Facts:

The case involves Gloria A. Anacleto as the petitioner and Alexander Van Twest along with Euroceanic Rainbow Enterprises Philippines, Inc. as respondents. On February 6, 1995, a complaint for reconveyance of title was filed by Atty. Ernesto V. Perez in the name of Van Twest and Euroceanic against Anacleto and Isaias M. Bongar. Van Twest, reported missing since June 16, 1992, was represented by Atty. Perez as his agent or counsel. Subsequently, on March 31, 1995, Atty. Perez entered into a compromise agreement with Anacleto and Bongar, represented by Atty. Diosdado M. Allado.

The provisions of the agreement established a payment schedule amounting to P4,800,000. The initial payment of P500,000 was to be held in escrow by Atty. Crispulo C. Rosacia, while subsequent payments were to be made via post-dated checks drawn by Anacleto. The agreement stipulated that both parties waived all claims related to the case, and it was explicitly mentioned that they warranted being duly authori

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Facts:

Background of the Case

• On February 6, 1995, a complaint for reconveyance of title was filed by Alexander Van Twest and Euroceanic Rainbow Enterprises Philippines, Inc. (hereinafter “Euroceanic”) against petitioner Gloria A. Anacleto and Isaias M. Bongar.
• The complaint asserted that although Alexander Van Twest had been reported missing since June 16, 1992, he was represented by counsel through his designated agent.

Execution of the Compromise Agreement

• On March 31, 1995, a compromise agreement was entered into between the parties:
• Plaintiff’s side: Represented by Atty. Ernesto V. Perez on behalf of Alexander Van Twest.
• Defendants’ side: Represented by Atty. Diosdado M. Allado on behalf of Gloria A. Anacleto and Isaias M. Bongar.
• Key provisions of the compromise included:
• Payment of a total of FOUR MILLION EIGHT HUNDRED THOUSAND PESOS (P4,800,000.00), with an initial cash payment of FIVE HUNDRED THOUSAND PESOS (P500,000.00) by defendant Bongar, delivered through a third-party escrow (Atty. Crispulo C. Rosacia).
• A schedule for subsequent payments from defendant Anacleto covered by post-dated checks payable to Atty. Ernesto V. Perez who would hold the funds in trust for the plaintiff.
• A warranty provision (paragraph 5) whereby the signatories represented and warranted that they were duly authorized to execute the agreement.
• An agreement to seek court approval for the compromise and the cancellation or lifting of the notice of lis pendens on the subject property.

Trial Court Proceedings and Subsequent Motions

• On April 6, 1995, the trial court rendered judgment based on the compromise agreement.
• Petitioner subsequently submitted a manifestation accompanied by a special power of attorney (SPA), and later, on June 2, 1995, filed an urgent omnibus motion requesting:
• That Atty. Perez submit an SPA to validate his authority.
• A deferment of her compliance with the payment obligations under the agreement.
• Despite Atty. Perez’s admission on June 23, 1995, that he did not possess an SPA from Van Twest, he maintained that petitioner's former counsel had been duly informed.
• The trial court denied petitioner’s motion on the ground of estoppel, holding that her prior knowledge of Atty. Perez’s lack of SPA precluded her from questioning the compromise later.

Issues with Representation and Authority

• A key factual element was Atty. Perez’s representation of Van Twest via a retainer agreement (dated July 11, 1990) which did not confer special power to enter into a compromise agreement.
• For litigation acts involving compromise or settlement, the law (as provided in Rule 138 A23 and Article 1878 of the Civil Code) mandates a special power of attorney.
• Furthermore, since Euroceanic is a juridical person, its litigation and settlement actions require proper board authorization, which was not secured by Atty. Perez.

Appellate and Certiorari Proceedings

• Petitioner’s subsequent motions to vacate the judgment and appeal were denied on procedural grounds (notice of appeal was filed 12 days late).
• On petition for certiorari before the Court of Appeals, petitioner challenged:
• The denial of her notice of appeal.
• The validity of the judgment based on the unauthorized compromise agreement.
• A crucial piece of evidence was the affidavit of Atty. Crispulo C. Rosacia, which detailed the negotiations and the known deficiency in Atty. Perez’s authority.
• The Court of Appeals had held that petitioner was estopped from questioning Atty. Perez’s authority based on her knowledge during the negotiations.

Issue:

Whether a party who enters into a compromise agreement with another, allegedly represented by a lawyer lacking special authority, may later question the validity of such agreement.

• Is petitioner estopped from denying the validity of the compromise agreement simply because she knew that Atty. Perez did not possess the necessary special power of attorney?
• Whether the absence of proper authority (i.e., special power of attorney and board authorization for Euroceanic) renders both the compromise agreement and the judgment based on it void.
• Whether the procedural lapses (e.g., late filing of the notice of appeal) should bar the petitioner from seeking relief through certiorari given the substantive malperformance in representation.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)