ATTY. EMMANUEL AGUSTIN, ET AL. v.

ALEJANDRO CRUZ-HERRERA

FACTS:
Respondent Herrera is the President of Podden, the company in which petitioners are employed.
Petitioners alleged that they were illegally dismissed by Respondent, thus, they enagged the
services of petitioner lawyer, Atty. Agustin, upon the verbal agreement that he will be paid on a
contingency basis at the rate if 10 % of the final monetary award.
The Labor Arbiter (LA) ruled in favor of the petitioners. No appeal was posed by respondent on
such judgement, hence, a motion for execution was filed by petitioners. However, respondent
moved to deny the motion and invoked that he and the employees-petitioners already executed
a compromise agreement and settled their dispute. Agustin opposed.
In resolving the conflict, LA reversed its previous decision and dismissed the case. On appeal to
the NLRC, the latter reversed the LA’s decision. Then, respondent appealed to the Court of
Appeals (CA). The appellate court ruled in favor of respondent and dismissed the complaint.
Hence, this present case.

ISSUE: Whether or not the CA erred in its decision to dismiss the case on the ground of the
compromise agreement which is with no knowledge of Agustin?

RULING: The Court held no.

The court stressed that Atty. Agustin should be reminded that his professional relation with his
clients is one of agency, hence, “the acts of an agent are deemed acts of the principal only if the
agent acts within the scope of his authority”.
But under the present case, Atty. Agustin was clearly to have been acting beyond the scope of
his authority in questioning the compromise agreement between his clients and Herrera.
The court also emphasized that it is a settled rule that parties may enter into a compromise
agreement without the intervention of a lawyer. Hence, although without knowledge of Agustin,
the compromise agreement was valid.