Laguitao, Renz Lyle H.

Natural Resources and Environmental Law

MW 7:30 – 9:00

REPUBLIC v. COURT OF APPEALS

GR Nos. 103882, 105276 November 25, 1998

FACTS:
On June 22, 1957, RA 1899 was approved granting authority to all municipalities and chartered
cities to undertake and carry out at their own expense the reclamation by dredging, filling, or
other means, of any foreshore lands bordering them, and to establish, provide, construct,
maintain and repair proper and adequate docking and harbor facilities as such municipalities and
chartered cities may determine in consultation with the Secretary of Finance and the Secretary of
Public Works and Communications.

Pursuant to the said law, Ordinance No. 121 was passed by the city of Pasay for the reclamation
of foreshore lands within their jurisdiction and entered into an agreement with Republic Real
Estate Corporation for the said project.

Republic questioned the agreement. It contended, among others, that the agreement between
RREC and the City of Pasay was void for the object of the contract is outside the commerce of
man, it being a foreshore land.  

Pasay City and RREC countered that the object in question is within the commerce of man
because RA 1899 gives a broader meaning on the term “foreshore land” than that in the
definition provided by the dictionary.

RTC rendered judgment in favour of Pasay City and RREC, and the decision was affirmed by
the CA with modifications.

ISSUE:
1.  Whether or not the term “foreshore land” includes the submerged area.
2. Whether or not “foreshore land” and the reclaimed area is within the commerce of man.

HELD:
The Court ruled that it is erroneous and unsustainable to uphold the opinion of the respondent
court that the term “foreshore land” includes the submerged areas. To repeat, the term "foreshore
lands" refers to:
The strip of land that lies between the high and low water marks and that is alternately wet and
dry according to the flow of the tide.  
A strip of land margining a body of water (as a lake or stream); the part of a seashore between
the low-water line usually at the seaward margin of a low-tide terrace and the upper limit of
wave wash at high tide usually marked by a beach scarp or berm. (Webster's Third New
International Dictionary)
The duty of the court is to interpret the enabling Act, RA 1899. In so doing, we cannot broaden
its meaning; much less widen the coverage thereof. If the intention of Congress were to include
submerged areas, it should have  provided expressly. That Congress did not so provide could
only signify the exclusion of submerged areas from the term “foreshore lands.”
It bears stressing that the subject matter of Pasay City Ordinance No. 121, as amended by
Ordinance No. 158, and the Agreement under attack, have been found to be outside the
intendment and scope of RA 1899, and therefore ultra vires and null and void.

CHAVEZ v. PEA & AMARI

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

FACTS: 

On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1084
creating PEA. PD No. 1084 tasked PEA "to reclaim land, including foreshore and submerged
areas," and "to develop, improve, acquire, lease and sell any and all kinds of lands." On the same
date, then President Marcos issued Presidential Decree No. 1085 transferring to PEA the "lands
reclaimed in the foreshore and offshore of the Manila Bay" under the Manila-Cavite Coastal
Road and Reclamation Project (MCCRRP).

On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517,
granting and transferring to PEA "the parcels of land so reclaimed under the Manila-Cavite
Coastal Road and Reclamation Project (MCCRRP) containing a total area of one million nine
hundred fifteen thousand eight hundred ninety four (1,915,894) square meters." Subsequently, on
April 9, 1988, the Register of Deeds of the Municipality of Parañaque issued Transfer
Certificates of Title Nos. 7309, 7311, and 7312, in the name of PEA, covering the three
reclaimed islands known as the "Freedom Islands" located at the southern portion of the Manila-
Cavite Coastal Road, Parañaque City.

PEA and AMARI entered into the JVA through negotiation without public bidding. On April 28,
1995, the Board of Directors of PEA, in its Resolution No. 1245, confirmed the JVA. On June 8,
1995, then President Fidel V. Ramos, through then Executive Secretary Ruben Torres, approved
the JVA.

The Senate Committees reported the results of their investigation in Senate Committee Report
No. 560 dated September 16, 1997. 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;
(2) the certificates of title covering the Freedom Islands are thus void, and (3) the JVA itself is
illegal.

On December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative Order
No. 365 creating a Legal Task Force to conduct a study on the legality of the JVA in view of
Senate Committee Report No. 560. The members of the Legal Task Force were the Secretary of
Justice, the Chief Presidential Legal Counsel, and the Government Corporate Counsel. The Legal
Task Force upheld the legality of the JVA, contrary to the conclusions reached by the Senate
Committees.

On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity) as a taxpayer, filed the
instant Petition for Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction
and Temporary Restraining Order. Petitioner contends the government stands to lose billions of
pesos in the sale by PEA of the reclaimed lands to AMARI. Petitioner prays that PEA publicly
disclose the terms of any renegotiation of the JVA, invoking Section 28, Article II, and Section
7, Article III, of the 1987 Constitution on the right of the people to information on matters of
public concern.

Due to the approval of the Amended JVA by the Office of the President, petitioner now prays
that on "constitutional and statutory grounds the renegotiated contract be declared null and void."

Issues: 

The issues raised by petitioner, PEA and AMARI are as follows:

1. Whether the reliefs prayed for are moot and academic because of subsequent events;
2. Whether the petition should be dismissed for failing to observe the principle of governing
the heirarchy of courts;
3. Whether the petition should be dismissed for non-exhaustion of administrative remedies;
4. Whether petitioner has locus standi;
5. Whether the constitutional right to information includes information on on-going
neogtiations BEFORE a final agreement;
6. Whether the stipulations in the amended joint venture agreement for the transfer to
AMARI of certain lands, reclaimed and still to be reclaimed violate the 1987
Constitution; and
7. Whether the Court has jurisdiction over the issue whether the amended JVA is grossly
disadvantageous to the government

Held: 
1. We rule that the signing and 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. Petitioner's principal basis in assailing the renegotiation of the JVA is its
violation of the Section 3, Article XII of the Constitution, which prohibits the
government from alienating lands of the public domain to private corporations. 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.

Also, the instant petition is a case of first impression being a wholly government owned
corporation performing public as well as proprietary functions. 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.

Lastly, 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. Under the Amended JVA, PEA is obligated
to transfer to AMARI the latter's seventy percent proportionate share in the reclaimed
areas as the reclamation progresses, The Amended JVA even allows AMARI to mortgage
at any time the entire reclaimed area to raise financing for the reclamation project.

2. 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.

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 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 judicial intervention.
2. The principle of exhaustion of administrative remedies does not apply when the issue
involved is a purely legal or constitutional question. 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. We
rule that the principle of exhaustion of administrative remedies does not apply in the
instant case.

The petitioner has standing to bring this taxpayer's suit because the petition seeks to
compel PEA to comply with its constitutional duties. There are two constitutional issues
involved here. First is the right of citizens to information on matters of public concern.
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 second issue is to prevent PEA from alienating hundreds of hectares of
alienable lands of the public domain in violation of the Constitution, compelling PEA to
comply with a constitutional duty to the nation.

4. Ordinary taxpayers have a right to initiate and prosecute actions questioning the
validity of acts or orders of government agencies or instrumentalities, if the issues raised
are of 'paramount public interest,' and if they 'immediately affect the social, economic and
moral well being of the people.'
We rule that since the instant petition, brought by a citizen, involves the enforcement of
constitutional rights — to information and to the equitable diffusion of natural resources
— matters of transcendental public importance, the petitioner has the requisite locus
standi.

     5. The State policy of full transparency in all transactions involving public interest
reinforces the people's right to information on matters of public concern. This State
policy is expressed in Section 28, Article II of the Constitution, thus: “Subject to
reasonable conditions prescribed by law, the State adopts and implements a policy of full
public disclosure of all its transactions involving public interest."

     Contrary to AMARI's contention, the commissioners of the 1986 Constitutional

Commission understood that the right to information "contemplates inclusion of
negotiations leading to the consummation of the transaction." Certainly, a consummated
contract is not a requirement for the exercise of the right to information. Otherwise, the
people can never exercise the right if no contract is consummated, and if one is
consummated, it may be too late for the public to expose its defects.

     Requiring a consummated contract will keep the public in the dark until the contract,
which may be grossly disadvantageous to the government or even illegal, becomes a fait
accompli.
     However, the right to information does not compel PEA to prepare lists, abstracts,
summaries and the like relating to the renegotiation of the JVA. 34 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 the inspection and copying.

     6. Article 339 of the Civil Code of 1889 defined property of public dominion as
follows:
"Art. 339.    Property of public dominion is —
     1.    That devoted to public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, riverbanks, shores, roadsteads, and that of a similar
character;
     2.    That belonging exclusively to the State which, without being of general public
use, is employed in some public service, or in the development of the national wealth,
such as walls, fortresses, and other works for the defense of the territory, and mines, until
granted to private individuals.

     Property devoted to public use referred to property open for use by the public. In
contrast, property devoted to public service referred to property used for some specific
public service and open only to those authorized to use the property.Property of public
dominion referred not only to property devoted to public use, but also to property not so
used but employed to develop the national wealth. This class of property constituted
property of public dominion although employed for some economic or commercial
activity to increase the national wealth.

     "Art. 341.    Property of public dominion, when no longer devoted to public use or to
the defense of the territory, shall become a part of the private property of the State." This
provision, however, was not self-executing. The legislature, or the executive department
pursuant to law, must declare the property no longer needed for public use or territorial
defense before the government could lease or alienate the property to private parties.

Act No. 2874 of the Philippine Legislature

Sec. 55.    Any tract of land of the public domain which, being neither timber nor mineral
land, shall be classified as suitable for residential purposes or for commercial, industrial,
or other productive purposes other than agricultural purposes, and shall be open to
disposition or concession, shall be disposed of under the provisions of this chapter, and
not otherwise.
The rationale behind this State policy is obvious. Government reclaimed, foreshore and
marshy public lands for non-agricultural purposes retain their inherent potential as areas
for public service. This is the reason the government prohibited the sale, and only
allowed the lease, of these lands to private parties. The State always reserved these lands
for some future public service.

However, government reclaimed and marshy lands, although subject to classification as

disposable public agricultural lands, could only be leased and not sold to private parties
because of Act No. 2874.
    
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. Like the
1973 Constitution, the 1987 Constitution allows private corporations to hold alienable
lands of the public domain only through lease. As in the 1935 and 1973 Constitutions, the
general law governing the lease to private corporations of reclaimed, foreshore and
marshy alienable lands of the public domain is still CA No. 141.

Without the constitutional ban, 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. An individual could own as many corporations as his means
would allow him. An individual could even hide his ownership of a corporation by
putting his nominees as stockholders of the corporation. The corporation is a convenient
vehicle to circumvent the constitutional limitation on acquisition by individuals of
alienable lands of the public domain.

PD No. 1085, coupled with President Aquino's 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. Being neither
timber, mineral, nor national park lands, the reclaimed Freedom Islands necessarily fall
under the classification of agricultural lands of the public domain. Under the 1987
Constitution, agricultural lands of the public domain are the only natural resources that
the State may alienate to qualified private parties. All other natural resources, such as the
seas or bays, are "waters . . . owned by the State" forming part of the public domain, and
are inalienable pursuant to Section 2, Article XII of the 1987 Constitution.

     In short, DENR is vested with the power to authorize the reclamation of areas under
water, while PEA is vested with the power to undertake the physical reclamation of areas
under water whether directly or through private contractors. DENR is also empowered to
classify lands of the public domain into alienable or disposable lands subject to the
approval of the President. On the other hand, PEA is tasked to develop, sell or lease the
reclaimed alienable lands of the public domain.
Clearly, 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. Likewise, the mere transfer by the National
Government of lands of the public domain to PEA does not make the lands alienable or
disposable lands of the public domain, much less patrimonial lands of PEA.

     There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell
its reclaimed lands. PD No. 1085 merely transferred "ownership and administration" of
lands reclaimed from Manila Bay to PEA, while EO No. 525 declared that lands
reclaimed by PEA "shall belong to or be owned by PEA." PEA's charter, however,
expressly tasks PEA "to develop, improve, acquire, administer, deal in, subdivide,
dispose, lease and sell any and all kinds of lands . . .  owned, managed, controlled and/or
operated by the government." 87 (Emphasis supplied) There is, therefore, legislative
authority granted to PEA to sell its lands, whether patrimonial or alienable lands of the
public domain. PEA may sell to private parties its patrimonial properties in accordance
with the PEA charter free from constitutional limitations. The constitutional ban on
private corporations from acquiring alienable lands of the public domain does not apply
to the sale of PEA's patrimonial lands.

Moreover, under Section 79 of PD No. 1445, otherwise known as the Government

Auditing Code, the government is required to sell valuable government property through
public bidding. Section 79 of PD No. 1445 mandates that:... "In the event that the public
auction fails, 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."

However, the original JVA dated April 25, 1995 covered not only the Freedom Islands
and the additional 250 hectares still to be reclaimed, it also granted an option to AMARI
to reclaim another 350 hectares. The original JVA, a negotiated contract, enlarged the
reclamation area to 750 hectares. The failure of public bidding on December 10, 1991,
involving only 407.84 hectares, is not a valid justification for a negotiated sale of 750
hectares, almost double the area publicly auctioned.

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 grant of legislative authority to sell public lands in accordance with Section 60 of CA
No. 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, 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.

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. This scheme
can even be applied to alienable agricultural lands of the public domain since PEA can
"acquire . . . any and all kinds of lands."

The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by
certificates of title in the name of PEA, are alienable lands of the public domain. PEA
may lease these lands to private corporations but may not sell or transfer ownership of
these lands to private corporations.

7. Considering that the Amended JVA is null and void ab initio, there is no necessity to
rule on this last issue. Besides, the Court is not the trier of facts, and this last issue
involves a determination of factual matters.