CHAVEZ v.

PUBLIC ESTATES AUTHORITY

G.R. No. 133250
July 9, 2002

FACTS:
On November 20, 1973, the government signed a contract with the Construction and
Development Corporation of the Philippines (CDCP) to reclaim certain areas of Manila Bay. On
February 4, 1977, then Pres. Ferdinand Marcos issued P.D. No. 1084 which created the Public
Estates Authority (PEA). On January 19, 1988, then Pres. Corazon Aquino issued Special Patent
No. 3517, which granted land reclaimed under the Manila-Cavite Coastal Road Reclamation
Project (MCCRRP) to PEA. PEA then entered into a Joint Venture Agreement (JVA) with
Amari Coastal Bay and Development Corporation (AMARI) to develop the Freedom Islands,
which are located along the Manila-Cavite Coastal Road, on April 25, 1995.

Following then Senate Pres. Ernesto Maceda’s speech criticizing the JVA, the Senate conducted
an investigation which resulted in Senate Committee Report No. 560, dated September 16, 1997.
Among the conclusions of the report are that the reclaimed lands PEA seeks to transfer to
AMARI under the JVA are inalienable, and that the JVA itself is illegal. However, a Legal Task
Force commissioned by then Pres. Fidel Ramos upheld the JVA’s legality. On April 4 and 5,
1998, the Philippine Daily Inquirer and Today reported that there were ongoing renegotiations
between PEA and AMARI.

On April 27, 1998, petitioner Frank Chavez filed a petition for mandamus with a prayer for a
writ of preliminary injunction and temporary restraining order. Despite this, on March 30, 1999,
PEA and AMARI signed the Amended JVA, which then Pres. Joseph Estrada approved on May
28 that same year.

ISSUES:
1. Whether the petition is moot and academic due to subsequent events.
2. Whether the petition merits dismissal for failing to observe the principle governing the
hierarchy of courts.
3. Whether the petitioner merits dismissal for non-exhaustion of administrative remedies.
4. Whether petitioner has locus standi.
5. Whether the constitutional right to information includes official information on on-going
negotiations before a final agreement.
6. Whether the stipulations in the Amended JVA for the transfer of reclaimed and “still to
be reclaimed” lands to AMARI violate the Constitution.

HELD:
1. NO.
PEA and AMARI’s claim that the signing of the Amended JVA has mooted the petition is
erroneous not only because the said JVA has not been implemented, but because it is a
potential violation of Sec. 3, Art. XII of the Constitution. In addition, the case is one of first
impression, since it is the first the Court has faced that deals with the sale of non-agricultural
lands to private corporations.
2. NO.
The principle of hierarchy of courts applies generally to cases involving factual questions. In
contrast, the instant case raises constitutional questions of transcendental importance. Also,
the case is a petition for mandamus which is within the Court’s jurisdiction under Sec. 5, Art.
VIII of the Constitution.

3. NO.
PEA claims that, unlike in Tanada v. Tuvera, it has no affirmative statutory duty to publicly
disclose information about the JVA renegotiation. This is erroneous since under Sec. 79 of
the Government Auditing Code, PEA is obligated to disclose to the public the terms and
conditions for the sale of its lands. More significantly, the principle of exhaustion of
administrative remedies does not apply to a purely legal or constitutional issue.

4. YES.
Petitioners’ standing is based on two constitutional issues: a) the right of citizens to
information on matters of public concern; and b) the application of a constitutional provision
regarding the distribution of alienable lands of the public domain to Filipino citizens.
Furthermore, the petition raises matters of transcendental importance.

5. YES.
Sec. 7, Art. III and Sec. 28, Art. II of the 1987 Constitution respectively define the right to
information and the State policy of full transparency in all transactions involving public
interest. PEA cites Chavez v. PCGG to argue that, in ongoing negotiations, the right to
information is limited to definite government propositions. AMARI also holds that the said
right cannot be invoked before the transaction is completed.

Contrary to AMARI’s argument, the members of the 1986 Constitutional Commission

understood that the right to information covers negotiations leading to a transaction’s
completion. This right affects three types of information: a) official records; b) documents
and papers pertaining to official acts, transactions, or decisions; and c) government research.
Matters recognized as privileged information are not covered by the right. However, PEA
does not claim that the information demanded by petitioner is privileged information.

6. YES.
Under P.D. No. 1085 and Special Patent No. 3517, and pursuant to Sec. 2, Art. XII of the
Constitution, the Freedom Islands are alienable and disposable lands of the public domain.
However, the Amended JVA also includes an additional 592.15 hectares of submerged land,
which remain inalienable and outside the commerce of man.

PEA also argues that P.D. No. 1085 and E.O. No. 525 authorize it to sell reclaimed lands. On
the contrary, there no such express authority in both laws. In addition, the provision in P.D.
No. 1085 regarding the transfer of reclaimed lands applies only to private individuals, not to
corporations. Furthermore, under R.A. No. 6957 (BOT Law) and the Local Government
Code, a contractor, if a corporate entity, can only be paid via leaseholds on reclaimed land.
This is to comply with Sec. 3, Art. XII of the Constitution, which prohibits private
corporations from holding alienable lands of the public domain except by lease.
 Despite this, PEA and AMARI assert that due to Special Patent No. 3517, the Freedom
Islands have become private lands of the former. It must be noted, however, that Special
Patent No. 3517 was made subject to C.A. No. 141, Sec. 60 of which bans the sale of
alienable lands of the public domain.

RESULT:
Petition is granted.