MELECIO DOREGO AND FELICIDAD DOREGO, PETITIONERS, VS. ARISTON PEREZ, THE HONORABLE RAMON BLANCO, AS PRESIDING JUDGE, COURT OF FIRST INSTANCE OF ILOILO AND THE PROVINCIAL SHERIFF…

Dorego versus Perez

The Case

This is a petition for certiorari with preliminary injunction filed by the spouses Melecio Dorego and Felicidad Dorego against Ariston Perez, the presiding judge of the Court of First Instance of Iloilo, and the provincial sheriff. The Dorego spouses ask the Supreme Court to stop the execution of a final judgment for the foreclosure of a real estate mortgage, claiming that the judgment had already been novated by an amicable settlement. The case matters because it teaches the strict proof required to establish a compromise, the limits on a lawyer's authority to settle a client's case, and the settled rule that the dismissal or withdrawal of an appeal leaves the judgment of the trial court standing as if no appeal had ever been taken.

Procedural History

Respondent Ariston Perez sued the Dorego spouses for foreclosure of a real estate mortgage before the Court of First Instance of Iloilo. On March 22, 1961, the trial court rendered judgment against the Dorego spouses, ordering them to pay a sum of money within ninety days, failing which the mortgaged properties would be sold at public auction.

The Dorego spouses appealed to the Court of Appeals. Their counsel later filed a manifestation withdrawing the appeal on the ground that the parties had amicably settled for 1,300 pesos. The Court of Appeals required counsel to present the written conformity of the spouses themselves and to pay the appeal docket fees. When these were not complied with, the Court of Appeals dismissed the appeal on January 26, 1962, for failure to pay the docket fees.

After the records were remanded, the trial court granted the motion for execution. It denied the petitioners' motion for reconsideration on July 6, 1963, ruling that the agreement between the counsels was ineffective to constitute a novation. Instead of appealing, the petitioners filed a separate action to annul the decision and enjoin its execution, but that case was dismissed, and their attempted appeal from the dismissal was itself dismissed for failure to perfect it. An alias writ of execution was then issued, and the mortgaged properties were advertised for public sale. On August 28, 1965, the petitioners filed this petition for certiorari with preliminary injunction, and the Supreme Court gave it due course. The properties were sold at public auction to respondent Perez for 2,000 pesos.

Facts

Respondent Perez obtained a judgment of foreclosure against the Dorego spouses. The spouses appealed to the Court of Appeals, but their counsel filed a manifestation withdrawing the appeal, alleging that the parties had amicably settled the case for 1,300 pesos.

The Court of Appeals required the written conformity of the spouses themselves and the payment of appeal docket fees. Neither was complied with, and the appeal was dismissed for failure to pay the docket fees. The dismissal made no mention of any amicable settlement.

When the records returned to the trial court, Perez moved for execution. The spouses opposed, relying on a receipt signed by their counsel and one of Perez's counsels, on the manifestation filed in the Court of Appeals, and on their own affidavits. The trial court disregarded the opposition and later denied reconsideration, holding that the agreement between the counsels could not constitute a novation of the rights and obligations of the parties themselves. The mortgaged properties were eventually sold at public auction to Perez.

Issues

• Whether or not the trial court gravely abused its discretion or exceeded its jurisdiction in denying the petitioners' opposition to the motion for execution and in allowing the execution of the judgment.
• Whether or not the judgment of March 22, 1961 had been novated by an amicable settlement between the parties, so that it could no longer be executed.
• Whether or not the receipt signed by the counsels proved a compromise binding on the parties themselves.

Applicable Provisions

Section 23 of Rule 138 of the Rules of Court, on the authority of attorneys, provides:

Attorneys and counselors shall receive their lawful compensation from their clients, and shall be entitled to a lien upon the property or funds in their hands or in the possession of the adverse party by reason of the suit, and upon the judgment in their favor, for the amount of their fees and expenses; but this lien shall not affect the rights of third persons. An attorney or counselor shall not, without special authority, compromise his client's litigation, or receive anything in payment of a claim or judgment in favor of his client, or give a receipt or discharge for money or property received by him for his client, or bind his client by any act which amounts to a waiver of any of his client's rights.

This provision bears on the case because it explains why the receipt signed by the counsels could not bind the parties: no special authority to compromise was shown.

Sections 2 and 4 of Rule 50 of the Rules of Court, on the dismissal of appeals, provide:

Section 2. Dismissal of appeal. An appeal may be dismissed by the appellate court, upon motion of the appellee or on its own motion, on any of the following grounds: (a) Failure of the appellant to pay the docketing and other lawful fees within the period fixed by these rules; (b) Failure of the appellant to file his brief within the time prescribed by these rules; (c) Failure of the appellant to appear at the hearing of the case; (d) Failure of the appellant to prosecute his appeal with diligence; (e) Failure of the appellant to comply with the rules or orders of the court.

Section 4. Effect of dismissal. A dismissal of an appeal under this rule shall have the effect of affirming the judgment or order appealed from, and the same shall be final and executory, and the trial court shall proceed to execute the same.

These provisions bear on the case because the dismissal of the appeal for failure to pay docket fees left the judgment of the trial court standing and executory.

Ruling

On the first issue, the Court held that the trial court did not gravely abuse its discretion in granting the motion for execution. The judgment had become final and executory, and the Court of Appeals had dismissed the appeal for the petitioners' failure to pay the docket fees.

On the second issue, the Court rejected the claim of novation. The petitioners assumed what they had to establish, namely, the fact of amicable settlement, which the respondent denied. The Court held that there was no satisfactory proof of the alleged settlement.

On the third issue, the Court held that the receipt proved only a personal agreement between the counsels. As the Court explained, without special authorization, counsels cannot compromise their client's litigation, and the special authorization of the respondent's counsel was not shown. The Court also noted that the dismissal of the appeal left the judgment to stand as if no appeal had been instituted, so execution was proper.

Doctrine

A judgment that has become final and executory may be executed as a matter of right. The dismissal or withdrawal of an appeal leaves the judgment of the trial court standing as if no appeal had been taken, and the trial court may proceed to execute it.

A lawyer cannot, without special authority, compromise the litigation of a client. A receipt or agreement signed by counsel alone does not bind the parties and cannot establish a compromise or a novation of a final judgment. The party alleging an amicable settlement must prove it, and the burden rests on that party.

Disposition

The petition for certiorari was dismissed, with costs against the petitioners, and the execution of the judgment was allowed to proceed.

Remember This

The single line worth memorizing is that the dismissal or withdrawal of an appeal leaves the judgment of the trial court standing as if no appeal had been taken, and that counsel cannot compromise a client's case without special authority. Examiners like to use this case to test the effect of the dismissal of an appeal and the authority of counsel to enter into a compromise.