Dungo V Lopena (Dancel)

DUNGO v. LOPENA (1962) respect to him because he did not sign the same.
This
motion to set aside was denied by the lower court. Duñgo
[J. Regala] filed a Notice of Appeal from the order approving the
foreclosure sale, as well as the order denying his motion to
set aside. The approval of the record on appeal however,
Summary and Doctrine was opposed by the respondents who claimed that the
judgment was not appealable having been rendered by
A compromise in itself is a contract. Under Art 1878, a virtue of the compromise agreement. The lower court
third person cannot bind another to a compromise dismissed the appeal.
agreement unless the third person has obtained a
special power of attorney for that purpose from the party II. ISSUES:
intended to be bound.
Was the compromise agreement of January 15,
Although the Civil Code expressly requires a special 1960, the Order of the same date approving the
power of attorney so that one may compromise an same, and, all the proceedings subsequent thereto,
interest of another, it is incorrect to conclude that its valid or void insofar as the petitioner herein is
concerned? NO.
absence renders the compromise agreement void. It is
merely unenforceable. III. RATIO:
When it appears that the client, on becoming aware of A compromise in itself is a contract.1 Under Art 1878, a
the compromise and judgment thereon, fails to third person cannot bind another to a compromise
repudiate promptly the action of his attorney, he will not agreement unless the third person has obtained a
be heard to contest its validity. special power of attorney for that purpose from the
party intended to be bound.
However, although the Civil Code expressly requires a

special power of attorney so that one may compromise
an interest of another, it is incorrect to conclude that its
I. FACTS: absence renders the compromise agreement void. It is
merely unenforceable.
Dungo and Gonzales purchased 3 parcels of land from
Lopena and Ramos for the total price of P269,804.00. Dungo had already ratified the compromise agreement
P28.000.00 was given as down payment with the agreement as established by the Tri-Party Agreement where it was
that the balance would be paid within 6 monthly installments. stipulated that the PAYOR submits and binds himself to
To secure the payment of the balance, vendees executed the force and effect of the order of CFI. Having so
over the same parcels of land Deed of Real Estate Mortgage consented to making that court order approving the
in favor of the vendors, with the condition that failure of the compromise agreement an integral part of the Tri-Party
vendees to pay any of the installments on their maturity Agreement, how Dungo now repudiate the compromise
dates shall automatically cause the entire unpaid balance to agreement and claim he has not authorized it?
become due and demandable. The vendees defaulted on the
1st installment. When it appears that the client, on becoming aware of
the compromise and judgment thereon, fails to
So the vendors filed a complaint with the CFI of Rizal. Before repudiate promptly the action of his attorney, he will not
the case could be tried, on January 15, 1960, a compromise be heard to contest its validity.
agreement was submitted to the lower court for approval. It
was signed by Lopena and Ramos on one hand, and Also the court noted that although Dungo was not a
Gonzales who represented that his signature was for both signatory, the compromise agreement benefited him in
himself and Dungo. Dungo’s counsel of record was present that the agreement extended the date of maturity of the
at the preparation of the compromise agreement and affixed loan.
his own signature. Lopena and Ramos has agreed to give
the defendants up to June30, 1960 to pay the mortgage
indebtedness. IV. DISPOSITIVE:
Subsequently, on May 3, 1960, a so-called Tri-Party WHEREFORE, the petition for certiorari and mandamus filed
Agreement was drawn. The signatories to it were Anastacio by the herein petitioner is hereby DISMISSED. The order of
Duñgo and Rodrigo S. Gonzales as debtors, Adriano Lopena the lower court dismissing the appeal is her by affirmed
and Rosa Ramos as creditors, and, one Emma R. Santos as
payor.
When Duñgo and Gonzales failed to pay the balance of their

indebtedness on June 30, 1960, respondents Lopena and
Ramos filed on July 5, 1960, a Motion for the Sale of
Mortgaged Property. As a result, the lower court granted the
above motion on July 19, 1960, and ordered the sale of the
mortgaged property. The 3 parcels of land were sold at a
public auction. The sheriff’s sale was later confirmed by the
lower court. Petitioner did not file any opposition.
Duñgo filed a motion to set aside all the proceedings on the

ground that the compromise agreement was void with

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DUNGO v. LOPENA (1962) respect to him because he did not sign the same.

However, although the Civil Code expressly requires a

When Duñgo and Gonzales failed to pay the balance of their

Duñgo filed a motion to set aside all the proceedings on the

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