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. Petitioner’s 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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 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 non-agricultural 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.

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 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
judicial intervention.
Same; Same; Same; Same; Same; The principle of exhaustion of
administrative remedies does not apply when the issue involved is a purely
legal or constitutional question.—Moreover, and this alone is determinative
of this issue, 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.

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 Same; Parties; Taxpayer’s Suits: A citizen has standing to bring this
taxpayer’s suit because the petition seeks to compel PEA to comply with its
constitutional duties; 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, a citizen has the requisite locus standi.—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 first issue is to compel
PEA to disclose publicly information on the sale of government lands worth
billions of pesos, 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, compelling PEA to comply with a
constitutional duty to the nation. Moreover, the petition raises matters of
transcendental importance to the public. In Chavez v. PCGG, the Court
upheld the right of a citizen to bring a taxpayer’s suit on matters of
transcendental importance to the public, thus—* * * 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.
Right to 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, as well as provide the people sufficient information to exercise
effectively other constitutional rights; An informed citizenry is essential to
the existence and proper functioning of any democracy.—These twin
provisions of the Constitution seek to promote transparency in policymaking
and in the operations of the government, as well as provide the people
sufficient information to exercise effectively other constitutional rights.
These twin provisions are essential to the exercise of freedom of expression.
If the government does not disclose its official acts, transactions and
decisions to citizens, whatever citizens say, even if expressed without any
restraint, will be speculative and amount to nothing. These twin provisions
are also essential to hold public officials “at all times x x x accountable to
the people,” for unless citizens have the proper information, they cannot
hold public officials accountable for anything. Armed with the right
information, citizens can participate in public discussions leading to the
formulation of government policies and their effective implementation.

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Chavez vs. Public Estates Authority

An informed citizenry is essential to the existence and proper functioning of

any democracy.
Same; Bids and Bidding; While information on, 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, once
the committee makes its official recommendation, there arises a “definite
proposition” on the part of the government, and from this moment, the
public’s right to information attaches, and any citizen can access all the
non-proprietary information leading to such definite proposition.—We must
first distinguish between information the law on public bidding requires
PEA to disclose publicly, and information the constitutional right to
information requires PEA to release to the public. Before the consummation
of the contract, PEA must, on its own and without demand from anyone,
disclose to the public matters relating to the disposition of its property.
These include the size, location, technical description and nature of the
property being disposed of the terms and conditions of the disposition, the
parties qualified to bid, the minimum price and similar information. PEA
must prepare all these data and disclose them to the public at the start of the
disposition process, long before the consummation of the contract, because
the Government Auditing Code requires public bidding. If PEA fails to
make this disclosure, any citizen can demand from PEA this information at
any time during the bidding process. Information, however, 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. While the evaluation or review is still ongoing, there are no
“official acts, transactions, or decisions” on the bids or proposals. However,
once the committee makes its official recommendation, there arises a
“definite proposition” on the part of the government. From this moment, the
public’s right to information attaches, and any citizen can access all the non-
proprietary information leading to such definite proposition.
Same; 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,
which may be grossly disadvantageous to the government or even illegal,
becomes a fait accompli.—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

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Chavez vs. Public Estates Authority

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. This negates the State policy of full
transparency on matters of public concern, a situation which the framers of
the Constitution could not have intended. 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.
We can allow neither an emasculation of a constitutional right, nor a retreat
by the State of its avowed “policy of full disclosure of all its transactions
involving public interest.”
Same; The right to information covers three categories of information
which are “matters of public concern,” namely, (1) official records, (2)
documents and papers pertaining to official acts, transactions and
decisions, and (3) government research data used in formulating policies.—
The right covers three categories of information which are “matters of
public concern,” namely: (1) official records; (2) documents and papers
pertaining to official acts, transactions and decisions; and (3) government
research data used in formulating policies. The first category refers to any
document that is part of the public records in the custody of government
agencies or officials. The second category refers to documents and papers
recording, evidencing, establishing, confirming, supporting, justifying or
explaining official acts, transactions or decisions of government agencies or
officials. The third category refers to research data, whether raw, collated or
processed, owned by the government and used in formulating government
policies.
Same; The information that a citizen 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.—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 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 the inspection and copying.
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Chavez vs. Public Estates Authority

Same; The right to information, however, does not extend to matters

recognized as privileged information under the separation of powers.—The
right to information, however, does not extend to matters recognized as
privileged information under the 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 recognized as confidential. The right may also be subject to
other limitations that Congress may impose by law.
Same; The constitutional right to information includes official
information on on-going negotiations before a final contract, which
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 order.—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 order.
Congress has also prescribed other limitations on the right to information in
several legislations.
National Economy and Patrimony; Regalian Doctrine; Foreshore and
Submerged Areas; Reclamation Projects; Words and Phrases; 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.—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 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.
Same; Same; Same; Same; After the effectivity of the 1935
Constitution, government reclaimed and marshy disposable lands of the
public domain continued to be only leased and not sold to private parties.
These lands remained sui generis, as the only alienable or disposable lands
of the public domain the government could not sell to private parties.—The
State policy prohibiting the sale to private parties of government reclaimed,
foreshore and marshy alienable lands of the public domain, first
implemented in 1907 was thus reaffirmed in CA No. 141 after the 1935
Consti-

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tution took effect. The prohibition on the sale of foreshore lands, however,
became a constitutional edict under the 1935 Constitution. Foreshore lands
became inalienable as natural resources of the State, unless reclaimed by the
government and classified as agricultural lands of the public domain, in
which case they would fall under the classification of government reclaimed
lands. After the effectivity of the 1935 Constitution, government reclaimed
and marshy disposable lands of the public domain continued to be only
leased and not sold to private parties. These lands remained sui generis, as
the only alienable or disposable lands of the public domain the government
could not sell to private parties.
Same; Same; Same; Same; Until now, 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.
—Since then and until now, 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. CA No. 141
does not authorize the President to reclassify government reclaimed and
marshy lands into other non-agricultural lands under Section 59 (d). 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.
Same; Same; Same; Same; One reason for the congressional authority
before lands under Section 59 of CA No. 141 previously transferred to
government units or entities could be sold to private parties is that Section
60 of CA No. 141 exempted government units and entities from the
maximum area of public lands that could be acquired from the State.—One
reason for the congressional authority is that Section 60 of CA No. 141
exempted government units and entities from the maximum area of public
lands that could be acquired from the State. These government units and
entities should not just turn around and sell these lands to private parties in
violation of constitutional or statutory limitations. Otherwise, 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 the same manner, such transfers
could also be used to evade the statutory prohibition in CA No. 141 on the
sale of government reclaimed and marshy lands of the public domain to
private parties. Section 60 of CA No. 141 constitutes by operation of law a
lien on these lands.
Same; Same; Same; Same; 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, though any
legis-

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Chavez vs. 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, such
legislative authority could only benefit private individuals.—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. This legislative authority is necessary in view of Section 60 of
CA No. 141, which states—“Sec. 60. x x x; but the land so granted, donated
or transferred to a province, municipality, or branch or subdivision of the
Government shall not be alienated, encumbered or otherwise disposed of in
a manner affecting its title, except when authorized by Congress; x x x.”
(Emphasis supplied) Without such legislative authority, PEA could not sell
but only lease its reclaimed foreshore and submerged 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.
Same; Same; Same; Same; The rationale behind the constitutional ban
on corporations from acquiring, except through lease, alienable lands of the
public domain is not well understood; In actual practice, the constitutional
ban strengthens the constitutional limitation on individuals from acquiring
more than the allowed area of alienable lands of the public domain; The
constitutional intent, under the 1973 and 1987 Constitutions, is to transfer
ownership of only a limited area of alienable land of the public domain to a
qualified individual.—The rationale behind the constitutional ban on
corporations from acquiring, except through lease, alienable lands of the
public domain is not well understood. * * * In actual practice, the
constitutional ban strengthens the constitutional limitation on individuals
from acquiring more than the allowed area of alienable lands of the public
domain. 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. The constitutional intent, under the
1973 and 1987 Constitutions, is to transfer ownership of only a limited area
of alienable land of the public domain to a qualified individual. This
constitutional intent is safeguarded by the provision prohibiting corporations
from acquiring alienable lands of the public domain, since the vehicle to
circumvent the constitutional intent is removed. The available

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alienable public lands are gradually decreasing in the face of an ever-

growing population. 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. This, it would seem, is the practical benefit
arising from the constitutional ban.
Same; Same; Same; Same; The mere reclamation of certain 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.—Under
Section 2, Article XII of the 1987 Constitution, the foreshore and
submerged areas of Manila Bay are part of the “lands of the public domain,
waters x x x and other natural resources” and consequently “owned by the
State.” As such, foreshore and submerged areas “shall not be alienated,”
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. 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.
Same; Same; Same; Same; 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, open to disposition or
concession to qualified parties.—PD No. 1085, issued on February 4, 1977,
authorized the issuance of special land patents for lands reclaimed by PEA
from the foreshore or submerged areas of Manila Bay. On January 19, 1988
then President Corazon C. Aquino issued Special Patent No. 3517 in the
name of PEA for the 157.84 hectares comprising the partially reclaimed
Freedom Islands. Subsequently, on April 9, 1999 the Register of Deeds of
the Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the
name of PEA pursuant to Section 103 of PD No. 1529 authorizing the
issuance of certificates of title corresponding to land patents. To this day,
these certificates of title are still in the name of PEA. 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. PD
No. 1085 and President Aquino’s issuance of a land patent also constitute a
declaration that the Freedom Islands are no longer needed for public service.
The Freedom Islands are thus alienable or

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Chavez vs. Public Estates Authority

disposable lands of the public domain, open to disposition or concession to

qualified parties.
Same; Same; Same; Same; Spanish Law of Waters of 1866; Under the
Spanish Law of Waters, 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.—
Under Article 5 of the Spanish Law of Waters of 1866, private parties could
reclaim from the sea only with “proper permission” from the State. Private
parties could own the reclaimed land only if not “otherwise provided by the
terms of the grant of authority.” This clearly meant that no one could
reclaim from sea without permission from the State because the sea is
property of public dominion. It also meant that the State could grant or
withhold ownership of the reclaimed land because any reclaimed land, like
the sea from which it emerged, belonged to the State. Thus, 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. 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, either by purchase or by grant,
belong to the public domain.”
Same; Same; Same; Same; Same; Article 5 of the Spanish Law of
Waters must be read together with laws subsequently enacted on the
disposition of public lands.—Article 5 of the Spanish Law of Waters must
be read together with laws subsequently enacted on the disposition of public
lands. In particular, CA No. 141 requires that lands of the public domain
must first be classified as alienable or disposable before the government can
alienate them. These lands must not be reserved for public or quasi-public
purposes. Moreover, 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.
This contract could not have converted the Freedom Islands into private
lands of a private corporation.
Same; Same; Same; Same; There is no legislative or Presidential act
classifying the additional 592.15 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, and in their present
state are inalienable and outside the commerce of man.—The Amended
JVA covers not only the Freedom Islands, but also an additional 592.15
hectares which are still submerged and forming part of Manila Bay. There is
no legislative or Presidential act classifying these submerged areas as
alienable or disposable lands of the public domain open to disposi-

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tion. These submerged areas are not covered by any patent or certificate of
title. There can be no dispute that these submerged areas form part of the
public domain, and in their present state are inalienable and outside the
commerce of man. Until reclaimed from the sea, these submerged areas are,
under the Constitution, “waters x x x owned by the State,” forming part of
the public domain and consequently inalienable. Only when actually
reclaimed from the sea can these submerged areas be classified as public
agricultural lands, which under the Constitution are the only natural
resources that the State may alienate. Once reclaimed and transformed into
public agricultural lands, the government may then officially classify these
lands as alienable or disposable lands open to disposition. Thereafter, the
government may declare these lands no longer needed for public service.
Only then can these reclaimed lands be considered alienable or disposable
lands of the public domain and within the commerce of man.
Same: Same; Same; Same; Public Estates Authority; Under EO No.
525, in relation to PD No. 3-A and PD No. 1084, PEA became the primary
implementing agency of the National Government to reclaim foreshore and
submerged lands of the public domain.—Section 1 of Executive Order No.
525 provides that PEA “shall be primarily responsible for integrating,
directing, and coordinating all reclamation projects for and on behalf of the
National Government.” The same section also states that “[A]ll reclamation
projects shall be approved by the President upon recommendation of the
PEA, and shall be undertaken by the PEA or through a proper contract
executed by it with any person or entity; x x x.” Thus, under EO No. 525, in
relation to PD No. 3-A and PD No. 1084, PEA became the primary
implementing agency of the National Government to reclaim foreshore and
submerged lands of the public domain. EO No. 525 recognized PEA as the
government entity “to undertake the reclamation of lands and ensure their
maximum utilization in promoting public welfare and interests.” Since large
portions of these reclaimed lands would obviously be needed for public
service, there must be a formal declaration segregating reclaimed lands no
longer needed for public service from those still needed for public service.
Same; Same; Same; Same; Same; Section 3 of EO No. 525, 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.—Section 3 of EO No.
525, 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. Otherwise,
reclaimed foreshore and submerged lands of the public domain would
automatically

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become alienable once reclaimed by PEA, whether or not classified as

alienable or disposable.
Same; Same; Same; Same; Same; Department of Environment and
Natural Resources; As manager, conservator and overseer of the natural
resources of the State, DENR exercises “supervision and control over
alienable and disposable public lands.” PEA needs authorization from
DENR before PEA can undertake reclamation in Manila Bay, or in any part
of the country; 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.—As manager, conservator and overseer of the natural
resources of the State, DENR exercises “supervision and control over
alienable and disposable public lands.” DENR also exercises “exclusive
jurisdiction on the management and disposition of all lands of the public
domain.” Thus, DENR decides whether areas under water, like foreshore or
submerged areas of Manila Bay, should be reclaimed or not. This means that
PEA needs authorization from DENR before PEA can undertake
reclamation projects in Manila Bay, or in any part of the country. DENR
also exercises exclusive jurisdiction over the disposition of all lands of the
public domain. Hence, DENR decides whether reclaimed lands of PEA
should be classified as alienable under Sections 6 and 7 of CA No. 141.
Once DENR decides that the reclaimed lands should be so classified, 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. We note that then DENR Secretary Fulgencio S. Factoran, Jr.
countersigned Special Patent No. 3517 in compliance with the Revised
Administrative Code and Sections 6 and 7 of CA No. 141. 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.
Same; Same; Same; Same; Same; Same; 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, lands reclaimed by PEA remain inalienable lands of the public
domain.—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

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VOL. 384, JULY 9, 2002 165

Chavez vs. Public Estates Authority

public domain to PEA does not make the lands alienable or disposable lands
of the public domain, much less patrimonial lands of PEA. 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, lands reclaimed by PEA remain inalienable lands of the
public domain. Only such an official classification and formal declaration
can convert reclaimed lands into alienable or disposable lands of the public
domain, open to disposition under the Constitution, Title I and Title III of
CA No. 141 and other applicable laws.
Same; Same; Same; Same; Same; 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; While PEA may sell its
alienable or disposable lands of the public domain to private individuals, it
cannot sell any of its alienable or disposable lands of the public domain to
private corporations.—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 x x x owned, managed, controlled and/or
operated by the government.” (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. PEA may also sell its alienable or
disposable lands of the public domain to private individuals since, with the
legislative authority, there is no longer any statutory prohibition against such
sales and the constitutional ban does not apply to individuals. PEA,
however, cannot sell any of its alienable or disposable lands of the public
domain to private corporations since Section 3, Article XII of the 1987
Constitution expressly prohibits such sales. The legislative authority
benefits only individuals. Private corporations remain barred from acquiring
any kind of alienable land of the public domain, including government
reclaimed lands.
Same; Same; Same; Same; Same; The provision in PD No. 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.—The provision in
PD No. 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. Otherwise, the provisions of PD No. 1085 would
violate both the 1973 and 1987 Constitutions.

166

166 SUPREME COURT REPORTS ANNOTATED

Chavez vs. Public Estates Authority

Same; Same; Same; Same; Same;