Agustin v. Cruz-Herrera (G.R. No. 174564; February 12, 2014)
FACTS: Respondent Herrera was the President of Podden while complainants were assemblers and/or line leader assigned at the production department. In 1993, the complainants were terminated from employment due to financial reverses. Upon verification, however, with the DOLE, no such report of financial reverses or even retrenchment was filed. This prompted the complainants to file a complaint for illegal dismissal, monetary claims and damages against Podden and Herrera. They engaged the services of Atty. Emmanuel D. Agustin (Atty. Agustin) to handle the caseupon the verbal agreement that he will be paid on a contingency basis at the rate of ten percent (10%) of the final monetary award or such amount of attorneys fees that will be finally determined.
The Labor Arbiter ordered/directed Herrera and Podden to reinstate the complainants to their former positions without loss of seniority rights and other privileges with full backwages.
No appeal was taken from the foregoing judgment hence, a motion for execution was filed.
On March 20, 1999, Herrera filed a Manifestation and Motion to deny issuance of the writ stating, among others, that Podden ceased operations on December 1, 1994 or almost four years before judgment was rendered by the LA on the illegal dismissal complaint and that nine of the eleven employees have executed Waivers and Quitclaims rendering any execution of the judgment inequitable.
On July 20, 1999, the Computation and Examination Unit of the National Labor Relations Commission (NLRC) released the computation of the total monetary award granted by the LA amounting toP3,358,441.84.
Atty. Agustin opposed Herreras motion and argued that the issuance of a writ of execution is ministerial because the LA decision has long been final and executory there being no appeal taken therefrom.
Resolving the conflict, the LA issued its Order denying the motion for the issuance of a writ of execution. The LA sustained as valid the Waivers and Quitclaims. Accordingly, the quitclaims were held to have superseded the matter of issuing a writ of execution.
The NLRC reversed the LA Order for the reason that it unlawfully amended, altered and modified the final and executory LA Decision The quitclaims were also held invalid based on the unconscionably low amount received by each of the complainants thereunder which ranged betweenP10,000.000 andP20,000.00 as against the judgment award ofP238,680.00 for each individual complainant.
The quitclaims executed by the complainants was nullified.
Herrera filed a petition for certiorari before the CA assailing the issuances of the NLRC. During the pendency of the petition, a joint compromise agreement was submitted to the CA whereby parties agreed that Herrera shall pay each of the complainants immediately upon the signing of the Joint Compromise Agreement the amount of Php 35,000.00 to each; and Herrera shall pay the costs of the suit and attorneys fees of the complainants equivalent to 10% (ten percent) of the total settlement agreement;
Atty. Agustin moved for the reconsideration of the foregoing resolution but his motion was denied in the CA Resolution. Displeased, Atty. Agustin, with the complainants named as his co-petitioners contending that the resolutions of the CA violated the principle of res judicata because they amended and altered the final and executory LA Decision and NLRC Resolution on the basis of an unconscionable compromise agreement that was executed without his knowledge and consent. Atty. Agustin prays that the joint compromise agreement be set aside. Hence, this petition for review on certiorari.
ISSUE:
Did the CA err in approving the joint compromise agreement executed by respondent Herrera and the former employees of Podden?
HELD: Atty. Agustin ought to be reminded that his professional relation with his clients is one of agency under the rules thereof "[t]he acts of an agent are deemed the acts of the principal only if the agent acts within the scope of his authority." J-Phil Marine Inc. v. NLRC, 583 Phil 671.It is clear that under the circumstances of this case, Atty. Agustin is acting beyond the scope of his authority in questioning the compromise agreement between the complainants, Podden and Herrera.
It is settled that parties may enter into a compromise agreement without the intervention of their lawyer.This precedes from the equally settled rule that a client has an undoubted right to settle a suit without the intervention of his lawyer for he is generally conceded to have the exclusive control over the subject-matter of the litigation and may, at any time before judgment, if acting in good faith, compromise, settle, and adjust his cause of action out of court without his attorneys intervention, knowledge, or consent, even though he has agreed with his attorney not to do so. Hence, the absence of a counsels knowledge or consent does not invalidate a compromise agreement.
Neither can a final judgment preclude a client from entering into a compromise. Rights may be waived through a compromise agreement, notwithstanding a final judgment that has already settled the rights of the contracting parties provided the compromise is shown to have been voluntarily, freely and intelligently executed by the parties, who had full knowledge of the judgment. Additionally, it must not be contrary to law, morals, good customs and public policy.
In the present case, the allegations of vitiated consent proffered by Atty. Agustin are all presumptions and suppositions that have no bearing as evidence. There is no proof that the complainants were forced, intimidated or defrauded into executing the quitclaims.
It must be noted that the complainants were laborers who desired to contest their dismissal for being illegal. With no clear means to pay for costly legal services, they hired Atty. Agustin whose remuneration was subject to the success of the illegal dismissal suit. Before a judgment was rendered in their favor, however, the company closed down and settlement of the suit for an amount lesser than their monetary claims, instead of execution of the favorable judgment, guaranteed the atonement for their illegal termination. To make the complainants liable for theP335,844.18 attorneys fees adjudged in the LA Decision would be allowing Atty. Agustin to get a lions share of theP385,000.00received by the former from the compromise agreement that terminated the suit; to allow that to happen will contravene the raison d're for contingent fee arrangements.
More importantly, Atty. Agustin was not totally deprived of his fees. Under the joint settlement agreement, he is entitled to receive ten percent (10%) of the total settlement.
DENIED
