(2) This agreement is the law between the contracting parties with which they are

required to comply in good faith. Verily, it is BCDA’s subsequent unilateral cancellation

of this perfected contract which this Court deemed to have been tainted with grave
abuse of discretion. BCDA could not validly renege on its obligation to subject the
unsolicited proposal to a competitive challenge in view of this perfected contract, and
especially so after BCDA gave its assurance that it would respect the rights that accrued
in SMLI’s favor arising from the same.

Collateral Issues:
a) On Public Bidding v Competitive Challenge. Public bidding may generally be more
preferred than a competitive challenge for reasons explained in the dissent. However,
there must be a careful balance between what is best for the government and what is
fair to the persons it deals with. Otherwise, any and all unsolicited proposal can be
cancellable, despite its acceptance, by the mere allegation that straight bidding is what
public interest so requires. Worse, the government can very well ignore, at will, its
contractual obligations by invoking that familiar mantra––public interest.

b) On the argument on perceived government losses and alleged dubious proceeding.

The alleged adverse economic impact on the government, in finding for SMLI, does not
constitute, under the premises, a valid cause for the reversal of the assailed Decision.
The ruling did not award the project in petitioner’s favor but merely ordered that SMLI’s
proposal be subjected to a competitive challenge. Consequently, any alleged
disadvantage the government would suffer is speculative at most as there is no final
award for the project as of yet.
Respondents harp on the alleged dubiousness of the proceeding that led to the
perfection of the agreement, but to rule now that irregularities marred the actions of
BCDA’s board and officers, as respondents would have us believe, would be
tantamount to prematurely exposing its former officers to potential administrative liability
without due process of law. If respondent would insist on such argument, it could have
at least shown that the proper disciplinary cases have been initiated as evidence that
BCDA reasonably believed that its previous officers indeed deviated from lawful
procedure.
c) On W/N estoppel can be invoked against the state. Respondents cannot also find
solace in the general rule that the State is not barred by estoppel by the mistakes or
errors of its officials or agents. As jurisprudence elucidates, the doctrine is subject to
exceptions, viz: Estoppels against the public are little favored. They should not be
invoked except [in rare] and unusual circumstances, and may not be invoked where
they would operate to defeat the effective operation of a policy adopted to protect the
public. They must be applied with circumspection and should be applied only in those
special cases where the interests of justice clearly require it. Nevertheless, the
government must not be allowed to deal dishonorably or capriciously with its
citizens, and must not play an ignoble part or do a shabby thing; and subject to
limitations . . ., the doctrine of equitable estoppel may be invoked against public
authorities as well as against private individuals.

DISPOSITIVE: Decision affirmed; MR denied with finality.

 REBUSQUILLO VS. SPS. DOMINGO (G.R. No. 204029, June 04, 2014)
NATURE OF THE CASE: Rule 45 certiorari petition assailing the CA decision which set
aside the RTC decision nullifying the self-adjudication of the estate in question by Sps
Gualvez as well as the notarized Deed of Absolute sale concerning the said estate
executed by Avelina in favor of the Spouses.
FACTS:
SPS Eulalio Abarientos – Victoria Villareal

(Mga Anak)

(Petitioner)
Avelina Juan Rosalino Fortunata Feliciano Abraham Carlos
Abarientos- Abarientos Abarientos Abarientos- Abarientos Abarientos Abarientos
Rebusquillo Orosco

(Son/ Petitioner)

(Daughter/Respondents)
(Respondents) Salvador

Emelinda Domingo
Spouses Gualvez

• Victoria died intestate; then Eulalio who also died intestate.

• Leaving behind an untitled parcel of land (2,869 sq. m.)
• Avelina and Salvador petitioned for the annulment and revocation of an affidavit of
self-adjudication and a Deed of Absolute Sale before RTC Legazpi
Ground: Emelinda and Domingo made her sign papers purporting to be
documents needed to facilitate the titling of the parcel of lot in dispute, but in reality, so
she claimed, were affidavit of self-adjudication and deed of sale in favor of the
respondents.
• In their answer, respondents admitted that the execution of the documents were
intended to facilitate the titling of the property, pursuant to an agreement between them
and the other heirs.
RTC ruling: Affidavit of
self-adjudication and deed of sale, annulled.
CA: Reversed RTC
Reason: CA held that the RTC erred in annulling the Affidavit of Self-Adjudication
simply on petitioners’ allegation of the existence of the heirs of Eulalio, considering that
issues on heirship must be made in administration or intestate proceedings, not in an
ordinary civil action. Further, the appellate court observed that the Deed of Absolute
Sale cannot be nullified as it is a notarized document that has in its favor the
presumption of regularity and is entitled to full faith and credit upon its face.
ISSUES:
1) W/N the rule that the declaration of heirship must be made in a spec pro is applicable
in this case;
2) W/N the deed of sale was valid, corollarily W/N a notarized document can be
nullified.
HELD: 1) No; 2) Sale was invalid; Notarized document can be nullified
(1) It has indeed been ruled that the declaration of heirship must be made in a special
proceeding, not in an independent civil action. However, the Court had likewise held that
recourse to administration proceedings to determine who heirs are is sanctioned only if
there is a good and compelling reason for such recourse. Hence, the Court had allowed
exceptions to the rule requiring administration proceedings as when the parties in the
civil case already presented their evidence regarding the issue of heirship, and the RTC
had consequently rendered judgment upon the issues it defined during the pre-trial.
The Court stated it would be more practical to dispense with a separate special
proceeding for the determination of the status of petitioner Avelina as sole heir of
Eulalio, especially in light of the fact that respondents spouses Gualvez admitted in
court that they knew for a fact that petitioner Avelina was not the sole heir of
Eulalio and that petitioner Salvador was one of the other living heirs with rights
over the subject land.
(2) The Court ruled that the deed of absolute sale was simulated, and therefore void.
The main characteristic of an absolute simulation is that the apparent contract is
not really desired or intended to produce legal effect or in any way alter the
juridical situation of the parties. As a result, an absolutely simulated or fictitious
contract is void, and the parties may recover from each other what they may have
given under the contract. In the present case, the true intention of the parties in the
execution of the Deed of Absolute Sale is immediately apparent from respondents’ very
own Answer to petitioners’ Complaint. As respondents themselves acknowledge, the
purpose of the Deed of Absolute Sale was simply to “facilitate the titling of the [subject]
property,” not to transfer the ownership of the lot to them.
Contrary to the appellate court’s opinion, the fact that the questioned Deed of Absolute
Sale was reduced to writing and notarized does not accord it the quality of
incontrovertibility otherwise provided by the parole evidence rule. The form of a contract
does not make an otherwise simulated and invalid act valid. The rule on parole
evidence is not, as it were, ironclad. Sec. 9, Rule 130 of the Rules of Court provides the
exceptions: “(b) The failure of the written agreement to express the true intent and
agreement of the parties thereto; (c) The validity of the written agreement.”

DISPOSITIVE: CA reversed; RTC decision reinstated.