FELICTANA BUMANLAG AND FLAVIANO BUMANLAG, PETITIONERS, VS. HON. ANACLETO B. ALZATE, AS PRESIDING JUDGE, BRANCH IF, COURT OF FIRST INSTANCE OF TARLAC, TOMASA BUMANLAG, AND SILVIN…

Bumanlag versus Alzate

The Case

This is a petition for certiorari brought by Felictana Bumanlag and Flaviano Bumanlag against Judge Anacleto Alzate, as presiding judge of the Court of First Instance of Tarlac, and against Tomasa Bumanlag and others. The petitioners sued for the partition of lots they inherited from their deceased father, and the respondents moved to dismiss on the ground that a final and executory judgment, based on a compromise agreement, had already settled the same parties, the same subject matter, and the same causes of action. The petitioners answered that the earlier judgment is void because their lawyer signed the compromise in their behalf without authority. The case matters because it fixes the status of a compromise signed by a lawyer without authority: it is not void but merely unenforceable, and it may be ratified, with the consequence that res judicata may then attach.

Procedural History

The petitioners filed a complaint for partition in the Court of First Instance of Tarlac. The respondents moved to dismiss, invoking res judicata arising from an earlier final and executory judgment based on a compromise agreement. The trial court, through the assailed Order of Judge Alzate, dismissed the complaint. The petitioners then came to the Supreme Court by certiorari, assailing that Order. The Supreme Court dismissed the petition and affirmed the Order.

Facts

The petitioners and the private respondents are heirs of a common deceased father, and the petitioners sued for the partition of the lots they inherited. The respondents opposed the action by pointing to an earlier case, already finally decided, involving the same parties, the same subject matter, and the same causes of action, in which judgment was rendered upon a compromise agreement.

That compromise agreement had been signed in behalf of the petitioners by their lawyer, who acted without their authorization. On that ground the petitioners insisted that the earlier judgment is void, and that no res judicata could arise from it.

In the years that followed, the petitioners kept silent for sixteen years. They also performed overt acts of exchanging or bartering some of the lots awarded to them with some of the lots of the private respondents. The earlier case, the Court noted, had produced a physical and actual partition, not merely a metaphysical one, even if it was not described with metes and bounds.

Issues

• Whether or not a compromise agreement signed in behalf of a party by a lawyer without authority from that party is void, or merely unenforceable and therefore capable of ratification.
• Whether or not the petitioners ratified the act of their lawyer, so that the earlier judgment stands and res judicata bars the present action for partition.
• Whether or not the absence of metes and bounds in the earlier partition invalidates it.

Applicable Provisions

Article 1403 of the Civil Code provides:

The following contracts are unenforceable, unless they are ratified: Number 1. Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers.

This is the provision the Court applies: a contract entered into in another's name without authority is unenforceable rather than void, and ratification cures the defect.

The same Article 1403 provides, in its first sentence, the rule on ratification:

The following contracts are unenforceable, unless they are ratified.

This is the textual basis for holding that the petitioners' silence and overt acts validated their lawyer's unauthorized compromise.

Ruling

On the first issue, the Court held that the compromise agreement is not void but merely unenforceable. A contract entered into in the name of another by one without authority falls under Article 1403, and the law itself says such a contract is unenforceable unless ratified. Being unenforceable and not void, it may be ratified by the party expressly or implicitly.

On the second issue, the Court found ratification. The petitioners kept silent for sixteen years, and they performed overt acts of exchanging or bartering some of the lots awarded to them with some of the lots of the private respondents. By that silence and those acts they doubtless ratified the act of their attorney. With ratification, the earlier judgment stands, all the requisites of res judicata are present, and the principle applies to bar the present case.

On the third issue, the Court rejected the argument that the partition was not one with metes and bounds. There was a physical and actual partition, not merely a metaphysical one.

Doctrine

A compromise agreement signed in behalf of a party by a lawyer without that party's authority is merely unenforceable, not void, because it falls under Article 1403 of the Civil Code, and it may be ratified expressly or implicitly. Ratification may be inferred from long silence and from overt acts consistent with the agreement, such as dealing with the lots awarded under it. Once ratified, the judgment by compromise stands, and where the same parties, subject matter, and causes of action are involved, res judicata bars a later suit. A partition need not be described with metes and bounds; a physical and actual partition suffices.

Disposition

The petition was dismissed and the assailed Order was affirmed, with costs against the petitioners.

Remember This

The one line to memorize: a compromise signed by a lawyer without authority is unenforceable, not void, and is cured by ratification. Examiners use this case to test the distinction between void and unenforceable contracts under Article 1403, and how ratification by silence and overt acts gives rise to res judicata.