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152

SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
*

G.R. No. 133250. July 9, 2002.

FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC
ESTATES AUTHORITY and AMARI COASTAL BAY
DEVELOPMENT CORPORATION, respondents.
Actions: Moot and Academic Issues: The signing of the Amended
Joint Venture Agreement (JVA) by the Public Estates Authority
(PEA) and Amari Coastal Bay and Development Corporation
(AMARI) cannot operate to moot the petition and divest the Court of
its jurisdiction, as the prayer to enjoin the signing of the Amended
JVA on constitutional grounds necessarily includes preventing its
implementation if in the meantime PEA and AMARI have signed
one in violation of the Constitution. Even in cases where supervening
events had made the cases moot, the Court did not hesitate to resolve
the legal or constitutional issues raised to formulate controlling
principles to guide the bench, bar, and the public.·We rule that the
signing of the Amended JVA by PEA and AMARI and its approval
by the President cannot operate to moot the petition and divest the
Court of its jurisdiction. PEA and AMARI have still to implement
the Amended JVA. The prayer to enjoin the signing of the Amended
JVA on constitutional grounds necessarily includes preventing its
implementation if in the meantime PEA and AMARI have signed
one in violation of the Constitution. PetitionerÊs principal basis in
assailing the renegotiation of the JVA is its violation of Section 3,
Article XII of the Constitution, which prohibits the government
from alienating lands of the public domain to private corporations.
If the Amended JVA indeed violates the Constitution, it is

_______________
*

EN BANC.

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VOL. 384, JULY 9, 2002

153

Chavez vs. Public Estates Authority
the duty of the Court to enjoin its implementation, and if already
implemented, to annul the effects of such unconstitutional contract.
The Amended JVA is not an ordinary commercial contract but one
which seeks to transfer title and ownership to 367.5 hectares of
reclaimed lands and submerged areas of Manila Bay to a single
private corporation. It now becomes more compelling for the Court
to resolve the issue to insure the government itself does not violate
a provision of the Constitution intended to safeguard the national
patrimony. Supervening events, whether intended or accidental,
cannot prevent the Court from rendering a decision if there is a
grave violation of the Constitution. In the instant case, if the
Amended JVA runs counter to the Constitution, the Court can still
prevent the transfer of title and ownership of alienable lands of the
public domain in the name of AMARI. Even in cases where
supervening events had made the cases moot, the Court did not
hesitate to resolve the legal or constitutional issues raised to
formulate controlling principles to guide the bench, bar, and the
public.
Same: Same; The instant petition is a case of first impression
since all previous decisions of the Court involving Section 3, Article
XII of the 1987 Constitution, or its counterpart provision in the 1973
Constitution, covered agricultural lands sold to private corporations
which acquired the lands from private parties, while in the instant
case, a private corporation seeks to acquire from a public
corporation, reclaimed lands and submerged areas for nonagricultural purposes by purchase under PD No. 1084 (charter of
PEA) and Title II of CA No. 141.·The instant petition is a case of
first impression. All previous decisions of the Court involving
Section 3, Article XII of the 1987 Constitution, or its counterpart
provision in the 1973 Constitution, covered agricultural lands sold
to private corporations which acquired the lands from private
parties. The transferors of the private corporations claimed or could
claim the right to judicial confirmation of their imperfect titles
under Title II of Commonwealth Act. 141 („CA No. 141‰ for brevity).
In the instant case, AMARI seeks to acquire from PEA, a public
corporation, reclaimed lands and submerged areas for
nonagricultural purposes by purchase under PD No. 1084 (charter
of PEA) and Title II of CA No. 141. Certain undertakings by AMARI
under the Amended JVA constitute the consideration for the
purchase. Neither AMARI nor PEA can claim judicial confirmation

of their titles because the lands covered by the Amended JVA are
newly reclaimed or still to be reclaimed. Judicial confirmation of
imperfect title requires open, continuous, exclusive and notorious
occupation of agricultural lands of the public domain for at least
thirty years since June 12, 1945 or earlier. Besides, the deadline for
filing applications for judicial confirmation of imperfect title expired
on December 31, 1987.
154

154

SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority

Same: Hierarchy of Courts; The principle of hierarchy of courts
applies generally to cases involving factual questions, not to those
raising constitutional issues of transcendental importance to the
public.·PEA and AMARI claim petitioner ignored the judicial
hierarchy by seeking relief directly from the Court. The principle of
hierarchy of courts applies generally to cases involving factual
questions. As it is not a trier of facts, the Court cannot entertain
cases involving factual issues. The instant case, however, raises
constitutional issues of transcendental importance to the public.
The Court can resolve this case without determining any factual
issue related to the case. Also, the instant case is a petition for
mandamus which falls under the original jurisdiction of the Court
under Section 5, Article VIII of the Constitution. We resolve to
exercise primary jurisdiction over the instant case.
Same;
Same;
Administrative
Law;
Exhaustion
of
Administrative Remedies; Right to Information; Considering that
PEA had an affirmative statutory duty to disclose to the public the
terms and conditions of the sale of its lands, and was even in breach
of this legal duty, petitioner had the right to seek direct judicial
intervention.·The original JVA sought to dispose to AMARI public
lands held by PEA, a government corporation. Under Section 79 of
the Government Auditing Code, the disposition of government lands
to private parties requires public bidding. PEA was under a positive
legal duty to disclose to the public the terms and conditions for the
sale of its lands. The law obligated PEA to make this public
disclosure even without demand from petitioner or from anyone.
PEA failed to make this public disclosure because the original JVA,
like the Amended JVA, was the result of a negotiated contract, not
of a public bidding. Considering that PEA had an affirmative
statutory duty to make the public disclosure,‰ and was even in
breach of this legal duty, petitioner had the right to seek direct

the petition raises matters of transcendental importance to the public. Same. Where a petition for mandamus involves the enforcement of constitutional rights·to information and to the equitable diffusion of natural resources· matters of transcendental public importance. JULY 9. involves the enforcement of constitutional rights·to information and to the equitable diffusion . thus·* * * We rule that since the instant petition.·Moreover. We rule that the principle of exhaustion of administrative remedies does not apply in the instant case. The thrust of the first issue is to compel PEA to disclose publicly information on the sale of government lands worth billions of pesos. and this alone is determinative of this issue. Parties.·The petitioner has standing to bring this taxpayerÊs suit because the petition seeks to compel PEA to comply with its constitutional duties. Same. the principle of exhaustion of administrative remedies does not apply when the issue. a citizen has the requisite locus standi. Moreover. the Court upheld the right of a citizen to bring a taxpayerÊs suit on matters of transcendental importance to the public. The principal issue in the instant case is the capacity of AMARI to acquire lands held by PEA in view of the constitutional ban prohibiting the alienation of lands of the public domain to private corporations. information which the Constitution and statutory law mandate PEA to disclose. Public Estates Authority Same. The thrust of the second issue is to prevent PEA from alienating hundreds of hectares of alienable lands of the public domain in violation of the Constitution.judicial intervention. Second is the application of a constitutional provision intended to insure the equitable distribution of alienable lands of the public domain among Filipino citizens. Same. involved is a purely legal or constitutional question. 2002 155 Chavez vs. brought by a citizen. The principle of exhaustion of administrative remedies does not apply when the issue involved is a purely legal or constitutional question. compelling PEA to comply with a constitutional duty to the nation. First is the right of citizens to information on matters of public concern. In Chavez v. PCGG. Same. TaxpayerÊs Suits: A citizen has standing to bring this taxpayerÊs suit because the petition seeks to compel PEA to comply with its constitutional duties. There are two constitutional issues involved here. Same. 155 VOL. 384.

the publicÊs right to information attaches. will be speculative and amount to nothing. and information the constitutional right to information requires PEA to release to the . the petitioner has the requisite locus standi. transactions and decisions to citizens. These twin provisions are essential to the exercise of freedom of expression. While information on. there arises a „definite proposition‰ on the part of the government. If the government does not disclose its official acts. Right to Information. An informed citizenry is essential to the existence and proper functioning of any democracy. they cannot hold public officials accountable for anything. Same. and from this moment. whatever citizens say.of natural resources·matters of transcendental public importance.‰ for unless citizens have the proper information. Bids and Bidding. Public Estates Authority An informed citizenry is essential to the existence and proper functioning of any democracy. and any citizen can access all the nonproprietary information leading to such definite proposition.·We must first distinguish between information the law on public bidding requires PEA to disclose publicly. as well as provide the people sufficient information to exercise effectively other constitutional rights. These twin provisions are also essential to hold public officials „at all times x x x accountable to the people. even if expressed without any restraint. once the committee makes its official recommendation. 156 156 SUPREME COURT REPORTS ANNOTATED Chavez vs.·These twin provisions of the Constitution seek to promote transparency in policymaking and in the operations of the government. citizens can participate in public discussions leading to the formulation of government policies and their effective implementation. as well as provide the people sufficient information to exercise effectively other constitutional rights. on-going evaluation or review of bids or proposal being undertaken by the bidding or review committee is not immediately accessible under the right to information. Armed with the right information. The twin provisions of the Constitution· right to information on matters of public concern and policy of full transparency·seek to promote transparency in policy-making and in the operations of the government.

However. PEA must prepare all these data and disclose them to the public at the start of the disposition process. however. it may be too late for the public to expose its defects. which may be grossly disadvantageous . PEA must. Requiring a consummated contract will keep the public in the dark until the contract. the people can never exercise the right if no contract is consummated. once the committee makes its official recommendation. transactions. becomes a fait accompli. Same. the minimum price and similar information.·Contrary to AMARIÊs contention. 384. which may be grossly disadvantageous to the government or even illegal. and any citizen can access all the nonproprietary information leading to such definite proposition. on its own and without demand from anyone. technical description and nature of the property being disposed of the terms and conditions of the disposition. Otherwise. the parties qualified to bid. any citizen can demand from PEA this information at any time during the bidding process. location. If PEA fails to make this disclosure. there are no „official acts. These include the size. The commissioners of the 1986 Constitutional Commission understood that the right to information contemplates inclusion of negotiations leading to the consummation of the transaction·requiring a consummated contract will keep the public in the dark until the contract. there arises a „definite proposition‰ on the part of the government. or decisions‰ on the bids or proposals. JULY 9. While the evaluation or review is still ongoing. the commissioners of the 1986 Constitutional Commission understood that the right to information „contemplates inclusion of negotiations leading to the consummation of the transaction.public. From this moment. the publicÊs right to information attaches. disclose to the public matters relating to the disposition of its property. 2002 157 Chavez vs. a consummated contract is not a requirement for the exercise of the right to information. on on-going evaluation or review of bids or proposals being undertaken by the bidding or review committee is not immediately accessible under the right to information. because the Government Auditing Code requires public bidding. Information. Public Estates Authority one is consummated. long before the consummation of the contract. and if 157 VOL. Before the consummation of the contract.‰ Certainly.

We can allow neither an emasculation of a constitutional right. The second category refers to documents and papers recording. Such a requirement will prevent the citizenry from participating in the public discussion of any proposed contract. all relating to the JVA. legal and expert opinions. documents and papers. The right only affords access to records. owned by the government and used in formulating government policies. becomes a fait accompli. terms of reference and other documents attached to such reports or minutes. (1) official records. One who exercises the right must copy the records. 158 . legal and expert opinions. evidencing. which means the opportunity to inspect and copy them. minutes of meetings. the right to information does not compel PEA to prepare lists. effectively truncating a basic right enshrined in the Bill of Rights. and (3) government research data used in formulating policies. whether raw.to the government or even illegal. The information that a citizen may access on the renegotiation of the JVA includes evaluation reports. (2) documents and papers pertaining to official acts. (2) documents and papers pertaining to official acts.‰ namely. summaries and the like relating to the renegotiation of the JVA. justifying or explaining official acts. confirming.·The right covers three categories of information which are „matters of public concern. establishing. documents and papers at his expense. The exercise of the right is also subject to reasonable regulations to protect the integrity of the public records and to minimize disruption to government operations. transactions and decisions. The first category refers to any document that is part of the public records in the custody of government agencies or officials. and (3) government research data used in formulating policies. supporting. This negates the State policy of full transparency on matters of public concern. like rules specifying when and how to conduct the inspection and copying. recommendations. minutes of meetings.·The information that petitioner may access on the renegotiation of the JVA includes evaluation reports. all relating to the JVA. The third category refers to research data. collated or processed.‰ namely: (1) official records. transactions or decisions of government agencies or officials. abstracts. recommendations. However. The right to information covers three categories of information which are „matters of public concern. a situation which the framers of the Constitution could not have intended. nor a retreat by the State of its avowed „policy of full disclosure of all its transactions involving public interest.‰ Same. Same. terms of reference and other documents attached to such reports or minutes. transactions and decisions.

and information on investigations of crimes by law enforcement agencies before the prosecution of the accused. Same. territories and possessions‰ in the Philippines passed to the Spanish Crown. The King. Same. The right to information.·The right to information. Reclamation Projects. National Economy and Patrimony. The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian doctrine which holds that the State owns all lands and waters of the public domain. however. which information. which courts have long recognized as confidential. does not extend to matters recognized as privileged information under the separation of powers. as the sovereign ruler and representative of the people. Same.158 SUPREME COURT REPORTS ANNOTATED Chavez vs. The right does not also apply to information on military and diplomatic secrets. Words and Phrases. military and diplomatic secrets and similar matters affecting national security and public order. The right may also be subject to other limitations that Congress may impose by law. must constitute definite propositions by the government and should not cover recognized exceptions like privileged information. military and diplomatic secrets and similar matters affecting national security and public order. Foreshore and Submerged Areas. however. does not extend to matters recognized as privileged information under the separation of powers. The information. Public Estates Authority Same. information affecting national security. that the constitutional right to information includes official information on on-going negotiations before a final contract. government reclaimed and marshy disposable lands of the public domain continued to be only leased and not sold to private .·We rule. Same. must constitute definite propositions by the government and should not cover recognized exceptions like privileged information. acquired and owned all lands and territories in the Philippines except those he disposed of by grant or sale to private individuals. however.·The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian doctrine which holds that the State owns all lands and waters of the public domain. therefore. The constitutional right to information includes official information on on-going negotiations before a final contract. Regalian Doctrine. After the effectivity of the 1935 Constitution. Congress has also prescribed other limitations on the right to information in several legislations. Upon the Spanish conquest of the Philippines. Same. ownership of all „lands. however.

141 after the 1935 Consti159 VOL. JULY 9.·Since then and until now. as the only alienable or disposable lands of the public domain the government could not sell to private parties.parties. became a constitutional edict under the 1935 Constitution. 384. After the effectivity of the 1935 Constitution. Lands classified under Section 59 (d) are the only alienable or disposable lands for non-agricultural purposes that the government could sell to private parties. 141 exempted government . first implemented in 1907 was thus reaffirmed in CA No. 2002 159 Chavez vs. the only way the government can sell to private parties government reclaimed and marshy disposable lands of the public domain is for the legislature to pass a law authorizing such sale. as the only alienable or disposable lands of the public domain the government could not sell to private parties. These lands remained sui generis. Until now. Same. Same. Foreshore lands became inalienable as natural resources of the State. The prohibition on the sale of foreshore lands. 141 previously transferred to government units or entities could be sold to private parties is that Section 60 of CA No. in which case they would fall under the classification of government reclaimed lands. the only way the government can sell to private parties government reclaimed and marshy disposable lands of the public domain is for the legislature to pass a law authorizing such sale.·One reason for the congressional authority is that Section 60 of CA No. One reason for the congressional authority before lands under Section 59 of CA No. unless reclaimed by the government and classified as agricultural lands of the public domain.·The State policy prohibiting the sale to private parties of government reclaimed. Same. 141 exempted government units and entities from the maximum area of public lands that could be acquired from the State. Same. 141 does not authorize the President to reclassify government reclaimed and marshy lands into other non-agricultural lands under Section 59 (d). Same. however. CA No. Same. These lands remained sui generis. Same. government reclaimed and marshy disposable lands of the public domain continued to be only leased and not sold to private parties. foreshore and marshy alienable lands of the public domain. Same. Public Estates Authority tution took effect.

except when authorized by Congress. there must be legislative authority empowering PEA to sell these lands. there must be legislative authority empowering PEA to sell these lands. encumbered or otherwise disposed of in a manner affecting its title. though any legis160 160 SUPREME COURT REPORTS ANNOTATED Chavez vs.‰ (Emphasis supplied) Without such legislative authority. x x x. x x x. but the land so granted. or branch or subdivision of the Government shall not be alienated. such transfers could also be used to evade the statutory prohibition in CA No. 141. municipality. which states·„Sec. These government units and entities should not just turn around and sell these lands to private parties in violation of constitutional or statutory limitations. Same. Section 60 of CA No.units and entities from the maximum area of public lands that could be acquired from the State. . donated or transferred to a province. Same. 141 constitutes by operation of law a lien on these lands. Hence. 141 on the sale of government reclaimed and marshy lands of the public domain to private parties. any legislative authority granted to PEA to sell its reclaimed alienable lands of the public domain would be subject to the constitutional ban on private corporations from acquiring alienable lands of the public domain. 60. such legislative authority could only benefit private individuals. Same. In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public domain. This legislative authority is necessary in view of Section 60 of CA No. Otherwise. Same. Nevertheless. the transfer of lands for non-agricultural purposes to government units and entities could be used to circumvent constitutional limitations on ownership of alienable or disposable lands of the public domain.·In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public domain. such legislative authority could only benefit private individuals. PEA could not sell but only lease its reclaimed foreshore and submerged alienable lands of the public domain. In the same manner. Public Estates Authority lative authority granted to PEA to sell its reclaimed alienable lands of the public domain would be subject to the constitutional ban on private corporations from acquiring alienable lands of the public domain.

since the vehicle to circumvent the constitutional intent is removed. Without the constitutional ban. Same. The corporation is a convenient vehicle to circumvent the constitutional limitation on acquisition by individuals of alienable lands of the public domain. 2002 161 Chavez vs. under the 1973 and 1987 Constitutions. JULY 9.·The rationale behind the constitutional ban on corporations from acquiring. The mere reclamation of certain areas by PEA does not convert these inalienable natural resources of . Same. except through lease. individuals who already acquired the maximum area of alienable lands of the public domain could easily set up corporations to acquire more alienable public lands. This. The most effective way to insure faithful adherence to this constitutional intent is to grant or sell alienable lands of the public domain only to individuals. The constitutional intent. under the 1973 and 1987 Constitutions. Same. * * * In actual practice. In actual practice. is to transfer ownership of only a limited area of alienable land of the public domain to a qualified individual. the constitutional ban strengthens the constitutional limitation on individuals from acquiring more than the allowed area of alienable lands of the public domain. The available 161 VOL. An individual could even hide his ownership of a corporation by putting his nominees as stockholders of the corporation. 384. This constitutional intent is safeguarded by the provision prohibiting corporations from acquiring alienable lands of the public domain. Same. alienable lands of the public domain is not well understood. except through lease. is the practical benefit arising from the constitutional ban. Same. alienable lands of the public domain is not well understood. An individual could own as many corporations as his means would allow him. is to transfer ownership of only a limited area of alienable land of the public domain to a qualified individual. Same. Public Estates Authority alienable public lands are gradually decreasing in the face of an ever-growing population.Same. The constitutional intent. the constitutional ban strengthens the constitutional limitation on individuals from acquiring more than the allowed area of alienable lands of the public domain. Same. it would seem. The rationale behind the constitutional ban on corporations from acquiring.

coupled with President AquinoÊs actual issuance of a special patent covering the Freedom Islands. Same. On January 19. Subsequently. is equivalent to an official proclamation classifying the Freedom Islands as alienable or disposable lands of the public domain. Same. PD No. 1085. 1988 then President Corazon C. 1529 authorizing the issuance of certificates of title corresponding to land patents. waters x x x and other natural resources‰ and consequently „owned by the State. 1085. 3517 in the name of PEA for the 157.‰ As such. issued on February 4. these certificates of title are still in the name of PEA. Aquino issued Special Patent No. The mere reclamation of these areas by PEA does not convert these inalienable natural resources of the State into alienable or disposable lands of the public domain. the foreshore and submerged areas of Manila Bay are part of the „lands of the public domain. Article XII of the 1987 Constitution. authorized the issuance of special land patents for lands reclaimed by PEA from the foreshore or submerged areas of Manila Bay.the State into alienable or disposable lands of the public domain· there must be a law or presidential proclamation officially classifying these reclaimed lands as alienable or disposable and open to disposition or concession.·Under Section 2. To this day. is equivalent to an official proclamation classifying the Freedom Islands as alienable or disposable lands of the public domain.·PD No.‰ unless they are classified as „agricultural lands‰ of the public domain. 1085. Same. 7311 and 7312 in the name of PEA pursuant to Section 103 of PD No. There must be a law or presidential proclamation officially classifying these reclaimed lands as alienable or disposable and open to disposition or concession. 1999 the Register of Deeds of the Municipality of Paranaque issued TCT Nos. coupled with President AquinoÊs actual issuance of a special patent covering the Freedom Islands. Moreover. The Freedom Islands are thus alienable or 162 162 SUPREME COURT REPORTS ANNOTATED . PD No. PD No. Same.84 hectares comprising the partially reclaimed Freedom Islands. on April 9. 7309. 1085 and President AquinoÊs issuance of a land patent also constitute a declaration that the Freedom Islands are no longer needed for public service. foreshore and submerged areas „shall not be alienated. these reclaimed lands cannot be classified as alienable or disposable if the law has reserved them for some public or quasi-public use. open to disposition or concession to qualified parties. 1977.

a private person reclaiming from the sea without permission from the State could not acquire ownership of the reclaimed land which would remain property of public dominion like the sea it replaced. CA No. 141 requires that lands of the public domain must first be classified as alienable or disposable before the government can alienate them. Same. Same. Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on the disposition of public lands. belonged to the State. a private person reclaiming from the sea without permission from the State could not acquire ownership of the reclaimed land which would remain property of public dominion like the sea it replaced. and in their present state are inalienable . Thus. Same. Same. open to disposition or concession to qualified parties. Same. Article 5 of the Spanish Law of Waters of 1866 adopted the time-honored principle of land ownership that „all lands that were not acquired from the government. These lands must not be reserved for public or quasi-public purposes. Same. Same.·Under Article 5 of the Spanish Law of Waters of 1866. like the sea from which it emerged. Moreover. Public Estates Authority disposable lands of the public domain. belong to the public domain. either by purchase or by grant. Under the Spanish Law of Waters. There is no legislative or Presidential act classifying the additional 592.·Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on the disposition of public lands.15 hectares submerged areas under the Amended JVA as alienable or disposable lands of the public domain open to disposition·these areas form part of the public domain.Chavez vs. Same. Same. Same. This contract could not have converted the Freedom Islands into private lands of a private corporation. Private parties could own the reclaimed land only if not „otherwise provided by the terms of the grant of authority. Same. Spanish Law of Waters of 1866. Same. It also meant that the State could grant or withhold ownership of the reclaimed land because any reclaimed land. private parties could reclaim from the sea only with „proper permission‰ from the State.‰ Same.‰ This clearly meant that no one could reclaim from sea without permission from the State because the sea is property of public dominion. In particular. the contract between CDCP and the government was executed after the effectivity of the 1973 Constitution which barred private corporations from acquiring any kind of alienable land of the public domain.

under the Constitution.‰ The same section also states that „[A]ll reclamation projects shall be approved by the President upon recommendation of the PEA. Only then can these reclaimed lands be considered alienable or disposable lands of the public domain and within the commerce of man. 1084. and coordinating all reclamation projects for and on behalf of the National Government. but also an additional 592. EO No. and shall be undertaken by the PEA or through a proper contract executed by it with any person or entity. Same. Once reclaimed and transformed into public agricultural lands. 1084. There is no legislative or Presidential act classifying these submerged areas as alienable or disposable lands of the public domain open to disposi163 VOL. 3-A and PD No. PEA became the primary implementing agency of the National Government to reclaim foreshore and submerged lands of the public domain. Only when actually reclaimed from the sea can these submerged areas be classified as public agricultural lands. 384. in relation to PD No.15 hectares which are still submerged and forming part of Manila Bay. JULY 9. under EO No. There can be no dispute that these submerged areas form part of the public domain.and outside the commerce of man. Under EO No. directing. PEA became the primary implementing agency of the National Government to reclaim foreshore and submerged lands of the public domain. which under the Constitution are the only natural resources that the State may alienate.‰ forming part of the public domain and consequently inalienable.· Section 1 of Executive Order No. 525 provides that PEA „shall be primarily responsible for integrating. 2002 163 Chavez vs. Public Estates Authority. These submerged areas are not covered by any patent or certificate of title. 525. Same: Same.‰ Thus. in relation to PD No. these submerged areas are. and in their present state are inalienable and outside the commerce of man. 3-A and PD No. Thereafter. the government may then officially classify these lands as alienable or disposable lands open to disposition. 525 recognized PEA as the government entity „to undertake the . the government may declare these lands no longer needed for public service. Same. Public Estates Authority tion. „waters x x x owned by the State. Until reclaimed from the sea. 525. x x x.·The Amended JVA covers not only the Freedom Islands.

Same. reclaimed foreshore and submerged lands of the public domain would automatically 164 164 SUPREME COURT REPORTS ANNOTATED Chavez vs. like foreshore or submerged areas of Manila Bay. DENR also exercises exclusive . Same.‰ Thus. As manager.· As manager. Same. by declaring that all lands reclaimed by PEA „shall belong to or be owned by PEA could not automatically operate to classify inalienable lands into alienable or disposable lands of the public domain. Same. Same. conservator and overseer of the natural resources of the State.‰ Since large portions of these reclaimed lands would obviously be needed for public service. DENR decides whether areas under water. Department of Environment and Natural Resources. DENR exercises „supervision and control over alienable and disposable public lands. DENR is vested with the power to authorize the reclamation of areas under water.‰ DENR also exercises „exclusive jurisdiction on the management and disposition of all lands of the public domain.‰ PEA needs authorization from DENR before PEA can undertake reclamation in Manila Bay. whether or not classified as alienable or disposable. while PEA is vested with the power to undertake the physical reclamation of areas under water. 525. Otherwise. by declaring that all lands reclaimed by PEA „shall belong to or be owned by the PEA could not automatically operate to classify inalienable lands into alienable or disposable lands of the public domain. 525. should be reclaimed or not. Same. or in any part of the country. Section 3 of EO No. This means that PEA needs authorization from DENR before PEA can undertake reclamation projects in Manila Bay. there must be a formal declaration segregating reclaimed lands no longer needed for public service from those still needed for public service. DENR exercises „supervision and control over alienable and disposable public lands. Same. whether directly or through private contractors. Same. Same. or in any part of the country.reclamation of lands and ensure their maximum utilization in promoting public welfare and interests. Public Estates Authority become alienable once reclaimed by PEA.·Section 3 of EO No. conservator and overseer of the natural resources of the State. Same.

Same. Same. much less patrimonial lands of PEA. DENR is also empowered to classify lands of the public domain into alienable or disposable lands subject to the approval of the President. In short. 3517 in compliance with the Revised Administrative Code and Sections 6 and 7 of CA No. Same. Public Estates Authority public domain to PEA does not make the lands alienable or disposable lands of the public domain. the mere transfer by the National Government of lands of the 165 VOL. Same. Only such an official classification and formal declaration can convert reclaimed lands into alienable or disposable lands of the public domain. 141 and other applicable laws. it then recommends to the President the issuance of a proclamation classifying the lands as alienable or disposable lands of the public domain open to disposition.jurisdiction over the disposition of all lands of the public domain. open to disposition under the Constitution. Hence. DENR is vested with the power to authorize the reclamation of areas under water. 2002 165 Chavez vs. PEA is tasked to develop. much less patrimonial lands of PEA. lands reclaimed by PEA remain inalienable lands of the public domain. whether directly or through private contractors. while PEA is vested with the power to undertake the physical reclamation of areas under water. Once DENR decides that the reclaimed lands should be so classified. On the other hand. We note that then DENR Secretary Fulgencio S. DENR decides whether reclaimed lands of PEA should be classified as alienable under Sections 6 and 7 of CA No. countersigned Special Patent No. Absent two official acts ·a classification that these lands are alienable or disposable and open to disposition and a declaration that these lands are not needed for public service.·The mere physical act of reclamation by PEA of foreshore or submerged areas does not make the reclaimed lands alienable or disposable lands of the public domain. Same. JULY 9. sell or lease the reclaimed alienable lands of the public domain. Likewise. 384. . Title I and Title III of CA No. Factoran. lands reclaimed by PEA remain inalienable lands of the public domain. Jr. 141. Absent two official acts·a classification that these lands are alienable or disposable and open to disposition and a declaration that these lands are not needed for public service. Same. 141.

While PEA may sell its alienable or disposable lands of the public domain to private individuals.· PEAÊs charter. 1085 would violate both the 1973 and 1987 Constitutions. Private corporations remain barred from acquiring any kind of alienable land of the public domain. dispose lease and sell any and all kinds of lands x x x owned. administer. Otherwise. The legislative authority benefits only individuals. Same.Same. Same. Same. with the legislative authority. deal in. 1085 stating that portions of the reclaimed lands could be transferred by PEA to the „contractor or his assignees‰ would not apply to private corporations but only to individuals because of the constitutional ban. Article XII of the 1987 Constitution expressly prohibits such sales. Same. PEA may also sell its alienable or disposable lands of the public domain to private individuals since. PEA may sell to private parties its patrimonial properties in accordance with the PEA charter free from constitutional limitations. therefore. Same. the provisions of PD No. subdivide. controlled and/or operated by the government. Same. acquire.‰ (Emphasis supplied) There is. managed. legislative authority granted to PEA to sell its lands. Same. there is no longer any statutory prohibition against such sales and the constitutional ban does not apply to individuals. however. Same.·The provision in PD No. cannot sell any of its alienable or disposable lands of the public domain to private corporations since Section 3. The constitutional ban on private corporations from acquiring alienable lands of the public domain does not apply to the sale of PEAÊs patrimonial lands. however. 166 166 SUPREME COURT REPORTS ANNOTATED Chavez vs. improve. 1085 stating that portions of the reclaimed lands could be transferred by PEA to the „contractor or his assignees‰ (Emphasis supplied) would not apply to private corporations but only to individuals because of the constitutional ban. The provision in PD No. Public Estates Authority . whether patrimonial or alienable lands of the public domain. PEA. it cannot sell any of its alienable or disposable lands of the public domain to private corporations. expressly tasks PEA „to develop. including government reclaimed lands. The constitutional ban on private corporations from acquiring alienable lands of the public domain does not apply to the sale of PEAÊs patrimonial lands. Same.

Same. Same. and further declared no longer needed for public service. 1991. involving only 407. Same. At the public auction sale. is not a valid justification for a subsequent negotiated sale of 750 hectares. 141. Same. which authorized PEA „to determine the kind and manner of payment for the transfer‰ of its assets and properties. enlarged the reclamation area to 750 hectares. 141 requiring public auction. Same. but merely authorizes PEA to decide the mode of payment. Same.·The original JVA dated April 25. Same. whether in kind or in installment. Private corporations are barred from bidding at the auction sale of any kind of alienable land of the public domain. a negotiated contract. 1995 covered not only the Freedom Islands and the additional 250 hectares still to be reclaimed. 141 apply to the disposition of reclaimed alienable lands of the public domain unless otherwise provided by law. PEA would have to conduct a public bidding in selling or leasing these lands. 654 merely authorizes PEA to decide the mode of payment. but does not authorize PEA to dispense with public auction. does not exempt PEA from the requirement of public auction. PEA must observe the provisions of Sections 63 and 67 of CA No. EO No. Besides.84 hectares. 654. 654. Same. Same. The failure of public bidding on December 10. Same. but does not authorize PEA to dispense with public auction. in the absence of a law exempting PEA from holding a public auction. Same.Same. Same. 1084. Same. whether in kind and in installment. almost double the area publicly auctioned. as amended.84 hectares. 3517 expressly states that the patent is issued by authority of the Constitution and PD No. 1991. it also granted an option to AMARI to reclaim another 350 hectares. the failure of public bidding happened on December 10. Same. .‰ This is an acknowledgment that the provisions of CA No. does not exempt PEA from the requirement of public auction. The failure of an earlier public bidding involving only 407. EO No. Same. Special Patent No. more than three years before the signing of the original JVA on April 25.·Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to disposition. Executive Order No. is not a valid justification for a negotiated sale of 750 hectares. almost double the area publicly auctioned. The original JVA. Same. „supplemented by Commonwealth Act No. only Philippine citizens are qualified to bid for PEAÊs reclaimed foreshore and submerged alienable lands of the public domain. which authorizes PEA „to determine the kind and manner of payment for the transfer‰ of its assets and properties.·At the public auction sale. only Philippine citizens are qualified to bid for PEAÊs reclaimed foreshore and submerged alienable lands of the public domain. Bids and Bidding.

Under either the BOT Law or the Local Government Code. Registration is not a mode of acquiring ownership but is merely evidence of ownership previously conferred by any of the recognized modes of acquiring ownership. 384. Same. Registration does not give the registrant a better right than what the registrant had prior to the registration. may be conveyed to him in ownership. can only be paid with lease-holds on portions of the reclaimed land. This is the only way these provisions of the BOT Law and the Local Government Code can avoid a direct collision with Section 3. Same. Same. 2002 167 Chavez vs. Same. Same.·Under either the BOT Law or the Local Government Code.1995. The 167 VOL. and if the contractor or developer is an individual. Public Estates Authority economic situation in the country had greatly improved during the intervening period. Same. cannot convert public lands into private lands. Jurisprudence holding that upon the grant of the patent or issuance of the certificate of title the alienable land of the public domain automatically becomes private land cannot apply to government units and entities like PEA. the contractor or developer. Registration is not a mode of acquiring ownership but is merely evidence of ownership previously conferred by any of the recognized modes of acquiring ownership. Same.·Registration of land under Act No. Same. Same. The registration of lands of the public domain under the Torrens system. portions of the reclaimed land.· Jurisprudence holding that upon the grant of the patent or issuance . 1529 does not vest in the registrant private or public ownership of the land. by itself. BOT Law (RA No. Same. Local Government Code. portions of the reclaimed land. If the contractor or developer is an individual. Land Registration. JULY 9. not exceeding 12 hectares of non-agricultural lands. 6957). Article XII of the 1987 Constitution. 496 or PD No. Same. if a corporate entity. not exceeding 12 hectares of nonagricultural lands. Same. Same. may be conveyed to him in ownership in view of the legislative authority allowing such conveyance. if a corporate entity. can only be paid with leaseholds on portions of the reclaimed land. the contractor or developer.

The transfer of the Freedom Islands to PEA was made subject to the provisions of CA No. before these lands can become private or patrimonial lands. 141. as amended.894) square meters. that by authority of the Constitution of the Philippines and in conformity with the provisions of Presidential Decree No. there are hereby granted and conveyed unto the Public Estates Authority the aforesaid tracts of land containing a total area of 168 168 SUPREME COURT REPORTS ANNOTATED Chavez vs. however.915.·Alienable lands of the public domain held by government entities under section 60 of CA No.‰ (Emphasis supplied) Same. cannot authorize the sale to private corporations of reclaimed alienable lands of the public domain because of the constitutional ban. Same. KNOW YE. Public Estates Authority one million nine hundred fifteen thousand eight hundred ninety four (1. 141 does not automatically convert alienable lands of the public domain into private or patrimonial lands. supplemented by Commonwealth Act No. Congress. or to government entities not tasked to dispose of public lands. Same. to wit: „NOW. The grant of legislative authority to sell public lands in accordance with Section 60 of CA No. 1084. or to government entities not tasked to dispose of public lands. Only individuals can benefit from such law. Otherwise. The alienable lands of the public domain must be transferred to qualified private parties. before these lands can become private or patrimonial lands. Same. 141 does not automatically convert alienable lands of the public domain into private or patrimonial lands·the alienable lands of the public domain must be transferred to qualified private parties. THEREFORE. 3517 issued by then President Aquino. 141 remain public lands because they cannot be alienated or encumbered unless Congress passes a law authorizing their disposition. the technical description of which are hereto attached and made an integral part hereof.of the certificate of title the alienable land of the public domain automatically becomes private land cannot apply to government units and entities like PEA. the constitutional ban will become illusory if Congress can declare lands of the public domain as private or patrimonial lands in the . 141 as expressly stated in Special Patent No. The grant of legislative authority to sell public lands in accordance with Section 60 of CA No.

The reclaimed lands being leased or sold by PEA are not private lands.·PEAÊs charter expressly states that PEA „shall hold lands of the public domain‰ as well as „any and all kinds of lands. Same. in the same manner that DENR. does not dispose of private lands but alienable lands of the public domain. Same. Only when qualified private parties acquire these lands will the lands become private lands. PEA . prior to such law. Thus. when it disposes of other alienable lands. not private lands. Same. with authority to sell reclaimed lands. JULY 9. Same. the mere fact that alienable lands of the public domain like the Freedom Islands are transferred to PEA and issued land patents or certificates of title in PEAÊs name does not automatically make such lands private. The mere fact that alienable lands of the public domain are transferred to PEA and issued land patents or certificates of title in PEAÊs name does not automatically make such lands private·to allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction a gross violation of the constitutional ban on private corporations from acquiring any kind of alienable land of the public domain. To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction a gross violation of the constitutional ban on private corporations from acquiring any kind of alienable land of the public domain. Same. In the hands of the government agency tasked and authorized to dispose of alienable of disposable lands of the public domain. As the central implementing agency tasked to undertake reclamation projects nationwide. This will allow private corporations to acquire directly from government agencies limitless areas of lands which.‰ PEA can hold both lands of the public domain and private lands. 169 VOL. with authority to sell reclaimed lands. Public Estates Authority. are concededly public lands. Public Estates Authority Same. these lands are still public. Same. Same. 384. PEA took the place of DENR as the government agency charged with leasing or selling reclaimed lands of the public domain.·As the central implementing agency tasked to undertake reclamation projects nationwide. PEA took the place of DENR as the government agency charged with leasing or selling reclaimed lands of the public domain. Same.hands of a government agency tasked to dispose of public lands. 2002 169 Chavez vs.

the fact remains that the Amended JVA requires PEA to „cause the issuance and delivery of the certificates of title conveying AMARIÊs Land Share in the name of AMARI. Article XII of the 1987 Constitution. Same. the Government Auditing Code. the Amended JVA „is not a sale but a joint venture with a stipulation for reimbursement of the original cost incurred by PEA for the earlier reclamation and construction works performed by the CDCP under its 1973 contract with the Republic. Public Estates Authority that private corporations „shall not hold such alienable lands of the public domain except by lease.will simply turn around. and Section 3.·AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom Islands or of the lands to be reclaimed from submerged areas of Manila Bay. Same. In the words of AMARI.‰ Whether the Amended JVA is a sale or a joint venture. . Article XII of the 1987 Constitution·the transfer of title and ownership to AMARI clearly means that AMARI will „hold‰ the reclaimed lands other than by lease. Same. the fact remains that the Amended JVA required PEA to „cause the issuance and delivery of the certificates of title conveying AMARIÊs Land Share in the name of AMARI. Same. a transaction considered a sale or alienation under CA No. a transaction considered a sale or alienation under CA No. Article XII of the 1987 Constitution.‰ a stipulation contravening Section 3. Article XII of the 1987 Constitution which was intended to diffuse equitably the ownership of alienable lands of the public domain among Filipinos. Whether the Amended JVA is a sale or a joint venture. and transfer several hundreds of hectares of these reclaimed and still to be reclaimed lands to a single private corporation in only one transaction. the Government Auditing Code. Article XII of the 1987 Constitution which provides 170 170 SUPREME COURT REPORTS ANNOTATED Chavez vs. and the transfer of title and ownership is a „disposition‰ of the reclaimed lands. now numbering over 80 million strong. Same. and Section 3. 141.‰ The transfer of title and ownership to AMARI clearly means that AMARI will „hold‰ the reclaimed lands other than by lease.‰ This stipulation still contravenes Section 3. The transfer of title and ownership is a „disposition‰ of the reclaimed lands. as PEA has now done under the Amended JVA. This scheme will effectively nullify the constitutional ban in Section 3. 141.

not available for sale to private parties unlike other alienable public lands·reclaimed lands retain their inherent potential as areas for public use or public service. Reclaimed lands retain their inherent potential as areas for public use or public service. not available for sale to private parties unlike other alienable public lands. SPECIAL CIVIL ACTION in the Supreme Court. & Chua Law Offices for Amari Coastal Bay. do so at their own risk. JULY 9. or seek to circumvent the constitutional ban on alienation of lands of the public domain to private corporations. lands reclaimed by the government are sui generis. Historically. Francisco I.·The Regalian doctrine is deeply implanted in our legal system. The facts are stated in the opinion of the Court. Same. the 1973 and 1987 Constitutions have barred private corporations from acquiring any kind of alienable land of the public domain. increasingly becoming scarce natural resources. J. Mandamus. unless converted pursuant to law into alienable or disposable lands of the public domain. 384. Same. Yorac. Those who attempt to dispose of inalienable natural resources of the State. Buenaventura. Historically. To insure such equitable distribution. Public Estates Authority petition seeks to compel the Public Estates Authority („PEA‰ for brevity) to disclose all facts on PEAÊs then on- . Sayoc & De Los Angeles Collaborating Counsel for Amari Coastal Bay. CARPIO. Foreshore and submerged areas form part of the public domain and are inalienable. 2002 171 Chavez vs. Mabanta. The 171 VOL. Azcuna. Arroyo. Chavez for and in his own behalf. etc. lands reclaimed by the government are sui generis. Lands reclaimed from foreshore and submerged areas also form part of the public domain and are also inalienable.Same. etc.: This is an original Petition for Mandamus with prayer for a writ of preliminary injunction and a temporary restraining order. are to be distributed equitably among our evergrowing population. Same. Romulo. Alienable lands of the public domain.

2 PEAÊs Memorandum dated August 4. subject to price escalation. On February 4. The petition further seeks to enjoin PEA from signing a new agreement with AMARI involving such reclamation.going renegotiations with Amari Coastal Bay and Development Corporation („AMARI‰ for brevity) to reclaim portions of Manila Bay. then President Ferdinand E. 172 . through the Commissioner of Public Highways. retention and _______________ 1 Section 4 of PD No. improve. the government. PEA and CDCP executed a Memorandum of Agreement dated December 29. signed a contract with the Construction and Development Corporation of the Philippines („CDCP‰ for brevity) to reclaim certain foreshore and offshore areas of Manila Bay. p. which stated: „(i) CDCP shall undertake all reclamation.‰ On the same date. then President Marcos issued Presidential Decree No. The Facts On November 20. 1999. 1084. PD No. x x x lease and sell any and all kinds of lands. 1 acquire. 1973. Marcos issued Presidential Decree No. construction. to be paid according to progress of works on a unit price/lump sum basis for items of work to be agreed upon. then President Marcos issued a memorandum directing PEA to amend its contract with CDCP. 3. 1084 tasked PEA „to reclaim land. CDCP obligated itself to carry out all the works in consideration of fifty percent of the total reclaimed land. 1981.‰ and „to develop. 1977. and such other works in the MCCRRP as may be agreed upon by the parties. so that „[A]ll future works in MCCRRP x x x shall be funded and owned by PEA. On December 29. 1085 transferring to PEA the „lands2 reclaimed in the foreshore and offshore of the Manila Bay‰ under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP). 1084 creating PEA. 1981. The contract also included the construction of Phases I and II of the Manila-Cavite Coastal Road.‰ Accordingly. including foreshore and submerged areas.

915. PEAÊs Memorandum quoted . title. above Mean Low Water Level located outside the Financial Center Area and the First 3 Neighborhood Unit. 1594. Aquino issued Special Patent No. 1995. Parañaque City. On April 25. 3517. and 7312. Public Estates Authority other terms and conditions provided for in Presidential Decree No. PEA entered into a Joint Venture Agreement („JVA‰ for brevity) with AMARI. which areas consist of approximately Ninety-Nine Thousand Four Hundred Seventy Three (99.172 SUPREME COURT REPORTS ANNOTATED Chavez vs.‰ Subsequently. 1984 which have not yet been sold. covering the three reclaimed islands known as the „Freedom Islands‰ located at the southern portion of the Manila-Cavite Coastal Road. on April 9.888) square meters of reclaimed areas at varying elevations. 7309. to develop the Freedom Islands. in the name of PEA. xxx (iii) x x x CDCP shall give up all its development rights and hereby agrees to cede and transfer in favor of PEA.841 hectares.441) square meters or 157.894) square meters. granting and transferring to PEA „the parcels of land so reclaimed under the ManilaCavite Coastal Road and Reclamation Project (MCCRRP) containing a total area of one million nine hundred fifteen thousand eight hundred ninety four (1. The JVA also required the reclamation of an additional 250 hectares of submerged areas surrounding these islands to complete the configuration in the Master Development _______________ 3 PEAÊs Memorandum.‰ On January 19. then President Corazon C.382. 1988. The Freedom Islands have a total land area of One Million Five Hundred Seventy Eight Thousand Four Hundred and Forty One (1.578. transferred or otherwise disposed of by CDCP as of said date. All the financing required for such works shall be provided by PEA. 5 and approximately Three Million Three Hundred Eighty Two Thousand Eight Hundred Eighty Eight (3. 1988.473) square meters in the Financial Center Area covered by land pledge No. supra note 2 at 7. all of the rights. a private corporation. the Register of Deeds of the Municipality of Parañaque issued Transfer Certificates of Title Nos. interest and participation of CDCP in and to all the areas of land reclaimed by CDCP in the MCCRRP as of December 30. 7311.

The members of the Legal Task Force were the Secretary of 8 Justice. Among the conclusions of their report are: (1) the reclaimed lands PEA seeks to transfer to AMARI under the JVA are lands of the public domain which the government has not classified as alienable lands and therefore PEA cannot alienate these lands. JULY 9.84-hectare Freedom Islands in view of the failure of the public bidding held on December 10. (2) the certificates of title covering the Freedom Islands are thus void. in its Resolution No. On November 29. advised PEA that PEA could negotiate the sale of the 157. 1995. 1997. 1994. 1996. On April 28. On December 5. and (3) the JVA itself is illegal.extensively. 560. the Statement of Facts in Senate Committee Report No. conducted a joint investigation. 1991 where there was not a single bidder. the Chief Presidential _______________ 4 In Opinion No. then Senate President Ernesto Maceda delivered a privilege speech in the Senate and denounced the JVA as the „grandmother of all scams.‰ As a result. On June 8. 89-296. 1995. See also Senate Committee Report . 560 dated September 16. Public Estates Authority Plan of the Southern Reclamation Project-MCCRRP. Ramos issued Presidential Administrative Order No. 330 dated December 23. Ramos. approved 6 the JVA. through then Executive Secretary Ruben Torres. the Government Corporate Counsel. confirmed the 5 JVA. 1997. 365 creating a Legal Task Force to conduct a study on the legality of the JVA in view of Senate Committee Report No. the Senate Committee on Government Corporations and Public Enterprises. PEA and AMARI entered into the JVA through negotiation 4 without public bidding. 560 dated September 16. in its Statement of Facts and the Case. 173 VOL. citing COA Audit Circular No. The Senate Committees reported the results of their investigation in Senate 7 Committee Report No. then President Fidel V. and the Committee on Accountability of Public Officers and Investigations. then President Fidel V. 2002 173 Chavez vs. 1245. 384. the Board of Directors of PEA. 1997.

Article II. Jr. the Philippine Daily Inquirer and Today published reports that there were on-going renegotiations between PEA and AMARI under an order issued by then President Fidel V. 174 174 SUPREME COURT REPORTS ANNOTATED Chavez vs. and Section 7. of the 1987 Constitution on the right of the people to information on matters of public concern. Petitioner contends the government stands to lose billions of pesos in the sale by PEA of the reclaimed lands to AMARI. Article III. and the Government Corporate Counsel. petitioner Frank I. „A court shall take judicial notice. filed the instant Petition for Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction and Temporary Restraining Order. 560. 1998.No. 5 PEAÊs Memorandum. of x x x the official acts of the legislature x x x. According to these reports. contrary to 11 the conclusions reached by the Senate Committees.‰ On April 27. without prejudice to the refiling of the case before the 12 proper court.‰ 8 Teofisto Guingona. PEA Chairman Arsenio Yulo and retired Navy Officer Sergio Cruz composed the negotiating panel of PEA. 132994 seeking to nullify the JVA. Petitioner prays that PEA publicly disclose the terms of any renegotiation of the JVA. invoking Section 28. Petitioner assails the sale to AMARI of lands of the public domain as a blatant violation . 1998.R. 7 The existence of this report is a matter of judicial notice pursuant to Section 1. The Court dismissed the petition „for unwarranted disregard of judicial hierarchy. Public Estates Authority 9 10 Legal Counsel. Ramos. Chavez („Petitioner‰ for brevity) as a taxpayer. On April 13. supra note 2 at 9. 1998. On April 4 and 5. The Legal Task Force upheld the legality of the JVA. 12. 6 Ibid. Rule 129 of the Rules of Court which provides. PEA Director Nestor Kalaw. No. without the introduction of evidence. p. Antonio M. Zulueta filed before the Court a Petition for Prohibition with Application for the Issuance of a Temporary Restraining Order and Preliminary Injunction docketed as G.

‰ for brevity). Finally. respectively. JULY 9. Petitioner filed a Reiterative Motion for Issuance of a TRO dated May 26. Due to the approval of the Amended JVA by the Office of the President. 2002 175 Chavez vs. On May 28.of Section 3. 1999. 1999. Article XII of the 1987 Constitution prohibiting the sale of alienable lands of the public domain to private corporations. Estrada approved the Amended JVA. 10 Virgilio C. petitioner filed an Omnibus Motion: (a) to require PEA to submit the terms of the renegotiated PEA-AMARI contract. on December 28.‰ The Issues 15 16 The issues raised by petitioner. petitioner asserts that he seeks to enjoin the loss of billions of pesos in properties of the State that are of public dominion. 1998. which the Court denied in a Resolution dated June 22. 1999. p. 384. 3. 1998 and June 25. On March 30. Annex „C‰. 1999. p. (b) for issuance of a temporary restraining order. 1999. 68. PEA and AMARI signed the Amended Joint Venture Agreement („Amended JVA. PEA and AMARI filed their Comments on October 19. Meanwhile. the Office of the President under the administration of then President Joseph E. 12 AMARIÊs Comment dated June 24. 1998. In a Resolution dated March 23. 1998. _______________ 9 Renato Cayetano. petitioner now prays that on „constitutional and statutory grounds the renegotiated contract be 14 declared null and void. AMARIÊs Memorandum dated June 19. Rollo. 175 VOL. Public Estates Authority 13 After several motions for extension of time. 1999. PEA and AMARI are as . and (c) to set the case for hearing on oral argument. 11 Report and Recommendation of the Legal Task Force. Abejo. the Court gave due course to the petition and required the parties to file their respective memoranda.

Galvez. III. 32. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY DISADVANTAGEOUS TO THE GOVERNMENT. Balanon-Corpuz. 14 PetitionerÊs Memorandum dated July 6. 48). VI. Rigodon signing PEAÊs Memorandum. RECLAIMED AND STILL TO BE RECLAIMED. _______________ 13 AMARI filed three motions for extension of time to file comment (Rollo. pp. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT AND ACADEMIC BECAUSE OF SUBSEQUENT EVENTS. while PEA filed nine motions for extension of time (Rollo. p. with Solicitor General Ricardo P. VIOLATE THE 1987 CONSTITUTION. pp. V. 16 Represented by Azcuna Yorac Arroyo & Chua Law Offices. Public Estates Authority II.follows: I. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT. and Associate Solicitor Raymund I. 38. 1999. 176 176 SUPREME COURT REPORTS ANNOTATED Chavez vs. Assistant Solicitor General Azucena R. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES OFFICIAL INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL AGREEMENT. 127. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE PRINCIPLE GOVERNING THE HIERARCHY OF COURTS. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF ADMINISTRATIVE-REMEDIES. 42. . IV. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT FOR THE TRANSFER TO AMARI OF CERTAIN LANDS. and Romulo Mabanta Sayoc & De los Angeles Law Offices. AND VII. 139). 15 Represented by the Office of the Solicitor General.

PEA has satisfied petitionerÊs prayer for a public disclosure of the renegotiations. petitionerÊs prayer to enjoin the signing of the Amended JVA is now moot because PEA and AMARI have already signed the Amended JVA on March 30. 177 VOL. Moreover. 2002 177 Chavez vs. Thus. PEA and AMARI have still to implement the Amended JVA. 1999.The CourtÊs Ruling First issue. 384. Likewise.‰ PEA and AMARI claim the petition is now moot and academic because AMARI furnished petitioner on June 21. PetitionerÊs principal basis in assailing the renegotiation of the JVA is its violation of Section 3. 1999 a copy of the signed Amended-JVA containing the terms and conditions agreed upon in the renegotiations. Public Estates Authority Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by simply fast-tracking the signing and approval of the Amended JVA before the Court could act on the issue. JULY 9. 1999. Presidential approval does not resolve the constitutional issue or remove it from the ambit of judicial review.‰ The petition also prays that the Court enjoin PEA from „privately entering into. We rule that the signing of the Amended JVA by PEA and AMARI and its approval by the President cannot operate to moot the petition and divest the Court of its jurisdiction. The petition prays that PEA publicly disclose the „terms and conditions of the on-going negotiations for a new agreement. the Office of the President has approved the Amended JVA on May 28. perfecting and/or executing any new agreement with AMARI. Article . whether the principal reliefs prayed for in the petition are moot and academic because of subsequent events. The prayer to enjoin the signing of the Amended JVA on constitutional grounds necessarily includes preventing its implementation if in the meantime PEA and AMARI have signed one in violation of the Constitution.

whether intended or accidental. Enrile. Gonzales v.5 hectares of reclaimed lands and submerged areas of Manila Bay to a single private corporation. 141 („CA No. and if already implemented. In the instant case. cannot prevent the Court from rendering a decision if there is a grave violation of the Constitution. which prohibits the government from alienating lands of the public domain to private corporations. Aquino v. Article XII of the 1987 Constitution. 141‰ for brevity). 178 178 SUPREME COURT REPORTS ANNOTATED Chavez vs. if the Amended JVA runs counter to the Constitution. Enage. bar. Paño. reclaimed . If the Amended JVA indeed violates the Constitution. 59 SCRA 183 (1974). 134 SCRA 438 (1985). and the public. a public corporation. It now becomes more compelling for the Court to resolve the issue to insure the government itself does not violate a provision of the Constitution intended to safeguard the national patrimony. All previous decisions of the Court involving Section 3. 65 SCRA 624 (1975 ). In the instant case. Even in cases where supervening events had made the cases moot. the Court did not hesitate to resolve the legal or constitutional issues raised to formulate controlling 17 principles to guide the bench. to annul the effects of such unconstitutional contract. covered agricultural lands sold to private corporations which acquired the lands from private parties. the instant petition is a case of first impression. AMARI seeks to acquire from PEA. 41 SCRA 1 (1971). the Court can still prevent the transfer of title and ownership of alienable lands of the public domain in the name of AMARI. Public Estates Authority Also. Dela Camara v.XII of the Constitution. Supervening events. Marcos. _______________ 17 Salonga v. The transferors of the private corporations claimed or could claim the right to judicial confirmation of their 19 imperfect titles under Title II of Commonwealth Act. or its counterpart provision in 18 the 1973 Constitution. it is the duty of the Court to enjoin its implementation. The Amended JVA is not an ordinary commercial contract but one which seeks to transfer title and ownership to 367.

20 PD No. 280 SCRA 297 (1997). 141. CA and Iglesia. and Republic v. v. CA. the deadline for filing applications for judicial confirmation of imperfect 20 title expired on December 31.. 2002 179 Chavez vs. 124 SCRA 460 (1983). Iglesia ni Cristo. Judge F. the Court did not apply the constitutional ban in the 1973 Constitution because the applicant corporation. Inc. 1987. had fully complied with all its obligations and even paid the full purchase price before the effectivity of the 1973 Constitution. IAC and Roman Catholic Bishop of Lucena. although the sales patent was issued after the 1973 Constitution took effect. Public Estates Authority Lastly. Director of Lands v. Republic v. Director of Lands v. Republic v... Besides. Cusi. Neither AMARI nor PEA can claim judicial confirmation of their titles because the lands covered by the Amended JVA are newly reclaimed or still to be reclaimed. Natividad v. 202 SCRA 493 (1991). 179 VOL. IAC and Acme Plywood & Veneer Co. 128 SCRA 44 (1984). 114 SCRA 799 (1982). Inc. Certain undertakings by AMARI under the Amended JVA constitute the consideration for the purchase. Hermanos y Hermanas de Sta. continuous. In Ayog v. 1945 or earlier. Lood. 114 SCRA 875 (1982). PEA is obligated to transfer to AMARI the latterÊs seventy percent proportionate share in the . JULY 9.lands and submerged areas for non-agricultural purposes by purchase under PD No. 146 SCRA 509 (1986). Under the Amended JVA. exclusive and notorious occupation of agricultural lands of the public domain for at least thirty years since June 12. Biñan Development Co. Article XIV. Cendana and Iglesia ni Cristo. Cruz de Mayo. 119 SCRA 449 (1982). CA and Nasipit Lumber Co. Republic v. 384. 1073. Director of Lands v. Republic v. there is a need to resolve immediately the constitutional issue raised in this petition because of the possible transfer at any time by PEA to AMARI of title and ownership to portions of the reclaimed lands. _______________ 18 Section 11. 1084 (charter of PEA) and Title II of CA No. 168 SCRA 165 (1988). 141 SCRA 21 (1986). 19 Manila Electric Co. Villaflor v. Castro-Bartolome.. Judicial confirmation of imperfect title requires open. Villanueva and Iglesia ni Cristo.. 118 SCRA 492 (1982).

pp. The Amended JVA even allows AMARI to mortgage at any time the entire reclaimed area to raise financing for the 21 reclamation project. Public Estates Authority . 180 180 SUPREME COURT REPORTS ANNOTATED Chavez vs. Also.2 (c) and (e) of the Amended JVA. The principle of hierarchy of courts applies generally to cases involving factual questions. _______________ 21 Annex „B‰. 22 Chavez v. We resolve to exercise primary jurisdiction over the instant case. PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly certain information without first asking PEA the needed information. the instant case is a petition for mandamus which falls under the original jurisdiction of the Court under Section 5. The instant case. raises constitutional issues of 22 transcendental importance to the public. PEA claims petitionerÊs direct resort to the Court violates the principle of exhaustion of administrative remedies. PCGG. 16-17. PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the Court. 1999. AMARIÊs Memorandum dated June 19. The Court can resolve this case without determining any factual issue related to the case. Third issue: whether the petition merits dismissal for nonexhaustion of administrative remedies. Section 5. however. the Court cannot entertain cases involving factual issues. As it is not a trier of facts. Article VIII of the Constitution. It also violates the rule that mandamus may issue only if there is no other-plain.reclaimed areas as the reclamation progresses. Second issue: whether the petition merits dismissal for failing to observe the principle governing the hierarchy of courts. speedy and adequate remedy in the ordinary course of law. 299 SCRA 744 (1998).

the Executive Department had an affirmative statutory duty under 24 Article 2 of the Civil Code and Section 1 of 25 Commonwealth Act No. x x x. If found to be valuable. after advertising by printed notice in the Official Gazette. all executive and administrative orders and proclamations. PEA claims it has no affirmative statutory duty to disclose publicly information about its renegotiation of the JVA. no need for the petitioners in Tañada to make an initial demand from the Office of the President. upon application of the officer accountable therefor. the disposition of government lands to _______________ 23 136 SCRA 27 (1985). or is no longer needed. be inspected by the head of the agency or his duly authorized representative in the presence of the auditor concerned and. Thus.‰ 25 Section 1 of CA No. a government corporation. Tuvera where the Court granted the petition for mandamus even if the petitioners there did not initially demand from the Office of the President the publication of the presidential decrees. if found to be valueless or unsaleable. PEA points out that in Tañada. The original JVA sought to dispose to AMARI public lands held by PEA. or for not less than three consecutive days in any . it may be destroyed in their presence. Under 26 Section 79 of the Government Auditing Code. 24 Article 2 of the Civil Code (prior to its amendment by EO No. 638 to publish the presidential decrees. therefore. There was. it shall.‰ 26 Section 79 of the Government Auditing Codes provides as follows: „When government property has become unserviceable for any cause. it may be sold at public auction to the highest bidder under the supervision of the proper committee on award or similar body in the presence of the auditor concerned or other authorized representative of the Commission. x x x. except such as have no general applicability. 200) provided as follows: „Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette. In the instant case.23 PEA distinguishes the instant case from Tañada v. PEA asserts that the Court must apply the principle of exhaustion of administrative remedies to the instant case in view of the failure of petitioner here to demand initially from PEA the needed information. unless it is provided otherwise. 638 provides as follows: „There shall be published in the Official Gazette all important legislative acts and resolutions of the Congress of the Philippines.

384. The principal issue in the instant case is the capacity of AMARI to acquire lands held by PEA in view of the constitutional ban prohibiting the alienation of lands of the public domain to private corporations. Fourth issue: whether petitioner has locus standi to bring this suit PEA argues that petitioner has no standing to institute mandamus proceedings to enforce his constitutional right to information without a showing that PEA refused to perform an affirmative duty imposed on PEA by the Constitution. Public Estates Authority private parties requires public bidding. _______________ publication. 2002 181 Chavez vs. or where the value of the property does not warrant the expense of 181 VOL. involved is a purely legal or 27 constitutional question. there is no-actual controversy requiring the exercise of the power of judicial review. not of a public bidding. PEA failed to make this public disclosure because the original JVA. Considering that PEA had an affirmative statutory duty to make the public disclosure. The law obligated PEA to make this public disclosure even without demand from petitioner or from anyone. Thus. Moreover. the principle of exhaustion of administrative remedies does not apply when the issue. petitioner had the right to seek direct judicial intervention. was the result of a negotiated contract. PEA was under a positive legal duty to disclose to the public the terms and conditions for the sale of its lands. JULY 9. PEA also claims that petitioner has not shown that he will suffer any concrete injury because of the signing or implementation of the Amended JVA.newspaper of general circulation. and this alone is determinative of this issue. like the Amended JVA. We rule that the principle of exhaustion of administrative remedies does not apply in the instant case.‰ and was even in breach of this legal duty. by notices posted for a like period in at least three public .

the Court upheld the right of a citizen to bring a taxpayerÊs suit on matters of transcendental importance to the public. He invokes several . First is the right of citizens to information on matters of public concern. Jr.‰ 27 Paat v.Ê Moreover. information which the Constitution and statutory law mandate PEA to disclose. The thrust of the second issue is to prevent PEA from alienating hundreds of hectares of alienable lands of the public domain in violation of the Constitution. economic and moral well being of the people. Moreover. Quisumbing v. 266 SCRA 167 (1997). the mere fact that he is a citizen satisfies the requirement of personal interest. 182 182 SUPREME COURT REPORTS ANNOTATED Chavez vs. Second is the application of a constitutional provision intended to insure the equitable distribution of alienable lands of the public domain among Filipino citizens. The thrust of the first issue is to compel PEA to disclose publicly information on the sale of government tends worth billions of pesos. There are two constitutional issues involved here. In Chavez v.Ê He asserts that ordinary taxpayers have a right to initiate and prosecute actions questioning the validity of acts or orders of government agencies or instrumentalities.Ê and if they Âimmediately affect the social. In the event that the public auction fails. PCGG. the petition raises matters of transcendental 28 importance to the public. the matter of recovering the illgotten wealth of the Marcoses is an issue of Âtranscendental importance to the public. the property may be sold at a private sale at such price as may be fixed by the same committee or body concerned and approved by the Commission.. such as in this case. if the issues raised are of Âparamount public interest. Court of Appeals. Judge Gumban. compelling PEA to comply with a constitutional duty to the nation. thus· „Besides. when the proceeding involves the assertion of a public right. petitioner emphasizes.places in the locality where the property is to be sold. 193 SCRA 520 (1991). Public Estates Authority The petitioner has standing to bring this taxpayerÊs suit because the petition seeks to compel PEA to comply with its constitutional duties. Valmonte v. 170 SCRA 256 (1989). Belmonte.

further declared that Âwhen a mandamus proceeding involves the assertion of a public right. the Court asserted that when the issue concerns a public right and the object of mandamus is to obtain the enforcement of a public duty. therefore.Ê Further. in Albano v. management and operation of the Manila International Container Terminal. Public Estates Authority the petitioners sought to enforce their right to be informed on matters of public concern. Reyes. while reiterating Tañada.decisions of this Court which have set aside the procedural matter of locus standi. _______________ 28 See note 22. the people are regarded as the real parties in interest. in the economic development of the country and the magnitude of the financial consideration involved. we said that while expenditure of public funds may not have been involved under the questioned contract for the development. the Court declared that the right they sought to be enforced Âis a public right recognized by no less than the fundamental law of the land. 384. he need not show that he has any legal or special interest in the result of the action.. and because it is sufficient that petitioner is a citizen and as such is interested in the execution of the laws. a right then recognized in Section 6. JULY 9. In the aforesaid case. Civil Service Commission. the disclosure provision in the Constitution would constitute sufficient authority for upholding the petitionerÊs standing..Ê We concluded that. the requirement of personal interest is satisfied by the mere fact that petitioner is a citizen and. In ruling for the petitionersÊ legal standing. the instant petition is anchored on the right of the . Âpublic interest [was] definitely involved considering the important role [of the subject contract] . Article IV of the 1973 Constitution.Ê Legaspi v. xxx In Tañada v. when the subject of the case involved public interest. as a consequence. Tuvera. 183 VOL. part of the general ÂpublicÊ which possesses the right. in connection with the rule that laws in order to be valid and enforceable must be published in the Official Gazette or otherwise effectively promulgated. 2002 183 Chavez vs. Similarly.

‰ (Emphasis supplied) The State policy of full transparency in all transactions involving public interest reinforces the peopleÊs right to information on matters of public concern. Access to official records. i. we rule that the petition at bar should be allowed. Public Estates Authority „Sec. Article III of the 1987 Constitution. Fifth issue: whether the constitutional right to information includes official information on on-going negotiations before a final agreement. the petitioner has the requisite locus standi. (1) the enforcement of a public right (2) espoused by a Filipino citizen. The right of the people to information on matters of public concern shall be recognized. This State policy is expressed in Section 28.‰ We rule that since the instant petition. 7. and to documents. subject to such limitations as may be provided by law. 28. Petitioner. shall be afforded the citizen. or decisions. Subject to reasonable conditions prescribed by law. thus: „Sec. and papers pertaining to official acts. the State adopts and implements a policy of full public disclosure of all its transactions involving public interest. Because of the satisfaction of the two basic requisites laid down by decisional law to sustain petitionerÊs legal standing. documents and papers·a right guaranteed under Section 7. Article III of the Constitution explains the peopleÊs right to information on matters of public concern in this manner: 184 184 SUPREME COURT REPORTS ANNOTATED Chavez vs. as well as to government research data used as basis for policy development. is a Filipino citizen. Section 7. a former solicitor general.people to information and access to official records.‰ (Emphasis supplied) These twin provisions of the Constitution seek to promote transparency in policy-making and in the operations of the .e. involves the enforcement of constitutional rights· to information and to the equitable diffusion of natural resources·matters of transcendental public importance. transactions. Article II of the Constitution. brought by a citizen.

An informed citizenry is essential to the existence and proper functioning of any democracy. JULY 9. · _______________ 29 Section 1. loyalty. citizens can participate in public discussions leading to the formulation of government policies and their effective implementation. 384. act with patriotism and justice. Yet. Public Estates Authority „An essential element of these freedoms is to keep open a continuing dialogue or process of communication between the government and the people. serve them with utmost responsibility. These twin provisions are essential to the exercise of freedom of expression. integrity. PCGG.‰ for unless citizens have the proper information. Only when the participants in the discussion are aware of the issues and have access to information relating thereto can such bear fruit. whatever citizens say. Public officers and employees must at all times be accountable to the people. citing Chavez v. transactions and decisions to citizens. even if expressed without any restraint. as well as provide the people sufficient information to exercise effectively other constitutional rights. 185 VOL. It is in the interest of the State that the channels for free political discussion be maintained to the end that the government may perceive and be responsive to the peopleÊs will. If the government does not disclose its official acts. 2002 185 Chavez vs.government. These twin provisions are also essential to hold public 29 officials „at all times x x x accountable to the people. will be speculative and amount to nothing. As explained by the Court in 30 Valmonte v. Belmonte. Article XI of the 1987 Constitution states as follows: „Public office is a public trust. and lead modest lives. Jr. they cannot hold public officials accountable for anything. Armed with the right information. this open dialogue can be effective only to the extent that the citizenry is informed and thus able to formulate its will intelligently. that in cases of ongoing negotiations the right to information is limited to .‰ 30 170 SCRA 256 (1989). and efficiency.‰ 31 PEA asserts.

I suppose is generic and therefore. agreements. it can cover both steps leading to a contract and already a consummated contract. To support its contention. putting them .‰ (Emphasis supplied) AMARI argues there must first be a consummated contract before petitioner can invoke the right. Suarez: And when we say ÂtransactionsÊ which should be distinguished from contracts. or does he refer to the contract itself? Mr. Mr. Presiding Officer.‰ Also. 24-25 (1986). Mr. Suarez: This contemplates inclusion of negotiations leading to the consummation of the transaction. pp. AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or before the closing of the transaction. 32 Record of the Constitutional Commission. Public Estates Authority the quality of decision-making in government agencies. subject only to reasonable safeguards on the national interest. does the Gentleman refer to the steps leading to the consummation of the contract. or treaties or whatever. AMARI cites the following discussion in the 1986 Constitutional Commission: „Mr. Vol. Ople: Yes. Government officials will hesitate to express their real sentiments during deliberations if there is immediate public dissemination of their discussions. Mr. Suarez: Thank you. V. 186 186 SUPREME COURT REPORTS ANNOTATED Chavez vs. Ople: The ÂtransactionsÊ used here.‰ PEA maintains the right does not include access to „intra-agency or interagency recommendations or communications during the stage when common assertions are still in the process of being formulated or are in the Âexploratory stageÊ. Requiring government officials to reveal their deliberations at the pre-decisional stage will degrade _______________ 31 See note 22.„definite propositions of the government. 32 Mr.

long before the consummation of the contract. on on-going evaluation or review of bids or proposals being undertaken by the bidding or review committee is not immediately accessible under the right to information. there are no „official acts. to disclose sufficient public information on any proposed settlement they have decided to take up with the ostensible owners and holders of ill-gotten wealth. though. because the Government Auditing Code requires public bidding. We must first distinguish between information the law on public bidding requires PEA to disclose publicly. on its own and without demand from anyone. 384. While the evaluation or review is still on-going. or decisions‰ on the bids or proposals. the Court ruled as follows: „Considering the intent of the framers of the Constitution. we believe that it is incumbent upon the PCGG and its officers. however. However. PEA must. 2002 Chavez vs. 187 VOL. From this moment. technical description and nature of the property being disposed of the terms and conditions of the disposition. Note 22. JULY 9. These include the size. the publicÊs right to information attaches. any citizen can demand from PEA this information at any time during the bidding process. location. as well as other government representatives. Before the consummation of the contract. the minimum price and similar information. and information the constitutional right to information requires PEA to release to the public. must _______________ 33 Supra. and any citizen can access all the non-proprietary information leading to such definite proposition. Public Estates Authority 187 . there arises a „definite proposition‰ on the part of the government. Information.under all kinds of pressure before they decide. PCGG. disclose to the public matters relating to the disposition of its property. In Chavez 33 v. PEA must prepare all these data and disclose them to the public at the start of the disposition process. transactions. the parties qualified to bid. Such information. once the committee makes its official recommendation. If PEA fails to make this disclosure.

evidencing.‰ namely: (1) official records. the people can never exercise the right if no contract is consummated. (2) documents and papers pertaining to official acts. a consummated contract is not a requirement for the exercise of the right to information. There is need. The first category refers to any document that is part of the public records in the custody of government agencies or officials. intelligence and other classified information.‰ (Emphasis supplied) Contrary to AMARIÊs contention. transactions and decisions. Requiring a consummated contract will keep the public in the dark until the contract. nor a retreat by the State of its avowed „policy of full disclosure of all its transactions involving public interest. Otherwise. of course. as discussed earlier·such as on matters involving national security. We can allow neither an emasculation of a constitutional right. diplomatic or foreign relations.pertain to definite propositions Of the government not necessarily to intraagency or inter-agency recommendations or communications during the stage when common assertions are still in the process of being formulated or are in the „exploratory‰ stage. and (3) government research data used in formulating policies.‰ The right covers three categories of information which are „matters of public concern. The third category refers to research data. supporting. establishing. and if one is consummated. the commissioners of the 1986 Constitutional Commission understood that the right to information „contemplates inclusion of negotiations leading to the consummation of the transaction. Such a requirement will prevent the citizenry from participating in the public discussion of any proposed contract. effectively truncating a basic right enshrined in the Bill of Rights. to observe the same restrictions on disclosure of information in general. which may be grossly disadvantageous to the government or even illegal. justifying or explaining official acts.‰ Certainly. it may be too late for the public to expose its defects. confirming. whether 188 . This negates the State policy of full transparency on matters of public concern. transactions or decisions of government agencies or officials. a situation which the framers of the Constitution could not have intended. The second category refers to documents and papers recording. becomes a fait accompli.

188

SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority

raw, collated or processed, owned by the government and
used in formulating government policies.
The information that petitioner may access on the
renegotiation of the JVA includes evaluation reports,
recommendations, legal and expert opinions, minutes of
meetings, terms of reference and other documents attached
to such reports or minutes, all relating to the JVA.
However, the right to information does not compel PEA to
prepare lists, abstracts, summaries and the like relating to
34
the renegotiation of the JVA. The right only affords access
to records, documents and papers, which means the
opportunity to inspect and copy them. One who exercises
the right must copy the records, documents and papers at
his expense. The exercise of the right is also subject to
reasonable regulations to protect the integrity of the public
records and to minimize disruption to government
operations, like rules specifying when and how to conduct
35
the inspection and copying.
The right to information, however, does not extend to
matters recognized as privileged information under the
36
separation of powers. The right does not also apply to
information on military and diplomatic secrets, information
affecting
national
security,
and
information
on
investigations of crimes by law enforcement agencies before
the prosecution of the accused, which courts have long
37
recognized as confidential. The right may also be subject
to other limitations that Congress may impose by law.
There is no claim by PEA that the information
demanded by petitioner is privileged information rooted in
the separation of powers. The information does not cover
Presidential conversations, correspondences, or discussions
during closed-door Cabinet meetings which, like internaldeliberations of the Supreme Court and other collegiate
38
courts, or executive sessions of either house of Congress,
are recognized as confidential. This kind of information
_______________
34

Ibid.

35

Legaspi v. Civil Service Commission, 150 SCRA 530 (1987).

36

Almonte v. Vasquez, 244 SCRA 286 (1995).

37

See Note 22.

38

Chavez v. PCGG, see note 22; Aquino-Sarmiento v. Morato, 203

SCRA 515 (1991).
189

VOL. 384, JULY 9, 2002

189

Chavez vs. Public Estates Authority
cannot be pried open by a co-equal branch of government. A
frank exchange of exploratory ideas and assessments, free
from the glare of publicity and pressure by interested
parties, is essential to protect the independence of decisionmaking of those tasked
to exercise Presidential, Legislative
39
and Judicial power. This is not the situation in the instant
case.
We rule, therefore, that the constitutional right to
information includes official information on on-going
negotiations before a final contract. The information,
however, must constitute definite propositions by the
government and should not cover recognized exceptions
like privileged information, military and diplomatic secrets
and similar
matters affecting national security and public
40
order. Congress has also prescribed other limitations
on
41
the right to information in several legislations.
_______________
39
40

Almonte v. Vasquez, see note 36.
PeopleÊs Movement for Press Freedom, et al. v. Hon. Raul

Manglapuz, G.R. No. 84642, En Banc Resolution dated April 13, 1988;
Chavez v. PCGG, see note 22.
41

Section 270 of the National Internal Revenue Code punishes any

officer or employee of the Bureau of Internal Revenue who divulges to
any person, except as allowed by law, information regarding the
business, income, or estate of any taxpayer, the secrets, operation, style
of work, or apparatus of any manufacturer or producer, or confidential
information regarding the business of any taxpayer, knowledge of which
was acquired by him in the discharge of his official duties. Section 14 of
R.A. No. 8800 (Safeguard Measures Act) prohibits the release to the
public of confidential information submitted in evidence to the Tariff
Commission. Section 3 (n) of R.A. No. 8504 (Philippine AIDS Prevention
and Control Act) classifies as confidential the medical records of HIV
patients. Section 6 (j) of R.A. No. 8043 (Inter-Country Adoption Act)
classifies as confidential the records of the adopted child, adopting
parents, and natural parents. Section 94 (f) of R.A. No. 7942 (Philippine

Mining Act) requires the Department of Environment and Natural
Resources to maintain the confidentiality of confidential information
supplied by contractors who are parties to mineral agreements or
financial and technical assistance agreements.
190

190

SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority

Sixth issue: whether stipulations in the Amended JVA for
the
transfer to AMARI of lands, reclaimed or to be reclaimed,
violate the Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and
submerged areas is rooted in the Regalian doctrine which
holds that the State owns all lands and waters of the public
domain. Upon the Spanish conquest of the Philippines,
ownership of all „lands, territories and possessions‰ in the
42
Philippines passed to the Spanish Crown. The King, as
the sovereign ruler and representative of the people,
acquired and owned all lands and territories in the
Philippines except those he disposed of by grant or sale to
private individuals.
The 1935, 1973 and 1987 Constitutions adopted the
Regalian doctrine substituting, however, the State, in lieu
of the King, as the owner of all lands and waters of the
public domain. The Regalian doctrine is the foundation of
the time-honored principle of land ownership that „all
lands that were not acquired from the Government, either
43
by purchase or by grant, belong to the public domain.‰
Article 339 of the Civil Code of 1889, which is now Article
420 of the Civil Code of 1950, incorporated the Regalian
doctrine.
_______________
42

The Recopilacion de Leyes de las Indias declared that: „We, having

acquired full sovereignty over the Indies, and all lands, territories, and
possessions not heretofore ceded away by our royal predecessors, or by
us, or in our name, still pertaining to the royal crown and patrimony, it is
our will that all lands which are held without proper and true deeds of

and commons in those places which are peopled. 141 continues to this day as the general law governing the classification and disposition of lands of the public domain. Court of Appeals. 1654 which provided for the lease. coves. confirming them in what they now have and giving them more if necessary. 299 SCRA 199 (1998). 1907. audiencias. 43 Cariño v.‰ See concurring opinion of Justice Reynato S. The exception mentioned in Cariño. which authorized the lease. in order that after reserving before all what to us or to our viceroys. referring to lands in the possession of an occupant 191 VOL. inlets and all waters within the maritime zone of the Spanish territory belonged to the public domain for public 44 use. On May 18. 1936. the National Assembly passed Commonwealth Act No. On November 7. all the rest of said lands may remain free and unencumbered for us to dispose of as we may wish. pastures. 935 (1909). the Philippine Legislature approved Act No. CA No. 2874. 384. of reclaimed lands of the government to corporations and individuals. Later. 41 Phil. JULY 9. and governors may seem necessary for public squares. Public Estates Authority Ownership and Disposition of Reclaimed Lands The Spanish Law of Waters of 1866 was the first statutory law governing the ownership and disposition of reclaimed lands in the Philippines. taking into consideration not only their present condition. ways. which provided as . the Philippine Commission enacted Act No. of reclaimed lands of the government to corporations and individuals. which authorized the lease. but also their future and their probable increase. but not the sale. Puno in Republic Real Estate Corporation v. The Spanish Law of Waters of 1866 allowed the reclamation of the sea under Article 5. but not the sale. 1919. 141. of reclaimed lands of the government to corporations and individuals. bays. but not the sale. The Spanish Law of Waters of 1866 and the Civil Code of 1889 Under the Spanish Law of Waters of 1866. and after-distributing to the natives what may be necessary for tillage and pasturage. the shores. Insular Government.grant be restored to us according as they belong to us. also known as the Public Land Act. on November 29. the Public Land Act. 2002 191 Chavez vs.

but. speaking through Justice Oliver Wendell Holmes. as a valid title by prescription. Public Estates Authority with proper permission.. That belonging exclusively to the State which.‰ See also Republic v. and that of a similar character. Property of public dominion is· 1. unless otherwise provided by the terms of the grant of authority. As prescription. torrents. 1754. since time immemorial. the principle is admitted. was recognized by the laws of Spain. pueblos or private persons. That devoted to public use. without . The United States Supreme Court. 197 SCRA 13 (1991). 546.‰ Under the Spanish Law of Waters. canals. we see no sufficient reason for hesitating to admit that it was recognized in the Philippines in regard to lands over which Spain had only a paper sovereignty. Jr. shores. riverbanks. _______________ and of his predecessors-in-interest. at all events. rivers. 2. is actually a species of a grant by the State. cited in 3 Philippine. 339.follows: „Article 5. such as roads. or by the provinces. 44 Article 1 of the Spanish Law of Waters of 1866. even against the Crown lands. it shall be sufficient if they shall show that ancient possession. Lee. provided the government issued the necessary permit and did not reserve ownership of the reclaimed land to the State. Lands reclaimed from the sea in consequence of works constructed by the State. land reclaimed from the sea belonged to the party undertaking the reclamation. 192 192 SUPREME COURT REPORTS ANNOTATED Chavez vs. ports and bridges constructed by the State. roadsteads. shall become the property of the party constructing such works. ÂWhere such possessors shall not be able to produce title deeds. declared in Cariño: „Prescription is mentioned again in the royal cedula of October 15. Article 339 of the Civil Code of 1889 defined property of public dominion as follows: „Art.Ê It may be that this means possession from before 1700.

or the executive department pursuant to law. The legislature. 1907. property devoted to public service referred to property used for some specific public service and open only to those authorized to use the property. fortresses. Property of public dominion. or in the development of the national wealth. was not self-executing. Article 341 of the Civil Code of 1889 governed the reclassification of property of public dominion into private property. 384. the Philippine Commission enacted Act No. and mines. Property of public dominion referred not only to property devoted to public use.1654 which regulated the lease of reclaimed and foreshore lands. This class of property constituted property of public dominion although employed for some economic or commercial activity to increase the national wealth. and other works for the defense of the territory. Act No. In contrast.‰ Property devoted to public use referred to property open for use by the public. such as walls. Public Estates Authority erty no longer needed for public use or territorial defense before the government could lease or alienate the property 45 to private parties. JULY 9. but also to property not so used but employed to develop the national wealth. The control and disposition of the foreshore as defined in existing law. until granted to private individuals.‰ This provision. 341. 2002 193 Chavez vs. is employed in some public service. must declare the prop193 VOL. and the title to all Government or public lands made or . shall become a part of the private property of the State.The salient provisions of this law were as follows: „Section 1.being of general public use. to wit: „Art. when no longer devoted to public use or to the defense of the territory. 1654 of the Philippine Commission On May 8. however.

x x x. Public Estates Authority dated public bidding in the lease of government reclaimed lands. 194 194 SUPREME COURT REPORTS ANNOTATED Chavez vs. Act No. Joven v. 1654 man_______________ 45 Ignacio v. Laurel v. 134 (1953). 93 Phil.reclaimed by the Government by dredging or filling or otherwise throughout the Philippine Islands. Court of Appeals. Act No. The Act also vested in the government control and disposition of foreshore lands. shall be retained by the Government without prejudice to vested rights and without prejudice to rights conceded to the City of Manila in the Luneta Extension. (a) The Secretary of the Interior shall cause all Government or public lands made or reclaimed by the Government by dredging or filling or otherwise to be divided into lots or blocks. 1654 mandated that the government should retain title to all lands reclaimed by the government. Section 2. 187 SCRA 797 (1990). Puno in Republic Real Estate Corporation v. and shall cause plats and plans of such surveys to be prepared and filed with the Bureau of Lands. See concurring opinion of Justice Reynato S. Director of Lands. xxx (e) The leases above provided for shall be disposed of to the highest and best bidder therefore.‰ (Emphasis supplied) Act No. subject to such regulations and safeguards as the Governor-General may by executive order prescribe. 1654 made government reclaimed lands sui generis in that unlike other public lands which the . 335 (1960). (b) Upon completion of such plats and plans the GovernorGeneral shall give notice to the public that such parts of the lands so made or reclaimed as are not needed for public purposes will be leased for commercial and business purposes. Private parties could lease lands reclaimed by the government only if these lands were no longer needed for public purpose. Garcia. Director of Lands. with the necessary streets and alleyways located thereon. 108 Phil. 299 SCRA 199 (1998).

2874. x x x.‰ Sec. 2002 Chavez vs. 2874 of the Philippine Legislature On November 29. however. roadstead. Act No. 2874. JULY 9. Public Estates Authority 195 . shall from time to time declare what lands are open. shore line. 7. enacted on October 7. to disposition or concession under this Act. (b) Timber. upon the recommendation of the Secretary of Agriculture and Natural Resources. This Act. 384. Only those lands shall be declared open to disposition or concession which have been officially delimited or classified x x x. the Governor-General. water. Sec. did not cover reclaimed lands.‰ 195 VOL. was also titled the Public Land Act. xxx _______________ 46 Act No. upon recommendation by the Secretary of Agriculture and Natural Resources. did not repeal Section 5 of the Spanish Law of Waters of 1866. Nevertheless. Act No. Act No. 1654 did not prohibit private parties from reclaiming parts of the sea under Section 5 of the Spanish Law of Waters. Section 23 of this Act provided as follows. however. were as follows: „Sec. For the purposes of the government and disposition of alienable or disposable public lands. or other valuable right which in the opinion of the Chief of the Bureau of Public Lands would be prejudicial to the interests of the public. 926. stream. Lands reclaimed from the sea by private parties with government permission remained private lands. and (c) Mineral lands. „x x x In no case may lands leased under the provisions of this chapter be taken so as to gain control of adjacent land. 1919. way. 8. shall from time to time classify the lands of the public domain into· (a) Alienable or disposable. the Philippine Legislature enacted 46 Act No. 6. on reclaimed lands. 1903. 1654.government could sell to private parties. The salient provisions of Act No. the Public Land Act. these reclaimed lands were available only for lease to private parties. The Governor-General.

shall be classified as suitable for residential purposes or for commercial. The lands comprised in classes (a). (b) Foreshore. Section 7 of the Act empowered the Governor-General to „declare what lands are open to disposition or concession. 2874 governed alienable lands of the public . Sec. being neither timber nor mineral land. 58. (d) Lands not included in any of the foregoing classes. filling. 2874 authorized the Governor-General to „classify lands of the public domain into x x x alienable 47 or disposable‰ lands. industrial. or other means.Sec. or other productive purposes other than agricultural purposes.‰ or „concession‰ as used in this Act. upon recommendation by the Secretary of Agriculture and Natural Resources. The lands included in class (d) may be disposed of by sale or lease under the provisions of this Act. lease. shall mean any of the methods authorized by this Act for the acquisition. 56. Any tract of land of the public domain which. Sec. foreshore and marshy lands. x x x. (b). must be suitable for residential.‰ 48 Title II of Act No. and (c) of section fifty-six shall be disposed of to private parties by lease only and not otherwise. All these lands. shall be disposed of under the provisions of this chapter. industrial or other _______________ 47 Section 10 of Act No. shall declare that the same are not necessary for the public service and are open to disposition under this chapter.‰ (Emphasis supplied) Section 6 of Act No. and shall be open to disposition or concession. The lands disposable under this title shall be classified as follows: (a) Lands reclaimed by the Government by dredging. use. 55. or benefit of the lands of the public domain other than timber or mineral lands.‰ Section 8 of the Act limited alienable or disposable lands only to those lands which have been „officially delimited and classified.‰ „disposition. commercial. 2874 provided as follows: „The words „alienation.‰ Section 56 of Act No. as soon as the Governor-General. however. (c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable lakes or rivers. as well as other lands. 2874 stated that lands „disposable 48 under this title shall be classified‰ as government reclaimed. and not otherwise.

foreshore and marshy lands of the public domain.‰ Act No. This is the reason the government prohibited the sale. 1654. Act No. These provisions vested upon the Governor-General the power to classify inalienable lands of the public domain into disposable lands of the public domain. 2874 did not authorize the reclassification of government reclaimed. 2874. Section 58 of Act No. Lands falling under Section 56 (d) were the only lands for nonagricultural purposes the government could sell to private parties. 2874 categorically mandated that disposable lands of the public domain classified as government reclaimed. foreshore and marshy lands remained sui generis. of these lands to private parties. under Act No. These provisions also empowered the Governor-General to classify further such disposable lands of the public domain into government reclaimed.domain for agricultural purposes. while Title III of the same Act governed alienable lands of the public domain for non-agricultural purposes. must formally declare that the lands were „not necessary for the public service. The State always reserved these lands for some future public service. as well as other non-agricultural lands. foreshore or marshy lands of the public domain. The rationale behind this State policy is obvious.‰ The Governor-General. foreshore and marshy public lands for non-agricultural purposes retain their inherent potential as areas for public service. as the only alienable or disposable lands of the public domain that the government could not sell to private parties. Government reclaimed. a policy first enunciated in 1907 in Act No. Government reclaimed. Thus. before allowing the lease of these lands to private parties. Public Estates Authority productive non-agricultural purposes. 2874 reiterated the State policy to lease and not to sell government reclaimed. the government could . 196 196 SUPREME COURT REPORTS ANNOTATED Chavez vs. and only allowed the lease. foreshore and marshy lands „shall be disposed of to private parties by lease only and not otherwise. foreshore and marshy lands into other nonagricultural lands under Section 56 (d).

or concession at the time of the inauguration of the Government established under this Constitution. donated. minerals. subject to any existing right. in which cases beneficial use may be the measure and limit of the grant. or 197 VOL.‰ (Emphasis supplied) . timber. The 1935 Constitution. _______________ 49 Section 57 of Act No. or transferred to a province. municipality. water supply.not sell government reclaimed. petroleum.49 unless the legislature passed a law allowing their sale. development. or utilization shall be limited to citizens of the Philippines or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens. but the land so granted. development. All agricultural. foreshore and marshy lands to private parties. the 1935 Constitution took effect upon its ratification by the Filipino people. Article XIII. encumbered. and other mineral oils. and their disposition. or lease for the exploitation. or utilization of any of the natural resources shall be granted for a period exceeding twenty-five years. in adopting the Regalian doctrine. Natural resources. Lands reclaimed from the sea by private parties with government permission remained private lands. except as to water rights for irrigation. 384. JULY 9. declared in Section 1. with the exception of public agricultural land. 2002 197 Chavez vs. that· „Section 1. renewable for another twenty-five years. or branch or subdivision of the Government shall not be alienated. Dispositions under the 1935 Constitution On May 14. waters. grant. fisheries. coal. or industrial uses other than the development of water power. 1935. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant to Section 5 of the Spanish Law of Waters of 1866. Public Estates Authority Act No. and mineral lands of the public domain. 2874 provided as follows: „x x x. concession. and no license. shall not be alienated. all forces of potential energy and other natural resources of the Philippines belong to the State. exploitation. lease.

foreshore lands. considered part of the StateÊs natural resources. No private corporation or association may acquire. government reclaimed and marshy lands. although subject to classification as disposable public agricultural lands.The 1935 Constitution barred the alienation of all natural resources except public agricultural lands. nor may any individual acquire such lands by purchase in excess of one hundred and forty hectares. lease. may be leased to an individual. became inalienable by constitutional fiat. not exceeding two thousand hectares. Government reclaimed and marshy lands of the public domain. Section 2. which were the only natural resources the State could alienate. x x x. The government could alienate foreshore lands only after these lands were reclaimed and classified as alienable agricultural lands of the public domain. Thus. could only be leased and not sold to private parties because of Act No. or by lease in excess of one thousand and twenty-four hectares. available only for lease for 25 years. The 1935 Constitution did not prohibit individuals and corporations from acquiring government reclaimed and marshy lands of the public domain that were classified as agricultural lands under existing public land laws.‰ 198 198 SUPREME COURT REPORTS ANNOTATED Chavez vs. Lands adapted to grazing. being neither timber nor mineral lands. except when authorized by the legislature. private corporation. or association. renewable for another 25 years.‰ (Emphasis supplied) . However. 2874. or by homestead in excess of twenty-four hectares. Public Estates Authority 50 agricultural lands. or hold public agricultural lands in excess of one thousand and twenty four hectares. fell under the classification of public _______________ otherwise disposed of in a manner affecting its title. Article XIII of the 1935 Constitution provided as follows: „Section 2. The prohibition on private parties from acquiring ownership of government reclaimed and marshy lands of the public domain was only a statutory prohibition and the legislature could therefore remove such prohibition.

(b) Timber. 6. also known as the Public Land Act.Still.‰ Sections 6. after the effectivity of the 1935 Constitution. 2002 199 Chavez vs. 141 authorizes the President to „declare what lands are open to disposition or concession. the legislature continued the long established State policy of retaining for the government title and ownership of government reclaimed and marshy lands of the public domain. upon the recommendation of the Secretary of Agriculture and Commerce. 141. 461 (1947). 141 states that the government can declare open for disposition or concession only lands that are „officially delimited and classified. the legislature did not repeal Section 58 of Act No. CA No. the National Assembly approved Commonwealth Act No. 7 and 8 of CA No. which prior to such classification are inalienable and outside the commerce of man. 2874 to open for sale to private parties government reclaimed and marshy lands of the public domain. 141 read as follows: „Sec. The President. 141 empowers the President to classify lands of the public domain into „alienable or 52 disposable‰ lands of the public domain. On the contrary. JULY 9. 141 of the Philippine National Assembly On November 7. Section 6 of CA No. as amended. 199 VOL. which compiled the then existing laws on lands of the public domain. Register of Deeds. Public Estates Authority governing the classification and disposition of lands of the 51 public domain other than timber and mineral lands.‰ Section 8 of CA No. 141. 1936. remains to this day the existing general law _______________ 50 Krivenko v. Section 7 of CA No. shall from time to time classify the lands of the public domain into· (a) Alienable or disposable. Commonwealth Act No. 79 Phil. 384. and .

being privately owned. taking into account 200 200 SUPREME COURT REPORTS ANNOTATED Chavez vs.(c) Mineral lands. which administration and disposition shall be governed by the laws at present in force or which may hereafter be enacted. have reverted to or become the property of the Commonwealth of the Philippines. shall from time to time declare what lands are open to disposition or concession under this Act. Section 4 (a) of RA No. 141 states as follows: „The provisions of this Act shall apply to the lands of the public domain. 141 defined the terms „alienation‰ and „disposition‰ as follows: „The words „alienation. the President. Section 10 of CA No. when practicable. for the purpose of their administration and disposition. or benefit of the lands of the public domain other than timber or mineral lands. upon recommendation by the Secretary of Agriculture and Commerce. but timber and mineral lands shall be governed by special laws and nothing in this Act provided shall be understood or construed to change or modify the administration and disposition of the lands commonly called „friar lands‰ and those which. shall mean any of the methods authorized by this Act for the acquisition.‰ „disposition. and may at any time and in like manner transfer such lands 53 from one class to another. nor in any manner become private property. 6657 has suspended the authority of the President to reclassify forest or mineral lands into agricultural lands. lease. nor those on which a private right authorized and recognized by this Act or any other .‰ or „concession‰ as used in this Act.‰ 53 R. „No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act until Congress. Sec. Only those lands shall be declared open to disposition or concession which have been officially delimited and classified and. Public Estates Authority Sec. use. For the purposes of the administration and disposition of alienable or disposable public lands. _______________ 51 Section 2 of CA No. nor appropriated by the Government. 8. No.A. surveyed. and which have not been reserved for public or quasi-public uses.‰ 52 Like Act No. 6657 (Comprehensive Agrarian Reform Law of 1988) states. 2874. 7.

(d) Lands not included in any of the foregoing classes. or which. is intended to be used for residential purposes or for commercial. before the government could alienate or dispose of lands of the public domain. as the case may be. 60. Any tract of land comprised under this title may be leased or sold. x x x. Sec. or other means. on government reclaimed. or other productive purposes other than agricultural. Public Estates Authority Sec. the specific limits of the public domain. developmental and equity considerations. foreshore and marshy lands of the public domain. and (c) of section fifty-nine shall be disposed of to private parties by lease only and not . filling. 2002 201 Chavez vs. x x x. 58. JULY 9. shall be disposed of under the provisions of this chapter and not otherwise. or association authorized to purchase or lease public lands for agricultural purposes. (b).valid law may be claimed. being neither timber nor mineral land. are as follows: „Sec. and is open to disposition or concession. (b) Foreshore. 384. to any person. corporation. 141. have ceased to be so. (c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable lakes or rivers. The lands comprised in classes (a). the President must first officially classify these lands as alienable or disposable. shall have delimited by law. Sec. Any tract of land of the public domain which. industrial. having been reserved or appropriated. The salient provisions of CA No. There must be no law reserving these lands for public or quasipublic uses. _______________ ecological. 61. and then declare them open to disposition or concession. 59. The lands disposable under this title shall be classified as follows: (a) Lands reclaimed by the Government by dredging.‰ 201 VOL.‰ Thus.

141. Section 61 allowed only the lease of such lands to private parties. Act 1654 mandated that the control and disposition of the _______________ 54 Covering Sections 58 to 68 of CA No. filling. Court of Appeals. 141 expressly states that disposable lands of the public domain tended for residential. industrial or other non-agricultural purposes.‰ (Emphasis supplied) Section 61 of CA No. foreshore and marshy disposable lands of the public domain.otherwise. All these lands are intended for residential. foreshore and marshy disposable lands for non-agricultural purposes 54 must comply with Chapter IX. however. after the effectivity of the 1935 Constitution. Justice Reynato S. Section 58 of Act No. upon recommendation by the Secretary of Agriculture. as follows: „Foreshore lands are lands of public dominion intended for public use. The government could sell to private parties only lands falling under Section 59 (d) of CA No. The lands included in class (d) may be disposed of by sale or lease under the provisions of this Act. As before. as soon as the President. Title III of CA No. Section 58 of CA No. Any disposition of government reclaimed. In his concurring opinion in the landmark case of 55 Republic Real Estate Corporation v. commercial. So too are lands reclaimed by the government by dredging. 141. 202 . 141 readopted. foreshore and marshy disposable lands of the public domain. or other means. 141. became inalienable under the 1935 Constitution which only allowed the lease of these lands to qualified private parties. Puno summarized succinctly the law on this matter. shall declare that the same are not necessary for the public service and are open to disposition under this chapter. 2874 prohibiting the sale of government reclaimed. 141.‰ Under Section 10 of CA No. unless a subsequent law amended or repealed these provisions. or those lands for nonagricultural purposes not classified as government reclaimed. the term „disposition‰ includes lease of the land. 55 299 SCRA 199 (1998). industrial or other productive purposes other than agricultural „shall be disposed of under the provisions of this chapter and not otherwise. Foreshore lands. commercial.

This was. subject to the original Ordinance appended .‰ Before leasing.‰ (Emphasis supplied) As observed by Justice Puno in his concurring opinion. 141 after the 1935 Constitution took effect. in which case they would fall under the classification of government reclaimed lands. Public Estates Authority foreshore and lands under water remained in the national government. The Public Land Acts of 1919 and 1936 also declared that the foreshore and lands reclaimed by the government were to be „disposed of to private parties by lease only and not otherwise. _______________ 56 Section 1. These lands remained sui generis. unless reclaimed by the government and classified as agricultural lands of the public domain. first implemented in 1907 was thus reaffirmed in CA No. foreshore and marshy alienable lands of the public domain. Said law allowed only the ÂleasingÊ of reclaimed land.202 SUPREME COURT REPORTS ANNOTATED Chavez vs.‰ The State policy prohibiting the sale to private parties of government reclaimed. the Governor-General. But even then. became a constitutional edict under the 1935 Constitution. government reclaimed and marshy disposable lands of the public domain continued to be only leased and not sold to 56 private parties. however. The land remained property of the State. After the effectivity of the 1935 Constitution. had first to determine that the land reclaimed was not necessary for the public service. This requisite must have been met before the land could be disposed of. however. The disposition of the reclaimed land was only by lease. The prohibition on the sale of foreshore lands. Foreshore lands became inalienable as natural resources of the State. 141 has remained in effect at present. Article XIII of the 1935 Constitution limited the disposition and utilization of public agricultural lands to Philippine citizens or to corporations at least sixty percent owned by Philippine citizens. however. the foreshore and lands under water were not to be alienated and sold to private parties. „Commonwealth Act No. upon recommendation of the Secretary of Agriculture and Natural Resources. as the only alienable or disposable lands of the public domain the government could not sell to private parties.

CA No. encumbered. that until the withdrawal of United states sovereignty in the Philippines. municipality or branch or subdivision of the Government for the purposes deemed by said entities conducive to the public interest. and shall not exceed one hundred and forty-four hectares: Provided. thereof. or otherwise disposed of in a manner affecting its title.to the 1935 Constitution stating. 384. That this limitation shall not apply to grants. Lands classified under Section 59 (d) are the only alienable or disposable lands for nonagricultural purposes that the government could sell to private parties. 60. donated.‰ (Emphasis supplied) The congressional authority required in Section 60 of CA No. the only way the government can sell to private parties government reclaimed and marshy disposable lands of the public domain is for the legislature to pass a law authorizing such sale. among others. or transfers made to a province. Section 60 of CA No. 141 mirrors the legislative authority required in Section 56 of Act No. Moreover. Section 60 of CA No. JULY 9. municipality or branch or subdivision of the Government shall not be alienated. 2002 203 Chavez vs. 141 does not authorize the President to reclassify government reclaimed and marshy lands into other non-agricultural lands under Section 59 (d). x x x The area so leased or sold shall be such as shall. 141 expressly requires congressional authority before lands under Section 59 that the government previously transferred to government units or entities could be sold to private parties. respectively. 141 declares that· „Sec.‰ 203 VOL. Public Estates Authority Since then and until now. One reason for the congressional authority is that Section 60 of CA No. except when authorized by Congress: x x x. donations. or transferred to a province. be reasonably necessary for the purposes for which such sale or lease is requested. 2874. in the judgment of the Secretary of Agriculture and Natural Resources. however. but the land so granted. „Citizens and corporations of the United States shall enjoy in the Commonwealth of the Philippines all the civil rights of the citizens and corporations. 141 exempted government units and .

CA No. In case of sale or lease of disposable lands of the public domain falling under Section 59 of CA No. the Director of Lands shall give notice by public advertisement in the same manner as in the case of leases or sales of agricultural public land. 141 provide as follows: „Sec. In the same manner. Sections 63 and 67 require a public bidding. These government units and entities should not just turn around and sell these lands to private parties in violation of constitutional or statutory limitations. Section 60 of CA No.‰ (Emphasis supplied) Thus. the transfer of lands for nonagricultural purposes to government units and entities could be used to circumvent constitutional limitations on ownership of alienable or disposable lands of the public domain. Upon receipt of such authority. Sec. such transfers could also be used to evade the statutory prohibition in CA No. 67. 63. 141 on the sale of government reclaimed 204 204 SUPREME COURT REPORTS ANNOTATED Chavez vs. x x x. Whenever it is decided that lands covered by this chapter are not needed for public purposes. Sections 63 and 67 of CA No. _______________ 57 Section 44 of PD No. and adjudication shall be made to the highest bidder. x x x. Otherwise. 141 constitutes by operation of law a 57 lien on these lands. Public Estates Authority and marshy lands of the public domain to private parties. 496) provides that „liens. 1529 (previously Section 39 of Act No. The lease or sale shall be made by oral bidding.entities from the maximum area of public lands that could be acquired from the State. 141 mandates the Government to put to public auction all leases or sales of alienable or disposable 58 lands of the public domain. claims or rights arising or existing under the laws and the Constitution of the Philippines which are not by law required to appear of record in the Registry of Deeds in order to be valid against . the Director of Lands shall ask the Secretary of Agriculture and Commerce (now the Secretary of Natural Resources) for authority to dispose of the same. 141.

141 did not repeal Section 5 of the Spanish Law of Waters of 1866.subsequent purchasers or encumbrancers of record‰ constitute statutory liens affecting the title. (2) Those which belong to the State. The 1935 Constitution prohibited the alienation of all natural resources except public agricultural lands. which took effect on June 18. and are intended for some public service or for the . shores. x x x. 384. 730.A. 1948. rivers. Section 1 of RA No. 58 RA No. 293. and others of similar character. 141. Articles 420 and 422 of the Civil Code of 1950 state that· „Art. JULY 9. No. ports and bridges constructed by the State. canals. However. 2002 205 Chavez vs. Public Estates Authority Like Act No. without being for public use. Private parties could still reclaim portions of the sea with government permission. shall be given preference to purchase at a private sale of which reasonable notice shall be given to him. 420. 730 provided as follows: „Notwithstanding the provisions of Sections 61 and 67 of Commonwealth Act No.‰ In addition. the reclaimed land could become private land only if classified as alienable agricultural land of the public domain open to disposition under CA No. on June 16. 293 allowing the 205 VOL. 141. roadsteads. The following things are property of public dominion: (1) Those intended for public use. CA No. banks. Congress enacted R. torrents. as amended by RA No. 1952 authorized the private sale of home lots to actual occupants of public lands not needed for public service. any Filipino citizen of legal age who is not the owner of a home lot in the municipality or city in which he resides and who had in good faith established his residence on a parcel of land of the Republic of the Philippines which is not needed for public service. The Civil Code of 1950 The Civil Code of 1950 readopted substantially the definition of property of public dominion found in the Civil Code of 1889. not more than one thousand square meters at a price to be fixed by the Director of Lands with the approval of the Secretary of Agriculture and Natural Resources. such as roads. 2874 before it. 1654 and Act No.

In the case of government reclaimed and marshy _______________ private sale of marshy alienable or disposable lands of the public domain to lessees who have improved and utilized the same as farms. shall form part of the patrimonial property of the State. Section 8. government reclaimed and marshy lands of the State.development of the national wealth. 59 See note 49. as well as the manner of their disposition. is governed by the applicable provisions of CA No. Public Estates Authority lands of the public domain. did not apply to marshy lands under Section 56 (c). 141. R. if developed to enhance the national wealth. which took effect on January 17. Title III of CA No. 1973. without being for public use. Dispositions under the 1973 Constitution The 1973 Constitution. 422. likewise adopted the Regalian doctrine. x x x. commercial. are classified as property of public dominion. industrial or other nonagricultural purposes. Property of public dominion. however. the Civil Code of 1950 included as property of public dominion those properties of the State which. the government must formally declare that the property of public dominion is no longer needed for public use or public service.A.‰ Again. when no longer intended for public use or for public service. No. Like the Civil Code of 1889. 141 which refers to marshy lands leased for residential. before the same could be classified as 59 patrimonial property of the State. Art. fishponds or other similar purposes for at least five years from the date of the lease contract with the government. are intended for public service or the „development of the national wealth.‰ Thus. the declaration of their being disposable. 293. even if not employed for public use or public service. Article XIV of the 1973 Constitution stated that· . 206 206 SUPREME COURT REPORTS ANNOTATED Chavez vs.

waters. Both the 1935 and 1973 Constitution. All lands of the public domain. beneficial use may be the measure and the limit of the grant. prohibited the alienation of all natural resources except agricultural lands of the public domain. except as to water rights for irrigation. were no longer allowed to acquire alienable lands of the public domain unlike in the 1935 Constitution. or utilization of any of the natural resources shall be granted for a period exceeding twenty-five years. Section 11.‰ In contrast. and other natural resources of the Philippines belong to the State.‰ (Emphasis supplied) The 1973 Constitution prohibited the alienation of all natural resources with the exception of „agricultural. wildlife. petroleum and other mineral oils. coal. or lease for the exploration. it would fall under the classification of agricultural land of the public domain. residential and 60 resettlement lands of the public domain. Article XIV of . industrial or commercial. The 1973 Constitution. and no license. limited the alienation of lands of the public domain to individuals who were citizens of the Philippines. commercial. exploitation. 2002 207 Chavez vs. however. fisheries. all forces of potential energy. 8. 384. residential. the term „public agricultural lands‰ in the 1935 Constitution encompassed industrial. concession.‰ However. Industrial or commercial. Private corporations. water supply. even if wholly owned by Philippine citizens. and resettlement lands of the public domain. residential. With the exception of agricultural. minerals. renewable for not more than twenty-five years. development.„Sec. JULY 9. 207 VOL. therefore. in which cases. fisheries. and resettlement lands of the public domain. or industrial uses other than the development of water power. natural resources shall not be alienated. the 1935 Constitution barred the alienation of all natural resources except „public agricultural lands. Public Estates Authority timber nor mineral land. If the land of public domain were neither _______________ 60 See note 60.

held or acquired by. Public Estates Authority and 8 of PD No. homestead or grant. Only individuals could now acquire alienable lands of the public domain. 11. and development requirements of the natural resources. However. No private corporation or association may hold by lease. and the conditions therefor. a wholly Government owned and controlled corporation with a special charter.‰ (Emphasis supplied) Thus. concession. PD No. Purpose. Sections 4 208 208 SUPREME COURT REPORTS ANNOTATED Chavez vs. No private corporation or association may hold alienable lands of the public domain except by lease not to exceed one thousand hectares in area nor may any citizen hold such lands by lease in excess of five hundred hectares or acquire by purchase. or association. ecological. license or permit.·The Authority is hereby created for the following purposes: . in excess of twenty-four hectares. 1084 creating PEA. 4. foreshore and marshy alienable lands of the public domain. corporation. taking into account conservation. 141 applied only to government reclaimed. private corporations could hold alienable lands of the public domain only through lease. The constitutional ban extended to all kinds of alienable lands of the public domain. timber or forest lands and other timber or forest resources in excess of one hundred thousand hectares. such area may be increased by the Batasang Pambansa upon recommendation of the National Economic and Development Authority. under the 1973 Constitution. 1084. 1084 Creating the Public Estates Authority On February 4. any qualified individual. while the statutory ban under CA No. then President Ferdinand Marcos issued Presidential Decree No. or leased to. 1977. vests PEA with the following purposes and powers:· „Sec.the 1973 Constitution declared that· „Sec. The Batasang Pambansa. and private corporations became absolutely barred from acquiring any kind of alienable land of the public domain. shall determine by law the size of land of the public domain which may be developed.

managed. 505 (1911). 112 (1929). economical and beneficial utilization of the above properties. Court of Appeals.‰ (Emphasis supplied) PD No. (c) To provide for. flume x x x. improve. deal in. Government v. in carrying out the purposes for which it is created. Foreshore areas are those covered and uncovered by the ebb and flow of the 61 tide. _______________ 61 Republic Real Estate Corporation v. (j) To reclaim lands and to construct work across. Aldecoa. JULY 9. by dredging. 53 Phil. see note 56. subdivide. 5. or otherwise. (b) To develop. lease and sell any and all kinds of lands. Powers and functions of the Authority. 19 Phil. xxx (i) To hold lands of the public domain in excess of the area permitted to private corporations by statute. acquire. dispose. canal. watercourse. xxx (o) To perform such acts and exercise such functions as may be necessary for the attainment of the purposes and objectives herein specified. 384. Sec. 62 Ibid. 209 VOL.(a) To reclaim land. operate or administer such service as may be necessary for the efficient. any stream. ditch. have the following powers and functions: (a) To prescribe its by-laws. controlled and/or operated by the government. Submerged areas are those permanently under 62 water regardless of the ebb and flow of the tide. administer. including foreshore and submerged areas. 2002 Chavez vs. or to acquire reclaimed land. Public Estates Authority 209 . owned. Cabangis. Foreshore and submerged areas indisputably belong to the public 63 domain and are inalienable unless reclaimed. estates and other forms of real property. filling or other means. buildings. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain. 63 Insular Government v.·The Authority shall.

and until today. PEA can hold title to private lands. there must be legislative authority empowering PEA to sell these lands.‰ Thus. This legislative authority is necessary in view of Section 60 of CA No. or branch or subdivision of the Government shall not be alienated. natural resources cannot be alienated.‰ PD No. any legislative authority granted to PEA to sell its reclaimed alienable lands of the public domain would be subject to the constitutional ban on private corporations from acquiring alienable lands of the public domain. has adopted the Regalian doctrine. as well as title to lands of the public domain. which states· „Sec.‰ and except for alienable agricultural lands of the public domain. The 1987 Constitution declares that all natural resources are „owned by the State. Sections 2 and 3. 1084 expressly empowers PEA „to hold lands of the public domain‰ even „in excess of the area permitted to private corporations by statute. 141. as it still applies now. Dispositions under the 1987 Constitution The 1987 Constitution.classified as alienable lands open to disposition. only to „private corporations and associations. encumbered or otherwise disposed of in a manner affecting its title.‰ (Emphasis supplied) Without such legislative authority. Hence. The constitutional ban applied then. PEA could not sell but only lease its reclaimed foreshore and submerged alienable lands of the public domain. a fully owned government corporation. donated or transferred to a province. like the 1935 and 1973 Constitutions before it. In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public domain. except when authorized by Congress. but the land so granted. 60. x x x. x x x. and further declared no longer needed for public service. The ban in the 1973 Constitution on private corporations from acquiring alienable lands of the public domain did not apply to PEA since it was then. municipality. Article XII of the 1987 Constitution state that· 210 210 SUPREME COURT REPORTS ANNOTATED . such legislative authority could only benefit private individuals. Nevertheless.

wildlife. the 1987 Constitution allows private corporations to hold alienable lands of the public domain only through lease. Public Estates Authority „Section 2. mineral lands. the size of lands of the public domain which may be acquired. waters. ecology. homestead.Chavez vs. forest or timber. held. Lands of the public domain are classified into agricultural. thus: 211 . or grant. 141. minerals. petroleum and other mineral oils. the commissioners probed the rationale behind this ban. All lands of the public domain. Private corporations or associations may not hold such alienable lands of the public domain except by lease. forests or timber. all forces of potential energy. renewable for not more than twenty-five years. developed. coal. Taking into account the requirements of conservation. Agricultural lands of the public domain may be further classified. x x x. and utilization of natural resources shall be under the full control and supervision of the State. and subject to the requirements of agrarian reform. flora and fauna. and national parks. and development. by law according to the uses which they may be devoted. and not to exceed one thousand hectares in area. Alienable lands of the public domain shall be limited to agricultural lands.‰ (Emphasis supplied) The 1987 Constitution continues the State policy in the 1973 Constitution banning private corporations from acquiring any kind of alienable land of the public domain. or acquire not more than twelve hectares thereof by purchase. all other natural resources shall not be alienated. The exploration. Citizens of the Philippines may lease not more than five hundred hectares. foreshore and marshy alienable lands of the public domain is still CA No. and other natural resources are owned by the State. the general law governing the lease to private corporations of reclaimed. except through lease. As in the 1935 and 1973 Constitutions. the Congress shall determine. fisheries. for a period not exceeding twenty-five years. Section 3. by law. alienable lands of the public domain is not well understood. development. Like the 1973 Constitution. During the deliberations of the 1986 Constitutional Commission. With the exception of agricultural lands. or leased and the conditions therefor. The Rationale behind the Constitutional Ban The rationale behind the constitutional ban on corporations from acquiring.

‰ (Emphasis supplied) 64 In Ayog v. Is that the intent of this provision? MR. 384.Ê If we recall. Cusi. it prohibits private corporations from acquiring alienable public lands. But it has not been very clear in jurisprudence what the reason for this is. Huge landholdings by corporations or private persons had spawned social unrest. JULY 9. BERNAS: Mr. this provision did not exist under the 1935 Constitution. placing the land in the name of a corporation would be more . BERNAS: In existing decisions involving the Iglesia ni Cristo. In effect. VILLEGAS: I think that is the spirit of the provision. In some of the cases decided in 1982 and 1983. If the constitutional intent is to encourage economic family-size farms. the Court explained the rationale behind this constitutional ban in this way: „Indeed. Public Estates Authority „FR. and not more than 12 hectares under the 1987 Constitution.‰ However. Vice-President. but this was introduced in the 1973 Constitution. line 5 which says: „No private corporation or association may hold alienable lands of the public domain except by lease. the Constitution could have simply limited the size of alienable lands of the public domain that corporations could acquire. one purpose of the constitutional prohibition against purchases of public agricultural lands by private corporations is to equitably diffuse land ownership or to encourage Âownercultivatorship and the economic family-size farmÊ and to prevent a recurrence of cases like the instant case. there were instances where the Iglesia ni Cristo was not allowed to acquire a mere 313-square meter land where a chapel stood because the Supreme Court said it would be in violation of this. 2002 211 Chavez vs.VOL. my questions have reference to page 3. who could acquire not more than 24 hectares of alienable lands of the public domain under the 1973 Constitution. it was Indicated that the purpose of this is to prevent large landholdings. FR. if the constitutional intent is to prevent huge landholdings. The Constitution could have followed the limitations on individuals. not to exceed one thousand hectares in area.

is to transfer ownership of only a limited area of alienable land of the public domain to a qualified individual. In actual practice. If the farmland is registered in the name of a corporation. This. his heirs would inherit shares in the corporation instead of subdivided parcels of the farmland. individuals who already acquired the maximum area of alienable lands of the public domain could easily set up corporations to acquire more alienable public lands. The corporation is a convenient vehicle to circumvent the constitutional limitation on acquisition by individuals of alienable lands of the public domain. The constitutional intent. An individual could own as many corporations as his means would allow him. The most effective way to insure faithful adherence to this constitutional intent is to grant or sell alienable lands of the public domain only to individuals. under the 1973 and 1987 Constitutions. upon the death of the owner. as stated in its . the constitutional ban strengthens the constitutional limitation on individuals from acquiring more than the allowed area of alienable lands of the public domain. An individual could even hide his ownership of a corporation by putting his nominees as stockholders of the corporation. The Amended Joint Venture Agreement The subject matter of the Amended JVA. Without the constitutional ban. This would prevent the continuing break-up of farmlands into smaller and smaller plots from one generation to the next. Public Estates Authority effective in preventing the break-up of farmlands. since the vehicle to circumvent the constitutional intent is removed._______________ 64 118 SCRA 492 (1982). This constitutional intent is safeguarded by the provision prohibiting corporations from acquiring alienable lands of the public domain. it would seem. The available alienable public lands are gradually decreasing in the face of an ever-growing population. is the practical benefit arising from the constitutional ban. 212 212 SUPREME COURT REPORTS ANNOTATED Chavez vs.

15 hectares are still submerged areas forming part of Manila Bay. totaling 367.‰ plus an option „granted to AMARI to subsequently reclaim another 350 66 hectares x x x. JULY 9. the total net usable area which is defined in the Amended JVA as the total reclaimed area less 30 percent earmarked for common areas. „[T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo Boulevard in Paranaque and Las Pinas.second Whereas clause. „[A]t AMARIÊs option as approved by PEA.441 square meters. an additional 350 hectares more or less to regularize 65 the configuration of the reclaimed area. AMARI will further shoulder all the reclamation costs of all the other areas.578.‰ and meters 3.15 hectares. consists of three properties.559 square contiguous to the three islands.2 (c) of the Amended JVA provides that· „x x x.421. AMARI and PEA will share. the Amended JVA covers a reclamation area of 750 hectares. namely: 1. at its own expense. in the proportion of 70 percent and 30 percent. Under the Amended JVA. AMARI will reimburse PEA the sum of P1. 384.‰ In short.894.200. Only 157. „[A]nother area of 2. and the rest of the 592.00 for PEAÊs „actual cost‰ in partially reclaiming the Freedom Islands.‰ PEA confirms that the Amended JVA involves „the development of the Freedom Islands and further reclamation of about 250 hectares x x x. AMARI will also complete. Metro Manila.129. PEA shall have the duty to execute without delay the necessary deed of transfer or conveyance of the title pertaining to . Public Estates Authority 2. still to be reclaimed. with a combined titled area of 1.84 hectares of the 750-hectare reclamation project have been reclaimed. the reclamation of the Freedom Islands. respectively. Section 5. will be issued in the name of AMARI. totaling 592.5 hectares. 2002 213 Chavez vs.‰ 213 VOL. Title to AMARIÊs share in the net usable area.

until such time when a corresponding proportionate area of additional land pertaining to PEA has been titled. PEA shall deliver to AMARI only seventy percent (70%) of the titles pertaining to AMARI. The Threshold Issue The threshold issue is whether AMARI. x x x. can-acquire and own under the Amended JVA 367.5 hectares of reclaimed land which will be titled in its name.2. PEA.‰ The Amended JVA is the product of a renegotiation of the original JVA dated April 25. 66 PEAÊs Memorandum. Section 3. see note 2 at 1 & 2. 1995. AMARIÊs Memorandum. shall then cause the issuance and delivery of the proper certificates of title covering AMARIÊs Land Share in the name of AMARI. a private corporation.a of the Amended JVA states that· „PEA hereby contributes to the joint venture its rights and privileges to perform Rawland Reclamation and Horizontal Development as well as own the Reclamation Area. that if more than seventy percent (70%) of the titled area at any given time pertains to AMARI. Public Estates Authority Indisputably. under the Amended JVA AMARI will acquire and own a maximum of 367. To implement the Amended JVA. 214 214 SUPREME COURT REPORTS ANNOTATED Chavez vs. 1995 and its supplemental agreement dated August 9. provided. Article XII of the 1987 Constitution which state that: . rights and privileges to reclaim foreshore and submerged areas in Manila Bay.5 hectares of reclaimed foreshore and submerged areas in Manila Bay in view of Sections 2 and 3. when requested in writing by AMARI. authority and privilege to undertake the Project in accordance with the Master Development Plan.AMARIÊs Land share based on the Land Allocation Plan. thereby granting the Joint Venture the full and exclusive right. PEA delegated to the unincorporated PEA-AMARI joint venture PEAÊs statutory authority.‰ (Emphasis supplied) _______________ 65 Annex „B‰. see note 6.

or other means. and other natural resources are owned by the State. and other mineral oils. wildlife. However. In its 67 Memorandum. x x x. as amended). x x x. All lands of the public domain. JULY 9. fisheries.‰ The Legal Task Force concluded that· „D. flora and fauna. Private corporations or associations may not hold such alienable lands of the public domain except by lease. all other natural resources shall not be alienated. coal. PEA admits that· „Under the Public Land Act (CA 141. all forces of potential energy. petroleum. x x x. 384. Conclusion Reclaimed lands are lands of the public domain. 59. The lands disposable under this title shall be classified as follows: (a) Lands reclaimed by the government by dredging.‰ (Emphasis supplied) 215 VOL. by virtue of which . reclaimed lands are classified as alienable and disposable lands of the public domain: ÂSec. xxx Section 3. 365 admitted in its Report and Recommendation to then President Fidel V. the rights of ownership and disposition over reclaimed lands have been transferred to PEA. With the exception of agricultural lands. 2002 215 Chavez vs. Ramos. x x x Alienable lands of the public domain shall be limited to agricultural lands. „[R]eclaimed lands are classified as alienable and 69 disposable lands of the public do-main. Public Estates Authority Classification of Reclaimed Foreshore and Submerged Areas PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are alienable or disposable lands of the public domain. the Legal Task Force constituted under Presidential Administrative Order No. forests or timber. waters. minerals. by statutory authority. filling.„Section 2.Ê ‰ (Emphasis supplied) 68 Likewise.

see note 12 at 3. 1987 Constitution). except by lease (Sec. waters x x x and other natural resources‰ and consequently „owned by the State. 141 provides that „only those lands shall be declared open to disposition or concession which 72 have been officially delimited and classified.‰ The President has the authority to classify inalienable lands of the public domain into alienable or disposable lands of the public domain. There must be a law or presidential proclamation officially classifying these reclaimed lands as alienable or disposable and open to disposition or concession.PEA. 3. 70 This should read Article XII. XVII. 44. p. 3. Article XII of the 1987 Constitution. as owner. Garcia. p.. these reclaimed lands cannot be classified as alienable or disposable if the law has reserved them for some public or 71 quasi-public use. 10 & 11. 141. 216 216 SUPREME COURT REPORTS ANNOTATED Chavez vs. The constitutional provision prohibiting private corporations 70 from holding public land. Art. Moreover.‰ As such. may validly convey the same to any qualified person without violating the Constitution or any statute. the Executive Department attempted to sell the Roppongi property in Tokyo. pursuant to Section 6 of CA No. Section 8 of CA No. 68 See notes 9. which was acquired by the Philippine Government for use as the . does not apply to reclaimed lands whose ownership has passed on to PEA by statutory grant. Public Estates Authority merged areas „shall not be alienated. 69 Annex „C‰. AMARIÊs Memorandum. the foreshore and submerged areas of Manila Bay are part of the „lands of the public domain.‰ unless they are classified as „agricultural lands‰ of the public domain. The mere reclamation of these areas by PEA does not convert these inalienable natural resources of the State into alienable or disposable lands of the public domain. In 73 Laurel vs. foreshore and sub_______________ 67 Ibid.‰ Under Section 2. Japan.

On January 19. the Court still ruled that. 335 [1960]. coupled with President AquinoÊs actual issuance of a special patent covering the Freedom Islands. issued on February 4. 1085. 1085. 74 Article 422 of the Civil Code states as follows: „Property of public dominion. 384. Bercilles. Aquino issued Special Patent No. authorized the issuance of special land patents for lands reclaimed by PEA from the foreshore or submerged areas of Manila Bay.Chancery of the Philippine Embassy. Public Estates Authority PD No. not available for private appropriation or ownership Âuntil there is a formal declaration on the part of the government to withdraw it from being suchÊ (Ignacio v. 1529 authorizing the issuance of certificates of title corresponding to land patents. when no longer needed for public use or public service. under Article 422 of the Civil Code. 1999 the Register of Deeds of the Municipality of Paranaque issued TCT Nos. The Court ruled that· „The fact that the Roppongi site has not been used for a long time for actual Embassy service does not automatically convert it to patrimonial property. 3517 in the name of PEA for the 157. v. shall form part of the patrimonial property of the State. 108 Phil. 72 Emphasis supplied. 1988 then President Corazon C. Although the Chancery had transferred to another location thirteen 74 years earlier. on April 9. 2002 217 Chavez vs. these certificates of title are still in the name of PEA. PD No. Any such conversion happens only if the property is withdrawn from public use (Cebu Oxygen and Acetylene Co. To this day. Director of Lands.84 hectares comprising the partially reclaimed Freedom Islands. a property of public dominion retains such character until formally declared otherwise. A property continues to be part of the public domain. . 141.‰ 217 VOL. 7311 and 7312 in the name of PEA pursuant to Section 103 of PD No. 66 SCRA 481 [1975]. 1977. 73 187 SCRA 797 (1990). JULY 9.‰ (Emphasis supplied) _______________ 71 Section 8 of CA No. 7309. Subsequently.

nor national park lands. AMARI. Section 3.‰ Being neither timber. mineral. Thus. then it cannot be said that reclaimed lands are lands of the public domain which the 75 State may not alienate. pueblos or private . All other natural resources. mineral lands. and are inalienable pursuant to Section 2. argues that „if the ownership of reclaimed lands may be given to the party constructing the works. 3517. are „waters x x x owned by the State‰ forming part of the public domain. and national parks. The Freedom Islands are thus alienable or disposable lands of the public domain. agricultural lands of the public domain are the only natural resources that the State may alienate to qualified private parties. the reclaimed Freedom Islands necessarily fall under the classification of agricultural lands of the public domain. PEA had already reclaimed the Freedom Islands although subsequently there were partial erosions on some areas. Article XII of the 1987 Constitution classifies lands of the public domain into „agricultural. the Freedom Islands were no longer part of Manila Bay but part of the land mass. 1973 with the Commissioner of Public Highways. PD No. citing Article 5 of the Spanish Law of Waters of 1866. Under the 1987 Constitution.is equivalent to an official proclamation classifying the Freedom Islands as alienable or disposable lands of the public domain. or by the provinces. Article XII of the 1987 Constitution. open to disposition or concession to qualified parties. Public Estates Authority AMARI claims that the Freedom Islands are private lands because CDCP.‰ Article 5 of the Spanish Law of Waters reads as follows: „Article 5. 1085 and President AquinoÊs issuance of a land patent also constitute a declaration that the Freedom Islands are no longer needed for public service. reclaimed the islands under a contract dated November 20. forest or timber. such as the seas or bays. The government had also completed the necessary surveys on these islands. Lands reclaimed from the sea in consequence of works constructed by the State. 218 218 SUPREME COURT REPORTS ANNOTATED Chavez vs. then a private corporation. At the time then President Aquino issued Special Patent No.

Rollo. Private parties could own the reclaimed land only if not „otherwise provided by the terms of the grant of authority. 219 VOL. 20. de Castillo. the contract between CDCP and the government was executed after the effectivity of the 1973 Constitution . In particular. JULY 9.‰ Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on the disposition of public lands. Public Estates Authority must first be classified as alienable or disposable before the government can alienate them. Insular Government. 13 SCRA 705 (1965). p. belonged to the State. p. Law of Waters of 1866. 935 (1909). 163 SCRA 286 (1988). CA No. Moreover. Rodriguez. Article 5 of the Spanish Law of Waters of 1866 adopted the time-honored principle of land ownership that „all lands that were not acquired from the government. 384. 141 requires that lands of the public domain _______________ 75 AMARIÊs Comment dated June 24. It also meant that the State could grant or withhold ownership of the reclaimed land because any reclaimed land.‰ This clearly meant that no one could reclaim from the sea without permission from the State because the sea is property of public dominion. unless otherwise provided by the terms of the grant of authority. either by purchase or by grant. with proper permission. 41 Phil. 2002 219 Chavez vs.persons. shall become the property of the party constructing such works. 77 Cariño v. 85. a private person reclaiming from the sea without permission from the State could not acquire ownership of the reclaimed land which would remain property of public dominion like the sea it 76 replaced. private parties could reclaim from the sea only with „proper permission‰ from the State. Republic v.‰ (Emphasis supplied) Under Article 5 of the Spanish. Lat Vda. belong to the public 77 domain. These lands must not be 78 reserved for public or quasi-public purposes. like the sea from which it emerged. Thus. 1998. 76 Dizon v.

66 hectares of the public domain in Manila Bay „situated in the cities of Manila and Pasay and the municipality of Paranaque. Court of Appeals. by Dewey Boulevard.‰ which _______________ 78 Proclamation No. and no longer by „grant or permission as provided in Section 5 of the Spanish Law of Waters of 1866. 3-A. on the East.‰ which area.‰ PD No. 525. the reclamation of areas under water. shall be limited to the National Government or any person authorized by it under a proper contract. 1954. Island of Luzon. by Manila Bay. Executive Order No. reserved for „National Park purposes‰ 464. 220 220 SUPREME COURT REPORTS ANNOTATED . issued on February 14. Private parties may reclaim from the sea only under a contract with the National Government. designated PEA as the National GovernmentÊs implementing arm to undertake „all reclamation projects of the government. Section 1 of PD No. by Manila Bay. as described in detail in the Proclamation. 3-A declared that· „The provisions of any law to the contrary notwithstanding. 1973.‰ See concurring opinion of Justice Reynato S. is „[B]ounded on the North. 41. whether foreshore or inland. and on the south and west. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation of areas under water could now be undertaken only by the National Government or by a person contracted by the National Government. Presidential Decree No. 299 SCRA 1999 (1998). „national parks‰ are inalienable natural resources of the State. This contract could not have converted the Freedom Islands into private lands of a private corporation. (Emphasis supplied) x x x. 1979. Puno in Republic Real Estate Corporation v. revoked all laws authorizing the reclamation of areas under water and revested solely in the National Government the power to reclaim lands. Province of Rizal. issued by President Ramon Magsaysay on July 5. issued on January 11. Article XII of the 1987 Constitution. Under sections 2 and 3.which barred private corporations from acquiring any kind of alienable land of the public domain.

Only then can these reclaimed lands be considered alienable or disposable lands of the public domain and within the commerce of man. The Amended JVA covers not only the Freedom Islands. subject to the constitutional ban on private corporations from acquiring alienable lands of the public domain. These submerged areas are not covered by any patent or certificate of title. 1084. There is no legislative or Presidential act classifying these submerged areas as alienable or disposable lands of the public domain open to disposition. Once reclaimed and transformed into public agricultural lands. maintain and operate such systems of sanitary sewers as may be necessary. tramways and other kinds of land transportation. Under Section 5 of PD No. under the Constitution. a private party receives compensation for reclamation services rendered to PEA. Payment to the contractor may be in cash. The classification of PEAÊs reclaimed foreshore and submerged lands into alienable or disposable lands open to disposition is necessary because PEA is tasked under its charter to undertake public services that require the use of lands of the public domain. Public Estates Authority „shall be undertaken by the PEA or through a proper contract executed by it with any person or entity.‰ forming part of the public domain and consequently inalienable. the government may declare these lands no longer needed for public service. [T]o . [T]o construct. or in kind consisting of portions of the reclaimed land. the functions of PEA include the following: „[T]o own or operate railroads. x x x. the government may then officially classify these lands as alienable or disposable lands open to disposition. Thereafter. The reclaimed land can be used as payment in kind only if the reclaimed land is first classified as alienable or disposable land open to disposition.‰ Under such contract. but also an additional 592. which under the Constitution are the only natural resources that the State may alienate. Only when actually reclaimed from the sea can these submerged areas be classified as public agricultural lands.15 hectares which are still submerged and forming part of Manila Bay.. and then declared no longer needed for public service.Chavez vs. these submerged areas are. Until reclaimed from the sea. and in their present state are inalienable and outside the commerce of man. „waters x x x owned by the State. There can be no dispute that these submerged areas form part of the public domain.

525 recognized PEA as the government entity „to undertake the reclamation of lands and ensure their maximum utilization 79 in promoting public welfare and interests. EO No. PEA became the primary implementing agency of the National Government to reclaim foreshore and submerged lands of the public domain.‰ Thus. 384. roads. a later law .‰ Thus. 525.‰ The same section also states that „[A]ll reclamation projects shall be approved by the President upon recommendation of the PEA. JULY 9. whether or not classified as alienable or disposable. 1084. buildings and/or any of its properties and to impose or collect fees or tolls for their use. directing. by declaring that all lands reclaimed by PEA „shall belong to or be owned by the PEA could not automatically operate to classify inalienable lands into alienable or disposable lands of the public domain. x x x. 3-A and PD No. Section 1 of Executive Order No. 525 provides that PEA „shall be primarily responsible for integrating. Otherwise. part of the reclaimed foreshore and submerged lands held by the PEA would actually be needed for public use or service since many of the functions imposed on PEA by its charter constitute essential public services. Section 3 of EO No. and coordinating all reclamation projects for and on behalf of the National Government. 2002 221 Chavez vs. utilities. there must be a formal declaration segregating reclaimed lands no longer needed for public service from those still needed for public service. under EO No. maintain and operate such storm drains as may be necessary.‰ Since large portions of these reclaimed lands would obviously be needed for public service. 525. The Revised Administrative Code of 1987. Moreover. in relation to PD No. reclaimed foreshore and submerged lands of the public domain would automatically become alienable once reclaimed by PEA. and shall be undertaken by the PEA or through a proper contract executed by it with any person or entity.‰ PEA is empowered to issue „rules and regulations as may be necessary for the proper use by private parties of any or all of the highways. Public Estates Authority struct.con221 VOL.

alienable and disposable public lands.‰ DENR . sub-classification. vests in the Department of Envi_______________ 79 Fifth Whereas clause of EO No. order. supervise and police our natural resources. concessions. 4. lease agreements and such other privileges concerning the development. DENR exercises „supervision and control over alienable and disposable public lands. Public Estates Authority ronment and Natural Resources („DENR‰ for brevity) the following powers and functions: „Sec. freshwater. Powers and Functions. noncompliance or violations of any regulation. impels appropriate taxes. surveying and titling of lands in consultation with 80 appropriate agencies. fees. regulations and guidelines on the issuance of licenses. 222 222 SUPREME COURT REPORTS ANNOTATED Chavez vs. development. (15) Exercise exclusive jurisdiction on the management and disposition of all lands of the public domain and serve as the sole agency responsible for classification. rentals and any such form of levy and collect such revenues for the exploration. and brackish water and over all aquatic resources of the country and shall continue to oversee. cancel or cause to cancel such privileges upon failure.‰ (Emphasis supplied) As manager.than either PD No. conservator and overseer of the natural resources of the State.·The Department shall: (1) x x x xxx (4) Exercise supervision and control over forest lands. utilization or gathering of such resources. charges. permits. 1084 or EO No. exploration and utilization of the countryÊs marine. and for all other causes which are in furtherance of the conservation of natural resources and supportive of the national interest. in the process of exercising such control. mineral resources and. x x x (14) Promulgate rules. 525. 525.

3517 in compliance with the Revised Administrative Code and Sections 6 and 7 of CA No. Jr. Hence.also exercises „exclusive jurisdiction on the management and disposition of all lands of the public domain. Chapter I. DENR is vested with the power to authorize the reclamation of areas under water. DENR decides whether reclaimed lands of PEA should be classified as alienable under _______________ 80 Section 4. PEA is tasked to develop. whether directly or through private contractors. 2002 223 Chavez vs. Title XIV Book IV. countersigned Special Patent No. the mere physical act of reclamation by PEA of foreshore or submerged areas does not make the reclaimed lands alienable or disposable lands of the public domain. much less patrimonial lands of PEA. should be reclaimed or not. 141. On the other hand. In short. This means that PEA needs authorization from DENR before PEA can undertake reclamation projects in Manila Bay. 223 VOL. JULY 9.‰ Thus. Factoran. DENR is also empowered to classify lands of the public domain into alienable or disposable lands subject to the approval of the President. Likewise. 141. Clearly. sell or lease the reclaimed alienable lands of the public domain. Public Estates Authority 81 82 Sections 6 and 7 of CA No. DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain. or in any part of the country. Once DENR decides that the reclaimed lands should be so classified. while PEA is vested with the power to undertake the physical reclamation of areas under water. it then recommends to the President the issuance of a proclamation classifying the lands as alienable or disposable lands of the public domain open to disposition. 384. like foreshore or submerged areas of Manila Bay. the mere transfer by the National Government of lands of the public domain to PEA does not make the lands alienable or . DENR decides whether areas under water. We note that then DENR Secretary Fulgencio S.

Title I 84 and Title III of CA No. or otherwise disposed of in a manner affecting 85 its title. argues that as alienable or disposable lands of the public domain. 141.·Whenever real property of the Government is authorized by law to be . much less patrimonial lands of PEA. admits that reclaimed lands transferred to a branch or subdivision of the government „shall not be alienated. 141 and other applicable laws. shall from time to time declare what lands are open to disposition or concession under this Act. Garcia. like the Legal Task Force. Public Estates Authority main. Absent two official acts·a classification that these lands are alienable or disposable and open to disposition and a declaration that these lands are not needed for public service. Only such an official classification and formal declaration can convert reclaimed lands into alienable or disposable lands of the public do_______________ 81 Section 6 of CA No. citing Section 60 of CA No. 48. the Court cited Section 48 of the Revised Administrative Code of 1987. the reclaimed lands shall be disposed of in accordance with CA No. 141 provides as follows: „For purposes of the administration and disposition of alienable or disposable public lands. upon the recommendation of the Secretary of Agriculture and Commerce. encumbered. x x x.disposable lands of the public domain.‰ 82 Section 7 of CA No. PEA. which states that· „Sec. Official Authorized to Convey Real Property. lands reclaimed by PEA remain inalienable lands of the public domain. open 83to disposition under the Constitution.‰ 224 224 SUPREME COURT REPORTS ANNOTATED Chavez vs. the Public Land Act. 142 provides as follows: „The President. PEAÊs Authority to Sell Reclaimed Lands PEA. the President. upon recommendation by the Secretary of Agriculture and Commerce.‰ (Emphasis by PEA) 86 In Laurel vs. shall from time to time classify the lands of the public domain into·(a) Alienable or disposable. 141. except when authorized by Congress: x x x.

provides that· „The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to the contract for the reclamation and construction of the Manila-Cavite Coastal Road Project between the Republic of . upon recommendation of the Secretary of Agriculture and Natural Resources. or Industrial and other Similar Purposes. fishpond. the Court concluded that a law is needed to convey any real property belonging to the Government.‰ 85 PEAÊs Memorandum. 384. 225 VOL.conveyed. or similar purposes for at least five years from the date of the contract of lease. 293. issued on February 4. authorized the sale of marshy lands under certain conditions. 1977. shall declare that the same are not necessary for the public service.‰ 84 RA No.‰ (Emphasis supplied) PEA contends that PD No. 525 constitute the legislative authority allowing PEA to sell its reclaimed lands. PD No. JULY 9. enacted on June 16. The Court declared that· _______________ 83 On „Lands for Residential. the deed of conveyance shall be executed in behalf of the government by the following: x x x. 1085. see note 2 at 45. marshy lands and lands under water bordering on shores or banks or navigable lakes or rivers which are covered by subsisting leases or leases which may hereafter be duly granted under the provisions of the said Act and are already improved and have been utilized for farming. 1085 and EO No. may be sold to the lessees thereof under the provisions of Chapter Five of the said Act as soon as the President.‰ Thus. Public Estates Authority „It is not for the President to convey real property of the government on his or her own sole will. 1948. 86 See note 73. Commercial. 2002 225 Chavez vs. It requires executive and legislative concurrence. Any such conveyance must be authorized and approved by a law enacted by the Congress. 293 provided as follows: „The provisions of section sixty-one of Commonwealth Act Numbered One hundred and forty-one to the contrary notwithstanding. Section 1 of RA No.

to be reclaimed as provided for in the abovementioned contract. conveyed and assigned to the ownership and administration of the Public Estates Authority established pursuant to PD No. Provided. On the basis of such patents. 1973 and/or any other contract or reclamation covering the same area is hereby transferred. The Secretary of Public Highways and the General Manager of the Public Estates Authority shall execute such contracts or agreements. All lands reclaimed by PEA shall belong to or be owned by the PEA which shall be responsible for its administration. 1084.the Philippines and the Construction and Development Corporation of the Philippines dated November 20. utilization or disposition in accordance with the provisions of Presidential Decree No. Any and all income that the PEA may derive from the sale. however. the Public Estates Authority shall issue in favor of the Republic of the Philippines the corresponding shares of stock in said entity with an issued value of said shares of stock (which) shall be deemed fully paid and non-assessable. Section 3 of EO No. including appropriate agreements with the Construction and Development Corporation of the Philippines. 3. Special land patent/patents shall be issued by the Secretary of Natural Resources in favor of the Public Estates Authority without prejudice to the subsequent transfer to the contractor or his assignees of such portion or portions of the land reclaimed. development. provides that· „Sec. the aforesaid contract between the Republic of the Philippines and the Construction and Development Corporation of the Philippines. 1979. or incident to. the Land Registration Commission shall issue the corresponding certificate of title. 1084. Public Estates Authority On the other hand. the Public Estates Authority shall exercise the rights and assume the obligations of the Republic of the Philippines (Department of Public Highways) arising from. lease or use of reclaimed lands . That the rights and interests of the Construction and Development Corporation of the Philippines pursuant to the aforesaid contract shall be recognized and respected. Henceforth. as may be necessary to implement the above. In consideration of the foregoing transfer and assignment. (Emphasis supplied) 226 226 SUPREME COURT REPORTS ANNOTATED Chavez vs. 525. issued on February 14.

227 VOL. 525 expressly states that PEA should dispose of its reclaimed lands „in accordance with the provisions of Presidential Decree No. PEA may sell to private parties its patrimonial properties in accordance with the PEA charter free from constitutional limitations. however. PD No.shall be used in accordance with the provisions of Presidential Decree No.‰ There is no express authority under either PD No. 1085 merely transferred „ownership and administration‰ of lands reclaimed from Manila Bay to PEA. 384. 1084. 525 declared that lands reclaimed by PEA „shall belong to or be owned by PEA. PEA may also sell its alienable or disposable lands of the public domain to private individuals since. PEA. Private corporations remain _______________ 87 Section 4(b) of PD No. therefore. administer. Public Estates Authority barred from acquiring any kind of alienable land of the . 2002 227 Chavez vs. subdivide. there is no longer any statutory prohibition against such sales and the constitutional ban does not apply to individuals. 87 managed. 525 for PEA to sell its reclaimed lands. The legislative authority benefits only individuals. JULY 9. 1085 or EO No.‰ (Emphasis supplied) There is. expressly tasks PEA „to develop. dispose lease and sell any and all kinds of lands x x x owned. Article XII of the 1987 Constitution expressly prohibits such sales. deal in. controlled and/or operated by the government. The constitutional ban on private corporations from acquiring alienable lands of the public domain does not apply to the sale of PEAÊs patrimonial lands. 1084. whether patrimonial or alienable lands of the public domain. improve. 1084. however. PEAÊs charter. with the legislative authority. legislative authority granted to PEA to sell its lands.‰ EO No. while EO No. cannot sell any of its alienable or disposable lands of the public domain to private corporations since Section 3.‰ the charter of PEA. acquire.

PEA would have to conduct a public bidding in selling or leasing these lands. PEA must observe the provisions of Sections 63 and 67 of CA No. EO No. 730 allows the private sale of home lots to actual occupants of public lands. The provision in PD No. 1445. 1445 mandates that· _______________ 88 R. and further declared no longer needed for public service. The requirement of public auction in the sale of reclaimed lands Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to disposition.‰ This is an acknowledgment that the provisions of CA No. otherwise known as the Government Auditing Code. 228 228 SUPREME COURT REPORTS ANNOTATED . „supplemented by Commonwealth Act No. the government is required to sell valuable government property through public bidding. 654. in the absence of a law exempting PEA from holding a public 88 auction. Otherwise. under Section 79 of PD No. No. 141. 1981. whether in kind and in installment. Section 79 of PD No.A. 1085 stating that portions of the reclaimed lands could be transferred by PEA to the „contractor or his assignees‰ (Emphasis supplied) would not apply to private corporations but only to individuals because of the constitutional ban. does not exempt PEA from the requirement of public auction. 141 requiring public auction. Executive Order No. 1084. the provisions of PD No. including government reclaimed lands. 654 merely authorizes PEA to decide the mode of payment. 141 apply to the disposition of reclaimed alienable lands of the public domain unless 89 otherwise provided by law.public domain. but does not authorize PEA to dispense with public auction. 3517 expressly states that the patent is issued by authority of the Constitution and PD No. as amended. See note 63. 1085 would violate both the 1973 and 1987 Constitutions. which authorizes PEA „to determine the kind and manner of payment for the transfer‰ of its assets and properties. 89 Issued on February 26. Special Patent No. Moreover.

only Philippine citizens are qualified to bid for PEAÊs reclaimed foreshore and submerged alienable lands of the public domain. 1991. PEA originally scheduled a public bidding for the Freedom Islands on December 10. The Commission on Audit implements Section 79 of the Government Auditing Code 91 through Circular No. if found to be valueless or unsaleable. be inspected by the head of the agency or his duly authorized representative in the presence of the auditor concerned and. 89-296 dated January 27. it shall. after advertising by printed notice in the Official Gazette. it may be destroyed in their presence. When government property has become unserviceable for any cause.‰ It is only when the public auction fails that a negotiated sale is allowed. 560 did not discuss this issue. PEA imposed a condition that the _______________ 90 While PEA claims there was a failure of public bidding on December 19.Chavez vs. and a negotiated sale can be resorted to only in case of „failure of public auction. by notices posted for a like period in at least three public places in the locality where the property is to be sold. Public Estates Authority „Section 79. If found to be valuable. Senate Committee Report No. . or for not less than three consecutive days in any newspaper of general circulation. upon application of the officer accountable therefor. or where the value of the property does not warrant the expense of publication. the property may be sold at a private sale at such price as may be fixed by the same committee or body concerned and approved by the Commission. Private corporations are barred from bidding at the auction sale of any kind of alienable land of the public domain. in which case the Commission on Audit 90 must approve the selling price.‰ At the public auction sale. This circular emphasizes that government assets must be disposed of only through public auction. In the event that the public auction fails. there is no showing that the Commission on Audit approved the price or consideration stipulated in the negotiated Amended JVA as required by Section 79 of the Government Auditing Code. or is no longer needed. it may be sold at public auction to the highest bidder under the supervision of the proper committee on award or similar body in the presence of the auditor concerned or other authorized representative of the Commission. 1989. 1991.

submitted a bid. it also granted an option to AMARI to reclaim another 350 hectares. x x x. the Government Corporate Counsel advised PEA it could sell the Freedom Islands through negotiation. 2002 229 Chavez vs. Public Estates Authority winning bidder should reclaim another 250 hectares of submerged areas to regularize the shape of the Freedom Islands. 6957 states· _______________ . on „Sale Thru Negotiation. 384.‰ Even Republic Act No. No one. enlarged the reclamation area to 750 94 hectares. 6957 („BOT Law. Article XII of the 1987 Constitution is absolute and clear: „Private corporations or associations may not hold such alienable lands of the public domain except by lease. 89-296. However. however. without need of another public bidding. The economic situation in the country had greatly improved during the intervening period. recognizes the constitutional ban.91 Paragraph 2 (a) of COA Circular No. because of93 the failure of the public bidding on December 10. a negotiated contract. The original JVA. 1994. 1995 covered not only the Freedom Islands and the additional 250 hectares still to be reclaimed.‰ 229 VOL. involving only 407. On December 23. under a 60-40 sharing of the additional reclaimed 92 areas in favor of the winning bidder. Besides. 1991. JULY 9. the failure of public bidding happened on December 10. Section 6 of RA No. Reclamation under the BOT Law and the Local Government Code The constitutional prohibition in Section 3.84 hectares. 1991.‰ states that disposal through negotiated sale may be resorted to if „[T]here was a failure of public auction. 1995.‰ for brevity). cited by PEA and AMARI as legislative authority to sell reclaimed lands to private parties. almost double the area publicly auctioned. The failure of public bidding95on December 10. 1991. more than three years before the signing of the original JVA on April 25. is not a valid justification for a negotiated sale of 750 hectares. the original JVA dated April 25.

·For the financing. 94 PEAÊs Memorandum. per Certification of Jaime T. p. as appearing in the Minutes of the PEA Board of Directors Meeting held on May 30.92 Senate Committee Report No. x xx xxx In case of land reclamation or construction of industrial estates. Financing. the . but not limited to. Section 302 of the Local Government Code. Repayment Scheme. citing COA Audit Circular No.‰ Although Section 302 of the Local Government Code does not contain a proviso similar to that of the BOT Law. see note 2. citing PEA Board Resolution No. 1991. Operation. cannot acquire reclaimed alienable lands of the public domain in view of the constitutional ban. 6. 835. Construction. construction. 1991. 560. 230 230 SUPREME COURT REPORTS ANNOTATED Chavez vs.‰ (Emphasis supplied) A private corporation. citing the Minutes of Meeting of the PEA Board of Directors held on December 19. even one that undertakes the physical reclamation of a government BOT project. 330. such as. 7-8. and Management of Infrastructure Projects by the Private Sector. Corporate Secretary. the grant of a portion or percentage of the reclaimed land. De Veyra. the project proponent x x x may likewise be repaid in the form of a share in the revenue of the project or other non-monetary payments. subject to the constitutional requirements with respect to the ownership of the land: x x x. See note 5. operation and maintenance of any infrastructure projects undertaken through the build-operate-and-transfer arrangement or any of its variations pursuant to the provisions of this Act. 89-296. to wit: „Section 302. Maintenance. 1991. 560. 7. 95 Senate Committee Report No. the repayment plan may consist of the grant of a portion or percentage of the reclaimed land or the industrial estate constructed. also mentioned by PEA and AMARI. Statement of Facts. authorizes local governments in land reclamation projects to pay the contractor or developer in kind consisting of a percentage of the reclaimed land. Public Estates Authority „Sec. pp. dated June 11. 93 Opinion No.

A. where the Court held· .84 hectares comprising the Freedom Islands have become private lands of PEA. homestead or grant. if a corporate entity. Public Estates Authority to him in ownership in view of the legislative authority allowing such conveyance. Registration of lands of the public domain Finally. 384. may be conveyed _______________ 96 Section 3.‰ However. Section 6 of R.‰ In short. 2002 231 Chavez vs. the contractor or developer. portions of the reclaimed land.‰ This theory is echoed by AMARI which maintains that the „issuance of the special patent leading to the eventual issuance of title takes the subject land away from the land of public domain and converts the property into patrimonial or private property. can only be paid with leaseholds on portions of the reclaimed land. PEA and AMARI cite the following rulings of the Court: 97 1. PEA and AMARI contend that with the issuance of Special Patent No. If the contractor or developer is an individual. Article XII of the 1987 Constitution provides as follows: „x x x Citizens of the Philippines may x x x acquire not more than twelve hectares thereof by purchase. Judge of CFI of Cotabato. In support of their theory. Article XII of the 1987 Constitution. 3517 and the corresponding certificates of titles. PEA theorizes that the „act of conveying the ownership of the reclaimed lands to public respondent PEA transformed such lands of the public domain to private lands. JULY 9. No.constitutional restrictions on land ownership automatically apply even though not expressly mentioned in the Local Government Code. the 157. This is the only way these provisions of the BOT Law and the Local Government Code can avoid a direct collision with Section 3. under either the BOT Law or the Local Government Code. 6657 (Comprehensive Agrarian Reform Law) limits the owner231 VOL. 96 not exceeding 12 hectares of non-agricultural lands. Thus. Sumail v.

Republic v.„Once the patent was granted and the corresponding certificate of title was issued. dated October 9. Court of Appeals. Intermediate Appellate Court. therefore.‰ 101 5. where the Court declared· „After the registration and issuance of the certificate and duplicate certificate of title based on a public land patent. he may do so only so long as the land remains part of the public domain and continues to be under his exclusive control. Heirs of Jose Aliwalas. Heirs of Gregorio Tengco v. the land covered thereby automatically comes under the operation of Republic Act 496 subject to all the safeguards provided therein. 1956. Lee Hong Hok v. 350. but once the patent is registered and a certificate of title is issued. the land ceases to be part of the public domain and becomes private property over which the Director of Lands has neither control nor jurisdiction.‰ 98 2. where the Court ruled· „While the Director of Lands has the power to review homestead patents. Public Estates Authority 99 3. · where the Court held „When the lots in dispute were certified as disposable on May 19. where the Court stated· „Proclamation No. 97 96 Phil.‰ _______________ ship of „public or private agricultural land‰ to a maximum of five hectares per person. and free patents were issued covering the same in favor of the private respondents. the land ceased to be part of the public domain and became private property over which the Director of Lands has neither control nor jurisdiction. the said lots ceased to be part of the public domain and. 1971. 232 232 SUPREME COURT REPORTS ANNOTATED Chavez vs. 946 (1955). 98 48 SCRA 372 (1977). of President . Manalo v. David. the Director of Lands lost jurisdiction over the same.‰ 100 4.

8-hectare public land to serve as the site for the hospital buildings and other facilities of Mindanao Medical Center. 233 VOL.Magsaysay legally effected a land grant to the Mindanao Medical Center. 496. validly sufficient for initial registration under the Land Registration Act. granted or conveyed to persons or to public or private corporations. 101 73 SCRA 146 (1976). the same shall be brought forthwith under the operation of this Act (Land Registration Act. 100 172 SCRA 795 (1989). which governs the registration of grants or patents involving public lands. Public Estates Authority Torrens System of a 12. provides that ÂWhenever public lands in the Philippine Islands belonging to the Government of the United States or to the Government of the Philippines are alienated.8-hectare public land in the name of Mindanao Medical Center under Section 122 of Act No. The fifth case cited involves the registration under the _______________ 99 168 SCRA 198 (1988). Section 122 of the Act. 2002 233 Chavez vs.Ê ‰ The first four cases cited involve petitions to cancel the land patents and the corresponding certificates of titles issued to private parties. Department of Health. This fifth case is an example of a public land being registered under Act No.Ê of the whole lot. a government unit under the Department of Health. The Court affirmed the registration of the 12. Act 496) and shall become registered lands. 496 without the land losing its character as a property of public dominion. JULY 9. The National Government transferred the 12. Thus. uniformly hold that the Director of Lands has no jurisdiction over private lands or that upon issuance of the certificate of title the land automatically comes under the Torrens System. Such land grant is constitutive of a Âfee simpleÊ title or absolute title in favor of petitioner Mindanao Medical Center. . which performed a public service.8-hectare‰ public land granted by the National Government to Mindanao Medical Center. 384. Bureau of Medical Services. These four cases.

In the instant case, the only patent and certificates of
title issued are those in the name of PEA, a wholly
government owned corporation performing public as well as
proprietary functions. No patent or certificate of title has
been issued to any private party. No one is asking the
Director of Lands to cancel PEAÊs patent or certificates of
title. In fact, the thrust of the instant petition is that PEAÊs
certificates of title should remain with PEA, and the land
covered by these certificates, being alienable lands of the
public domain, should not be sold to a private corporation.
Registration of land under Act No. 496 or PD No. 1529
does not vest in the registrant private or public ownership
of the land. Registration is not a mode of acquiring
ownership but is merely evidence of ownership previously
conferred by any of the recognized modes of acquiring
ownership. Registration does not give the registrant a
better right 102than what the registrant had prior to the
registration.
The registration of lands of the public
domain under the Torrens system,
by itself, cannot convert
103
public lands into private lands.
Jurisprudence holding that upon the grant of the patent
or issuance of the certificate of title the alienable land of
the public domain automatically becomes private land
cannot apply to government units and entities like PEA.
The transfer of the Freedom Islands to PEA was made
subject to the provisions of CA No. 141
_______________
102
103

Avila v. Tapucar, 201 SCRA 148 (1991).
Republic v. Ayala Cia, et al., 14 SCRA 259 (1965); Dizon v.

Rodriguez, 13 SCRA 705 (1965).
234

234

SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority

as expressly stated in Special Patent No. 3517 issued by
then President Aquino, to wit:
„NOW, THEREFORE, KNOW YE, that by authority of the
Constitution of the Philippines and in conformity with the
provisions of Presidential Decree No. 1084, supplemented by
Commonwealth Act No. 141, as amended, there are hereby granted

and conveyed unto the Public Estates Authority the aforesaid tracts
of land containing a total area of one million nine hundred fifteen
thousand eight hundred ninety four (1,915,894) square meters; the
technical description of which are hereto attached and made an
integral part hereof.‰ (Emphasis supplied)

Thus, the provisions of CA No. 141 apply to the Freedom
Islands on matters not covered by PD No. 1084. Section 60
of CA No. 141 prohibits, „except when authorized by
Congress,‰ the sale of alienable lands of the public domain
that are transferred to government units or entities.
Section 60 of CA No. 141 constitutes, under Section 44 of
PD No. 1529, a „statutory lien affecting title‰ of the
registered
land even if not annotated on the certificate of
104
title.
Alienable lands of the public domain held by
government entities under section 60 of CA No. 141 remain
public lands because they cannot be alienated or
encumbered unless Congress passes a law authorizing
their disposition. Congress, however, cannot authorize the
sale to private corporations of reclaimed alienable lands of
the public domain because of the constitutional ban. Only
individuals can benefit from such law.
The grant of legislative authority to sell public lands in
accordance with Section 60 of CA No. 141 does not
automatically con_______________
104

Section 44 of PD No. 1529 states as follows: „Every registered

owner receiving a certificate of title in pursuance of a decree of
registration, and every subsequent purchaser of registered land taking a
certificate of title for value and in good faith, shall hold the same free
from all encumbrances except those noted on said certificate and any of
the following encumbrances which may be subsisting, namely: First.
Liens, claims or rights arising or existing under the laws and
Constitution of the Philippines which are not by law required to appear of
record in the Registry of Deeds in order to be valid against subsequent
purchasers or encumbrancers of record. x x x.‰ Under Section 103 of PD
No. 1529, Section 44 applies to certificates of title issued pursuant to a
land patent granted by the government.
235

VOL. 384, JULY 9, 2002
Chavez vs. Public Estates Authority

235

vert alienable lands of the public domain into private or
patrimonial lands. The alienable lands of the public domain
must be transferred to qualified private parties, or to
government entities not tasked to dispose of public lands,
before these lands can become private or patrimonial lands.
Otherwise, the constitutional ban will become illusory if
Congress can declare lands of the public domain as private
or patrimonial lands in the hands of a government agency
tasked to dispose of public lands. This will allow private
corporations to acquire directly from government agencies
limitless areas of lands which, prior to such law, are
concededly public lands.
Under EO No. 525, PEA became the central
implementing agency of the National Government to
reclaim foreshore and submerged areas of the public
domain. Thus, EO No. 525 declares that·
„EXECUTIVE ORDER NO. 525
Designating the Public Estates Authority as the Agency Primarily
Responsible for all Reclamation Projects
Whereas, there are several reclamation projects which are ongoing
or being proposed to be undertaken in various parts of the country
which need to be evaluated for consistency with national programs;
Whereas, there is a need to give further institutional support to
the GovernmentÊs declared policy to provide for a coordinated,
economical and efficient reclamation of lands;
Whereas, Presidential Decree No. 3-A requires that all
reclamation of areas shall be limited to the National Government or
any person authorized by it under proper contract;
Whereas, a central authority is needed to act on behalf of the
National Government which shall ensure a coordinated and
integrated approach in the reclamation of lands;
Whereas, Presidential Decree No. 1084 creates the Public Estates
Authority as a government corporation to undertake reclamation of
lands and ensure their maximum utilization in promoting public
welfare and interests; and
Whereas, Presidential Decree No. 1416 provides the President
with continuing authority to reorganize the national government
including the transfer, abolition, or merger of functions and offices.
236

236

SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority

Thus. not private lands. directing. MARCOS. x x x. President of the Philippines. In the hands of the government agency tasked and authorized to dispose of alienable of disposable lands of the public domain. FERDINAND E.‰ As the central implementing agency tasked to undertake reclamation projects nationwide. All reclamation projects shall be approved by the President upon recommendation of the PEA. do hereby order and direct the following: Section 1. The reclaimed lands being leased or sold by PEA are not private lands. 1416. with authority to sell reclaimed lands. PEA took the place of DENR as the government agency charged with leasing or selling reclaimed lands of the public domain. does not dispose of private lands but alienable lands of the public domain. Only when qualified private parties acquire these lands will the lands become private lands. THEREFORE. The Public Estates Authority (PEA) shall be primarily responsible for integrating. PEAÊs charter expressly states that PEA „shall hold lands of the public domain‰ as well as „any and all kinds of lands. Provided. PEA will simply turn around. and coordinating all reclamation projects for and on behalf of the National Government. as PEA has now done under the Amended JVA. in the same manner that DENR.NOW. by virtue of the powers vested in me by the Constitution and pursuant to Presidential Decree No. when it disposes of other alienable lands. these lands are still public. the mere fact that alienable lands of the public domain like the Freedom Islands are transferred to PEA and issued land patents or certificates of title in PEAÊs name does not automatically make such lands private. To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction a gross violation of the constitutional ban on private corporations from acquiring any kind of alienable land of the public domain. I. that. Furthermore.‰ PEA can hold both lands of the public domain and private lands. and transfer several hundreds of hectares of these reclaimed and still . reclamation projects of any national government agency or entity authorized under its charter shall be undertaken in consultation with the PEA upon approval of the President. and shall be undertaken by the PEA or through a proper contract executed by it with any person or entity.

respectively. once registered under Act No.‰ This will open the floodgates to corporations and even individuals acquiring hundreds of hectares of alienable lands of the public domain under the guise that in the hands of PEA these lands are private lands. Article XII of the 1987 Constitution which was intended to diffuse equitably the ownership of alienable lands of the public domain among Filipinos.237 VOL. if allowed. This will result in corporations amassing huge landholdings never before seen in this country·creating the very evil that the constitutional ban was designed to prevent. This will completely reverse the clear direction of constitutional development in this country.024 105 hectares of public lands. automatically become private lands is contrary to existing laws. 1529. JULY 9. or conveyed to persons or the public or private corporations. The contention of PEA and AMARI that public lands. now PD No. This scheme will effectively nullify the constitutional ban in Section 3. provide as follows: Act No. 384.‰ . 496 or PD No. and Section 103 of PD No. 496. granted. now numbering over 80 million strong. 1529. 2002 237 Chavez vs. The 1973 Constitution prohibited private corporations from acquiring any kind of public land. Section 122 of Act No. can even be applied to alienable agricultural lands of the public domain since PEA can „acquire x x x any and all kinds of lands. Several laws authorize lands of the public domain to be registered under the Torrens System or Act No. 122. the same shall be brought forthwith under the operation of this Act and shall become registered lands. 496. This scheme. 1529. The 1935 Constitution allowed private corporations to acquire not more than 1. and the 1987 Constitution has unequivocally reiterated this prohibition. without losing their character as public lands. Public Estates Authority to be reclaimed lands to a single private corporation in only one transaction. 496 „Sec. Whenever public lands in the Philippine Islands belonging to the x x x Government of the Philippine Islands are alienated.

·Whenever real property of the Government is authorized by law to be conveyed. 48. Certificate of Title to Patents.‰ (Emphasis pplied) Based on its legislative history. 103. or branch or subdivision of the Government._______________ 105 Section 2. municipality. or transferred to a province. granted or conveyed to any person. 141 that the land „shall not be alienated. Article XIII of the 1935 Constitution. may be registered under the Torrens System pursuant to Section 103 of PD No. Alienable lands of the public domain „granted. the phrase „conveyed to any person‰ in Section 103 of PD No. 141. however. the same shall be brought forthwith under the operation of this Decree. Such registration. except when authorized by Congress. The need for legislative authority prevents the registered land of the public domain from becoming private land that can be disposed of to qualified private parties. Public Estates Authority PD No. 238 238 SUPREME COURT REPORTS ANNOTATED Chavez vs. Official Authorized to Convey Real Property. The Revised Administrative Code of 1987 also recognizes that lands of the public domain may be registered under the Torrens System. donated. Section 48. encumbered or otherwise disposed of in a manner affecting its title. is expressly subject to the condition in Section 60 of CA No.·Whenever public land is by the Government alienated. Book I of the Code states· „Sec. 1529 includes conveyances of public lands to public corporations. 1529. foreshore and marshy lands of the public domain that have been titled but still cannot be alienated or encumbered unless expressly authorized by Congress.‰ as provided in Section 60 of CA No.‰ This provision refers to government reclaimed. the deed of conveyance shall be executed in behalf of the government by the following: (1) x x x . Chapter 12. 1529 „Sec.

and the nature of the public use. Section 85 of PD No. 1529 states· „Sec.·Whenever any registered land. or any other agency or instrumentality exercising such right shall file for registration in the proper Registry a certified copy of the judgment which shall state definitely by an adequate description. Private property purchased by the National Government for expansion of an airport may also be titled in the name of the government agency tasked to administer the airport. Nevertheless. 496 or PD No. a new certificate shall be issued in favor of the National Government. Public Estates Authority ment corporation regulating port operations in the country. Land taken by eminent domain. municipality. A memorandum of the right or interest taken shall be made on each certificate of title by the Register of Deeds. province. city. by the executive head of the agency or instrumentality. province. is expropriated or taken by eminent domain. Private lands taken by the Government for public use under its power of eminent domain become unquestionably part of the public domain. and where the fee simple is taken. 384. or any other agency or instrumentality . or interest therein. JULY 9. remain registered land. Private property donated to a municipality for use as a town plaza or public school site may likewise be titled in 106 the name of the municipality. 2002 239 Chavez vs. There is no requirement or provision in any existing law for the deregistration of land from the Torrens System. private property purchased by the National Government for expansion of a public wharf may be titled in the name of a govern239 VOL. 1529. 1529 authorizes the Register of Deeds to issue in the name of the National Government new certificates of title covering such expropriated lands. Section 85 of PD No. city or municipality. the National Government. 85. and if already registered under Act No. but titled in the name of any political subdivision or of any corporate agency or instrumentality. All these properties become properties of the public domain. the number of the certificate of title.(2) For property belonging to the Republic of the Philippines. the particular property or interest expropriated.‰ (Emphasis supplied) Thus.

lands registered under Act No. In the words of AMARI. Article XII of the 1987 Constitution which provides that private corporations „shall not hold such alienable lands of the public domain except by lease.‰ The transfer of title and ownership to AMARI clearly means that AMARI will „hold‰ the reclaimed lands other than by lease. Public Estates Authority claimed from submerged areas of Manila Bay. AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom Islands or of the lands to be re_______________ 106 Harty v. Foreshore and submerged areas form part of the public domain .‰ This stipulation still contravenes Section 3. Article XII of the 1987 Constitution. the fact remains that the Amended JVA requires PEA to „cause the issuance and delivery of the certificates of title conveying AMARIÊs Land 107 Share in the name of AMARI. the Amended JVA „is not a sale but a joint venture with a stipulation for reimbursement of the original cost incurred by PEA for the earlier reclamation and construction works performed by the CDCP under its 1973 contract with the Republic. 1529 are not exclusively private or patrimonial lands. The transfer of title and ownership is a „disposition‰ of the reclaimed lands. 496 or PD No.‰ (Emphasis supplied) Consequently. 141. 13 Phil. Lands of the public domain may also be registered pursuant to existing laws. the Government Auditing Code. The Regalian doctrine is deeply implanted in our legal system. 152 (1909).‰ Whether the Amended JVA is a sale or a joint venture. a transaction considered a sale or alienation109under 108 CA No. Municipality of Victoria. and Section 3.exercising such right for the land so taken. 240 240 SUPREME COURT REPORTS ANNOTATED Chavez vs. The legal expenses incident to the memorandum of registration or issuance of a new certificate of title shall be for the account of the authority taking the land or interest therein.

the 1973 and 1987 Constitutions have barred private corporations from acquiring any kind of alienable land of the public domain. increasingly becoming scarce natural resources. depriving. Lands reclaimed from foreshore and submerged areas also form part of the public domain and are also inalienable. or benefit of the lands of the public domain other than timber or mineral lands. Thus. withdrawing of an authority. The words „alienation. 89-296 dated January 27.2 (c) of the Amended JVA. which requires public auction in the sale of government assets.‰ 109 Section 79 of the Government Auditing Code. use.‰ These COA Circulars implement Section 79 of the Government Auditing Code. Reclaimed lands retain their inherent potential as areas for public use or public service. shall mean any of the methods authorized by this Act for the acquisition. 108 Section 10 of CA No. 2002 241 Chavez vs. Historically. not available for sale to private parties unlike other alienable public lands._______________ 107 Annex „B‰. 10. 384. lease. Section 5. speaks of „guidelines (which) shall be observed and adhered to in the divestment or disposal of property and other assets of all government entities/instrumentalities‰ and that „divestment shall refer to the manner or scheme of taking away. COA Audit Circular No.‰ or „concession‰ as used in this Act. or seek to circumvent the constitutional ban on alienation of lands of the public . AMARIÊs Memorandum. Alienable lands of the public domain. 241 VOL. COA Audit Circular No. Those who attempt to dispose of inalienable natural resources of the State. Public Estates Authority and are inalienable. 86-264 dated October 16. are to be distributed equitably among our evergrowing population. power or title. see note 21 at 16. To insure such equitable distribution. JULY 9. 1986 speaks of „guidelines (which) shall govern the general procedures on the divestment or disposal of assets of governmentowned and/or controlled corporations and their subsidiaries. lands reclaimed by the government are sui generis.‰ „disposition. unless converted pursuant to law into alienable or disposable lands of the public domain. 141 provides as follows: „Sec.‰ Likewise. includes all kinds of disposal or divestment of government assets.

Public Estates Authority transfer is void for being contrary to Section 3. PEA may only sell these lands to Philippine citizens. The government can make such classification and declaration only after PEA has reclaimed these submerged areas. which is 70 percent of the net usable area of 110. Only then can these lands qualify as agricultural lands of the public domain. the 592.34 hectares of the Freedom Islands.34 hectares.84 hectares of reclaimed lands comprising the Freedom Islands. The net 242 242 SUPREME COURT REPORTS ANNOTATED Chavez vs. such _______________ 110 The share of AMARI in the Freedom Islands is 77. Since the Amended JVA seeks to transfer to AMARI. Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the public domain until classified as alienable or disposable lands open to disposition and declared no longer needed for public service. which are the only natural resources the government can alienate.15 hectares of submerged areas are inalienable and outside the commerce of man. We can now summarize our conclusions as follows: 1. Since the Amended JVA also seeks to transfer to . The 592. 110 a private corporation. subject to the ownership limitations in the 1987 Constitution and existing laws. In their present state.49 hectares. ownership of 77. The 157. PEA may lease these lands to private corporations but may not sell or transfer ownership of these lands to private corporations.domain to private corporations. 3. do so at their own risk. are alienable lands of the public domain. 2. 4. now covered by certificates of title in the name of PEA.

such transfer is void for being contrary to Section 2. Under Article 112 1409 of the Civil Code. (4) Those whose object is outside the commerce of men. Thereafter.‰ are „inexistent and void from the beginning. object or purpose is contrary to law. and therefore declares the Amended JVA null and void ab initio. and further declare them no longer needed for public service. the government can classify the reclaimed lands as alienable or disposable. Article XII of the 1987 Constitution.‰ or whose „object is outside the commerce of men. contracts whose „object or purpose is contrary to law. and this last issue involves a determination of factual matters. which is 70 percent of the net usable area of 414. Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain. x x x. x x x. the transfer of such reclaimed alienable lands of the public domain to AMARI will be void in view of Section 3.47 hectares.‰ . Considering that the Amended JVA is null and void ab initio. Article XII of the 1987 Constitution which prohibits the alienation of natural resources other than agricultural lands of the public domain. 111 The share of AMARI in the submerged areas for reclamation is 290. Seventh issue: whether the Court is the proper forum to raise the issue of whether the Amended JVA is grossly disadvantageous to the government. the Court is not a trier of facts.111 AMARI ownership of 290. _______________ usable area is the total land area of the Freedom Islands less 30 percent allocated for common areas.129 hectares. Clearly. PEA may reclaim these submerged areas. Still. 112 Article 1409 of the Civil Code provides as follows: „The following contracts are inexistent and void from the beginning: (1) Those whose cause. the Amended JVA violates glaringly Sections 2 and 3. Besides.156 hectares of still submerged areas of Manila Bay.‰ The Court must perform its duty to defend and uphold the Constitution. there is no necessity to rule on this last issue.

(Association of Philippine Coconut Desiccators vs. 286 SCRA 109 [1998]). Court of Appeals.J.. whether agricultural. 384. 2002 243 Chavez vs. Ynares-Santiago. JJ. Amended Joint Venture Agreement declared null and void. Sandoval-Gutierrez. Austria-Martinez and Corona. Puno.243 VOL. Jr. Petition granted. SO ORDERED. the petition is GRANTED. The Public Estates Authority and Amari Coastal Bay Development Corporation are PERMANENTLY ENJOINED from implementing the Amended Joint Venture Agreement which is hereby declared NULL and VOID ab initio. Panganiban.·Before the Treaty of Paris on April 11. (Palomo vs. Notes. Kapunan. Mendoza. private ownership of land could only be acquired through royal concessions.).‰ (Republic vs. Court of Appeals. hence. 299 SCRA 199 [1998]) ··o0o·· 244 . mineral or forest were under the exclusive patrimony and dominion of the Spanish Crown. (C. 1899. Bellosillo. Davide. JULY 9. 266 SCRA 392 [1997]). The term „foreshore‰ refers to „that part of the land adjacent to the sea which is alternately covered and left dry by the ordinary flow of the tides. Respondents enjoined permanently from implementing the same. Quisumbing. concur. Only judicial review of decisions of administrative agencies made in the exercise of their quasi-judicial function is subject to the exhaustion doctrine. our lands. Philippine Coconut Authority. Public Estates Authority WHEREFORE. Vitug.

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