SM Land v BCDA

SM Land v BCDA (G.R. No. 203655, March 18, 2015) NATURE OF THE CASE: MR from SC decision granting SMLIs petition for certiorari and directing BCDA to subject the formers unsolicited proposal for the development of Bonifacio South Property to a competitive challenge. FACTS: SM Land, Inc. submitted an unsolicited proposal to develop Bonifacio South Property. Respondent BCDA, under the current presidency of Casanova, however, terminated the competitive challenge on the following grounds: a) SMLI’s offer was incompatible with public interest and, therefore, void; b) the whole process that lead to the issuance of a Certificate of Successful Negotiation was highly irregular, citing a dubious process that lead to the naming of SMLI as the original proponent given the fact that another developer has submitted a proposal to develop the land in question two months before SMLI. BCDA also submitted that the Joint Venture Selection Committee’s recommendation and BCDA’s Boards approval using competitive challenge, instead of the usual public bidding process, are themselves questionable. BCDA also submitted that the government stands to lose P13 B in the agreement. In this MR, respondent argued that BCDA and SMLI do not have a contract that would bestow upon the latter the right to demand that its unsolicited proposal be subjected to a competitive challenge. Assuming arguendo the existence of such an agreement between the parties, respondents contend that the same may be terminated by reason of public interest. ISSUES: 1) W/N there was a perfected contract between the parties; 2) W/N BCDA may terminate the same by reason of public interest. HELD: 1) Yes; 2) No. RATIO DECIDENDI: (1) There was a valid agreement between the parties. The elements of a valid contract were all present: a) Consent. In the case at bar, when SMLI submitted the first Unsolicited Proposal to BCDA on December 14, 2009, the submission constituted an offer to undertake the development of the subject property. BCDA then entered into negotiations with SMLI until the BCDA finally accepted the terms of the final unsolicited proposal. Their agreement was thereafter reduced into writing through the issuance of the Certification of Successful Negotiations where the meeting of the parties’ minds was reflected. b) Cause. The cause of the agreement in the case at hand is their interest in the sale or acquisition and development of the property and their undertaking to perform their respective obligations, among others, as reflected in the Certificate of Successful Negotiations and in the Terms of Reference (TOR) issued by BCDA. c) Object. Here, when the BCDA Board issued the Certification of Successful Negotiations, it only accepted SMLI’s Unsolicited Proposal and declared SMLI eligible to enter into the proposed JV activity. It also “agreed to subject [SMLI]’s Original Proposal to Competitive Challenge.” (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 AbarientosRebusquillo

Juan Abarientos

(Daughter/Responde nts) Emelinda

Spous es

Rosalino Abarientos

Fortunata AbarientosOrosco

Feliciano Abarientos

Abraham Abarientos

Carlos Abarientos

(Son/ Petitioner) (Responden

Salvador

Domingo 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 selfadjudication 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.