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.