put an end to the one already commenced is a form of amicable settlement that is not only allowed but encouraged in civil cases.

While there is no formal document denominated as “Amicable Settlement” signed by the parties, as mandated by Section 411 of the Local Government Code, the requirements of said section have been substantially complied with. The minutes of the barangay conciliation proceedings readily discloses the terms agreed upon by the parties to the settlement of their dispute and the acknowledgment receipt which was written in a language known to the parties, signed by them and attested by the Lupon Chairman and witnessed by several barangay officials serves as an indubitable proof of the amicable settlement and of the substantial compliance of its terms by Alipio. Moreover even without the minutes and the receipt, the compromise agreement is undeniably valid considering that it is a consensual contract, and as such, it is perfected upon the meeting of the minds of the parties.

Hilda’s refusal to accept the remaining P5,000 cannot constitute an effective repudiation of the settlement considering that the reason for such refusal (allegedly because of its insufficiency) is not one of the grounds recognized by the Section 418 of the LGC which is vitiation of consent through fraud, violence or intimidation on Alipio’s part. The fraud here, if any, was committed prior to the amicable settlement. (Harold vs. Aliba, G.R. 130864, October 2, 2007).

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