G.R. No. 122950 ; November 20, 2000
ESTATE OF THE LATE MENA BOLANOS, et al., petitioners, vs. HON. COURT OF APPEALS, et al., respondents.

FACTS

Mena Bolanos was the registered owner of a residential lot in Quezon City. In 1984, through her daughter and attorney-in-fact Lydia, she mortgaged the property. After a foreclosure and auction sale, Lydia, as attorney-in-fact, arranged for respondents Jerry Bania and Col. Florencio Saavedra to redeem the property, with an agreement for Mena to repurchase it within one year. Mena failed to repurchase, prompting Bania to file a complaint for consolidation of ownership in 1989.
During the pendency of the case, a compromise agreement was entered into in open court on June 25, 1991. It was signed by plaintiff Jerry Bania and, for defendant Mena Bolanos, by Atty. Mario Bolanos as her court-appointed guardian ad litem and Atty. Sulpicio Bolanos, Jr. as her counsel. Lydia Bolanos also signed. The trial court approved the agreement in an Order-Decision. Upon Mena’s failure to comply, the court issued an order of execution. Mena died on January 8, 1992. The property was subsequently sold at public auction to Bania and a representative of another defendant.

ISSUE

Whether the Court of Appeals erred in dismissing the petition for annulment of the compromise agreement and the subsequent Order-Decision of the trial court.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The core legal logic rests on the doctrines of estoppel and ratification. Petitioners, who are heirs of Mena Bolanos including those who initially represented her, sought to annul the compromise agreement long after its execution and the death of the decedent. They argued fraud and lack of proper representation, claiming Mena was incompetent and not duly represented by her sons Mario and Sulpicio.
The Court ruled that petitioners are estopped from challenging the agreement due to their subsequent conduct. Crucially, nearly a year after the auction sale, all heirs, including the petitioners, jointly filed a “Motion to Annul Public Bidding” in the same civil case through their brother and counsel, Atty. Sulpicio Bolanos, Jr.—the very person they later alleged had fraudulently connived against their interest. This act constituted a clear ratification of the authority of Mario and Sulpicio to represent their mother in the original case and of the proceedings therein. By actively participating in the case through the same counsel, petitioners cannot later repudiate the compromise agreement. The authority of a lawyer is presumed, and not having been challenged in a timely manner by the parties concerned, it binds the client. Thus, any alleged defect in the representation or fraud was deemed cured by ratification, barring the action for annulment.