Republic v. Fetalvero, G.R. No.

198008, February 4, 2019

Facts: Fetalvero owned a 2,787-square meter parcel of land in Iligan City, Lanao del Norte. In 1999, the
DPWH, took 569 square meters from Fetalvero's property to be used in its flood control project. Fetalvero
stated that the project's construction on that portion of land rendered the remaining part useless, so he
demanded payment for the entire area at P15,000.00 per square meter. However, under Presidential
Administrative Order No. 50, the just compensation Fetalvero was entitled to was only P2,500.00 per
square meter, or a total of P1,422,500.00, plus 10% thereof. Despite negotiations, the parties failed to
agree on the amount of just compensation.

Republic of the Philippines (Republic), through the Office of the Solicitor General, filed before the RTC a
Complaint for expropriation against Fetalvero.

Office of the Solicitor General filed before the trial court a Notice of Appearance. It entered its appearance
as counsel for the Republic and informed the trial court that it authorized Atty. Lorea to appear on its
behalf. It emphasized that since it "retain[ed] supervision and control of the representation in [the] case
and [had] to approve withdrawal of the case, non-appeal[,] or other actions which appear to compromise
the interest of the Gove1nment, only notices of orders, resolutions, and decisions served on him will bind
the [Republic]."

Trial court issued an Order and referred the case to the Philippine Mediation Center for mediation. Parties
entered into a Compromise Agreement and the trial court issued an Order approving the Compromise
Agreement. On November 6, 2008, the Republic received a copy of the Order.

In a letter DPWH requested advice from the Office of the Solicitor General regarding the Compromise
Agreement's legality.

Office of the Solicitor General replied that the government cannot be bound by the Compromise
Agreement since it was not submitted to its office for review, which is a condition under the deputation
letter and the Notice of Appearance. Thus, it was improper for the DPWH to directly submit the
Compromise Agreement to the trial court for judgment.

Issue: Whether or not the Compromise Agreement is void for not having being submitted to the Office of
the Solicitor General for review;

Held: No. On petitioner's claim, this Court takes this opportunity to reiterate our ruling in Republic of the
Philippines v. Viaje, et al., which clarified the role of a deputized counsel in relation to the Office of the
Solicitor General:

The power of the OSG to deputize legal officers of government departments, bureaus, agencies and offices
to assist it in representing the government is well settled. The Administrative Code of 1987 explicitly states
that the OSG shall have the power to "deputize legal officers of government departments, bureaus,
agencies and offices to assist the Solicitor General and appear or represent the Government in cases
involving their respective offices, brought before the courts and exercise supervision and control over
such legal officers with respect to such cases." But it is likewise settled that the OSG's deputized counsel
is "no more than the 'surrogate' of the Solicitor General in any particular proceeding" and the latter
remains the principal counsel entitled to be furnished copies of all court orders, notices, and decisions. . .
. The appearance of the deputized counsel did not divest the OSG of control over the case and did not
make the deputized special attorney the counsel of record.

Here, the Office of the Solicitor General, as the principal counsel, is shown in both the deputation letter
addressed to Atty. Lorea and the Notice of Appearance filed before the trial court.

When Atty. Lorea entered into mediation, he only did so on behalf of the principal counsel, the Solicitor
General. Mediation necessarily involves bargaining of the parties' interests, and a compromise agreement
is one (1) of its consequences. Under the reservation in the Notice of Appearance, Atty. Lorea must submit
the resulting Compromise Agreement to then Solicitor General Agnes VST Devanadera for review and
approval, especially since the amount respondent claims is significantly larger than what he was allegedly
only entitled to get. Without the Solicitor General's positive action on the Compromise Agreement, it
cannot be given any effect and cannot bind the Solicitor General's client, the government.

Nonetheless, despite the lack of the Solicitor General's approval, this Court holds that the government is
still bound by the Compromise Agreement due to laches.

The Solicitor General is assumed to have known of the Compromise Agreement since, as principal counsel,
she was furnished a copy of the trial court's June 27, 2008 Order, which referred the case to mediation.
Even if she did not know that Atty. Lorea signed a Compromise Agreement, she was later informed of it
through the copy of the trial court's October 17, 2008 Order, which approved the Compromise
Agreement. The Solicitor General received the October 17, 2008 Order on November 6, 2008; yet, she
filed no appeal or motion to contest the Order or the Compromise Agreement's validity.

Thus, based on the deputation letter, which stated that "only notices of orders, resolutions, and decisions
served on [the Office of the Solicitor General] will bind the [g]overnment, the entity, agency[,] and/or
official represented[,]" and the Notice of Appearance, which stated that "only notices of orders,
resolutions, and decisions served on [the Office of the Solicitor General] will bind the party represented[,]"
the Solicitor General's receipt of the October 17, 2008 Order bound petitioner to the trial court's
judgment.

The underlying justification for compelling service of pleadings, orders, notices and decisions on the OSG
as principal counsel is one and the same. As the lawyer for the government or the government corporation
involved, the OSG is entitled to the service of said pleadings and decisions, whether the case is before the
courts or before a quasi-judicial agency such as respondent commission. Needless to say, a uniform rule
for all cases handled by the OSG simplifies procedure, prevents confusion and thus facilitates the orderly
administration of justice.

The Solicitor General could have contested the June 27, 2008 and October 17, 2008 Orders, but she did
not. There was no explanation of her inaction in any of the pleadings. By the time petitioner filed a Petition
for Certiorari, estoppel by laches has already set in.