Chavez vs PEA and Amari Coastal Bay Development Corporation

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

Facts: Public Estates Authority (PEA) is a wholly government-owned and controlled corporation which
is the primary implementing agency of the National Government to reclaim foreshore and submerged
lands of the public domain. By virtue of a Special Patent issued by President Corazon Aquino, the
Register of Deeds of the Paranaque, in April 1988, issued certificates of title, in the name of PEA,
covering three reclaimed islands known as the Freedom Islands located at the southern portion of the
Manila-Cavite Coastal Road, Paranaque City. The Freedom Islands have a total land area of 157.841
hectares.

In April 1995, PEA entered into a Joint Venture Agreement (JVA) with AMARI, a private corporation, to
develop the Freedom Islands. 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
Plan of the Southern Reclamation Project-Manila Cavite Coastal Road Reclamation Project. The JVA was
later amended giving AMARI an option to reclaim an additional 350 hectares of submerged area. Part of
the consideration for AMARIs work is the conveyance of 70% of the total net usable reclaimed area
equivalent to 367.5 hectares, title of which will be in AMARIs name.

Issue: Whether or not AMARI, a private corporation, can acquire and own under the Amended JVA
367.5 hectares of reclaimed foreshore and submerged areas in Manila Bay

Held: No. AMARI as a private corporation cannot acquire the reclaimed Freedom Islands, though
alienable lands of the public domain, except by lease, as provided under Section 3, Article XII of the
Constitution. The still submerged areas (i.e., the more or less additional 250 and 350 hectares of
submerged areas) in Manila Bay are inalienable lands of the public domain; as such, they are beyond the
commerce of man, as provided under Section 2, Article XII of the Constitution.

The reclaimed Freedom Islands: The assignment to PEA of the ownership and administration of the
reclaimed areas in Manila Bay, coupled with President Aquinos actual issuance of a special patent
covering the Freedom Islands, is equivalent to an official proclamation classifying the Freedom Islands as
alienable or disposable lands of the public domain. They also constitute a declaration that the Freedom
Islands are no longer needed for public service. The Freedom Islands are thus alienable or disposable
lands of the public domain, open to disposition or concession to qualified parties.

The submerged areas: The mere reclamation of foreshore and submerged areas by PEA does not
convert these inalienable natural resources of 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. Moreover, these reclaimed lands cannot
be classified as alienable or disposable if the law has reserved them for some public or quasi-public use.

PEAs authority to sell: In order for PEA to sell its reclaimed foreshore and submerged alienable lands of
the public domain, there must be legislative authority empowering PEA to sell these lands, in view of the
requirement under CA No. 141. Without such legislative authority, PEA could not sell but only lease its
reclaimed foreshore and submerged alienable lands of the public domain. PEAs Charter grants it such
express legislative authority to sell its lands, whether patrimonial or alienable lands of the public
domain. Nevertheless, 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. Hence, such legislative authority could only benefit private
individuals.

Registration of alienable lands of the public domain: 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 than
what the registrant had prior to the registration. The registration of lands of the public domain under
the Torrens system, by itself, 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.

Lands registered under Act No. 496 or PD No. 1529 are not exclusively private or patrimonial
lands. Lands of the public domain may also be registered pursuant to existing laws. Several laws
authorize lands of the public domain to be registered under the Torrens System or Act No. 496, now PD
No. 1529, without losing their character as public lands. For instance,

- Under the Revised Administrative Code of 1987, private property purchased by the National
Government for expansion of an airport may be titled in the name of the government
agency tasked to administer the airport. Private property donated to a municipality for use
as a town plaza or public school site may likewise be titled in the name of the
municipality. All these properties become properties of the public domain, and if already
registered under Act No. 496 or PD No. 1529, remain registered land. There is no
requirement or provision in any existing law for the de-registration of land from the Torrens
System.

- Private lands taken by the Government for public use under its power of eminent domain
become unquestionably part of the public domain. Nevertheless, Section 85 of PD No. 1529
authorizes the Register of Deeds to issue in the name of the National Government new
certificates of title covering such expropriated lands.