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96. Caballero vs. Deiparine, 60 SCRA 136 Facts: -Plaintiffs are the children by the first marriage Vicenta Bucao.

Defendants (Raga’s) are the children by Bucao's second marriage. -Vicenta Bucao and Tomas Raga acquired land in Cebu. ¼ of this land was sold to Antonio Caballero (one of the plaintiffs). Land was never transferred thru title. Vicenta dies, but no partition of her estate was made between her heirs -Later on, Deiparine acquired the whole lot through purchase from Tomas Raga. TCT was issued to Deiparine, who instituted ejectment proceedings against the plaintiff -Plaintiffs assailed said sale, alleging said land was previously sold to him and is also forms part of the share inherited from Vicenta -During pre-trial hearing, parties allegedly executed a stipulation of facts -The stipulation was only signed by Atty. Guba(for plaintiffs) and Atty. Hilario Davide (for respondents). -From the stipulation of facts, the CFI rendered decision in favor of the defendants (that Deiparine owns the whole lot). -Plaintiffs filed for reconsideration saying that they were never made to participate in the preparation and formation of the stipulation of facts Issue: WON the stipulation of facts is valid

-admission of such facts prejudicial to his client's interests was beyond the scope of his authority as counsel and practically gave away the case -The conduct of Atty. Guba in entering into a compromise agreement without the knowledge and consent of his clients is not in keeping with the sworn duty of a lawyer to protect the interest of his clients. It amounts to fraud. -The stipulation of facts which was made the basis of the decision was null and void as it contained serious unauthorized admissions against the interest of the plaintiffs who had no hand in its preparation. -Attorneys cannot, without special authority, compromise their client’s litigation. -The case is remanded to court of origin for further proceedings and the amended complaint submitted by plaintiffs should be accepted. Note: No agency related provision was cited in the decision, but Rule 138, Section 23 of the Rules of Court was cited providing that: Authority of attorneys to bind clients. — Attorneys have authority to bind their clients in any case by any agreement in relation thereto made in writing, and in taking appeals, and in all matters of ordinary judicial procedure. But they cannot, without special authority, compromise their client's litigation, or receive anything in discharge of a client's claim but the full amount in cash.

Ratio: No. -Court found it puzzling that petitioners’ signatures were not affixed in the stipulation of facts even if Whence we can infer that the relevant provision Atty. Guba required said stipulation to be verified by may be Art. 1878 (3) which provides that: the plaintiff (despite the fact that by its nature/subject matter the complaint did not require Art. 1878. Special powers of attorney are verification) necessary in the following cases: -said stipulation of facts entered into by parties (3)To compromise, to submit questions to constituted a compromise agreement (which arbitration, to renounce the right to appeal from practically confesses judgement), without the a judgment, to waive objections to the venue of consent or conformity of his clients an action or to abandon a prescription already -Guba, as counsel for plaintiffs, agreed to facts acquired; adverse to his client's interest in the compromise agreement i.e. • agreeing that Deiparine was a buyer in good faith (despite plaintiff's claim that they can prove that Deiparine was a purchaser in bad faith) • that during her lifetime, Vicenta Bucao, with conformity of her husband, sold her undivided half of said land to Tomas Raga (despite the fact that no evidence was adduced in support of this claim)