GR L 56962; (August, 1982) (Digest)
G.R. No. L-56962 August 21, 1982
Republic of the Philippines (National Irrigation Administration), petitioner, vs. Honorable Andres B. Plan, in his capacity as Presiding Judge, Court of First Instance of Isabela, Branch II, Cauayan, and Andres Pua.
FACTS
A civil case for damages was filed against the National Irrigation Administration (NIA) and its employee, Ruben Galutan, arising from a vehicular collision involving a NIA truck. The Solicitor General, representing NIA, filed an answer denying liability and asserting affirmative defenses. The Solicitor General later delegated representation at pre-trial to NIA’s field legal staff via a letter, instructing compliance with pre-trial rules. Subsequently, without the knowledge or participation of the Solicitor General or NIA management, an Amicable Settlement was executed and submitted to the court by Atty. Emelina Cattiling, a NIA field lawyer. This settlement obligated NIA to pay substantial sums beyond the amounts already settled by the GSIS insurer. The trial court approved the settlement and later issued a writ of execution against NIA.
ISSUE
Whether the Amicable Settlement executed by NIA’s field lawyer is valid and binding upon the NIA.
RULING
The Supreme Court ruled the Amicable Settlement is void and not binding on NIA. The legal logic is anchored on the principle of agency and authority to compromise. A compromise settlement, which involves concessions and waivers of rights, requires special authority. Atty. Cattiling, as a field lawyer, possessed no such power to bind NIA. The Special Power of Attorney presented did not grant her any authority to compromise the case; it was not executed by NIA itself and certainly not pursuant to any board resolution, which is the proper governing body to confer such significant authority. Since the lawyer acted without the requisite power, her actions produced no legal effect against her principal, the NIA. Consequently, the trial court’s approval of the void settlement could not validate it, and all subsequent proceedings based thereon, including the writ of execution, are likewise void. The petition was granted, and the challenged orders of the respondent judge were set aside.