Chaves Vs Pea PDF

6/17/2015
G.R.No.133250
TodayisWednesday,June17,2015
RepublicofthePhilippines
SUPREMECOURT
Manila
ENBANC
G.R.No.133250July9,2002
FRANCISCOI.CHAVEZ,petitioner,
vs.
PUBLICESTATESAUTHORITYandAMARICOASTALBAYDEVELOPMENTCORPORATION,respondents.
CARPIO,J.:
This is an original Petition for Mandamus with prayer for a writ of preliminary injunction and a temporary
restrainingorder.ThepetitionseekstocompelthePublicEstatesAuthority("PEA"forbrevity)todiscloseallfacts
on PEA's then ongoing renegotiations with Amari Coastal Bay and Development Corporation ("AMARI" for
brevity)toreclaimportionsofManilaBay.ThepetitionfurtherseekstoenjoinPEAfromsigninganewagreement
withAMARIinvolvingsuchreclamation.
TheFacts
OnNovember20,1973,thegovernment,throughtheCommissionerofPublicHighways,signedacontractwith
theConstructionandDevelopmentCorporationofthePhilippines("CDCP"forbrevity)toreclaimcertainforeshore
andoffshoreareasofManilaBay.The contract also included the construction of Phases I and II of the Manila
CaviteCoastalRoad.CDCPobligateditselftocarryoutalltheworksinconsiderationoffiftypercentofthetotal
reclaimedland.
OnFebruary4,1977,thenPresidentFerdinandE.MarcosissuedPresidentialDecreeNo.1084creatingPEA.PD
No. 1084 tasked PEA "to reclaim land, including foreshore and submerged areas," and "to develop, improve,
acquire, x x x lease and sell any and all kinds of lands."1 On the same date, then President Marcos issued
PresidentialDecreeNo.1085transferringtoPEAthe"landsreclaimedintheforeshoreandoffshoreoftheManila
Bay"2undertheManilaCaviteCoastalRoadandReclamationProject(MCCRRP).
OnDecember29,1981,thenPresidentMarcosissuedamemorandumdirectingPEAtoamenditscontractwith
CDCP, so that "[A]ll future works in MCCRRP x x x shall be funded and owned by PEA." Accordingly, PEA and
CDCPexecutedaMemorandumofAgreementdatedDecember29,1981,whichstated:
"(i)CDCPshallundertakeallreclamation,construction,andsuchotherworksintheMCCRRPasmaybe
agreeduponbytheparties,tobepaidaccordingtoprogressofworksonaunitprice/lumpsumbasisfor
items of work to be agreed upon, subject to price escalation, retention and other terms and conditions
providedforinPresidentialDecreeNo.1594.Allthefinancingrequiredforsuchworksshallbeprovidedby
PEA.
xxx
(iii)xxxCDCPshallgiveupallitsdevelopmentrightsandherebyagreestocedeandtransferinfavorof
PEA, all of the rights, title, interest and participation of CDCP in and to all the areas of land reclaimed by
CDCP in the MCCRRP as of December 30, 1981 which have not yet been sold, transferred or otherwise
disposed of by CDCP as of said date, which areas consist of approximately NinetyNine Thousand Four
HundredSeventyThree(99,473)squaremetersintheFinancialCenterAreacoveredbylandpledgeNo.5
and approximately Three Million Three Hundred Eighty Two Thousand Eight Hundred Eighty Eight
(3,382,888)squaremetersofreclaimedareasatvaryingelevationsaboveMeanLowWaterLevellocated
outsidetheFinancialCenterAreaandtheFirstNeighborhoodUnit."3
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 ManilaCavite Coastal Road and Reclamation
Project(MCCRRP)containingatotalareaofonemillionninehundredfifteenthousandeighthundredninetyfour
(1,915,894) square meters." Subsequently, on April 9, 1988, the Register of Deeds of the Municipality of
http://www.lawphil.net/judjuris/juri2002/jul2002/gr_133250_2002.html
1/35
6/17/2015
G.R.No.133250
Paraaque 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 ManilaCavite
CoastalRoad,ParaaqueCity.TheFreedomIslandshaveatotallandareaofOneMillionFiveHundredSeventy
EightThousandFourHundredandFortyOne(1,578,441)squaremetersor157.841hectares.
On April 25, 1995, PEA entered into a Joint Venture Agreement ("JVA" for brevity) with AMARI, a private
corporation,todeveloptheFreedomIslands.TheJVAalsorequiredthereclamationofanadditional250hectares
ofsubmergedareassurroundingtheseislandstocompletetheconfigurationintheMasterDevelopmentPlanof
the Southern Reclamation ProjectMCCRRP. PEA and AMARI entered into the JVA through negotiation without
publicbidding.4OnApril28,1995,theBoardofDirectorsofPEA,initsResolutionNo.1245,confirmedtheJVA.5
OnJune8,1995,thenPresidentFidelV.Ramos,throughthenExecutiveSecretaryRubenTorres,approvedthe
JVA.6
OnNovember29,1996,thenSenatePresidentErnestoMacedadeliveredaprivilegespeechintheSenateand
denounced the JVA as the "grandmother of all scams." As a result, the Senate Committee on Government
Corporations and Public Enterprises, and the Committee on Accountability of Public Officers and Investigations,
conducted a joint investigation. The Senate Committees reported the results of their investigation in Senate
Committee Report No. 560 dated September 16, 1997.7 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
certificatesoftitlecoveringtheFreedomIslandsarethusvoid,and(3)theJVAitselfisillegal.
OnDecember5,1997,thenPresidentFidelV.RamosissuedPresidentialAdministrativeOrderNo.365creatinga
LegalTaskForcetoconductastudyonthelegalityoftheJVAinviewofSenateCommitteeReportNo.560.The
membersoftheLegalTaskForceweretheSecretaryofJustice,8theChiefPresidentialLegalCounsel,9andthe
Government Corporate Counsel.10 The Legal Task Force upheld the legality of the JVA, contrary to the
conclusionsreachedbytheSenateCommittees.11
On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that there were ongoing
renegotiationsbetweenPEAandAMARIunderanorderissuedbythenPresidentFidelV.Ramos.According to
these reports, PEA Director Nestor Kalaw, PEA Chairman Arsenio Yulo and retired Navy Officer Sergio Cruz
composedthenegotiatingpanelofPEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with Application for the
IssuanceofaTemporaryRestrainingOrderandPreliminaryInjunctiondocketedasG.R.No.132994seekingto
nullifytheJVA.TheCourtdismissedthepetition"forunwarranteddisregardofjudicialhierarchy,withoutprejudice
totherefilingofthecasebeforethepropercourt."12
OnApril27,1998,petitionerFrankI.Chavez("Petitioner"forbrevity)asataxpayer,filedtheinstantPetition for
Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction and Temporary Restraining Order.
PetitionercontendsthegovernmentstandstolosebillionsofpesosinthesalebyPEAofthereclaimedlandsto
AMARI.PetitionerpraysthatPEApubliclydisclosethetermsofanyrenegotiationoftheJVA,invokingSection28,
ArticleII,andSection7,ArticleIII,ofthe1987Constitutionontherightofthepeopletoinformationonmattersof
publicconcern.PetitionerassailsthesaletoAMARIoflandsofthepublicdomainasablatantviolationofSection
3, Article XII of the 1987 Constitution prohibiting the sale of alienable lands of the public domain to private
corporations. Finally, petitioner asserts that he seeks to enjoin the loss of billions of pesos in properties of the
Statethatareofpublicdominion.
After several motions for extension of time,13 PEA and AMARI filed their Comments on October 19, 1998 and
June25,1998,respectively.Meanwhile,onDecember28,1998,petitionerfiledanOmnibusMotion:(a)torequire
PEA to submit the terms of the renegotiated PEAAMARI contract (b) for issuance of a temporary restraining
orderand(c)tosetthecaseforhearingonoralargument.PetitionerfiledaReiterativeMotionforIssuanceofa
TROdatedMay26,1999,whichtheCourtdeniedinaResolutiondatedJune22,1999.
InaResolutiondatedMarch23,1999,theCourtgaveduecoursetothepetitionandrequiredthepartiestofile
theirrespectivememoranda.
OnMarch30,1999,PEAandAMARIsignedtheAmendedJointVentureAgreement("AmendedJVA,"forbrevity).
On May 28, 1999, the Office of the President under the administration of then President Joseph E. Estrada
approvedtheAmendedJVA.
Due to the approval of the Amended JVA by the Office of the President, petitioner now prays that on
"constitutionalandstatutorygroundstherenegotiatedcontractbedeclarednullandvoid."14
TheIssues
2/35
6/17/2015
G.R.No.133250
Theissuesraisedbypetitioner,PEA15andAMARI16areasfollows:
I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT AND ACADEMIC
BECAUSEOFSUBSEQUENTEVENTS
II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE PRINCIPLE
GOVERNINGTHEHIERARCHYOFCOURTS
III. WHETHER THE PETITION MERITS DISMISSAL FOR NONEXHAUSTION OF ADMINISTRATIVE
REMEDIES
IV.WHETHERPETITIONERHASLOCUSSTANDITOBRINGTHISSUIT
V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES OFFICIAL INFORMATION
ONONGOINGNEGOTIATIONSBEFOREAFINALAGREEMENT
VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT FOR THE
TRANSFERTOAMARIOFCERTAINLANDS,RECLAIMEDANDSTILLTOBERECLAIMED,VIOLATETHE
1987CONSTITUTIONAND
VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF WHETHER THE
AMENDEDJOINTVENTUREAGREEMENTISGROSSLYDISADVANTAGEOUSTOTHEGOVERNMENT.
TheCourt'sRuling
Firstissue:whethertheprincipalreliefsprayedforinthepetitionaremootandacademicbecauseof
subsequentevents.
The petition prays that PEA publicly disclose the "terms and conditions of the ongoing negotiations for a new
agreement." The petition also prays that the Court enjoin PEA from "privately entering into, perfecting and/or
executinganynewagreementwithAMARI."
PEA and AMARI claim the petition is now moot and academic because AMARI furnished petitioner on June 21,
1999acopyofthesignedAmendedJVAcontainingthetermsandconditionsagreeduponintherenegotiations.
Thus, PEA has satisfied petitioner's prayer for a public disclosure of the renegotiations. Likewise, petitioner's
prayertoenjointhesigningoftheAmendedJVAisnowmootbecausePEAandAMARIhavealreadysignedthe
AmendedJVAonMarch30,1999.Moreover,theOfficeofthePresidenthasapprovedtheAmendedJVAonMay
28,1999.
PetitionercountersthatPEAandAMARIcannotavoidtheconstitutionalissuebysimplyfasttrackingthesigning
andapprovaloftheAmendedJVAbeforetheCourtcouldactontheissue.Presidentialapprovaldoesnotresolve
theconstitutionalissueorremoveitfromtheambitofjudicialreview.
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'sprincipalbasisinassailingtherenegotiationoftheJVAisitsviolationofSection3,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 the duty of the Court to enjoin its
implementation,andifalreadyimplemented,toannultheeffectsofsuchunconstitutionalcontract.
TheAmendedJVAisnotanordinarycommercialcontractbutonewhichseekstotransfertitleandownership
to367.5hectaresofreclaimedlandsandsubmergedareasofManilaBaytoasingleprivatecorporation.
ItnowbecomesmorecompellingfortheCourttoresolvetheissuetoinsurethegovernmentitselfdoesnotviolate
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.Intheinstantcase,iftheAmendedJVArunscountertotheConstitution,theCourtcanstillprevent
thetransferoftitleandownershipofalienablelandsofthepublicdomaininthenameofAMARI.Even in cases
where supervening events had made the cases moot, the Court did not hesitate to resolve the legal or
constitutionalissuesraisedtoformulatecontrollingprinciplestoguidethebench,bar,andthepublic.17
Also,theinstantpetitionisacaseoffirstimpression.AllpreviousdecisionsoftheCourtinvolvingSection3,Article
XII of the 1987 Constitution, or its counterpart provision in the 1973 Constitution,18coveredagricultural lands
sold to private corporations which acquired the lands from private parties. The transferors of the private
corporationsclaimedorcouldclaimtherighttojudicialconfirmationoftheirimperfecttitles19underTitleIIof
Commonwealth Act. 141 ("CA No. 141" for brevity). In the instant case, AMARI seeks to acquire from PEA, a
3/35
6/17/2015
G.R.No.133250
publiccorporation,reclaimedlandsandsubmergedareasfornonagriculturalpurposesbypurchaseunderPD
No.1084(charterofPEA)andTitleIIIofCANo.141.CertainundertakingsbyAMARIundertheAmendedJVA
constitutetheconsiderationforthepurchase.NeitherAMARInorPEAcanclaimjudicialconfirmationoftheirtitles
becausethelandscoveredbytheAmendedJVAarenewlyreclaimedorstilltobereclaimed.Judicialconfirmation
ofimperfecttitlerequiresopen,continuous,exclusiveandnotoriousoccupationofagriculturallandsofthepublic
domain for at least thirty years since June 12, 1945 or earlier. Besides, the deadline for filing applications for
judicialconfirmationofimperfecttitleexpiredonDecember31,1987.20
Lastly, there is a need to resolve immediately the constitutional issue raised in this petition because of the
possibletransferatanytimebyPEAtoAMARIoftitleandownershiptoportionsofthereclaimedlands.Underthe
Amended JVA, PEA is obligated to transfer to AMARI the latter's seventy percent proportionate share in the
reclaimedareasasthereclamationprogresses.TheAmendedJVAevenallowsAMARItomortgageatanytime
theentirereclaimedareatoraisefinancingforthereclamationproject.21
Secondissue:whetherthepetitionmeritsdismissalforfailingtoobservetheprinciplegoverningthe
hierarchyofcourts.
PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the Court. The
principleofhierarchyofcourtsappliesgenerallytocasesinvolvingfactualquestions.Asitisnotatrieroffacts,
theCourtcannotentertaincasesinvolvingfactualissues.Theinstantcase,however,raisesconstitutionalissues
of transcendental importance to the public.22 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
jurisdictionoftheCourtunderSection5,ArticleVIIIoftheConstitution.Weresolvetoexerciseprimaryjurisdiction
overtheinstantcase.
Thirdissue:whetherthepetitionmeritsdismissalfornonexhaustionofadministrativeremedies.
PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly certain information
without first asking PEA the needed information. PEA claims petitioner's direct resort to the Court violates the
principleofexhaustionofadministrativeremedies.Italsoviolatestherulethatmandamusmayissueonlyifthere
isnootherplain,speedyandadequateremedyintheordinarycourseoflaw.
PEAdistinguishestheinstantcasefromTaadav.Tuvera23wheretheCourtgrantedthepetitionformandamus
even if the petitioners there did not initially demand from the Office of the President the publication of the
presidentialdecrees.PEApointsoutthatinTaada,theExecutiveDepartmenthadanaffirmativestatutoryduty
under Article 2 of the Civil Code24 and Section 1 of Commonwealth Act No. 63825 to publish the presidential
decrees.Therewas,therefore,noneedforthepetitionersinTaadatomakeaninitialdemandfromtheOfficeof
thePresident.Intheinstantcase,PEAclaimsithasnoaffirmativestatutorydutytodisclosepubliclyinformation
about its renegotiation of the JVA. Thus, PEA asserts that the Court must apply the principle of exhaustion of
administrativeremediestotheinstantcaseinviewofthefailureofpetitionerheretodemandinitiallyfromPEAthe
neededinformation.
TheoriginalJVAsoughttodisposetoAMARIpubliclandsheldbyPEA,agovernmentcorporation.UnderSection
79 of the Government Auditing Code,26 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
saleofitslands.ThelawobligatedPEAtomakethispublicdisclosureevenwithoutdemandfrompetitioneror
fromanyone.PEAfailedtomakethispublicdisclosurebecausetheoriginalJVA,liketheAmendedJVA,wasthe
resultofanegotiatedcontract,notofapublicbidding.ConsideringthatPEAhadanaffirmativestatutorydutyto
make the public disclosure, and was even in breach of this legal duty, petitioner had the right to seek direct
judicialintervention.
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.27 The principal issue in the
instantcaseisthecapacityofAMARItoacquirelandsheldbyPEAinviewoftheconstitutionalbanprohibitingthe
alienation of lands of the public domain to private corporations. We rule that the principle of exhaustion of
administrativeremediesdoesnotapplyintheinstantcase.
Fourthissue:whetherpetitionerhaslocusstanditobringthissuit
PEAarguesthatpetitionerhasnostandingtoinstitutemandamusproceedingstoenforcehisconstitutionalright
to information without a showing that PEA refused to perform an affirmative duty imposed on PEA by the
Constitution.PEAalsoclaimsthatpetitionerhasnotshownthathewillsufferanyconcreteinjurybecauseofthe
signingorimplementationoftheAmendedJVA.Thus,thereisnoactualcontroversyrequiringtheexerciseofthe
powerofjudicialreview.
Thepetitionerhasstandingtobringthistaxpayer'ssuitbecausethepetitionseekstocompelPEAtocomplywith
4/35
6/17/2015
G.R.No.133250
its constitutional duties. There are two constitutional issues involved here. First is the right of citizens to
informationonmattersofpublicconcern.Secondistheapplicationofaconstitutionalprovisionintendedtoinsure
the equitable distribution of alienable lands of the public domain among Filipino citizens. The thrust of the first
issueistocompelPEAtodisclosepubliclyinformationonthesaleofgovernmentlandsworthbillionsofpesos,
informationwhichtheConstitutionandstatutorylawmandatePEAtodisclose.Thethrustofthesecondissueisto
prevent PEA from alienating hundreds of hectares of alienable lands of the public domain in violation of the
Constitution,compellingPEAtocomplywithaconstitutionaldutytothenation.
Moreover,thepetitionraisesmattersoftranscendentalimportancetothepublic.InChavezv.PCGG,28theCourt
upheldtherightofacitizentobringataxpayer'ssuitonmattersoftranscendentalimportancetothepublic,thus
"Besides,petitioneremphasizes,thematterofrecoveringtheillgottenwealthoftheMarcosesisanissue
of'transcendentalimportancetothepublic.'Heassertsthatordinarytaxpayershavearighttoinitiateand
prosecuteactionsquestioningthevalidityofactsorordersofgovernmentagenciesorinstrumentalities,if
theissuesraisedareof'paramountpublicinterest,'andifthey'immediatelyaffectthesocial,economicand
moralwellbeingofthepeople.'
Moreover, the mere fact that he is a citizen satisfies the requirement of personal interest, when the
proceedinginvolvestheassertionofapublicright,suchasinthiscase.Heinvokesseveraldecisionsofthis
Court which have set aside the procedural matter of locusstandi, when the subject of the case involved
publicinterest.
xxx
In Taada v. Tuvera, 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, the people are regarded as the real parties in
interestandbecauseitissufficientthatpetitionerisacitizenandassuchisinterestedintheexecutionof
the laws, he need not show that he has any legal or special interest in the result of the action. In the
aforesaidcase,thepetitionerssoughttoenforcetheirrighttobeinformedonmattersofpublicconcern,a
rightthenrecognizedinSection6,ArticleIVofthe1973Constitution,inconnectionwiththerulethatlawsin
order to be valid and enforceable must be published in the Official Gazette or otherwise effectively
promulgated.Inrulingforthepetitioners'legalstanding,theCourtdeclaredthattherighttheysoughttobe
enforced'isapublicrightrecognizedbynolessthanthefundamentallawoftheland.'
Legaspi v. Civil Service Commission, while reiterating Taada, further declared that 'when a mandamus
proceedinginvolvestheassertionofapublicright,therequirementofpersonalinterestissatisfiedbythe
merefactthatpetitionerisacitizenand,therefore,partofthegeneral'public'whichpossessestheright.'
Further, in Albano v. Reyes, we said that while expenditure of public funds may not have been involved
underthequestionedcontractforthedevelopment,managementandoperationoftheManilaInternational
Container Terminal, 'public interest [was] definitely involved considering the important role [of the subject
contract]...intheeconomicdevelopmentofthecountryandthemagnitudeofthefinancialconsideration
involved.' We concluded that, as a consequence, the disclosure provision in the Constitution would
constitutesufficientauthorityforupholdingthepetitioner'sstanding.
Similarly, the instant petition is anchored on the right of the people to information and access to official
records,documentsandpapersarightguaranteedunderSection7,ArticleIIIofthe1987Constitution.
Petitioner, a former solicitor general, is a Filipino citizen. Because of the satisfaction of the two basic
requisites laid down by decisional law to sustain petitioner's legal standing, i.e. (1) the enforcement of a
publicright(2)espousedbyaFilipinocitizen,werulethatthepetitionatbarshouldbeallowed."
Werulethatsincetheinstantpetition,broughtbyacitizen,involvestheenforcementofconstitutionalrights to
informationandtotheequitablediffusionofnaturalresourcesmattersoftranscendentalpublicimportance,the
petitionerhastherequisitelocusstandi.
Fifthissue:whethertheconstitutionalrighttoinformationincludesofficialinformationonongoing
negotiationsbeforeafinalagreement.
Section7,ArticleIIIoftheConstitutionexplainsthepeople'srighttoinformationonmattersofpublicconcernin
thismanner:
"Sec.7.Therightofthepeopletoinformationonmattersofpublicconcernshallberecognized.Accessto
official records, and to documents, and papers pertaining to official acts, transactions, or
decisions,aswellastogovernmentresearchdatausedasbasisforpolicydevelopment,shallbeafforded
thecitizen,subjecttosuchlimitationsasmaybeprovidedbylaw."(Emphasissupplied)
The State policy of full transparency in all transactions involving public interest reinforces the people's right to
5/35
6/17/2015
G.R.No.133250
informationonmattersofpublicconcern.ThisStatepolicyisexpressedinSection28,ArticleIIoftheConstitution,
thus:
"Sec.28.Subjecttoreasonableconditionsprescribedbylaw,theStateadoptsandimplementsapolicyof
fullpublicdisclosureofallitstransactionsinvolvingpublicinterest."(Emphasissupplied)
ThesetwinprovisionsoftheConstitutionseektopromotetransparencyinpolicymakingandintheoperationsof
the government, as well as provide the people sufficient information to exercise effectively other constitutional
rights.Thesetwinprovisionsareessentialtotheexerciseoffreedomofexpression.Ifthegovernmentdoesnot
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,"29 for unless citizens have the proper information, they
cannotholdpublicofficialsaccountableforanything.Armedwiththerightinformation,citizenscanparticipatein
public discussions leading to the formulation of government policies and their effective implementation. An
informed citizenry is essential to the existence and proper functioning of any democracy. As explained by the
CourtinValmontev.Belmonte,Jr.30
"An essential element of these freedoms is to keep open a continuing dialogue or process of
communicationbetweenthegovernmentandthepeople.ItisintheinterestoftheStatethatthechannels
forfreepoliticaldiscussionbemaintainedtotheendthatthegovernmentmayperceiveandberesponsive
tothepeople'swill.Yet,thisopendialoguecanbeeffectiveonlytotheextentthatthecitizenryisinformed
andthusabletoformulateitswillintelligently.Onlywhentheparticipantsinthediscussionareawareofthe
issuesandhaveaccesstoinformationrelatingtheretocansuchbearfruit."
PEAasserts,citingChavezv.PCGG,31thatincasesofongoingnegotiationstherighttoinformationislimitedto
"definite propositions of the government." PEA maintains the right does not include access to "intraagency or
interagency recommendations or communications during the stage when common assertions are still in the
processofbeingformulatedorareinthe'exploratorystage'."
Also,AMARIcontendsthatpetitionercannotinvoketherightatthepredecisionalstageorbeforetheclosingof
the transaction. To support its contention, AMARI cites the following discussion in the 1986 Constitutional
Commission:
"Mr.Suarez.Andwhenwesay'transactions'whichshouldbedistinguishedfromcontracts,agreements,or
treatiesorwhatever,doestheGentlemanrefertothestepsleadingtotheconsummationofthecontract,or
doesherefertothecontractitself?
Mr.Ople:The'transactions'usedhere,Isupposeisgenericandtherefore,itcancoverbothsteps
leadingtoacontractandalreadyaconsummatedcontract,Mr.PresidingOfficer.
Mr. Suarez: This contemplates inclusion of negotiations leading to the consummation of the
transaction.
Mr.Ople:Yes,subjectonlytoreasonablesafeguardsonthenationalinterest.
Mr.Suarez:Thankyou."32(Emphasissupplied)
AMARI argues there must first be a consummated contract before petitioner can invoke the right. Requiring
governmentofficialstorevealtheirdeliberationsatthepredecisionalstagewilldegradethequalityofdecision
making in government agencies. Government officials will hesitate to express their real sentiments during
deliberations if there is immediate public dissemination of their discussions, putting them under all kinds of
pressurebeforetheydecide.
We must first distinguish between information the law on public bidding requires PEA to disclose publicly, and
informationtheconstitutionalrighttoinformationrequiresPEAtoreleasetothepublic.Beforetheconsummation
ofthecontract,PEAmust,onitsownandwithoutdemandfromanyone,disclosetothepublicmattersrelatingto
the disposition of its property. These include the size, location, technical description and nature of the property
beingdisposedof,thetermsandconditionsofthedisposition,thepartiesqualifiedtobid,theminimumpriceand
similarinformation.PEAmustprepareallthesedataanddisclosethemtothepublicatthestartofthedisposition
process,longbeforetheconsummationofthecontract,becausetheGovernmentAuditingCoderequirespublic
bidding.IfPEAfailstomakethisdisclosure,anycitizencandemandfromPEAthisinformationatanytimeduring
thebiddingprocess.
Information,however,onongoingevaluationorreviewofbidsorproposalsbeingundertakenbythebidding
orreviewcommitteeisnotimmediatelyaccessibleundertherighttoinformation.Whiletheevaluationorreviewis
stillongoing,thereareno"officialacts,transactions,ordecisions"onthebidsorproposals.However,oncethe
committee makes its official recommendation, there arises a "definite proposition" on the part of the
6/35
6/17/2015
G.R.No.133250
government.Fromthismoment,thepublic'srighttoinformationattaches,andanycitizencanaccessallthenon
proprietaryinformationleadingtosuchdefiniteproposition.InChavezv.PCGG,33theCourtruledasfollows:
"ConsideringtheintentoftheframersoftheConstitution,webelievethatitisincumbentuponthePCGG
anditsofficers,aswellasothergovernmentrepresentatives,todisclosesufficientpublicinformationonany
proposed settlement they have decided to take up with the ostensible owners and holders of illgotten
wealth. Such information, though, must pertain to definite propositions of the government, not
necessarily to intraagency or interagency recommendations or communications during the stage when
common assertions are still in the process of being formulated or are in the "exploratory" stage. There is
need, of course, to observe the same restrictions on disclosure of information in general, as discussed
earlier such as on matters involving national security, diplomatic or foreign relations, intelligence and
otherclassifiedinformation."(Emphasissupplied)
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,aconsummatedcontractisnotarequirementfortheexerciseoftherighttoinformation.
Otherwise,thepeoplecanneverexercisetherightifnocontractisconsummated,andifoneisconsummated,it
maybetoolateforthepublictoexposeitsdefects.
1 w p h i1 .n t
Requiring a consummated contract will keep the public in the dark until the contract, which may be grossly
disadvantageoustothegovernmentorevenillegal,becomesafaitaccompli.ThisnegatestheStatepolicyoffull
transparency on matters of public concern, a situation which the framers of the Constitution could not have
intended.Sucharequirementwillpreventthecitizenryfromparticipatinginthepublicdiscussionofanyproposed
contract,effectivelytruncatingabasicrightenshrinedintheBillofRights.Wecanallowneitheranemasculation
of a constitutional right, nor a retreat by the State of its avowed "policy of full disclosure of all its transactions
involvingpublicinterest."
Therightcoversthreecategoriesofinformationwhichare"mattersofpublicconcern,"namely:(1)officialrecords
(2) documents and papers pertaining to official acts, transactions and decisions and (3) government research
datausedinformulatingpolicies.Thefirstcategoryreferstoanydocumentthatispartofthepublicrecordsinthe
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
governmentagenciesorofficials.Thethirdcategoryreferstoresearchdata,whetherraw,collatedorprocessed,
ownedbythegovernmentandusedinformulatinggovernmentpolicies.
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
PEAtopreparelists,abstracts,summariesandthelikerelatingtotherenegotiationoftheJVA.34Therightonly
affordsaccesstorecords,documentsandpapers,whichmeanstheopportunitytoinspectandcopythem.One
whoexercisestherightmustcopytherecords,documentsandpapersathisexpense.Theexerciseoftherightis
alsosubjecttoreasonableregulationstoprotecttheintegrityofthepublicrecordsandtominimizedisruptionto
governmentoperations,likerulesspecifyingwhenandhowtoconducttheinspectionandcopying.35
The right to information, however, does not extend to matters recognized as privileged information under the
separation of powers.36 The right does not also apply to information on military and diplomatic secrets,
informationaffectingnationalsecurity,andinformationoninvestigationsofcrimesbylawenforcementagencies
beforetheprosecutionoftheaccused,whichcourtshavelongrecognizedasconfidential.37Therightmayalso
besubjecttootherlimitationsthatCongressmayimposebylaw.
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 closeddoor Cabinet meetings which, like internal deliberations of the Supreme Court and
othercollegiatecourts,orexecutivesessionsofeitherhouseofCongress,38arerecognizedasconfidential.This
kindofinformationcannotbepriedopenbyacoequalbranchofgovernment.Afrankexchangeofexploratory
ideasandassessments,freefromtheglareofpublicityandpressurebyinterestedparties,isessentialtoprotect
theindependenceofdecisionmakingofthosetaskedtoexercisePresidential,LegislativeandJudicialpower.39
Thisisnotthesituationintheinstantcase.
We rule, therefore, that the constitutional right to information includes official information on ongoing
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.40 Congress has also prescribed other
limitationsontherighttoinformationinseverallegislations.41
7/35
6/17/2015
G.R.No.133250
Sixthissue:whetherstipulationsintheAmendedJVAforthetransfertoAMARIoflands,reclaimedorto
bereclaimed,violatetheConstitution.
TheRegalianDoctrine
TheownershipoflandsreclaimedfromforeshoreandsubmergedareasisrootedintheRegaliandoctrinewhich
holds that the State owns all lands and waters of the public domain. Upon the Spanish conquest of the
Philippines,ownershipofall"lands,territoriesandpossessions"inthePhilippinespassedtotheSpanishCrown.42
TheKing,asthesovereignrulerandrepresentativeofthepeople,acquiredandownedalllandsandterritoriesin
thePhilippinesexceptthosehedisposedofbygrantorsaletoprivateindividuals.
The1935,1973and1987ConstitutionsadoptedtheRegaliandoctrinesubstituting,however,theState,inlieuof
theKing,astheownerofalllandsandwatersofthepublicdomain.TheRegaliandoctrineisthefoundationofthe
timehonored principle of land ownership that "all lands that were not acquired from the Government, either by
purchaseorbygrant,belongtothepublicdomain."43Article339oftheCivilCodeof1889,whichisnowArticle
420oftheCivilCodeof1950,incorporatedtheRegaliandoctrine.
OwnershipandDispositionofReclaimedLands
The Spanish Law of Waters of 1866 was the first statutory law governing the ownership and disposition of
reclaimed lands in the Philippines. On May 18, 1907, the Philippine Commission enacted Act No. 1654 which
provided for the lease, but not the sale, of reclaimed lands of the government to corporations and
individuals. Later, on November 29, 1919, the Philippine Legislature approved Act No. 2874, the Public Land
Act, which authorized the lease, but not the sale, of reclaimed lands of the government to corporations
andindividuals.OnNovember7,1936,theNationalAssemblypassedCommonwealthActNo.141,alsoknown
asthePublicLandAct,whichauthorizedthelease,butnotthesale,ofreclaimedlandsofthegovernment
to corporations and individuals. CA No. 141 continues to this day as the general law governing the
classificationanddispositionoflandsofthepublicdomain.
TheSpanishLawofWatersof1866andtheCivilCodeof1889
UndertheSpanishLawofWatersof1866,theshores,bays,coves,inletsandallwaterswithinthemaritimezone
of the Spanish territory belonged to the public domain for public use.44 The Spanish Law of Waters of 1866
allowedthereclamationoftheseaunderArticle5,whichprovidedasfollows:
"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by the
provinces, pueblos or private persons, with proper permission, shall become the property of the party
constructingsuchworks,unlessotherwiseprovidedbythetermsofthegrantofauthority."
Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party undertaking the
reclamation, provided the government issued the necessary permit and did not reserve ownership of the
reclaimedlandtotheState.
Article339oftheCivilCodeof1889definedpropertyofpublicdominionasfollows:
"Art.339.Propertyofpublicdominionis
1.Thatdevotedtopublicuse,suchasroads,canals,rivers,torrents,portsandbridgesconstructedbythe
State,riverbanks,shores,roadsteads,andthatofasimilarcharacter
2.ThatbelongingexclusivelytotheStatewhich,withoutbeingofgeneralpublicuse,isemployedinsome
publicservice,orinthedevelopmentofthenationalwealth,suchaswalls,fortresses,andotherworksfor
thedefenseoftheterritory,andmines,untilgrantedtoprivateindividuals."
Propertydevotedtopublicusereferredtopropertyopenforusebythepublic.In contrast, property devoted to
publicservicereferredtopropertyusedforsomespecificpublicserviceandopenonlytothoseauthorizedtouse
theproperty.
Propertyofpublicdominionreferrednotonlytopropertydevotedtopublicuse,butalsotopropertynotsoused
but employed to develop the national wealth. This class of property constituted property of public dominion
althoughemployedforsomeeconomicorcommercialactivitytoincreasethenationalwealth.
Article 341 of the Civil Code of 1889 governed the reclassification of property of public dominion into private
property,towit:
"Art. 341. Property of public dominion, when no longer devoted to public use or to the defense of the
territory,shallbecomeapartoftheprivatepropertyoftheState."
8/35
6/17/2015
G.R.No.133250
This provision, however, was not selfexecuting. 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
leaseoralienatethepropertytoprivateparties.45
ActNo.1654ofthePhilippineCommission
On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the lease of reclaimed and
foreshorelands.Thesalientprovisionsofthislawwereasfollows:
"Section1.Thecontrolanddispositionoftheforeshoreasdefinedinexistinglaw,andthetitletoall
Government or public lands made or reclaimed by the Government by dredging or filling or
otherwise throughout the Philippine Islands, shall be retained by the Government without prejudice to
vestedrightsandwithoutprejudicetorightsconcededtotheCityofManilaintheLunetaExtension.
Section2.(a)TheSecretaryoftheInteriorshallcauseallGovernmentorpubliclandsmadeorreclaimed
bytheGovernmentbydredgingorfillingorotherwisetobedividedintolotsorblocks,withthenecessary
streetsandalleywayslocatedthereon,andshallcauseplatsandplansofsuchsurveystobepreparedand
filedwiththeBureauofLands.
(b)UponcompletionofsuchplatsandplanstheGovernorGeneralshallgivenoticetothepublicthat
suchpartsofthelandssomadeorreclaimedasarenotneededforpublicpurposeswillbeleased
forcommercialandbusinesspurposes,xxx.
xxx
(e)The leases above provided for shall be disposed of to the highest and best bidder therefore,
subject to such regulations and safeguards as the GovernorGeneral may by executive order prescribe."
(Emphasissupplied)
ActNo.1654mandatedthatthegovernment should retain title to all lands reclaimed by the government.
The Act also vested in the government control and disposition of foreshore lands. Private parties could lease
landsreclaimedbythegovernmentonlyiftheselandswerenolongerneededforpublicpurpose.Act No. 1654
mandated public bidding in the lease of government reclaimed lands. Act No. 1654 made government
reclaimedlandssuigenerisinthatunlikeotherpubliclandswhichthegovernmentcouldselltoprivateparties,
thesereclaimedlandswereavailableonlyforleasetoprivateparties.
Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866. Act No. 1654 did not
prohibit private parties from reclaiming parts of the sea under Section 5 of the Spanish Law of Waters. Lands
reclaimedfromtheseabyprivatepartieswithgovernmentpermissionremainedprivatelands.
ActNo.2874ofthePhilippineLegislature
On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land Act.46 The salient
provisionsofActNo.2874,onreclaimedlands,wereasfollows:
"Sec. 6. The GovernorGeneral, upon the recommendation of the Secretary of Agriculture and
NaturalResources,shallfromtimetotimeclassifythelandsofthepublicdomaininto
(a)Alienableordisposable,
(b)Timber,and
(c)Minerallands,xxx.
Sec. 7. For the purposes of the government and disposition of alienable or disposable public lands, the
GovernorGeneral, upon recommendation by the Secretary of Agriculture and Natural Resources,
shallfromtimetotimedeclarewhatlandsareopentodispositionorconcessionunderthisAct."
Sec. 8. Only those lands shall be declared open to disposition or concession which have been
officiallydelimitedorclassifiedxxx.
xxx
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
disposedofundertheprovisionsofthischapter,andnototherwise.
9/35
6/17/2015
G.R.No.133250
Sec.56.Thelandsdisposableunderthistitleshallbeclassifiedasfollows:
(a)LandsreclaimedbytheGovernmentbydredging,filling,orothermeans
(b)Foreshore
(c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable
lakesorrivers
(d)Landsnotincludedinanyoftheforegoingclasses.
xxx.
Sec.58.Thelandscomprisedinclasses(a),(b),and(c)ofsectionfiftysixshallbedisposedofto
private parties by lease only and not otherwise, as soon as the GovernorGeneral, upon
recommendationbytheSecretaryofAgricultureandNaturalResources,shalldeclarethatthesame
arenotnecessaryforthepublicserviceandareopentodispositionunderthischapter.The lands
included in class (d) may be disposed of by sale or lease under the provisions of this Act."
(Emphasissupplied)
Section 6 of Act No. 2874 authorized the GovernorGeneral to "classify lands of the public domain into x x x
alienableordisposable"47lands.Section 7 of the Act empowered the GovernorGeneral to "declare what lands
are open to disposition or concession." Section 8 of the Act limited alienable or disposable lands only to those
landswhichhavebeen"officiallydelimitedandclassified."
Section 56 of Act No. 2874 stated that lands "disposable under this title48 shall be classified" as government
reclaimed, foreshore and marshy lands, as well as other lands. All these lands, however, must be suitable for
residential,commercial,industrialorotherproductivenonagriculturalpurposes.Theseprovisionsvestedupon
the GovernorGeneral the power to classify inalienable lands of the public domain into disposable lands of the
publicdomain.TheseprovisionsalsoempoweredtheGovernorGeneraltoclassifyfurthersuchdisposablelands
ofthepublicdomainintogovernmentreclaimed,foreshoreormarshylandsofthepublicdomain,aswellasother
nonagriculturallands.
Section 58 of Act No. 2874 categorically mandated that disposable lands of the public domain classified as
government reclaimed, foreshore and marshy lands "shall be disposed of to private parties by lease only
and not otherwise." The GovernorGeneral, before allowing the lease of these lands to private parties, must
formallydeclarethatthelandswere"notnecessaryforthepublicservice."ActNo.2874reiteratedtheStatepolicy
to lease and not to sell government reclaimed, foreshore and marshy lands of the public domain, a policy first
enunciatedin1907inActNo.1654.Governmentreclaimed,foreshoreandmarshylandsremainedsuigeneris,
as the only alienable or disposable lands of the public domain that the government could not sell to private
parties.
TherationalebehindthisStatepolicyisobvious.Governmentreclaimed,foreshoreandmarshypubliclandsfor
nonagricultural 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
reservedtheselandsforsomefuturepublicservice.
Act No. 2874 did not authorize the reclassification of government reclaimed, foreshore and marshy lands into
othernonagriculturallandsunderSection56(d).LandsfallingunderSection56(d)weretheonlylandsfornon
agricultural purposes the government could sell to private parties. Thus, under Act No. 2874, the government
could not sell government reclaimed, foreshore and marshy lands to private parties, unless the legislature
passedalawallowingtheirsale.49
ActNo.2874didnotprohibitprivatepartiesfromreclaimingpartsoftheseapursuanttoSection5oftheSpanish
LawofWatersof1866.Lands reclaimed from the sea by private parties with government permission remained
privatelands.
Dispositionsunderthe1935Constitution
On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino people. The 1935
Constitution,inadoptingtheRegaliandoctrine,declaredinSection1,ArticleXIII,that
"Section 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy and other natural resources of the
PhilippinesbelongtotheState,andtheirdisposition,exploitation,development,orutilizationshallbelimited
to citizens of the Philippines or to corporations or associations at least sixty per centum of the capital of
whichisownedbysuchcitizens,subjecttoanyexistingright,grant,lease,orconcessionatthetimeofthe
10/35
6/17/2015
G.R.No.133250
inauguration of the Government established under this Constitution. Natural resources, with the
exceptionofpublicagriculturalland,shallnotbealienated,andnolicense,concession,orleasefor
the exploitation, development, or utilization of any of the natural resources shall be granted for a period
exceeding twentyfive years, renewable for another twentyfive years, except as to water rights for
irrigation, water supply, fisheries, or industrial uses other than the development of water power, in which
casesbeneficialusemaybethemeasureandlimitofthegrant."(Emphasissupplied)
The1935Constitutionbarredthealienationofallnaturalresourcesexceptpublicagriculturallands,whichwere
theonlynaturalresourcestheStatecouldalienate.Thus,foreshorelands,consideredpartoftheState'snatural
resources,becameinalienablebyconstitutionalfiat,availableonlyforleasefor25years,renewableforanother
25years.Thegovernmentcouldalienateforeshorelandsonlyaftertheselandswerereclaimedandclassifiedas
alienableagriculturallandsofthepublicdomain.Governmentreclaimedandmarshylandsofthepublicdomain,
being neither timber nor mineral lands, fell under the classification of public agricultural lands.50 However,
governmentreclaimedandmarshylands,althoughsubjecttoclassificationasdisposablepublicagriculturallands,
couldonlybeleasedandnotsoldtoprivatepartiesbecauseofActNo.2874.
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. The
1935Constitutiondidnotprohibitindividualsandcorporationsfromacquiringgovernmentreclaimedandmarshy
lands of the public domain that were classified as agricultural lands under existing public land laws. Section 2,
ArticleXIIIofthe1935Constitutionprovidedasfollows:
"Section 2. No private corporation or association may acquire, lease, or hold public agricultural
lands in excess of one thousand and twenty four hectares, nor may any individual acquire such
lands by purchase in excess of one hundred and forty hectares, or by lease in excess of one
thousandandtwentyfourhectares,orbyhomesteadinexcessoftwentyfourhectares.Landsadapted
to grazing, not exceeding two thousand hectares, may be leased to an individual, private corporation, or
association."(Emphasissupplied)
Still,aftertheeffectivityofthe1935Constitution,thelegislaturedidnotrepealSection58ofActNo.2874toopen
for sale to private parties government reclaimed and marshy lands of the public domain. On the contrary, the
legislature continued the long established State policy of retaining for the government title and ownership of
governmentreclaimedandmarshylandsofthepublicdomain.
CommonwealthActNo.141ofthePhilippineNationalAssembly
On November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also known as the Public
LandAct,whichcompiledthethenexistinglawsonlandsofthepublicdomain.CANo.141,asamended,remains
to this day the existing general law governing the classification and disposition of lands of the public domain
otherthantimberandminerallands.51
Section 6 of CA No. 141 empowers the President to classify lands of the public domain into "alienable or
disposable"52 lands of the public domain, which prior to such classification are inalienable and outside the
commerce of man. Section 7 of CA No. 141 authorizes the President to "declare what lands are open to
dispositionorconcession."Section8ofCANo.141statesthatthegovernmentcandeclareopenfordisposition
orconcessiononlylandsthatare"officiallydelimitedandclassified."Sections6,7and8ofCANo.141readas
follows:
"Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and Commerce,
shallfromtimetotimeclassifythelandsofthepublicdomaininto
(a)Alienableordisposable,
(b)Timber,and
(c)Minerallands,
andmayatanytimeandinlikemannertransfersuchlandsfromoneclasstoanother,53forthepurposeof
theiradministrationanddisposition.
Sec.7.Forthepurposesoftheadministrationanddispositionofalienableordisposablepubliclands,the
President,uponrecommendationbytheSecretaryofAgricultureandCommerce,shallfromtimeto
timedeclarewhatlandsareopentodispositionorconcessionunderthisAct.
Sec. 8. Only those lands shall be declared open to disposition or concession which have been
officiallydelimitedandclassifiedand,whenpracticable,surveyed,andwhichhavenotbeenreserved
forpublicorquasipublicuses,norappropriatedbytheGovernment,norinanymannerbecomeprivate
11/35
6/17/2015
G.R.No.133250
property, nor those on which a private right authorized and recognized by this Act or any other valid law
maybeclaimed,orwhich,havingbeenreservedorappropriated,haveceasedtobeso.xxx."
Thus, before the government could alienate or dispose of lands of the public domain, the President must first
officiallyclassifytheselandsasalienableordisposable,andthendeclarethemopentodispositionorconcession.
Theremustbenolawreservingtheselandsforpublicorquasipublicuses.
The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of the public
domain,areasfollows:
"Sec. 58. Any tract of land of the public domain which, being neither timber nor mineral land, is
intended to be used for residential purposes or for commercial, industrial, or other productive
purposes other than agricultural, and is open to disposition or concession, shall be disposed of
undertheprovisionsofthischapterandnototherwise.
Sec.59.Thelandsdisposableunderthistitleshallbeclassifiedasfollows:
(a)LandsreclaimedbytheGovernmentbydredging,filling,orothermeans
(b)Foreshore
(c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable
lakesorrivers
(d)Landsnotincludedinanyoftheforegoingclasses.
Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case may be, to any
person,corporation,orassociationauthorizedtopurchaseorleasepubliclandsforagriculturalpurposes.x
xx.
Sec.61.Thelandscomprisedinclasses(a),(b),and(c)ofsectionfiftynineshallbedisposedofto
privatepartiesbyleaseonlyandnototherwise,assoonasthePresident, upon recommendation by
theSecretaryofAgriculture,shalldeclarethatthesamearenotnecessaryforthepublicserviceand
areopentodispositionunderthischapter.Thelandsincludedinclass(d)maybedisposedofbysale
orleaseundertheprovisionsofthisAct."(Emphasissupplied)
Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of Act No. 2874
prohibiting the sale of government reclaimed, foreshore and marshy disposable lands of the public domain. All
these lands are intended for residential, commercial, industrial or other nonagricultural purposes. As before,
Section 61 allowed only the lease of such lands to private parties. The government could sell to private parties
onlylandsfallingunderSection59(d)ofCANo.141,orthoselandsfornonagriculturalpurposesnotclassified
as government reclaimed, foreshore and marshy disposable lands of the public domain. Foreshore lands,
however,becameinalienableunderthe1935Constitutionwhichonlyallowedtheleaseoftheselandstoqualified
privateparties.
Section 58 of CA No. 141 expressly states that disposable lands of the public domain intended for residential,
commercial, industrial or other productive purposes other than agricultural "shall be disposed of under the
provisionsofthischapterandnototherwise."UnderSection10ofCANo.141,theterm"disposition"includes
lease of the land. Any disposition of government reclaimed, foreshore and marshy disposable lands for non
agriculturalpurposesmustcomplywithChapterIX,TitleIIIofCANo.141,54unlessasubsequentlawamended
orrepealedtheseprovisions.
In his concurring opinion in the landmark case of Republic Real Estate Corporation v. Court of Appeals,55
JusticeReynatoS.Punosummarizedsuccinctlythelawonthismatter,asfollows:
"Foreshorelandsarelandsofpublicdominionintendedforpublicuse.So too are lands reclaimed by the
governmentbydredging,filling,orothermeans.Act1654mandatedthatthecontrolanddispositionofthe
foreshoreandlandsunderwaterremainedinthenationalgovernment.Saidlawallowedonlythe'leasing'
of reclaimed land. The Public Land Acts of 1919 and 1936 also declared that the foreshore and lands
reclaimedbythegovernmentweretobe"disposedoftoprivatepartiesbyleaseonlyandnototherwise."
Beforeleasing,however,theGovernorGeneral,uponrecommendationoftheSecretaryofAgricultureand
NaturalResources,hadfirsttodeterminethatthelandreclaimedwasnotnecessaryforthepublicservice.
Thisrequisitemusthavebeenmetbeforethelandcouldbedisposedof.But even then, the foreshore
andlandsunderwaterwerenottobealienatedandsoldtoprivateparties.Thedispositionofthe
reclaimedlandwasonlybylease.ThelandremainedpropertyoftheState."(Emphasissupplied)
As observed by Justice Puno in his concurring opinion, "Commonwealth Act No. 141 has remained in effect at
12/35
6/17/2015
G.R.No.133250
present."
TheStatepolicyprohibitingthesaletoprivatepartiesofgovernmentreclaimed,foreshoreandmarshyalienable
lands of the public domain, first implemented in 1907 was thus reaffirmed in CA No. 141 after the 1935
Constitution 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
reclaimedbythegovernmentandclassifiedasagriculturallandsofthepublicdomain,inwhichcasetheywould
fallundertheclassificationofgovernmentreclaimedlands.
After the effectivity of the 1935 Constitution, government reclaimed and marshy disposable lands of the public
domaincontinuedtobeonlyleasedandnotsoldtoprivateparties.56Theselandsremainedsuigeneris,asthe
onlyalienableordisposablelandsofthepublicdomainthegovernmentcouldnotselltoprivateparties.
Since then and until now, the only way the government can sell to private parties government reclaimed and
marshydisposablelandsofthepublicdomainisforthelegislaturetopassalawauthorizingsuchsale.CA No.
141 does not authorize the President to reclassify government reclaimed and marshy lands into other non
agriculturallandsunderSection59(d).LandsclassifiedunderSection59(d)aretheonlyalienableordisposable
landsfornonagriculturalpurposesthatthegovernmentcouldselltoprivateparties.
Moreover,Section60ofCANo.141expressly requires congressional authority before lands under Section 59
thatthegovernmentpreviouslytransferredtogovernmentunitsorentitiescouldbesoldtoprivateparties.Section
60ofCANo.141declaresthat
"Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of the Secretary of
AgricultureandNaturalResources,bereasonablynecessaryforthepurposesforwhichsuchsaleorlease
is requested, and shall not exceed one hundred and fortyfour hectares: Provided, however, That this
limitation shall not apply to grants, donations, or transfers made to a province, municipality or branch or
subdivision of the Government for the purposes deemed by said entities conducive to the public interest
but the land so granted, donated, or transferred to a province, municipality or branch or
subdivisionoftheGovernmentshallnotbealienated,encumbered,orotherwisedisposedofina
manneraffectingitstitle,exceptwhenauthorizedbyCongress:xxx."(Emphasissupplied)
The congressional authority required in Section 60 of CA No. 141 mirrors the legislative authority required in
Section56ofActNo.2874.
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 nonagricultural purposes to government units and
entitiescouldbeusedtocircumventconstitutionallimitationsonownershipofalienableordisposablelandsofthe
publicdomain.In the same manner, such transfers could also be used to evade the statutory prohibition in CA
No.141onthesaleofgovernmentreclaimedandmarshylandsofthepublicdomaintoprivateparties.Section60
ofCANo.141constitutesbyoperationoflawalienontheselands.57
IncaseofsaleorleaseofdisposablelandsofthepublicdomainfallingunderSection59ofCANo.141,Sections
63and67requireapublicbidding.Sections63and67ofCANo.141provideasfollows:
"Sec.63.Wheneveritisdecidedthatlandscoveredbythischapterarenotneededforpublicpurposes,the
Director of Lands shall ask the Secretary of Agriculture and Commerce (now the Secretary of Natural
Resources)forauthoritytodisposeofthesame.Uponreceiptofsuchauthority,theDirectorofLandsshall
give notice by public advertisement in the same manner as in the case of leases or sales of agricultural
publicland,xxx.
Sec. 67. The lease or sale shall be made by oral bidding and adjudication shall be made to the
highestbidder.xxx."(Emphasissupplied)
Thus,CANo.141mandatestheGovernmenttoputtopublicauctionallleasesorsalesofalienableordisposable
landsofthepublicdomain.58
LikeActNo.1654andActNo.2874beforeit,CANo.141didnotrepealSection5oftheSpanishLawofWaters
of 1866. Private parties could still reclaim portions of the sea with government permission. However, the
reclaimed land could become private land only if classified as alienable agricultural land of the public
domain open to disposition under CA No. 141. The 1935 Constitution prohibited the alienation of all natural
resourcesexceptpublicagriculturallands.
TheCivilCodeof1950
13/35
6/17/2015
G.R.No.133250
TheCivilCodeof1950readoptedsubstantiallythedefinitionofpropertyofpublicdominionfoundintheCivilCode
of1889.Articles420and422oftheCivilCodeof1950statethat
"Art.420.Thefollowingthingsarepropertyofpublicdominion:
(1)Thoseintendedforpublicuse,suchasroads,canals,rivers,torrents,portsandbridgesconstructedby
theState,banks,shores,roadsteads,andothersofsimilarcharacter
(2)ThosewhichbelongtotheState,withoutbeingforpublicuse,andareintendedforsomepublicservice
orforthedevelopmentofthenationalwealth.
xxx.
Art. 422. Property of public dominion, when no longer intended for public use or for public service, shall
formpartofthepatrimonialpropertyoftheState."
Again,thegovernmentmustformallydeclarethatthepropertyofpublicdominionisnolongerneededforpublic
useorpublicservice,beforethesamecouldbeclassifiedaspatrimonialpropertyoftheState.59Inthecaseof
governmentreclaimedandmarshylandsofthepublicdomain,thedeclarationoftheirbeingdisposable,aswell
asthemanneroftheirdisposition,isgovernedbytheapplicableprovisionsofCANo.141.
LiketheCivilCodeof1889,theCivilCodeof1950includedaspropertyofpublicdominionthosepropertiesofthe
State which, without being for public use, are intended for public service or the "development of the national
wealth." Thus, government reclaimed and marshy lands of the State, even if not employed for public use or
publicservice,ifdevelopedtoenhancethenationalwealth,areclassifiedaspropertyofpublicdominion.
The1973Constitution,whichtookeffectonJanuary17,1973,likewiseadoptedtheRegaliandoctrine.Section8,
ArticleXIVofthe1973Constitutionstatedthat
"Sec.8.Alllandsofthepublicdomain,waters,minerals,coal,petroleumandothermineraloils,allforcesof
potentialenergy,fisheries,wildlife,andothernaturalresourcesofthePhilippinesbelongtotheState.With
the exception of agricultural, industrial or commercial, residential, and resettlement lands of the
publicdomain,naturalresourcesshallnotbealienated, and no license, concession, or lease for the
exploration,development,exploitation,orutilizationofanyofthenaturalresourcesshallbegrantedfora
period exceeding twentyfive years, renewable for not more than twentyfive years, except as to water
rightsforirrigation,watersupply,fisheries,orindustrialusesotherthanthedevelopmentofwaterpower,in
whichcases,beneficialusemaybethemeasureandthelimitofthegrant."(Emphasissupplied)
The 1973 Constitution prohibited the alienation of all natural resources with the exception of "agricultural,
industrial or commercial, residential, and resettlement lands of the public domain." In contrast, the 1935
Constitution barred the alienation of all natural resources except "public agricultural lands." However, the term
"public agricultural lands" in the 1935 Constitution encompassed industrial, commercial, residential and
resettlement lands of the public domain.60 If the land of public domain were neither timber nor mineral land, it
would fall under the classification of agricultural land of the public domain. Both the 1935 and 1973
Constitutions, therefore, prohibited the alienation of all natural resources except agricultural lands of
thepublicdomain.
The 1973 Constitution, however, limited the alienation of lands of the public domain to individuals who were
citizens of the Philippines. Private corporations, even if wholly owned by Philippine citizens, were no longer
allowedtoacquirealienablelandsofthepublicdomainunlikeinthe1935Constitution.Section11,ArticleXIVof
the1973Constitutiondeclaredthat
"Sec. 11. The Batasang Pambansa, taking into account conservation, ecological, and development
requirementsofthenaturalresources,shalldeterminebylawthesizeoflandofthepublicdomainwhich
maybedeveloped,heldoracquiredby,orleasedto,anyqualifiedindividual,corporation,orassociation,
and the conditions therefor. No private corporation or association may hold alienable lands of the
publicdomainexceptbylease 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, homestead or grant, in
excess of twentyfour hectares. No private corporation or association may hold by lease, concession,
license or permit, timber or forest lands and other timber or forest resources in excess of one hundred
thousand hectares. However, such area may be increased by the Batasang Pambansa upon
recommendationoftheNationalEconomicandDevelopmentAuthority."(Emphasissupplied)
Thus, under the 1973 Constitution, private corporations could hold alienable lands of the public domain only
throughlease.Onlyindividualscouldnowacquirealienablelandsofthepublicdomain,andprivatecorporations
14/35
6/17/2015
G.R.No.133250
became absolutely barred from acquiring any kind of alienable land of the public domain. The
constitutionalbanextendedtoallkindsofalienablelandsofthepublicdomain,whilethestatutorybanunderCA
No.141appliedonlytogovernmentreclaimed,foreshoreandmarshyalienablelandsofthepublicdomain.
PDNo.1084CreatingthePublicEstatesAuthority
On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree No. 1084 creating PEA, a
wholly government owned and controlled corporation with a special charter. Sections 4 and 8 of PD No. 1084,
vestsPEAwiththefollowingpurposesandpowers:
"Sec.4.Purpose.TheAuthorityisherebycreatedforthefollowingpurposes:
(a)Toreclaimland,includingforeshoreandsubmergedareas,bydredging,fillingorothermeans,
ortoacquirereclaimedland
(b)Todevelop,improve,acquire,administer,dealin,subdivide,dispose,leaseandsellanyandallkinds
oflands,buildings,estatesandotherformsofrealproperty,owned,managed,controlledand/oroperated
bythegovernment
(c) To provide for, operate or administer such service as may be necessary for the efficient, economical
andbeneficialutilizationoftheaboveproperties.
Sec.5.PowersandfunctionsoftheAuthority.TheAuthorityshall,incarryingoutthepurposesforwhichit
iscreated,havethefollowingpowersandfunctions:
(a)Toprescribeitsbylaws.
xxx
(i)Toholdlandsofthepublicdomaininexcessoftheareapermittedtoprivatecorporationsbystatute.
(j)To reclaim lands and to construct work across, or otherwise, any stream, watercourse, canal, ditch,
flumexxx.
xxx
(o) To perform such acts and exercise such functions as may be necessary for the attainment of the
purposesandobjectiveshereinspecified."(Emphasissupplied)
PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain. Foreshore
areas are those covered and uncovered by the ebb and flow of the tide.61 Submerged areas are those
permanently under water regardless of the ebb and flow of the tide.62 Foreshore and submerged areas
indisputably belong to the public domain63 and are inalienable unless reclaimed, classified as alienable lands
opentodisposition,andfurtherdeclarednolongerneededforpublicservice.
Thebaninthe1973Constitutiononprivatecorporationsfromacquiringalienablelandsofthepublicdomaindid
notapplytoPEAsinceitwasthen,anduntiltoday,afullyownedgovernmentcorporation.Theconstitutionalban
applied then, as it still applies now, only to "private corporations and associations." PD No. 1084 expressly
empowers PEA "to hold lands of the public domain" even "in excess of the area permitted to private
corporations by statute." Thus, PEA can hold title to private lands, as well as title to lands of the public
domain.
InorderforPEAtosellitsreclaimedforeshoreandsubmergedalienablelandsofthepublicdomain,theremust
be legislative authority empowering PEA to sell these lands. This legislative authority is necessary in view of
Section60ofCANo.141,whichstates
"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
affectingitstitle,exceptwhenauthorizedbyCongressxxx."(Emphasissupplied)
Without such legislative authority, PEA could not sell but only lease its reclaimed foreshore and submerged
alienablelandsofthepublicdomain.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.
15/35
6/17/2015
G.R.No.133250
The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the Regalian doctrine. The
1987 Constitution declares that all natural resources are "owned by the State," and except for alienable
agriculturallandsofthepublicdomain,naturalresourcescannotbealienated.Sections2and3,ArticleXIIofthe
1987Constitutionstatethat
"Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all
forcesofpotentialenergy,fisheries,forestsortimber,wildlife,floraandfauna,andothernaturalresources
areownedbytheState.With the exception of agricultural lands, all other natural resources shall
notbealienated.Theexploration,development,andutilizationofnaturalresourcesshallbeunderthefull
controlandsupervisionoftheState.xxx.
Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands, and
national parks. Agricultural lands of the public domain may be further classified by law according to the
useswhichtheymaybedevoted.Alienablelandsofthepublicdomainshallbelimitedtoagricultural
lands. Private corporations or associations may not hold such alienable lands of the public
domainexceptbylease,foraperiodnotexceedingtwentyfiveyears,renewablefornotmorethan
twentyfiveyears,andnottoexceedonethousandhectaresinarea.CitizensofthePhilippinesmay
leasenotmorethanfivehundredhectares,oracquirenotmorethantwelvehectaresthereofbypurchase,
homestead,orgrant.
Taking into account the requirements of conservation, ecology, and development, and subject to the
requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the public
domain which may be acquired, developed, held, or leased and the conditions therefor." (Emphasis
supplied)
The 1987 Constitution continues the State policy in the 1973 Constitution banning private corporations from
acquiringanykindofalienablelandofthepublicdomain.Likethe1973Constitution,the1987Constitution
allowsprivatecorporationstoholdalienablelandsofthepublicdomainonlythroughlease.Asinthe1935and
1973 Constitutions, the general law governing the lease to private corporations of reclaimed, foreshore and
marshyalienablelandsofthepublicdomainisstillCANo.141.
TheRationalebehindtheConstitutionalBan
Therationalebehindtheconstitutionalbanoncorporationsfromacquiring,exceptthroughlease,alienablelands
ofthepublicdomainisnotwellunderstood.Duringthedeliberationsofthe1986ConstitutionalCommission,the
commissionersprobedtherationalebehindthisban,thus:
"FR.BERNAS:Mr.VicePresident,myquestionshavereferencetopage3,line5whichsays:
`Noprivatecorporationorassociationmayholdalienablelandsofthepublicdomainexceptbylease,notto
exceedonethousandhectaresinarea.'
If we recall, this provision did not exist under the 1935 Constitution, but this was introduced in the 1973
Constitution.Ineffect,itprohibitsprivatecorporationsfromacquiringalienablepubliclands.Butithasnot
beenveryclearinjurisprudencewhatthereasonforthisis.Insomeofthecasesdecidedin1982and
1983,itwasindicatedthatthepurposeofthisistopreventlargelandholdings.Isthattheintentof
thisprovision?
MR.VILLEGAS:Ithinkthatisthespiritoftheprovision.
FR.BERNAS:InexistingdecisionsinvolvingtheIglesianiCristo,therewereinstanceswheretheIglesiani
Cristo was not allowed to acquire a mere 313square meter land where a chapel stood because the
SupremeCourtsaiditwouldbeinviolationofthis."(Emphasissupplied)
InAyogv.Cusi,64theCourtexplainedtherationalebehindthisconstitutionalbaninthisway:
"Indeed, one purpose of the constitutional prohibition against purchases of public agricultural lands by
private corporations is to equitably diffuse land ownership or to encourage 'ownercultivatorship and the
economicfamilysizefarm'andtopreventarecurrenceofcasesliketheinstantcase.Hugelandholdingsby
corporationsorprivatepersonshadspawnedsocialunrest."
However,iftheconstitutionalintentistopreventhugelandholdings,theConstitutioncouldhavesimplylimitedthe
sizeofalienablelandsofthepublicdomainthatcorporationscouldacquire.TheConstitutioncouldhavefollowed
thelimitationsonindividuals,whocouldacquirenotmorethan24hectaresofalienablelandsofthepublicdomain
underthe1973Constitution,andnotmorethan12hectaresunderthe1987Constitution.
If the constitutional intent is to encourage economic familysize farms, placing the land in the name of a
16/35
6/17/2015
G.R.No.133250
corporationwouldbemoreeffectiveinpreventingthebreakupoffarmlands.Ifthefarmlandisregisteredinthe
nameofacorporation,uponthedeathoftheowner,hisheirswouldinheritsharesinthecorporationinsteadof
subdivided parcels of the farmland. This would prevent the continuing breakup of farmlands into smaller and
smallerplotsfromonegenerationtothenext.
In actual practice, the constitutional ban strengthens the constitutional limitation on individuals from acquiring
morethantheallowedareaofalienablelandsofthepublicdomain.Withouttheconstitutionalban,individualswho
already acquired the maximum area of alienable lands of the public domain could easily set up corporations to
acquiremorealienablepubliclands.Anindividualcouldownasmanycorporationsashismeanswouldallowhim.
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
individualsofalienablelandsofthepublicdomain.
Theconstitutionalintent,underthe1973and1987Constitutions,istotransferownershipofonlyalimitedareaof
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
circumventtheconstitutionalintentisremoved.The available alienable public lands are gradually decreasing in
thefaceofanevergrowingpopulation.Themosteffectivewaytoinsurefaithfuladherencetothisconstitutional
intentistograntorsellalienablelandsofthepublicdomainonlytoindividuals.This,itwouldseem,isthepractical
benefitarisingfromtheconstitutionalban.
TheAmendedJointVentureAgreement
The subject matter of the Amended JVA, as stated in its second Whereas clause, consists of three properties,
namely:
1. "[T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo Boulevard in
ParanaqueandLasPinas,MetroManila,withacombinedtitledareaof1,578,441squaremeters"
2."[A]notherareaof2,421,559squaremeterscontiguoustothethreeislands"and
3. "[A]t AMARI's option as approved by PEA, an additional 350 hectares more or less to regularize the
configurationofthereclaimedarea."65
PEAconfirmsthattheAmendedJVAinvolves"thedevelopmentoftheFreedomIslandsandfurtherreclamationof
about250hectaresxxx,"plusanoption"grantedtoAMARItosubsequentlyreclaimanother350hectaresxx
x."66
In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of the 750
hectarereclamationprojecthavebeenreclaimed,andtherestofthe592.15hectaresarestillsubmerged
areasformingpartofManilaBay.
Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA's "actual cost" in
partially reclaiming the Freedom Islands. AMARI will also complete, at its own expense, the reclamation of the
Freedom Islands. AMARI will further shoulder all the reclamation costs of all the other areas, totaling 592.15
hectares, still to be reclaimed. AMARI and PEA will share, in the proportion of 70 percent and 30 percent,
respectively,thetotalnetusableareawhichisdefinedintheAmendedJVAasthetotalreclaimedarealess30
percentearmarkedforcommonareas.TitletoAMARI'sshareinthenetusablearea,totaling367.5hectares,will
beissuedinthenameofAMARI.Section5.2(c)oftheAmendedJVAprovidesthat
"xxx,PEAshallhavethedutytoexecutewithoutdelaythenecessarydeedoftransferorconveyanceof
the title pertaining to AMARI's Land share based on the Land Allocation Plan. PEA, when requested in
writing by AMARI, shall then cause the issuance and delivery of the proper certificates of title
coveringAMARI'sLandShareinthenameofAMARI,xxxprovided,thatifmorethanseventypercent
(70%) of the titled area at any given time pertains to AMARI, PEA shall deliver to AMARI only seventy
percent(70%)ofthetitlespertainingtoAMARI,untilsuchtimewhenacorrespondingproportionateareaof
additionallandpertainingtoPEAhasbeentitled."(Emphasissupplied)
Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5 hectares of
reclaimedlandwhichwillbetitledinitsname.
ToimplementtheAmendedJVA,PEAdelegatedtotheunincorporatedPEAAMARIjointventurePEA'sstatutory
authority, rights and privileges to reclaim foreshore and submerged areas in Manila Bay. Section 3.2.a of the
AmendedJVAstatesthat
"PEAherebycontributestothejointventureitsrightsandprivilegestoperformRawlandReclamationand
Horizontal Development as well as own the Reclamation Area, thereby granting the Joint Venture the full
17/35
6/17/2015
G.R.No.133250
and exclusive right, authority and privilege to undertake the Project in accordance with the Master
DevelopmentPlan."
TheAmendedJVAistheproductofarenegotiationoftheoriginalJVAdatedApril25,1995anditssupplemental
agreementdatedAugust9,1995.
TheThresholdIssue
ThethresholdissueiswhetherAMARI,aprivatecorporation,canacquireandownundertheAmendedJVA367.5
hectaresofreclaimedforeshoreandsubmergedareasinManilaBayinviewofSections2and3,ArticleXIIofthe
1987Constitutionwhichstatethat:
"Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all
forcesofpotentialenergy,fisheries,forestsortimber,wildlife,floraandfauna,andothernaturalresources
areownedbytheState.Withtheexceptionofagriculturallands,allothernaturalresourcesshallnot
bealienated.xxx.
xxx
Section 3. x x x Alienable lands of the public domain shall be limited to agricultural lands. Private
corporations or associations may not hold such alienable lands of the public domain except by
lease,xxx."(Emphasissupplied)
ClassificationofReclaimedForeshoreandSubmergedAreas
PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are alienable or
disposablelandsofthepublicdomain.InitsMemorandum,67PEAadmitsthat
"Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as alienable and
disposablelandsofthepublicdomain:
'Sec.59.Thelandsdisposableunderthistitleshallbeclassifiedasfollows:
(a)Landsreclaimedbythegovernmentbydredging,filling,orothermeans
xxx.'"(Emphasissupplied)
Likewise, the Legal Task Force68 constituted under Presidential Administrative Order No. 365 admitted in its
ReportandRecommendationtothenPresidentFidelV.Ramos,"[R]eclaimedlandsareclassifiedasalienable
anddisposablelandsofthepublicdomain."69TheLegalTaskForceconcludedthat
"D.Conclusion
Reclaimed lands are lands of the public domain. However, by statutory authority, the rights of ownership
anddispositionoverreclaimedlandshavebeentransferredtoPEA,byvirtueofwhichPEA,asowner,may
validlyconveythesametoanyqualifiedpersonwithoutviolatingtheConstitutionoranystatute.
Theconstitutionalprovisionprohibitingprivatecorporationsfromholdingpublicland,exceptbylease(Sec.
3, Art. XVII,70 1987 Constitution), does not apply to reclaimed lands whose ownership has passed on to
PEAbystatutorygrant."
UnderSection2,ArticleXIIofthe1987Constitution,theforeshoreandsubmergedareasofManilaBayarepart
ofthe "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
inalienablenaturalresourcesoftheStateintoalienableordisposablelandsofthepublicdomain.Theremustbea
laworpresidentialproclamationofficiallyclassifyingthesereclaimedlandsasalienableordisposableandopento
dispositionorconcession.Moreover,thesereclaimedlandscannotbeclassifiedasalienableordisposableifthe
lawhasreservedthemforsomepublicorquasipublicuse.71
Section8ofCANo.141providesthat"onlythoselandsshallbedeclaredopentodispositionorconcessionwhich
havebeenofficiallydelimitedandclassified."72ThePresidenthastheauthoritytoclassifyinalienablelandsof
thepublicdomainintoalienableordisposablelandsofthepublicdomain,pursuanttoSection6ofCANo.141.In
Laurelvs.Garcia,73 the Executive Department attempted to sell the Roppongi property in Tokyo, Japan, which
was acquired by the Philippine Government for use as the Chancery of the Philippine Embassy. Although the
Chanceryhadtransferredtoanotherlocationthirteenyearsearlier,theCourtstillruledthat,underArticle42274
18/35
6/17/2015
G.R.No.133250
of the Civil Code, a property of public dominion retains such character until formally declared otherwise. The
Courtruledthat
"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. Any such conversion happens only if the property is
withdrawnfrompublicuse(CebuOxygenandAcetyleneCo.v.Bercilles,66SCRA481[1975].Aproperty
continues to be part of the public domain, not available for private appropriation or ownership
'until there is a formal declaration on the part of the government to withdraw it from being such'
(Ignaciov.DirectorofLands,108Phil.335[1960]."(Emphasissupplied)
PDNo.1085,issuedonFebruary4,1977,authorizedtheissuanceofspeciallandpatentsforlandsreclaimedby
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
ParanaqueissuedTCTNos.7309,7311and7312inthenameofPEApursuanttoSection103ofPDNo.1529
authorizingtheissuanceofcertificatesoftitlecorrespondingtolandpatents.Tothisday,thesecertificatesoftitle
arestillinthenameofPEA.
PDNo.1085,coupledwithPresidentAquino'sactualissuanceofaspecialpatentcoveringtheFreedomIslands,
is equivalent to an official proclamation classifying the Freedom Islands as alienable or disposable lands of the
publicdomain.PDNo.1085andPresidentAquino'sissuanceofalandpatentalsoconstituteadeclarationthat
the Freedom Islands are no longer needed for public service. The Freedom Islands are thus alienable or
disposablelandsofthepublicdomain,opentodispositionorconcessiontoqualifiedparties.
At the time then President Aquino issued Special Patent No. 3517, PEA had already reclaimed the Freedom
Islandsalthoughsubsequentlytherewerepartialerosionsonsomeareas.Thegovernmenthadalsocompleted
thenecessarysurveysontheseislands.Thus,theFreedomIslandswerenolongerpartofManilaBaybutpartof
thelandmass.Section3,ArticleXIIofthe1987Constitutionclassifieslandsofthepublicdomaininto"agricultural,
forest or timber, mineral lands, and national parks." Being neither timber, mineral, nor national park lands, the
reclaimed Freedom Islands necessarily fall under the classification of agricultural lands of the public domain.
Underthe1987Constitution,agriculturallandsofthepublicdomainaretheonlynaturalresourcesthattheState
mayalienatetoqualifiedprivateparties.Allothernaturalresources,suchastheseasorbays,are"watersxxx
ownedbytheState"formingpartofthepublicdomain,andareinalienablepursuanttoSection2,ArticleXIIofthe
1987Constitution.
AMARIclaimsthattheFreedomIslandsareprivatelandsbecauseCDCP,thenaprivatecorporation,reclaimed
theislandsunderacontractdatedNovember20,1973withtheCommissionerofPublicHighways.AMARI,citing
Article5oftheSpanishLawofWatersof1866,arguesthat"iftheownershipofreclaimedlandsmaybegivento
thepartyconstructingtheworks,thenitcannotbesaidthatreclaimedlandsarelandsofthepublicdomainwhich
theStatemaynotalienate."75Article5oftheSpanishLawofWatersreadsasfollows:
"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by the
provinces, pueblos or private persons, with proper permission, shall become the property of the party
constructingsuchworks,unlessotherwiseprovidedbythetermsofthegrantofauthority."(Emphasis
supplied)
UnderArticle5oftheSpanishLawofWatersof1866,privatepartiescouldreclaimfromtheseaonlywith"proper
permission" from the State. Private parties could own the reclaimed land only if not "otherwise provided by the
termsofthegrantofauthority."Thisclearlymeantthatnoonecouldreclaimfromtheseawithoutpermissionfrom
the State because the sea is property of public dominion. It also meant that the State could grant or withhold
ownershipofthereclaimedlandbecauseanyreclaimedland,liketheseafromwhichitemerged,belongedtothe
State. Thus, a private person reclaiming from the sea without permission from the State could not acquire
ownershipofthereclaimedlandwhichwouldremainpropertyofpublicdominionliketheseaitreplaced.76Article
5oftheSpanishLawofWatersof1866adoptedthetimehonoredprincipleoflandownershipthat"alllandsthat
werenotacquiredfromthegovernment,eitherbypurchaseorbygrant,belongtothepublicdomain."77
Article5oftheSpanishLawofWatersmustbereadtogetherwithlawssubsequentlyenactedonthedisposition
of public lands. In particular, CA No. 141 requires that lands of the public domain must first be classified as
alienableordisposablebeforethegovernmentcanalienatethem.Theselandsmustnotbereservedforpublicor
quasipublic purposes.78 Moreover, the contract between CDCP and the government was executed after the
effectivityofthe1973Constitutionwhichbarredprivatecorporationsfromacquiringanykindofalienablelandof
the public domain. This contract could not have converted the Freedom Islands into private lands of a private
corporation.
PresidentialDecreeNo.3A,issuedonJanuary11,1973,revokedalllawsauthorizingthereclamationofareas
underwaterandrevestedsolelyintheNationalGovernmentthepowertoreclaimlands.Section1ofPDNo.3A
19/35
6/17/2015
G.R.No.133250
declaredthat
"The provisions of any law to the contrary notwithstanding, the reclamation of areas under water,
whetherforeshoreorinland,shallbelimitedtotheNationalGovernmentoranypersonauthorizedby
itunderapropercontract.(Emphasissupplied)
xxx."
PDNo.3ArepealedSection5oftheSpanishLawofWatersof1866becausereclamationofareasunderwater
could now be undertaken only by the National Government or by a person contracted by the National
Government.PrivatepartiesmayreclaimfromtheseaonlyunderacontractwiththeNationalGovernment,and
nolongerbygrantorpermissionasprovidedinSection5oftheSpanishLawofWatersof1866.
Executive Order No. 525, issued on February 14, 1979, designated PEA as the National Government's
implementingarmtoundertake"allreclamationprojectsofthegovernment,"which"shallbeundertakenbythe
PEAorthroughapropercontractexecutedbyitwithanypersonorentity."Undersuchcontract,aprivate
party receives compensation for reclamation services rendered to PEA. Payment to the contractor may be in
cash, or in kind consisting of portions of the reclaimed land, subject to the constitutional ban on private
corporationsfromacquiringalienablelandsofthepublicdomain.Thereclaimedlandcanbeusedaspaymentin
kind only if the reclaimed land is first classified as alienable or disposable land open to disposition, and then
declarednolongerneededforpublicservice.
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 disposition. 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
commerceofman.Untilreclaimedfromthesea,thesesubmergedareasare,undertheConstitution,"watersxx
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
publicagriculturallands,thegovernmentmaythenofficiallyclassifytheselandsasalienableordisposablelands
open to disposition. Thereafter, the government may declare these lands no longer needed for public service.
Onlythencanthesereclaimedlandsbeconsideredalienableordisposablelandsofthepublicdomainandwithin
thecommerceofman.
TheclassificationofPEA'sreclaimedforeshoreandsubmergedlandsintoalienableordisposablelandsopento
dispositionisnecessarybecausePEAistaskedunderitschartertoundertakepublicservicesthatrequiretheuse
oflandsofthepublicdomain.UnderSection5ofPDNo.1084,thefunctionsofPEAincludethefollowing:"[T]o
own or operate railroads, tramways and other kinds of land transportation, x x x [T]o construct, maintain and
operatesuchsystemsofsanitarysewersasmaybenecessary[T]oconstruct,maintainandoperatesuchstorm
drains as may be necessary." 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, roads, utilities, buildings and/or any of its
properties and to impose or collect fees or tolls for their use." Thus, part of the reclaimed foreshore and
submergedlandsheldbythePEAwouldactuallybeneededforpublicuseorservicesincemanyofthefunctions
imposedonPEAbyitscharterconstituteessentialpublicservices.
Moreover,Section1ofExecutiveOrderNo.525providesthatPEA"shallbeprimarilyresponsibleforintegrating,
directing, and coordinating all reclamation projects for and on behalf of the National Government." The same
sectionalsostatesthat"[A]llreclamationprojectsshallbeapprovedbythePresidentuponrecommendationofthe
PEA,andshallbeundertakenbythePEAorthroughapropercontractexecutedbyitwithanypersonorentityx
xx."Thus,underEONo.525,inrelationtoPDNo.3AandPDNo.1084,PEAbecametheprimaryimplementing
agencyoftheNationalGovernmenttoreclaimforeshoreandsubmergedlandsofthepublicdomain.EONo.525
recognized PEA as the government entity "to undertake the reclamation of lands and ensure their maximum
utilization in promoting public welfare and interests."79 Since large portions of these reclaimed lands would
obviouslybeneededforpublicservice,theremustbeaformaldeclarationsegregatingreclaimedlandsnolonger
neededforpublicservicefromthosestillneededforpublicservice.
1 w p h i1 .n t
Section3ofEONo.525,bydeclaringthatalllandsreclaimedbyPEA"shallbelongtoorbeownedbythePEA,"
could not automatically operate to classify inalienable lands into alienable or disposable lands of the public
domain.Otherwise,reclaimedforeshoreandsubmergedlandsofthepublicdomainwouldautomaticallybecome
alienableoncereclaimedbyPEA,whetherornotclassifiedasalienableordisposable.
The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO No. 525, vests in the
DepartmentofEnvironmentandNaturalResources("DENR"forbrevity)thefollowingpowersandfunctions:
"Sec.4.PowersandFunctions.TheDepartmentshall:
20/35
6/17/2015
G.R.No.133250
(1)xxx
xxx
(4) Exercise supervision and control over forest lands, alienable and disposable public lands,
mineralresourcesand,intheprocessofexercisingsuchcontrol,imposeappropriatetaxes,fees,charges,
rentalsandanysuchformoflevyandcollectsuchrevenuesfortheexploration,development,utilizationor
gatheringofsuchresources
xxx
(14) Promulgate rules, regulations and guidelines on the issuance of licenses, permits,
concessions, lease agreements and such other privileges concerning the development,
exploration and utilization of the country's marine, freshwater, and brackish water and over all
aquaticresourcesofthecountryandshallcontinuetooversee,superviseandpoliceournatural
resources cancel or cause to cancel such privileges upon failure, noncompliance or violations of any
regulation,order,andforallothercauseswhichareinfurtheranceoftheconservationofnaturalresources
andsupportiveofthenationalinterest
(15)Exercise exclusive jurisdiction on the management and disposition of all lands of the public
domainandserveasthesoleagencyresponsibleforclassification,subclassification,surveyingand
titlingoflandsinconsultationwithappropriateagencies."80(Emphasissupplied)
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
managementanddispositionofalllandsofthepublicdomain."Thus,DENRdecideswhetherareasunderwater,
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
decideswhetherreclaimedlandsofPEAshouldbeclassifiedasalienableunderSections681and782ofCANo.
141.OnceDENRdecidesthatthereclaimedlandsshouldbesoclassified,itthenrecommendstothePresident
theissuanceofaproclamationclassifyingthelandsasalienableordisposablelandsofthepublicdomainopento
disposition.WenotethatthenDENRSecretaryFulgencioS.Factoran,Jr.countersignedSpecialPatentNo.3517
incompliancewiththeRevisedAdministrativeCodeandSections6and7ofCANo.141.
Inshort,DENRisvestedwiththepowertoauthorizethereclamationofareasunderwater,whilePEAisvested
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
subjecttotheapprovalofthePresident.Ontheotherhand,PEAistaskedtodevelop,sellorleasethereclaimed
alienablelandsofthepublicdomain.
Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas does not make the
reclaimedlandsalienableordisposablelandsofthepublicdomain,muchlesspatrimoniallandsofPEA.Likewise,
the mere transfer by the National Government of lands of the public domain to PEA does not make the lands
alienableordisposablelandsofthepublicdomain,muchlesspatrimoniallandsofPEA.
Absenttwoofficialactsaclassificationthattheselandsarealienableordisposableandopentodispositionand
adeclarationthattheselandsarenotneededforpublicservice,landsreclaimedbyPEAremaininalienablelands
ofthepublicdomain.Onlysuchanofficialclassificationandformaldeclarationcanconvertreclaimedlandsinto
alienableordisposablelandsofthepublicdomain,opentodispositionundertheConstitution,TitleIandTitleIII83
ofCANo.141andotherapplicablelaws.84
PEA'sAuthoritytoSellReclaimedLands
PEA,liketheLegalTaskForce,arguesthatasalienableordisposablelandsofthepublicdomain,thereclaimed
landsshallbedisposedofinaccordancewithCANo.141,thePublicLandAct.PEA,citingSection60ofCANo.
141,admitsthatreclaimedlandstransferredtoabranchorsubdivisionofthegovernment"shallnotbealienated,
encumbered,orotherwisedisposedofinamanneraffectingitstitle,exceptwhenauthorizedbyCongress:xx
x."85(EmphasisbyPEA)
InLaurelvs.Garcia,86theCourtcitedSection48oftheRevisedAdministrativeCodeof1987,whichstatesthat
"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the Government is
21/35
6/17/2015
G.R.No.133250
authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the
governmentbythefollowing:xxx."
Thus,theCourtconcludedthatalawisneededtoconveyanyrealpropertybelongingtotheGovernment.The
Courtdeclaredthat
"ItisnotforthePresidenttoconveyrealpropertyofthegovernmentonhisorherownsolewill.Anysuch
conveyance must be authorized and approved by a law enacted by the Congress. It requires
executiveandlegislativeconcurrence."(Emphasissupplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority allowing PEA to sell its
reclaimedlands.PDNo.1085,issuedonFebruary4,1977,providesthat
"ThelandreclaimedintheforeshoreandoffshoreareaofManilaBaypursuanttothecontractforthe
reclamation and construction of the ManilaCavite Coastal Road Project between the Republic of the
Philippines and the Construction and Development Corporation of the Philippines dated November 20,
1973and/oranyothercontractorreclamationcoveringthesameareaisherebytransferred,conveyed
and assigned to the ownership and administration of the Public Estates Authority established
pursuant to PD No. 1084 Provided, however, 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, the Public Estates Authority shall exercise the rights and assume the obligations of the
Republic of the Philippines (Department of Public Highways) arising from, or incident to, the aforesaid
contractbetweentheRepublicofthePhilippinesandtheConstructionandDevelopmentCorporationofthe
Philippines.
Inconsiderationoftheforegoingtransferandassignment,thePublicEstatesAuthorityshallissueinfavor
oftheRepublicofthePhilippinesthecorrespondingsharesofstockinsaidentitywithanissuedvalueof
saidsharesofstock(which)shallbedeemedfullypaidandnonassessable.
TheSecretaryofPublicHighwaysandtheGeneralManagerofthePublicEstatesAuthorityshallexecute
such contracts or agreements, including appropriate agreements with the Construction and Development
CorporationofthePhilippines,asmaybenecessarytoimplementtheabove.
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
assigneesofsuchportionorportionsofthelandreclaimedortobereclaimedasprovidedforin
the abovementioned contract. On the basis of such patents, the Land Registration Commission
shallissuethecorrespondingcertificateoftitle."(Emphasissupplied)
Ontheotherhand,Section3ofEONo.525,issuedonFebruary14,1979,providesthat
"Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the PEA which shall be
responsibleforitsadministration,development,utilizationordispositioninaccordancewiththeprovisionsof
PresidentialDecreeNo.1084.AnyandallincomethatthePEAmayderivefromthesale,leaseoruseof
reclaimedlandsshallbeusedinaccordancewiththeprovisionsofPresidentialDecreeNo.1084."
ThereisnoexpressauthorityundereitherPDNo.1085orEONo.525forPEAtosellitsreclaimedlands.PDNo.
1085merelytransferred"ownershipandadministration"oflandsreclaimedfromManilaBaytoPEA,whileEONo.
525declaredthatlandsreclaimedbyPEA"shallbelongtoorbeownedbyPEA."EONo.525expresslystatesthat
PEA should dispose of its reclaimed lands "in accordance with the provisions of Presidential Decree No. 1084,"
thecharterofPEA.
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."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
patrimonialpropertiesinaccordancewiththePEAcharterfreefromconstitutionallimitations.Theconstitutional
ban on private corporations from acquiring alienable lands of the public domain does not apply to the sale of
PEA'spatrimoniallands.
PEAmayalsosellitsalienableordisposablelandsofthepublicdomaintoprivateindividualssince,withthe
legislativeauthority,thereisnolongeranystatutoryprohibitionagainstsuchsalesandtheconstitutionalbandoes
notapplytoindividuals.PEA,however,cannotsellanyofitsalienableordisposablelandsofthepublicdomainto
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
22/35
6/17/2015
G.R.No.133250
alienablelandofthepublicdomain,includinggovernmentreclaimedlands.
The provision in PD No. 1085 stating that portions of the reclaimed lands could be transferred by PEA to the
"contractororhisassignees"(Emphasissupplied)wouldnotapplytoprivatecorporationsbutonlytoindividuals
becauseoftheconstitutionalban.Otherwise,theprovisionsofPDNo.1085wouldviolateboththe1973and1987
Constitutions.
Therequirementofpublicauctioninthesaleofreclaimedlands
Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to disposition, and
further declared no longer needed for public service, 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. 141 requiring public
auction, in the absence of a law exempting PEA from holding a public auction.88 Special Patent No. 3517
expressly states that the patent is issued by authority of the Constitution and PD No. 1084, "supplemented by
CommonwealthActNo.141,asamended."ThisisanacknowledgmentthattheprovisionsofCANo.141applyto
the disposition of reclaimed alienable lands of the public domain unless otherwise provided by law. Executive
Order No. 654,89 which authorizes PEA "to determine the kind and manner of payment for the transfer" of its
assets and properties, does not exempt PEA from the requirement of public auction. EO No. 654 merely
authorizesPEAtodecidethemodeofpayment,whetherinkindandininstallment,butdoesnotauthorizePEAto
dispensewithpublicauction.
Moreover,underSection79ofPDNo.1445,otherwiseknownastheGovernmentAuditingCode,thegovernment
isrequiredtosellvaluablegovernmentpropertythroughpublicbidding.Section79ofPDNo.1445mandatesthat
"Section 79. When government property has become unserviceable for any cause, or is no longer
needed, it shall, upon application of the officer accountable therefor, be inspected by the head of the
agencyorhisdulyauthorizedrepresentativeinthepresenceoftheauditorconcernedand,iffoundtobe
valuelessorunsaleable,itmaybedestroyedintheirpresence.Iffoundtobevaluable,itmaybesoldat
publicauctiontothehighestbidderunderthesupervisionofthepropercommitteeonawardorsimilar
bodyinthepresenceoftheauditorconcernedorotherauthorizedrepresentativeoftheCommission,after
advertisingbyprintednoticeintheOfficialGazette,orfornotlessthanthreeconsecutivedaysin
anynewspaperofgeneralcirculation,orwherethevalueofthepropertydoesnotwarranttheexpense
of publication, by notices posted for a like period in at least three public places in the locality where the
propertyistobesold.Intheeventthatthepublicauctionfails,thepropertymaybesoldataprivate
saleatsuchpriceasmaybefixedbythesamecommitteeorbodyconcernedandapprovedbythe
Commission."
Itisonlywhenthepublicauctionfailsthatanegotiatedsaleisallowed,inwhichcasetheCommissiononAudit
mustapprovethesellingprice.90TheCommissiononAuditimplementsSection79oftheGovernmentAuditing
CodethroughCircularNo.8929691datedJanuary27,1989.This circular emphasizes that government assets
mustbedisposedofonlythroughpublicauction,andanegotiatedsalecanberesortedtoonlyincaseof"failure
ofpublicauction."
At the public auction sale, only Philippine citizens are qualified to bid for PEA's reclaimed foreshore and
submergedalienablelandsofthepublicdomain.Privatecorporationsarebarredfrombiddingattheauctionsale
ofanykindofalienablelandofthepublicdomain.
PEA originally scheduled a public bidding for the Freedom Islands on December 10, 1991. PEA imposed a
condition that the winning bidder should reclaim another 250 hectares of submerged areas to regularize the
shape of the Freedom Islands, under a 6040 sharing of the additional reclaimed areas in favor of the winning
bidder.92Noone,however,submittedabid.OnDecember23,1994,theGovernmentCorporateCounseladvised
PEAitcouldselltheFreedomIslandsthroughnegotiation,withoutneedofanotherpublicbidding,becauseofthe
failureofthepublicbiddingonDecember10,1991.93
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.94 The failure of public bidding on
December 10, 1991, involving only 407.84 hectares,95 is not a valid justification for a negotiated sale of 750
hectares,almostdoubletheareapubliclyauctioned.Besides,thefailureofpublicbiddinghappenedonDecember
10,1991,morethanthreeyearsbeforethesigningoftheoriginalJVAonApril25,1995.Theeconomicsituation
inthecountryhadgreatlyimprovedduringtheinterveningperiod.
ReclamationundertheBOTLawandtheLocalGovernmentCode
The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is absolute and clear: "Private
23/35
6/17/2015
G.R.No.133250
corporationsorassociationsmaynotholdsuchalienablelandsofthepublicdomainexceptbylease,xxx."Even
RepublicActNo.6957("BOTLaw,"forbrevity),citedbyPEAandAMARIaslegislativeauthoritytosellreclaimed
landstoprivateparties,recognizestheconstitutionalban.Section6ofRANo.6957states
"Sec. 6. Repayment Scheme. For the financing, construction, operation and maintenance of any
infrastructure projects undertaken through the buildoperateandtransfer arrangement or any of its
variationspursuanttotheprovisionsofthisAct,theprojectproponentxxxmaylikewiseberepaidinthe
formofashareintherevenueoftheprojectorothernonmonetarypayments,suchas,butnotlimitedto,
thegrantofaportionorpercentageofthereclaimedland,subject to the constitutional requirements
withrespecttotheownershipoftheland:xxx."(Emphasissupplied)
A private corporation, even one that undertakes the physical reclamation of a government BOT project, cannot
acquirereclaimedalienablelandsofthepublicdomaininviewoftheconstitutionalban.
Section302oftheLocalGovernmentCode,alsomentionedbyPEAandAMARI,authorizeslocalgovernmentsin
landreclamationprojectstopaythecontractorordeveloperinkindconsistingofapercentageofthereclaimed
land,towit:
"Section302.Financing,Construction,Maintenance,Operation,andManagementofInfrastructureProjects
bythePrivateSector.xxx
xxx
In case of land reclamation or construction of industrial estates, the repayment plan may consist of the
grantofaportionorpercentageofthereclaimedlandortheindustrialestateconstructed."
AlthoughSection302oftheLocalGovernmentCodedoesnotcontainaprovisosimilartothatoftheBOTLaw,
theconstitutionalrestrictionsonlandownershipautomaticallyapplyeventhoughnotexpresslymentionedinthe
LocalGovernmentCode.
Thus,undereithertheBOTLawortheLocalGovernmentCode,thecontractorordeveloper,ifacorporateentity,
canonlybepaidwithleaseholdsonportionsofthereclaimedland.Ifthecontractorordeveloperisanindividual,
portionsofthereclaimedland,notexceeding12hectares96ofnonagriculturallands,maybeconveyedtohimin
ownershipinviewofthelegislativeauthorityallowingsuchconveyance.Thisistheonlywaytheseprovisionsof
theBOTLawandtheLocalGovernmentCodecanavoidadirectcollisionwithSection3,ArticleXIIofthe1987
Constitution.
Registrationoflandsofthepublicdomain
Finally,PEAtheorizesthatthe"actofconveyingtheownershipofthereclaimedlandstopublicrespondentPEA
transformedsuchlandsofthepublicdomaintoprivatelands."ThistheoryisechoedbyAMARIwhichmaintains
thatthe"issuanceofthespecialpatentleadingtotheeventualissuanceoftitletakesthesubjectlandawayfrom
thelandofpublicdomainandconvertsthepropertyintopatrimonialorprivateproperty."Inshort,PEAandAMARI
contendthatwiththeissuanceofSpecialPatentNo.3517andthecorrespondingcertificatesoftitles,the157.84
hectarescomprisingtheFreedomIslandshavebecomeprivatelandsofPEA.Insupportoftheirtheory,PEAand
AMARIcitethefollowingrulingsoftheCourt:
1.Sumailv.JudgeofCFIofCotabato,97wheretheCourtheld
"Oncethepatentwasgrantedandthecorrespondingcertificateoftitlewasissued,thelandceasedtobe
partofthepublicdomainandbecameprivatepropertyoverwhichtheDirectorofLandshasneithercontrol
norjurisdiction."
2.LeeHongHokv.David,98wheretheCourtdeclared
"Aftertheregistrationandissuanceofthecertificateandduplicatecertificateoftitlebasedonapublicland
patent,thelandcoveredtherebyautomaticallycomesundertheoperationofRepublicAct496subjecttoall
thesafeguardsprovidedtherein."3.HeirsofGregorioTengcov.HeirsofJoseAliwalas,99wheretheCourt
ruled
"WhiletheDirectorofLandshasthepowertoreviewhomesteadpatents,hemaydosoonlysolongasthe
landremainspartofthepublicdomainandcontinuestobeunderhisexclusivecontrolbutoncethepatent
isregisteredandacertificateoftitleisissued,thelandceasestobepartofthepublicdomainandbecomes
privatepropertyoverwhichtheDirectorofLandshasneithercontrolnorjurisdiction."
4.Manalov.IntermediateAppellateCourt,100wheretheCourtheld
24/35
6/17/2015
G.R.No.133250
"When the lots in dispute were certified as disposable on May 19, 1971, and free patents were issued
coveringthesameinfavoroftheprivaterespondents,thesaidlotsceasedtobepartofthepublicdomain
and,therefore,theDirectorofLandslostjurisdictionoverthesame."
5.Republicv.CourtofAppeals,101wheretheCourtstated
"ProclamationNo.350,datedOctober9,1956,ofPresidentMagsaysaylegallyeffectedalandgranttothe
Mindanao Medical Center, Bureau of Medical Services, Department of Health, of the whole lot, validly
sufficient for initial registration under the Land Registration Act. Such land grant is constitutive of a 'fee
simple'titleorabsolutetitleinfavorofpetitionerMindanaoMedicalCenter.Thus, Section 122 of the Act,
which governs the registration of grants or patents involving public lands, provides that 'Whenever public
landsinthePhilippineIslandsbelongingtotheGovernmentoftheUnitedStatesortotheGovernmentof
thePhilippinesarealienated,grantedorconveyedtopersonsortopublicorprivatecorporations,thesame
shallbebroughtforthwithundertheoperationofthisAct(LandRegistrationAct,Act496)andshallbecome
registeredlands.'"
The first four cases cited involve petitions to cancel the land patents and the corresponding certificates of titles
issued to private parties. These four cases 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. The fifth case cited involves the registration under the Torrens System of a 12.8hectare public land
granted by the National Government to Mindanao Medical Center, a government unit under the Department of
Health.The National Government transferred the 12.8hectare public land to serve as the site for the hospital
buildingsandotherfacilitiesofMindanaoMedicalCenter,whichperformedapublicservice.The Court affirmed
theregistrationofthe12.8hectarepubliclandinthenameofMindanaoMedicalCenterunderSection122ofAct
No.496.ThisfifthcaseisanexampleofapubliclandbeingregisteredunderActNo.496withoutthelandlosing
itscharacterasapropertyofpublicdominion.
In the instant case, the only patent and certificates of title issued are those in the name of PEA, a wholly
governmentownedcorporationperformingpublicaswellasproprietaryfunctions.Nopatentorcertificateoftitle
hasbeenissuedtoanyprivateparty.NooneisaskingtheDirectorofLandstocancelPEA'spatentorcertificates
oftitle.Infact,thethrustoftheinstantpetitionisthatPEA'scertificatesoftitleshouldremainwithPEA,andthe
land covered by these certificates, being alienable lands of the public domain, should not be sold to a private
corporation.
RegistrationoflandunderActNo.496orPDNo.1529doesnotvestintheregistrantprivateorpublicownership
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
betterrightthanwhattheregistranthadpriortotheregistration.102Theregistrationoflandsofthepublicdomain
undertheTorrenssystem,byitself,cannotconvertpubliclandsintoprivatelands.103
Jurisprudenceholdingthatuponthegrantofthepatentorissuanceofthecertificateoftitlethealienablelandof
thepublicdomainautomaticallybecomesprivatelandcannotapplytogovernmentunitsandentitieslikePEA.The
transferoftheFreedomIslandstoPEAwasmadesubjecttotheprovisionsofCANo.141asexpresslystatedin
SpecialPatentNo.3517issuedbythenPresidentAquino,towit:
"NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the Philippines and in conformity
withtheprovisionsofPresidentialDecreeNo.1084,supplementedbyCommonwealthActNo.141,as
amended,thereareherebygrantedandconveyeduntothePublicEstatesAuthoritytheaforesaidtractsof
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
parthereof."(Emphasissupplied)
Thus,theprovisionsofCANo.141applytotheFreedomIslandsonmattersnotcoveredbyPDNo.1084.Section
60 of CA No. 141 prohibits, "except when authorized by Congress," the sale of alienable lands of the public
domainthataretransferredtogovernmentunitsorentities.Section60ofCANo.141constitutes,underSection
44ofPDNo.1529,a"statutorylienaffectingtitle"oftheregisteredlandevenifnotannotatedonthecertificateof
title.104AlienablelandsofthepublicdomainheldbygovernmententitiesunderSection60ofCANo.141remain
public lands because they cannot be alienated or encumbered unless Congress passes a law authorizing their
disposition.Congress,however,cannotauthorizethesaletoprivatecorporationsofreclaimedalienablelandsof
thepublicdomainbecauseoftheconstitutionalban.Onlyindividualscanbenefitfromsuchlaw.
The grant of legislative authority to sell public lands in accordance with Section 60 of CA No. 141 does not
automaticallyconvertalienablelandsofthepublicdomainintoprivateorpatrimoniallands.Thealienablelandsof
thepublicdomainmustbetransferredtoqualifiedprivateparties,ortogovernmententitiesnottaskedtodispose
ofpubliclands,beforetheselandscanbecomeprivateorpatrimoniallands.Otherwise,theconstitutionalbanwill
becomeillusoryifCongresscandeclarelandsofthepublicdomainasprivateorpatrimoniallandsinthehandsof
25/35
6/17/2015
G.R.No.133250
a government agency tasked to dispose of public lands. This will allow private corporations to acquire directly
fromgovernmentagencieslimitlessareasoflandswhich,priortosuchlaw,areconcededlypubliclands.
Under EO No. 525, PEA became the central implementing agency of the National Government to reclaim
foreshoreandsubmergedareasofthepublicdomain.Thus,EONo.525declaresthat
"EXECUTIVEORDERNO.525
DesignatingthePublicEstatesAuthorityastheAgencyPrimarilyResponsibleforallReclamationProjects
Whereas,thereareseveralreclamationprojectswhichareongoingorbeingproposedtobeundertakenin
variouspartsofthecountrywhichneedtobeevaluatedforconsistencywithnationalprograms
Whereas,thereisaneedtogivefurtherinstitutionalsupporttotheGovernment'sdeclaredpolicytoprovide
foracoordinated,economicalandefficientreclamationoflands
Whereas,PresidentialDecreeNo.3ArequiresthatallreclamationofareasshallbelimitedtotheNational
Governmentoranypersonauthorizedbyitunderpropercontract
Whereas, a central authority is needed to act on behalf of the National Government which shall
ensureacoordinatedandintegratedapproachinthereclamationoflands
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
publicwelfareandinterestsand
Whereas,PresidentialDecreeNo.1416providesthePresidentwithcontinuingauthoritytoreorganizethe
nationalgovernmentincludingthetransfer,abolition,ormergeroffunctionsandoffices.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers
vestedinmebytheConstitutionandpursuanttoPresidentialDecreeNo.1416,doherebyorderanddirect
thefollowing:
Section 1. The Public Estates Authority (PEA) shall be primarily responsible for integrating,
directing,andcoordinatingallreclamationprojectsforandonbehalfoftheNationalGovernment.
AllreclamationprojectsshallbeapprovedbythePresidentuponrecommendationofthePEA,andshallbe
undertakenbythePEAorthroughapropercontractexecutedbyitwithanypersonorentityProvided,that,
reclamation projects of any national government agency or entity authorized under its charter shall be
undertakeninconsultationwiththePEAuponapprovalofthePresident.
xxx."
As the central implementing agency tasked to undertake reclamation projects nationwide, with authority to sell
reclaimed lands, PEA took the place of DENR as the government agency charged with leasing or selling
reclaimedlandsofthepublicdomain.ThereclaimedlandsbeingleasedorsoldbyPEAarenotprivatelands,in
the same manner that DENR, when it disposes of other alienable lands, 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. In the hands of the government agency tasked and authorized to dispose of
alienableofdisposablelandsofthepublicdomain,theselandsarestillpublic,notprivatelands.
Furthermore,PEA'scharterexpresslystatesthatPEA"shallholdlandsofthepublicdomain"aswellas"any
andallkindsoflands."PEAcanholdbothlandsofthepublicdomainandprivatelands.Thus,themerefactthat
alienablelandsofthepublicdomainliketheFreedomIslandsaretransferredtoPEAandissuedlandpatentsor
certificatesoftitleinPEA'snamedoesnotautomaticallymakesuchlandsprivate.
ToallowvastareasofreclaimedlandsofthepublicdomaintobetransferredtoPEAasprivatelandswillsanction
agrossviolationoftheconstitutionalbanonprivatecorporationsfromacquiringanykindofalienablelandofthe
public domain. PEA will simply turn around, as PEA has now done under the Amended JVA, and transfer
severalhundredsofhectaresofthesereclaimedandstilltobereclaimedlandstoasingleprivatecorporationin
onlyonetransaction.ThisschemewilleffectivelynullifytheconstitutionalbaninSection3,ArticleXIIofthe1987
Constitutionwhichwasintendedtodiffuseequitablytheownershipofalienablelandsofthepublicdomainamong
Filipinos,nownumberingover80millionstrong.
Thisscheme,ifallowed,canevenbeappliedtoalienableagriculturallandsofthepublicdomainsincePEAcan
"acquire x x x any and all kinds of lands." This will open the floodgates to corporations and even individuals
acquiringhundredsofhectaresofalienablelandsofthepublicdomainundertheguisethatinthehandsofPEA
theselandsareprivatelands.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
26/35
6/17/2015
G.R.No.133250
reverse the clear direction of constitutional development in this country. The 1935 Constitution allowed private
corporationstoacquirenotmorethan1,024hectaresofpubliclands.105The1973Constitutionprohibitedprivate
corporations from acquiring any kind of public land, and the 1987 Constitution has unequivocally reiterated this
prohibition.
The contention of PEA and AMARI that public lands, once registered under Act No. 496 or PD No. 1529,
automaticallybecomeprivatelandsiscontrarytoexistinglaws.Severallawsauthorizelandsofthepublicdomain
to be registered under the Torrens System or Act No. 496, now PD No. 1529, without losing their character as
publiclands.Section122ofActNo.496,andSection103ofPDNo.1529,respectively,provideasfollows:
ActNo.496
"Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x Government of the
PhilippineIslandsarealienated,granted,orconveyedtopersonsorthepublic or private corporations,
thesameshallbebroughtforthwithundertheoperationofthisActandshallbecomeregisteredlands."
PDNo.1529
"Sec.103.CertificateofTitletoPatents.WheneverpubliclandisbytheGovernmentalienated,grantedor
conveyed to any person, the same shall be brought forthwith under the operation of this Decree."
(Emphasissupplied)
Based on its legislative history, the phrase "conveyed to any person" in Section 103 of PD No. 1529 includes
conveyancesofpubliclandstopubliccorporations.
Alienable lands of the public domain "granted, donated, or transferred to a province, municipality, or branch or
subdivisionoftheGovernment,"asprovidedinSection60ofCANo.141,mayberegisteredundertheTorrens
SystempursuanttoSection103ofPDNo.1529.Suchregistration,however,isexpresslysubjecttothecondition
in Section 60 of CA No. 141 that the land "shall not be alienated, encumbered or otherwise disposed of in a
manner affecting its title, except when authorized by Congress." This provision refers to government
reclaimed,foreshoreandmarshylandsofthepublicdomainthathavebeentitledbutstillcannotbealienatedor
encumberedunlessexpresslyauthorizedbyCongress.Theneedforlegislativeauthoritypreventstheregistered
landofthepublicdomainfrombecomingprivatelandthatcanbedisposedoftoqualifiedprivateparties.
The Revised Administrative Code of 1987 also recognizes that lands of the public domain may be registered
undertheTorrensSystem.Section48,Chapter12,BookIoftheCodestates
"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the Government is
authorizedbylawtobeconveyed,thedeedofconveyanceshallbeexecutedinbehalfofthegovernment
bythefollowing:
(1)xxx
(2)ForpropertybelongingtotheRepublicofthePhilippines,buttitledinthenameofanypolitical
subdivision or of any corporate agency or instrumentality, by the executive head of the agency or
instrumentality."(Emphasissupplied)
Thus,privatepropertypurchasedbytheNationalGovernmentforexpansionofapublicwharfmaybetitledinthe
nameofagovernmentcorporationregulatingportoperationsinthecountry.Private property purchased by the
NationalGovernmentforexpansionofanairportmayalsobetitledinthenameofthegovernmentagencytasked
toadministertheairport.Privatepropertydonatedtoamunicipalityforuseasatownplazaorpublicschoolsite
may likewise be titled in the name of the municipality.106 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
requirementorprovisioninanyexistinglawforthederegistrationoflandfromtheTorrensSystem.
PrivatelandstakenbytheGovernmentforpublicuseunderitspowerofeminentdomainbecomeunquestionably
partofthepublicdomain.Nevertheless,Section85ofPDNo.1529authorizestheRegisterofDeedstoissuein
thenameoftheNationalGovernmentnewcertificatesoftitlecoveringsuchexpropriatedlands.Section85ofPD
No.1529states
"Sec.85.Landtakenbyeminentdomain.Wheneveranyregisteredland,orinteresttherein,isexpropriated
ortakenbyeminentdomain,theNationalGovernment,province,cityormunicipality,oranyotheragency
orinstrumentalityexercisingsuchrightshallfileforregistrationintheproperRegistryacertifiedcopyofthe
judgment which shall state definitely by an adequate description, the particular property or interest
expropriated,thenumberofthecertificateoftitle,andthenatureofthepublicuse.Amemorandumofthe
rightorinteresttakenshallbemadeoneachcertificateoftitlebytheRegisterofDeeds,andwherethefee
simpleistaken,anewcertificateshallbeissuedinfavoroftheNationalGovernment,province,city,
27/35
6/17/2015
G.R.No.133250
municipality,oranyotheragencyorinstrumentalityexercisingsuchrightforthelandsotaken.Thelegal
expensesincidenttothememorandumofregistrationorissuanceofanewcertificateoftitleshallbeforthe
accountoftheauthoritytakingthelandorinteresttherein."(Emphasissupplied)
Consequently,landsregisteredunderActNo.496orPDNo.1529arenotexclusivelyprivateorpatrimoniallands.
Landsofthepublicdomainmayalsoberegisteredpursuanttoexistinglaws.
AMARImakesapartingshotthattheAmendedJVAisnotasaletoAMARIoftheFreedomIslandsorofthelands
tobereclaimedfromsubmergedareasofManilaBay.InthewordsofAMARI,theAmendedJVA"isnotasalebut
ajointventurewithastipulationforreimbursementoftheoriginalcostincurredbyPEAfortheearlierreclamation
andconstructionworksperformedbytheCDCPunderits1973contractwiththeRepublic."WhethertheAmended
JVAisasaleorajointventure,thefactremainsthattheAmendedJVArequiresPEAto"causetheissuanceand
deliveryofthecertificatesoftitleconveyingAMARI'sLandShareinthenameofAMARI."107
This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which provides that private
corporations"shallnotholdsuchalienablelandsofthepublicdomainexceptbylease."Thetransferoftitleand
ownershiptoAMARIclearlymeansthatAMARIwill"hold"thereclaimedlandsotherthanbylease.Thetransferof
titleandownershipisa"disposition"ofthereclaimedlands,atransactionconsideredasaleoralienationunder
CANo.141,108theGovernmentAuditingCode,109andSection3,ArticleXIIofthe1987Constitution.
TheRegaliandoctrineisdeeplyimplantedinourlegalsystem.Foreshoreandsubmergedareasformpartofthe
publicdomainandareinalienable.Landsreclaimedfromforeshoreandsubmergedareasalsoformpartofthe
publicdomainandarealsoinalienable,unlessconvertedpursuanttolawintoalienableordisposablelandsofthe
publicdomain.Historically,landsreclaimedbythegovernmentaresuigeneris,notavailableforsaletoprivate
partiesunlikeotheralienablepubliclands.Reclaimedlandsretaintheirinherentpotentialasareasforpublicuse
orpublicservice.Alienablelandsofthepublicdomain,increasinglybecomingscarcenaturalresources,aretobe
distributed equitably among our evergrowing population. To insure such equitable distribution, the 1973 and
1987 Constitutions have barred private corporations from acquiring any kind of alienable land of the public
domain.Those who attempt to dispose of inalienable natural resources of the State, or seek to circumvent the
constitutionalbanonalienationoflandsofthepublicdomaintoprivatecorporations,dosoattheirownrisk.
Wecannowsummarizeourconclusionsasfollows:
1.The157.84hectaresofreclaimedlandscomprisingtheFreedomIslands,nowcoveredbycertificatesof
titleinthenameofPEA,arealienablelandsofthepublicdomain.PEAmayleasetheselandstoprivate
corporations but may not sell or transfer ownership of these lands to private corporations. PEA may only
sell these lands to Philippine citizens, subject to the ownership limitations in the 1987 Constitution and
existinglaws.
2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the
publicdomainuntilclassifiedasalienableordisposablelandsopentodispositionanddeclarednolonger
neededforpublicservice.ThegovernmentcanmakesuchclassificationanddeclarationonlyafterPEAhas
reclaimed these submerged areas. Only then can these lands qualify as agricultural lands of the public
domain, which are the only natural resources the government can alienate. In their present state, the
592.15hectaresofsubmergedareasareinalienableandoutsidethecommerceofman.
3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34
hectares110oftheFreedomIslands,suchtransferisvoidforbeingcontrarytoSection3,ArticleXIIofthe
1987Constitutionwhichprohibitsprivatecorporationsfromacquiringanykindofalienablelandofthepublic
domain.
4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares111 of still
submergedareasofManilaBay,suchtransferisvoidforbeingcontrarytoSection2,ArticleXIIofthe1987
Constitution which prohibits the alienation of natural resources other than agricultural lands of the public
domain.PEAmayreclaimthesesubmergedareas.Thereafter,thegovernmentcanclassifythereclaimed
lands as alienable or disposable, and further declare them no longer needed for public service. Still, the
transferofsuchreclaimedalienablelandsofthepublicdomaintoAMARIwillbevoidinviewofSection3,
ArticleXIIofthe1987Constitutionwhichprohibitsprivatecorporationsfromacquiringanykindofalienable
landofthepublicdomain.
Clearly,theAmendedJVAviolatesglaringlySections2and3,ArticleXIIofthe1987Constitution.Under Article
1409112oftheCivilCode,contractswhose"objectorpurposeiscontrarytolaw,"orwhose"objectisoutsidethe
commerceofmen,"are"inexistentandvoidfromthebeginning."TheCourtmustperformitsdutytodefendand
upholdtheConstitution,andthereforedeclarestheAmendedJVAnullandvoidabinitio.
Seventhissue:whethertheCourtistheproperforumtoraisetheissueofwhethertheAmendedJVAis
28/35
6/17/2015
G.R.No.133250
grosslydisadvantageoustothegovernment.
Considering that the Amended JVA is null and void ab initio, there is no necessity to rule on this last issue.
Besides,theCourtisnotatrieroffacts,andthislastissueinvolvesadeterminationoffactualmatters.
WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari Coastal Bay Development
CorporationarePERMANENTLYENJOINEDfromimplementingtheAmendedJointVentureAgreementwhichis
herebydeclaredNULLandVOIDabinitio.
SOORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing, YnaresSantiago,
SandovalGutierrez,AustriaMartinez,andCorona,JJ.,concur.
Footnote
1Section4ofPDNo.1084.
2PEA'sMemorandumdatedAugust4,1999,p.3.
3PEA'sMemorandum,supranote2at7.PEA'sMemorandumquotedextensively,initsStatementofFacts
andtheCase,theStatementofFactsinSenateCommitteeReportNo.560datedSeptember16,1997.
4 In Opinion No. 330 dated December 23, 1994, the Government Corporate Counsel, citing COA Audit
CircularNo.89296,advisedPEAthatPEAcouldnegotiatethesaleofthe157.84hectareFreedomIslands
inviewofthefailureofthepublicbiddingheldonDecember10,1991wheretherewasnotasinglebidder.
SeealsoSenateCommitteeReportNo.560,p.12.
5PEA'sMemorandum,supranote2at9.
6Ibid.
7TheexistenceofthisreportisamatterofjudicialnoticepursuanttoSection1,Rule129oftheRulesof
Court which provides, "A court shall take judicial notice, without the introduction of evidence, of x x x the
officialactsofthelegislaturexxx."
8TeofistoGuingona,Jr.
9RenatoCayetano.
10VirgilioC.Abejo.
11ReportandRecommendationoftheLegalTaskForce,Annex"C",AMARI'sMemorandumdatedJune
19,1999.
12AMARI'sCommentdatedJune24,1998,p.3Rollo,p.68.
13AMARIfiledthreemotionsforextensionoftimetofilecomment(Rollo,pp.32,38,48),whilePEAfiled
ninemotionsforextensionoftime(Rollo,pp.127,139).
14Petitioner'sMemorandumdatedJuly6,1999,p.42.
15 Represented by the Office of the Solicitor General, with Solicitor General Ricardo P. Galvez, Assistant
Solicitor General Azucena R. BalanonCorpuz, and Associate Solicitor Raymund I. Rigodon signing PEA's
Memorandum.
16 Represented by Azcuna Yorac Arroyo & Chua Law Offices, and Romulo Mabanta Sayoc & De los
AngelesLawOffices.
17Salongav.Pao,134SCRA438(1985)Gonzalesv.Marcos,65SCRA624(1975)Aquinov.Enrile,59
SCRA183(1974)DelaCamarav.Enage,41SCRA1(1971).
18Section11,ArticleXIV.
29/35
6/17/2015
G.R.No.133250
19 Manila Electric Co. v. Judge F. CastroBartolome, 114 SCRA 799 (1982) Republic v. CA and Iglesia,
andRepublicv.CendanaandIglesianiCristo,119SCRA449(1982)Republicv.VillanuevaandIglesiani
Cristo, 114 SCRA 875 (1982) Director of Lands v. Lood, 124 SCRA 460 (1983) Republic v. Iglesia ni
Cristo,128SCRA44(1984)DirectorofLandsv.HermanosyHermanasdeSta.CruzdeMayo,Inc.,141
SCRA 21 (1986) Director of Lands v. IAC and Acme Plywood & Veneer Co., 146 SCRA 509 (1986)
Republicv.IACandRomanCatholicBishopofLucena,168SCRA165(1988)Natividadv.CA,202SCRA
493(1991)Villaflorv.CAandNasipitLumberCo.,280SCRA297(1997).InAyogv.Cusi,118SCRA492
(1982), the Court did not apply the constitutional ban in the 1973 Constitution because the applicant
corporation,BianDevelopmentCo.,Inc.,hadfullycompliedwithallitsobligationsandevenpaidthefull
purchasepricebeforetheeffectivityofthe1973Constitution,althoughthesalespatentwasissuedafterthe
1973Constitutiontookeffect.
20PDNo.1073.
21Annex"B",AMARI'sMemorandumdatedJune19,1999,Section5.2(c)and(e)oftheAmendedJVA,
pp.1617.
22Chavezv.PCGG,299SCRA744(1998).
23136SCRA27(1985).
24Article2oftheCivilCode(priortoitsamendmentbyEONo.200)providedasfollows:"Lawsshalltake
effect after fifteen days following the completion of their publication in the Official Gazette, unless it is
providedotherwise,xxx."
25 Section 1 of CA No. 638 provides as follows: "There shall be published in the Official Gazette all
importantlegislativeactsandresolutionsoftheCongressofthePhilippinesallexecutiveandadministrative
ordersandproclamations,exceptsuchashavenogeneralapplicabilityxxx."
26 Section 79 of the Government Auditing Codes provides as follows: "When government property has
become unserviceable for any cause, or is no longer needed, it shall, upon application of the officer
accountabletherefor,beinspectedbytheheadoftheagencyorhisdulyauthorizedrepresentativeinthe
presenceoftheauditorconcernedand,iffoundtobevaluelessorunsaleable,itmaybedestroyedintheir
presence.Iffoundtobevaluable,itmaybesoldatpublicauctiontothehighestbidder under the
supervisionofthepropercommitteeonawardorsimilarbodyinthepresenceoftheauditorconcernedor
other authorized representative of the Commission, after advertising by printed notice in the Official
Gazette, or for not less than three consecutive days in any newspaper of general circulation, or
where the value of the property does not warrant the expense of publication, by notices posted for a like
periodinatleastthreepublicplacesinthelocalitywherethepropertyistobesold.Intheeventthatthe
publicauctionfails,thepropertymaybesoldataprivatesaleatsuchpriceasmaybefixedbythe
samecommitteeorbodyconcernedandapprovedbytheCommission."
27Paatv.CourtofAppeals,266SCRA167(1997)Quisumbingv.JudgeGumban,193SCRA520(1991)
Valmontev.Belmonte,Jr.,170SCRA256(1989).
28Seenote22.
29 Section 1, Article XI of the 1987 Constitution states as follows: "Public office is a public trust. Public
officers and employees must at all times be accountable to the people, serve them with utmost
responsibility,integrity,loyalty,andefficiency,actwithpatriotismandjustice,andleadmodestlives."
30170SCRA256(1989).
31Seenote22.
32RecordoftheConstitutionalCommission,Vol.V,pp.2425,(1986).
33Supra,Note22.
34Ibid.
35Legaspiv.CivilServiceCommission,150SCRA530(1987).
36Almontev.Vasquez,244SCRA286(1995).
30/35
6/17/2015
G.R.No.133250
37SeeNote22.
38Chavezv.PCGG,seenote22AquinoSarmientov.Morato,203SCRA515(1991).
39Almontev.Vasquez,seenote36.
40 People's Movement for Press Freedom, et al. v. Hon. Raul Manglapus, G.R. No. 84642, En Banc
ResolutiondatedApril13,1988Chavezv.PCGG,seenote22.
41Section270oftheNationalInternalRevenueCodepunishesanyofficeroremployeeoftheBureauof
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
manufacturerorproducer,orconfidentialinformationregardingthebusinessofanytaxpayer,knowledgeof
whichwasacquiredbyhiminthedischargeofhisofficialduties.Section 14 of R.A. No. 8800 (Safeguard
Measures Act) prohibits the release to the public of confidential information submitted in evidence to the
TariffCommission.Section3(n)ofR.A.No.8504(PhilippineAIDSPreventionandControlAct)classifiesas
confidentialthemedicalrecordsofHIVpatients.Section6(j)ofR.A.No.8043(InterCountryAdoptionAct)
classifiesasconfidentialtherecordsoftheadoptedchild,adoptingparents,andnaturalparents.Section94
(f)ofR.A.No.7942(PhilippineMiningAct)requirestheDepartmentofEnvironmentandNaturalResources
tomaintaintheconfidentialityofconfidentialinformationsuppliedbycontractorswhoarepartiestomineral
agreementsorfinancialandtechnicalassistanceagreements.
42The Recopilacion de Leyes de las Indias declared that: "We, having acquired full sovereignty over the
Indies,andalllands,territories,andpossessionsnotheretoforecededawaybyourroyalpredecessors,or
byus,orinourname,stillpertainingtotheroyalcrownandpatrimony,itisourwillthatalllandswhichare
heldwithoutproperandtruedeedsofgrantberestoredtousaccordingastheybelongtous,inorderthat
afterreservingbeforeallwhattousortoourviceroys,audiencias,andgovernorsmayseemnecessaryfor
publicsquares,ways,pastures,andcommonsinthoseplaceswhicharepeopled,takingintoconsideration
not only their present condition, but also their future and their probable increase, and after distributing to
thenativeswhatmaybenecessaryfortillageandpasturage,confirmingtheminwhattheynowhaveand
giving them more if necessary, all the rest of said lands may remain free and unencumbered for us to
dispose of as we may wish." See concurring opinion of Justice Reynato S. Puno in Republic Real Estate
Corporationv.CourtofAppeals,299SCRA199(1998).
43Cariov.InsularGovernment,41Phil.935(1909).TheexceptionmentionedinCario,referringtolands
inthepossessionofanoccupantandofhispredecessorsininterest,sincetimeimmemorial,isactuallya
speciesofagrantbytheState.TheUnitedStatesSupremeCourt,speakingthroughJusticeOliverWendell
Holmes,Jr.,declaredinCario:"PrescriptionismentionedagainintheroyalcedulaofOctober15,1754,
cited in 3 Philippine, 546 'Where such possessors shall not be able to produce title deeds, it shall be
sufficient if they shall show that ancient possession, as a valid title by prescription.' It may be that this
means possession from before 1700 but, at all events, the principle is admitted. As prescription, even
againsttheCrownlands,wasrecognizedbythelawsofSpain,weseenosufficientreasonforhesitatingto
admit that it was recognized in the Philippines in regard to lands over which Spain had only a paper
sovereignty."SeealsoRepublicv.Lee,197SCRA13(1991).
44Article1oftheSpanishLawofWatersof1866.
45Ignaciov.DirectorofLands,108Phil.335(1960)Jovenv.DirectorofLands,93Phil.134(1953)Laurel
v. Garcia, 187 SCRA 797 (1990). See concurring opinion of Justice Reynato S. Puno in Republic Real
EstateCorporationv.CourtofAppeals,299SCRA199(1998).
46ActNo.926,enactedonOctober7,1903,wasalsotitledthePublicLandAct.ThisAct,however,didnot
coverreclaimedlands.Nevertheless,Section23ofthisActprovidedasfollows:"xxxInnocasemaylands
leasedundertheprovisionsofthischapterbetakensoastogaincontrolofadjacentland,water,stream,
shoreline,way,roadstead,orothervaluablerightwhichintheopinionoftheChiefoftheBureauofPublic
Landswouldbeprejudicialtotheinterestsofthepublic."
47Section10ofActNo.2874providedasfollows:"Thewords"alienation,""disposition,"or"concession"as
used in this Act, shall mean any of the methods authorized by this Act for the acquisition, lease, use, or
benefitofthelandsofthepublicdomainotherthantimberorminerallands."
48 Title II of Act No. 2874 governed alienable lands of the public domain for agricultural purposes, while
TitleIIIofthesameActgovernedalienablelandsofthepublicdomainfornonagriculturalpurposes.
49Section57ofActNo.2874providedasfollows:"xxxbutthelandsogranted,donated,ortransferredto
31/35
6/17/2015
G.R.No.133250
aprovince,municipality,orbranchorsubdivisionoftheGovernmentshallnotbealienated,encumbered,or
otherwisedisposedofinamanneraffectingitstitle,exceptwhenauthorizedbythelegislaturexxx."
50Krivenkov.RegisterofDeeds,79Phil.461(1947).
51Section2ofCANo.141statesasfollows:"TheprovisionsofthisActshallapplytothelandsofthepublic
domain 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, being privately owned, have reverted to or become the
propertyoftheCommonwealthofthePhilippines,whichadministrationanddispositionshallbegovernedby
thelawsatpresentinforceorwhichmayhereafterbeenacted."
52LikeActNo.2874,Section10ofCANo.141definedtheterms"alienation"and"disposition"asfollows:
"Thewords"alienation,""disposition,"or"concession"asusedinthisAct,shallmeananyofthemethods
authorizedbythisActfortheacquisition,lease,use,orbenefitofthelandsofthepublicdomainotherthan
timberorminerallands."
53 R.A. No. 6657 has suspended the authority of the President to reclassify forest or mineral lands into
agriculturallands.Section4(a)ofRANo.6657(ComprehensiveAgrarianReformLawof1988)states,"No
reclassificationofforestorminerallandstoagriculturallandsshallbeundertakenaftertheapprovalofthis
Act until Congress, taking into account ecological, developmental and equity considerations, shall have
delimitedbylaw,thespecificlimitsofthepublicdomain."
54CoveringSections58to68ofCANo.141.
55299SCRA199(1998).
56Section1,ArticleXIIIofthe1935Constitutionlimitedthedispositionandutilizationofpublicagricultural
landstoPhilippinecitizensortocorporationsatleastsixtypercentownedbyPhilippinecitizens.Thiswas,
however,subjecttotheoriginalOrdinanceappendedtothe1935Constitutionstating,amongothers,that
untilthewithdrawalofUnitedStatessovereigntyinthePhilippines,"CitizensandcorporationsoftheUnited
StatesshallenjoyintheCommonwealthofthePhilippinesallthecivilrightsofthecitizensandcorporations,
respectively,thereof."
57Section44ofPDNo.1529(previouslySection39ofActNo.496)providesthat"liens,claimsorrights
arisingorexistingunderthelawsandtheConstitutionofthePhilippineswhicharenotbylawrequiredto
appear of record in the Registry of Deeds in order to be valid against subsequent purchasers or
encumbrancersofrecord"constitutestatutoryliensaffectingthetitle.
1 w p h i1 .n t
58 RA No. 730, which took effect on June 18, 1952, authorized the private sale of home lots to actual
occupants of public lands not needed for public service. Section 1 of RA No. 730 provided as follows:
"NotwithstandingtheprovisionsofSections61and67ofCommonwealthActNo.141,asamendedbyRA
No. 293, any Filipino citizen of legal age who is not the owner of a home lot in the municipality or city in
whichheresidesandwhohadingoodfaithestablishedhisresidenceonaparceloflandoftheRepublicof
the Philippines which is not needed for public service, shall be given preference to purchase at a private
saleofwhichreasonablenoticeshallbegiventohim,notmorethanonethousandsquaremetersataprice
to be fixed by the Director of Lands with the approval of the Secretary of Agriculture and Natural
Resources.xxx."Inaddition,onJune16,1948,CongressenactedR.A.No.293allowingtheprivatesale
ofmarshyalienableordisposablelandsofthepublicdomaintolesseeswhohaveimprovedandutilizedthe
same as farms, fishponds or other similar purposes for at least five years from the date of the lease
contractwiththegovernment.R.A.No.293,however,didnotapplytomarshylandsunderSection56(c),
Title III of CA No. 141 which refers to marshy lands leased for residential, commercial, industrial or other
nonagriculturalpurposes.
59Seenote49.
60Seenote60.
61RepublicRealEstateCorporationv.CourtofAppeals,seenote56.
62Ibid.
63InsularGovernmentv.Aldecoa,19Phil.505(1911)Governmentv.Cabangis,53Phil.112(1929).
64118SCRA492(1982).
32/35
6/17/2015
G.R.No.133250
65Annex"B",AMARI'sMemorandum,seenote2at1&2.
66PEA'sMemorandum,seenote6.
67Ibid.,p.44.
68Seenotes9,10&11.
69Annex"C",p.3,AMARI'sMemorandum,seenote12at3.
70ThisshouldreadArticleXII.
71Section8ofCANo.141.
72Emphasissupplied.
73187SCRA797(1990).
74Article422oftheCivilCodestatesasfollows:"Propertyofpublicdominion,whennolongerneededfor
publicuseorpublicservice,shallformpartofthepatrimonialpropertyoftheState."
75AMARI'sCommentdatedJune24,1998,p.20Rollo,p.85.
76Dizonv.Rodriguez,13SCRA705(1965)Republicv.LatVda.deCastillo,163SCRA286(1988).
77Cariov.InsularGovernment,41Phil.935(1909).
78 Proclamation No. 41, issued by President Ramon Magsaysay on July 5, 1954, reserved for "National
Park purposes" 464.66 hectares of the public domain in Manila Bay "situated in the cities of Manila and
PasayandthemunicipalityofParanaque,ProvinceofRizal,IslandofLuzon,"whicharea,asdescribed
indetailintheProclamation,is"B]oundedontheNorth,byManilaBayontheEast,byDeweyBoulevard
andonthesouthandwest,byManilaBay."SeeconcurringopinionofJusticeReynatoS.PunoinRepublic
RealEstateCorporationv.CourtofAppeals,299SCRA1999(1998).UnderSections2and3,ArticleXIIof
the1987Constitution,"nationalparks"areinalienablenaturalresourcesoftheState.
79FifthWhereasclauseofEONo.525.
80Section4,ChapterI,TitleXIV,BookIV.
81 Section 6 of CA No 141 provides as follows: "The President, upon the recommendation of the
SecretaryofAgricultureandCommerce,shallfromtimetotimeclassifythelandsofthepublicdomain
into(a)Alienableordisposable,xxx."
82 Section 7 of CA No. 141 provides as follows: "For purposes of the administration and disposition of
alienable or disposable public lands, the President, upon recommendation by the Secretary of
Agriculture and Commerce, shall from time to time declare what lands are open to disposition or
concessionunderthisAct."
83On"LandsforResidential,Commercial,orIndustrialandotherSimilarPurposes."
84RANo.293,enactedonJune16,1948,authorizedthesaleofmarshylandsundercertainconditions.
Section 1 of RA No. 293 provided as follows: "The provisions of section sixtyone of Commonwealth Act
Numbered One hundred and fortyone to the contrary notwithstanding, marshy lands and lands under
waterborderingonshoresorbanksornavigablelakesorriverswhicharecoveredbysubsistingleasesor
leaseswhichmayhereafterbedulygrantedundertheprovisionsofthesaidActandarealreadyimproved
andhavebeenutilizedforfarming,fishpond,orsimilarpurposesforatleastfiveyearsfromthedateofthe
contractoflease,maybesoldtothelesseesthereofundertheprovisionsofChapterFiveofthesaidActas
soonasthePresident,uponrecommendationoftheSecretaryofAgricultureandNaturalResources,shall
declarethatthesamearenotnecessaryforthepublicservice."
85PEA'sMemorandum,seenote2at45.
86Seenote73.
33/35
6/17/2015
G.R.No.133250
87Section4(b)ofPDNo.1084
88R.A.No.730allowstheprivatesaleofhomelotstoactualoccupantsofpubliclands.Seenote63.
89IssuedonFebruary26,1981.
90WhilePEAclaimstherewasafailureofpublicbiddingonDecember10,1991,thereisnoshowingthat
theCommissiononAuditapprovedthepriceorconsiderationstipulatedinthenegotiatedAmendedJVAas
required by Section 79 of the Government Auditing Code. Senate Committee Report No. 560 did not
discussthisissue.
91 Paragraph 2 (a) of COA Circular No. 89296, on "Sale Thru Negotiation," states that disposal through
negotiatedsalemayberesortedtoif"[T]herewasafailureofpublicauction."
92SenateCommitteeReportNo.560,StatementofFacts,p.7,citingPEABoardResolutionNo.835,as
appearingintheMinutesofthePEABoardofDirectorsMeetingheldonMay30,1991,perCertificationof
JaimeT.DeVeyra,CorporateSecretary,datedJune11,1991.
93OpinionNo.330,citingCOAAuditCircularNo.89296.Seenote5.
94PEA'sMemorandum,seenote2.
95SenateCommitteeReportNo.560,pp.78,citingtheMinutesofMeetingofthePEABoardofDirectors
heldonDecember19,1991.
96Section3,ArticleXIIofthe1987Constitutionprovidesasfollows:"xxxCitizensofthePhilippinesmayx
xxacquirenotmorethantwelvehectaresthereofbypurchase,homesteadorgrant."However,Section6
of R.A. No. 6657 (Comprehensive Agrarian Reform Law) limits the ownership of "public or private
agriculturalland"toamaximumoffivehectaresperperson.
9796Phil.946(1955).
9848SCRA372(1977).
99168SCRA198(1988).
100172SCRA795(1989).
10173SCRA146(1976).
102Avilav.Tapucar,201SCRA148(1991).
103Republicv.AyalaCia,etal.,14SCRA259(1965)Dizonv.Rodriguez,13SCRA705(1965).
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
certificateoftitleforvalueandingoodfaith,shallholdthesamefreefromallencumbrancesexceptthose
noted on said certificate and any of the following encumbrances which may be subsisting, namely: First.
Liens,claimsorrightsarisingorexistingunderthelawsandConstitutionofthePhilippineswhich
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,
Section44appliestocertificatesoftitleissuedpursuanttoalandpatentgrantedbythegovernment.
105Section2,ArticleXIIIofthe1935Constitution.
106Hartyv.MunicipalityofVictoria,13Phil.152(1909).
107Annex"B",AMARI'sMemorandum,seenote21at16,Section5.2(c)oftheAmendedJVA.
108 Section 10 of CA No. 141 provides as follows: "Sec. 10. The words "alienation," "disposition," or
"concession"asusedinthisAct,shallmeananyofthemethodsauthorizedbythisActfortheacquisition,
lease,use,orbenefitofthelandsofthepublicdomainotherthantimberorminerallands."
109Section79oftheGovernmentAuditingCode,whichrequirespublicauctioninthesaleofgovernment
34/35
6/17/2015
G.R.No.133250
assets,includesallkindsofdisposalordivestmentofgovernmentassets.Thus,COAAuditCircularNo.86
264 dated October 16, 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." Likewise, COA Audit Circular No. 89296 dated January 27, 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
takingaway,depriving,withdrawingofanauthority,powerortitle."TheseCOACircularsimplementSection
79oftheGovernmentAuditingCode.
110TheshareofAMARIintheFreedomIslandsis77.34hectares,whichis70percentofthenetusable
areaof110.49hectares.ThenetusableareaisthetotallandareaoftheFreedomIslandsless30percent
allocatedforcommonareas.
111TheshareofAMARIinthesubmergedareasforreclamationis290.129hectares,whichis70percent
ofthenetusableareaof414.47hectares.
112Article1409oftheCivilCodeprovidesasfollows:"Thefollowingcontractsareinexistentandvoidfrom
thebeginning:(1)Thosewhosecause,objectorpurposeiscontrarytolawxxx(4)Thosewhoseobject
isoutsidethecommerceofmenxxx."
TheLawphilProjectArellanoLawFoundation
35/35

Chaves Vs Pea PDF

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chaves Vs Pea PDF

Uploaded by

Copyright:

Available Formats

6/17/2015

You might also like