Chavez v PEA, G.R. No.

133250
Posted by Y V . V. on F EBRU A RY 1, 2020
Francisco I. Chavez v. Public Estates Authority & Amari Coastal Development
Corporation, G.R. No. 133250, July 9, 2002
Facts:
• In 1973, the government signed a contract with the Construction and Development
Corporation of the Philippines (CDCP) to reclaim certain foreshore and offshore areas of
Manila Bay. The contract also included the construction of Phases I and II of the Manila-
Cavite Coastal Road. CDCP obligated itself to carry out all the works in consideration of
50% of the reclaimed land.
• In 1977, then President Marcos created the Public Estates Authority (PEA), tasking it to
“reclaim land, including foreshore and submerged areas” and “to develop, improve,
acquire, lease and sell any and all kinds of lands” and issued another Presidential Decree
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).
• In 1981, then President Marcos issued a memo directing PEA to amend its contract with
CDCP, so that “All future works in MCCRRP shall be funded and owned by PEA.
• In 1988, then President Aquino issued a Special Patent transferring to PEA the
reclaimed parcels of land. Then, the Register of Deeds of Parañaque issued titles in the
name of PEA, covering the “Freedom Islands”.
• In 1995, the PEA entered into a Joint Venture Agreement (JVA) with AMARI, a private
corporation, to develop the Freedom Islands without public bidding.
• In 1998, Frank I. Chavez 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 that the government stands to lose billions of pesos in the sale
by PEA of the reclaimed lands to AMARI. Petitioner assails the sale to AMARI of lands
of the public domain as a violation of Section 3, Article XII of the 1987 Constitution
prohibiting the sale of alienable lands of the public domain to private corporations.
• Court denied his motion for a TRO.
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Issue:
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.
Ruling:
Wherefore, the petition is GRANTED. The Public Estates Authority and Amari Coastal
Bay Development Corporation are PERMANENTLY ENJOINED from implementing
the Amended Joint which is hereby declared NULL and VOID ab initio.
Ratio:
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 Philippines passed to the Spanish Crown.
• The 1935, 1973 and 1987 Constitution 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. It is a time-honored principle of land ownership that “all lands that were not
acquired from the Government, either by purchase or grant, belong to the public domain.”
• AMARI as a private corporation cannot acquire the reclaimed Freedom Islands, though
alienable lands of the public domain, except by lease, as provided under Sec. 3, Article
XII of the Constitution.
• The Decision does not bar private corporations from participating in reclamation
projects and being paid for their services in reclaiming lands. The Decision however
prohibits, private corporations to acquire reclaimed lands of the public domain.
• Despite the nullity of the Amended JUA, AMARI is not precluded from recovering
from the PEA in the proper proceedings, on a quantum meruit basis, whatever AMERI
may have incurred in implementing the Amended JUA prior to its declaration of nullity.