ESTOPPEL

Microsoft Philippines, Inc. v. CIR, G.R. No. 180173, April 6, 2011, 647 SCRA 398;Silicon
Philippines, Inc. v. CIR, G.R. No. 172378, January 17, 2011, 639 SCRA 521;Kepco Philippines
Corporation v. CIR, G.R. No. 179961, January 31, 2011, 641 SCRA 70

It is a well-settled rule that the government cannot be estopped by the mistakes, errors or omissions
of its agents.32It has been specifically held that estoppel does not apply to the government, especially
on matters of taxation. Taxes are the nation’s lifeblood through which government agencies continue
to operate and with which the State discharges its functions for the welfare of its constituents.33

REPUBLIC OF THE PHILIPPINES, (Represented by the Acting Commissioner of Land

Registration), petitioner,
vs.
COURT OF APPEALS, Spouses CATALINO SANTOS and THELMA BARRERO SANTOS, ST.
JUDE'S ENTERPRISES, INC., Spouses DOMINGO CALAGUIAN and FELICIDAD CALAGUIAN,
VIRGINIA DELA FUENTE and LUCY MADAYA, respondents.

The general rule is that the State cannot be put in estoppel by the mistakes or errors of its officials or
agents.13However, like all general rules, this is also subject to exception, viz.:14

Estoppels against the public are little favored. They should not be invoked except in
a 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.

In Republic v. Sandiganbayan,15 the government, in its effort to recover ill-gotten wealth, tried to skirt
the application of estoppel against it by invoking a specific constitutional provision.16 The Court
countered: 17

We agree with the statement that the State is immune from estoppel, but this concept
is understood to refer to acts and mistakes of its officials especially those which are
irregular (Sharp International Marketing vs. Court of Appeals, 201 SCRA 299; 306
[1991]; Republic v. Aquino, 120 SCRA 186 [1983]), which peculiar circumstances are
absent in this case at bar. Although the State's right of action to recover ill-gotten
wealth is not vulnerable to estoppel[;] it is non sequitur to suggest that a contract,
freely and in good faith executed between the parties thereto is susceptible to
disturbance ad infinitum.A different interpretation will lead to the absurd scenario of
permitting a party to unilaterally jettison a compromise agreement which is supposed
to have the authority of res judicata (Article 2037, New Civil Code), and like any other
contract, has the force of law between parties thereto (Article 1159, New Civil Code;
Hernaez vs. Kao, 17 SCRA 296 [1996]; 6 Padilla, Civil Code Annotated, 7th ed.,
1987, p. 711; 3 Aquino, Civil Code, 1990 ed., p. 463). . . .

Heirs of Reyes v. Republic, 529 Phil. 510, 519-520 (2006).

As a rule, the State, as represented by the government, is not estopped by the mistakes or errors of
its officials or agents, especially true when the government's actions are sovereign in nature.

THE CITY OF DAVAO, REPRESENTED BY THE CITY TREASURER OF DAVAO

CITY, Petitioner,
vs.
THE INTESTATE ESTATE OF AMADO S. DALISAY, REPRESENTED BY SPECIAL
ADMINISTRATOR ATTY. NICASIO B. PADERNA, Respondent.

The general rule is that the State cannot be put in estoppel by the mistakes or errors of its officials or
agents.24Indeed, like all general rules, this is also subject to exceptions. Estoppel should not be
invoked except in a rare and unusual circumstance. It 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.2

GR No. 141241, November 22, 2005, per Corona, J. (citing Republic v. CA, 211 SCRA 657, July
20, 1992)

The time-honored rule that the government cannot be estopped by the mistakes or errors of its agent
is not without exceptions. In Republic of the Philippines v. G Holdings,20 this Court held thus:

"While the Republic or the government is usually not estopped by the mistake or error on the
part of its officials or agents, the Republic cannot now take refuge in the rule as it does not
afford a blanket or absolute immunity. Our pronouncement in Republic v. Court of Appeals is
instructive: the Solicitor-General may not be excused from its shortcomings by invoking the
doctrine as if it were some magic incantation that could benignly, if arbitrarily, condone and
erase its errors."

The rule on non-estoppel of the government is not designed to perpetrate an injustice. In general,
the rules on appeal are created and enforced to ensure the orderly administration of justice. The
judicial machinery would run aground if late petitions, like the present one, are allowed on the flimsy
excuse that the attending lawyer was grossly lacking in vigilance.