G.R. No. L-9354; February 15, 1957
CASILDA M. VDA. DE MEJIA, ETC., plaintiff-appellee, vs. MARY H. LOHLA and EUGENIO B. LOHLA, defendants. MARY N. LOHLA, defendant-appellant.

FACTS

Spouses Eugenio B. Lohla and Mary Nichols Lohla executed a deed of absolute sale on March 6, 1950, in favor of Casilda M. Vda. de Mejia for a residential lot in Cebu City for P37,000. After the title was transferred to Casilda, the spouses refused to deliver possession and instead filed an action (Civil Case No. 1662-R) to annul the deed, claiming it was a sale with a right of repurchase. Casilda then filed a separate action (Civil Case No. R-1763) to recover possession. On September 3, 1952, Eugenio B. Lohla, with counsel but without his wife Mary’s explicit participation, entered into a compromise agreement with Casilda, represented by her attorney-in-fact. The agreement granted the Lohlas an option to repurchase the lot for P52,792.25 on or before December 4, 1952, failing which they would deliver possession and dismiss their annulment case. The trial court approved the compromise and rendered a decision based on it on September 4, 1952. Eugenio later sought buyers in Manila and, on December 2, 1952, sent a telegram to his wife Mary in Cebu, asking her to request an extension of the repurchase period from Casilda’s counsel, which she did. The period was extended, but the Lohlas ultimately failed to repurchase. Upon Casilda’s motion, a writ of execution was issued, received by Mary on February 17, 1953. On March 25, 1953, Mary filed a petition for relief from judgment, which the trial court denied. Mary appealed, arguing the compromise was unauthorized and she had no knowledge of it.

ISSUE

Whether the trial court erred in denying Mary Lohla’s petition for relief from judgment based on an allegedly unauthorized compromise agreement.

RULING

The Supreme Court affirmed the trial court’s order denying the petition for relief. The Court held that while under Article 1878 of the New Civil Code and Section 21, Rule 127 of the Rules of Court, a special power of attorney is required for an attorney to compromise litigation, Mary Lohla had tacitly ratified the compromise agreement. Her actions—specifically, endorsing her husband’s telegram to Casilda’s counsel to request an extension of the repurchase period—constituted ratification, which retroacts to the date of the compromise. Additionally, the Court found that a special power of attorney executed by Mary in favor of her husband on December 28, 1950, which authorized him to “dispose of any and all my properties,” was comprehensive enough to include the power to compromise. The Court also noted that the petition for relief was filed out of time, as the sixty-day period from learning of the judgment (which could be deemed from her receipt and action on the telegram on December 2, 1952) had expired by March 25, 1953.