GR 35132; (November, 1931) (Digest)
G.R. No. 35132; November 25, 1931
EL MONTE DE PIEDAD Y CAJA DE AHORROS DE MANILA, plaintiff-appellee, vs. JOSE FERNANDO RODRIGO and POTENCIANA DE YUPANGCO, judicial administratrix of the deceased Juana Mariano y Torres, defendants. JOSE FERNANDO RODRIGO, appellant.
FACTS
El Monte de Piedad y Caja de Ahorros de Manila filed an action to foreclose a real estate mortgage executed by the defendants to secure a loan. The mortgage covered properties, including two parcels in Manila and one in Bulacan. During the pendency of the case, the parties’ counsel entered into a written agreement without the direct authorization of their clients, wherein the appellant consented to a judgment against him alone and the appellee agreed to grant extended payment terms. Appellee’s counsel later withdrew consent, claiming the agreement inaccurately relieved the co-defendant administratrix from all liability. The trial court rejected the agreement and rendered a judgment of foreclosure. The appellant appealed, arguing the court erred in rejecting the agreement and in exercising jurisdiction since one mortgaged property was in Bulacan.
ISSUE
1. Whether the trial court erred in rejecting the written agreement entered into by counsel for both parties.
2. Whether the trial court in Manila had jurisdiction over the foreclosure action when one mortgaged property was located in Bulacan.
RULING
1. No, the trial court did not err in rejecting the agreement. The agreement was null and void because it was signed only by the attorneys without special authority from their clients or the clients’ direct intervention. Under Article 1809 of the Civil Code and Section 27 of the Code of Civil Procedure, attorneys require special authority to compromise their clients’ rights. Additionally, the agreement did not reflect the true intention of the appellee’s counsel, as it erroneously released the co-defendant administratrix from all liability, which would have prejudiced the appellee’s right to foreclose on all mortgaged properties.
2. No, the trial court in Manila had jurisdiction. Section 254 of the Code of Civil Procedure allows an action for foreclosure of a mortgage to be brought in the court where the land or some part thereof lies. Since two of the three mortgaged parcels were situated in Manila, the Court of First Instance of Manila properly exercised jurisdiction. The judgment of foreclosure was affirmed.
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