FACTS:

Government signed a contract with CDCP to reclaim

certain foreshore and offshore areas of Manila Bay
which also included the construction of Phases I and II of
the Manila-Cavite Coastal Road. CDCP obligated itself
to carry out all the works in consideration of fifty percent
of the total reclaimed land.

a. government stands to lose billions of pesos in the

sale by PEA of the reclaimed lands to AMARI

b. praying public disclosure of terms of any

negotiation pursuant to right of people to information
on matters of public concern.
Pres. Marcos created and tasked PEA to reclaim land,
including foreshore and submerged areas and to
develop, improve, acquire, lease and sell any and all
kinds of lands. By virtue of PD No. 1085, he transferred
to PEA the lands reclaimed in the foreshore and offshore
of the Manila Bay.

Then President Aquino issued Special Patent granting

and transferring to PEA the parcels of land so reclaimed
under MCCRR Project. Subsequently, the Register of
Deeds of Paraaque issued Transfer Certificates of
Titles in the name of PEA, covering the three reclaimed
islands known as the Freedom Islands.

PEA entered into a JVA with AMARI, a private

corporation, to develop the Freedom Islands through
negotiation without public bidding. The JVA also required
the reclamation of an additional 250 hectares of
submerged areas surrounding these islands to complete
the configuration in the Master Development Plan. The
BOD of PEA and Pres. Ramos approved the JVA.

Senate President Ernesto Maceda delivered a privilege

speech in the Senate and denounced the JVA as the
"grandmother of all scams. As a result joint investigation
was conducted and found out that JVA is illegal for
alienating reclaimed lands which is land of public
domain.

Pres. Ramos created a task force to investigate the

legality of JVA, which tasked force upheld the legality of
JVA contrary to conclusions reached by Senate
committees. Inquirer and Today published reports that
there were on-going renegotiations between PEA and
AMARI under an order issued by then President Fidel V.
Ramos.

Chavez, petitioner as a taxpayer, filed the instant

Petition for Mandamus with Prayer for the Issuance of a
Writ of Preliminary Injunction and Temporary Restraining
Order contending that:

c. assailing also the sale of PEA to AMARI of lands

of the public domain as a blatant violation of Section
3, Article XII of the 1987 Constitution prohibiting the
sale of alienable lands of the public domain to
private corporations.

PEA and AMARI signed the Amended JVA and the office
of the Pres. approved under the administration of then
Pres. Estrada approved the Amended JVA.

Due to the approval of the Amended JVA petitioner now

prays that on "constitutional and statutory grounds the
renegotiated contract be declared null and void.
ISSUES:

I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR

IN THE PETITION ARE MOOT AND ACADEMIC
BECAUSE OF SUBSEQUENT EVENTS;

II. WHETHER THE PETITION MERITS DISMISSAL

FOR FAILING TO OBSERVE THE PRINCIPLE
GOVERNING THE HIERARCHY OF COURTS;

III. WHETHER THE PETITION MERITS DISMISSAL

FOR NON-EXHAUSTION OF ADMINISTRATIVE
REMEDIES;

IV. WHETHER PETITIONER HAS LOCUS STANDI TO

BRING THIS SUIT;

V. WHETHER THE CONSTITUTIONAL RIGHT TO

INFORMATION INCLUDES OFFICIAL INFORMATION
ON ON-GOING NEGOTIATIONS BEFORE A FINAL
AGREEMENT;

The instant petition is a case of first impression.

VI. WHETHER THE STIPULATIONS IN THE AMENDED

JOINT VENTURE AGREEMENT FOR THE TRANSFER
TO AMARI OF CERTAIN LANDS, RECLAIMED AND
STILL TO BE RECLAIMED, VIOLATE THE 1987
CONSTITUTION; AND

VII. WHETHER THE COURT IS THE PROPER FORUM

FOR RAISING THE ISSUE OF WHETHER THE
AMENDED JOINT VENTURE AGREEMENT IS
GROSSLY
DISADVANTAGEOUS
TO
THE
GOVERNMENT.

HELD:

First issue: whether the principal reliefs prayed for

in the petition are moot and academic because of
subsequent events.

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.

Supervening events, whether intended or accidental,

cannot prevent the Court from rendering a decision if
there is a grave violation of the Constitution.

Even in cases where supervening events had made

the cases moot, the Court did not hesitate to resolve
the legal or constitutional issues raised to formulate
controlling principles to guide the bench, bar, and the
public.

There is a need to resolve immediately the

constitutional issue raised in this petition because of
the possible transfer at any time by PEA to AMARI of
title and ownership to portions of the reclaimed
lands.

Second issue: whether the petition merits dismissal

for failing to observe the principle governing the
hierarchy of courts.

Principle of hierarchy of courts applies generally to

cases involving factual questions.

The instant case raises constitutional issues of

transcendental importance to the public. The Court
can resolve this case without determining any factual
issue related to the case.

Third issue: whether the petition merits dismissal

for non-exhaustion of administrative remedies.

We rule that the principle of exhaustion of

administrative remedies does not apply in the instant
case.

The principle of exhaustion of administrative

remedies does not apply when the issue involved is
a purely legal or constitutional question.

The principal issue in the instant case is the capacity

of AMARI to acquire lands held by PEA in view of the
constitutional ban prohibiting the alienation of lands
of the public domain to private corporations.

Fourth issue: whether petitioner has locus standi to

bring this suit

Since the instant petition brought by a citizen

involves the enforcement of constitutional rights - to
information and to the equitable diffusion of natural
resources - matters of transcendental public
importance.

The petitioner has the requisite locus standi.

Information on on-going evaluation or review of

bids or proposals being undertaken by the bidding or
review committee is not immediately accessible
under the right to information.

However, once the committee makes its official

recommendation, there arises a "definite
proposition" on the part of the government.

From this moment, the public's right to information

attaches, and any citizen can access all the nonproprietary information leading to such definite
proposition.

Fifth issue: whether the constitutional right to

information includes official information on ongoing negotiations before a final agreement.

The right to information, however, does not extend to

matters recognized as privileged information.

Section 7 Art. III and Section 28 Art. II of the

Constitution seek to promote transparency in policymaking and in the operations of the government, as
well as provide the people sufficient information to
exercise effectively other constitutional rights.

Since there is no claim by PEA that the information

demanded by petitioner is privileged information, we
rule, therefore, that the constitutional right to
information includes official information on on-going
negotiations before a final contract.

The court distinguish between information the law on

public bidding requires PEA to disclose publicly, and
information the constitutional right to information
requires PEA to release to the public.

Sixth issue: whether stipulations in the Amended

JVA for the transfer to AMARI of lands, reclaimed or
to be reclaimed, violate the Constitution.

Govt Auditing Code requires public bidding on

matters relating to the disposition of property of PEA.

So PEA must on its own and without demand from

anyone, disclose to the public matters relating to the
disposition of its property.

If PEA fails to make this disclosure, any citizen can

demand from PEA this information at any time during
the bidding process.

The ownership of lands reclaimed from foreshore

and submerged areas is rooted in the Regalian
doctrine.

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
reclaimed land to the State.

Article 339 of the Civil Code of 1889 provides that

property of public dominion referred not only to property
devoted to public use, but also to property not so used
but employed to develop the national wealth.

Article 341 of the Civil Code of 1889, a not selfexecuting provision; declare that property of public
dominion, when no longer devoted to public use or to the
defense of the territory, shall become a part of the
private property of the State upon declaration of the
executive and passing of a law by the legislative.

Act No. 1654 mandated that the government should

retain title to all lands reclaimed by the government.
It also vests in the government control and disposition of
foreshore lands.

Private parties could lease lands reclaimed by the

government only if these lands were no longer
needed for public purpose and mandated public
bidding in the lease of government reclaimed lands.

This act made government reclaimed lands sui

generis in that unlike other public lands which the
government could sell to private parties; these
reclaimed lands were available only for lease to
private parties.

Government reclaimed, foreshore and marshy lands

remained sui generis, as the only alienable or
disposable lands of the public domain that the
government could not sell to private parties.

Under Act No. 2874, the government could not sell

government reclaimed, foreshore and marshy lands
to private parties, unless the legislature passed a
law allowing their sale.49

It did not prohibit private parties from reclaiming

parts of the sea pursuant to Spanish Law of Waters
and lands reclaimed from the sea by private parties
with government permission remained private lands.

The 1935 Constitution did not prohibit individuals and

corporations from acquiring government reclaimed and
marshy lands of the public domain that were classified
as agricultural lands under existing public land laws.

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.

This act did not repeal the provision of Spanish Law

of Waters allowing private parties to reclaim parts of
the sea with governments permission and such
reclaimed lands remained private lands.

Act No. 2874 the Public Land Act authorized the

Governor-General to "classify lands of the public
domain, to "declare what lands are open to disposition or
concession and also limited alienable or disposable
lands only to those lands which have been "officially
delimited and classified.

This act 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.

But the legislature did not repeal Act 2874 but

continued the long established State policy of
retaining for the government title and ownership of
government reclaimed and marshy lands of the
public domain.

Commonwealth Act No. 141 of the Philippine

National Assembly readopted the prohibition in 1935
Constitution of sale of government reclaimed, foreshore
and marshy disposable lands of the public domain. All
these lands are intended for residential, commercial,
industrial or other non-agricultural purposes.

The government could sell to private parties only

those lands for non-agricultural purposes not
classified as government reclaimed, foreshore and
marshy disposable lands of the public domain.

 This act 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
provisions of this chapter and not otherwise."

It also included as property of public dominion those

properties 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
public service, if developed to enhance the national
wealth, are classified as property of public dominion.
Since then and until now, the only way the
government can sell to private parties government
reclaimed and marshy disposable lands of the public
domain is for the legislature to pass a law
authorizing such sale.

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.

In case of sale or lease of disposable lands of the

public domain, CA No. 141 mandates the
Government to put to public auction all leases or
sales.

1973 Constitutions prohibited the alienation of all

natural resources except agricultural lands of the public
domain.

Under 1973 Constitution, private corporations could

hold alienable lands of the public domain only
through lease.
Only individuals could now acquire alienable lands of
the public domain, and private corporations
became absolutely barred from acquiring any
kind of alienable land of the public domain.

The constitutional ban extended to all kinds of

alienable lands of the public domain, while the
statutory ban under CA No. 141 applied only to
government reclaimed, foreshore and marshy
alienable lands of the public domain.

PD No. 1084 Creating the Public Estates Authority

CA No. 141 did not repeal Spanish Law of Waters

provision allowing private parties to reclaim portions
of the sea with government permission. However,
this time the reclaimed is not automatically a
private land.

The ban in the 1973 Constitution on private

corporations from acquiring alienable lands of the
public domain did not apply to PEA since it was

It could become private land only after being

classified as alienable agricultural land of the
public domain open to disposition.
then, and until today, a fully owned government
corporation.
The Civil Code of 1950 the government must formally
declare that the property of public dominion is no longer
needed for public use or public service, before the same
could be classified as patrimonial property of the State.

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.

In order for PEA to sell its reclaimed foreshore and

submerged alienable lands of the public domain,
there must be legislative authority empowering PEA
to sell these lands in view of CA 141.

Without such legislative authority, PEA could not sell

but only lease its reclaimed foreshore and
submerged alienable lands of the public domain.

Nevertheless, any legislative authority granted to

PEA to sell its reclaimed alienable lands of the public
domain would be subject to the constitutional ban on
private corporations from acquiring alienable lands
of the public domain.

corporations to acquire more alienable public lands.

An individual could own as many corporations as his
means would allow him.

The Amended JVA covers a reclamation area of 750

hectares. Only 157.84 hectares of the 750-hectare
reclamation project have been reclaimed, and the rest of
the 592.15 hectares are still submerged areas forming
part of Manila Bay.

Under the Amended JVA AMARI will acquire and

own a maximum of 367.5 hectares of reclaimed land
which will be titled in its name in line of 70-30% of
total net usable area.

To implement the Amended JVA, PEA delegated to

the unincorporated PEA-AMARI joint venture PEA's
statutory authority, rights and privileges to reclaim
foreshore and submerged areas in Manila Bay.

Hence, such legislative authority could only benefit

private individuals.

The 1987 Constitution continues the State policy in the

1973 Constitution banning private corporations from
acquiring any kind of alienable land of the public
domain.

The Threshold Issue

Like the 1973 Constitution, the 1987 Constitution

allows private corporations to hold alienable lands of
the public domain only through lease.

The threshold issue is whether AMARI, a private

corporation, can acquire and own under the
Amended JVA 367.5 hectares of reclaimed foreshore
and submerged areas in Manila Bay in view of
Sections 2 and 3, Article XII of the 1987 Constitution.

As in the 1935 and 1973 Constitutions, the general

law governing the lease to private corporations of
reclaimed, foreshore and marshy alienable lands of
the public domain is still CA No. 141.

Under Section 2, Article XII of the 1987

Constitution, the foreshore and submerged areas
of Manila Bay are part of the "lands of the public
domain and consequently "owned by the State."

The constitutional ban strengthens the constitutional

limitation on individuals from acquiring more than the
allowed area of alienable lands of the public domain.

As such, foreshore and submerged areas "shall not

be alienated," unless they are classified as
"agricultural lands" of the public domain.

Without the constitutional ban, individuals who

already acquired the maximum area of alienable
lands of the public domain could easily set up

The mere reclamation of these areas by PEA does

not convert these inalienable natural resources of

the State into alienable or disposable lands of the

public domain.

Absent two official acts a classification that these

lands are alienable or disposable and open to

Likewise, the mere transfer by the National

Government of lands of the public domain to PEA
does not make the lands alienable or disposable
lands of the public domain, much less patrimonial
lands of PEA.

disposition and a declaration that these lands are not

needed for public service, lands reclaimed by PEA
remain inalienable lands of the public domain.

CA No. 141 provides that "only those lands shall be

declared open to disposition or concession which
have been officially delimited and classified.

PEA must observe the provisions of CA No. 141

requiring public auction, in the absence of a law
exempting PEA from holding a public auction.

There must be a law or presidential proclamation

officially classifying these reclaimed lands as
alienable or disposable and open to disposition or
concession and must not been reserved for some
public or quasi-public use.

For the Special Patent issued to PEA expressly

acknowledge that the provisions of CA No. 141 apply
to the disposition of reclaimed alienable lands of the
public domain unless otherwise provided by law.

PD No. 1085 authorized the issuance of special land

patents for lands reclaimed by PEA from the
foreshore or submerged areas of Manila Bay
coupled with President Aquino's actual issuance of
a special patent covering the Freedom Islands, is
equivalent to an official proclamation classifying the
Freedom Islands as alienable or disposable lands of
the public domain.

The Freedom Islands are thus alienable or

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

The classification of PEA's reclaimed foreshore and

submerged lands into alienable or disposable lands
open to disposition is necessary because PEA is
tasked under its charter to undertake public services
that require the use of lands of the public domain.

Thus, part of the reclaimed foreshore and

submerged lands held by the PEA would actually be
needed for public use or service since many of the
functions imposed on PEA by its charter constitute
essential public services.

Executive Order No. 654 which authorizes PEA "to

determine the kind and manner of payment in
contracts it entered into for reclamation does not
exempt PEA from the requirement of public auction.

No. 1445, the Government Auditing Code required

sale of valuable government property through public
bidding.

It is only when the public auction fails that a

negotiated sale is allowed, in which case the
Commission on Audit must approve the selling price.

At the public auction sale, only Philippine citizens

are qualified to bid for PEA's reclaimed foreshore
and submerged alienable lands of the public domain.
Private corporations are barred from bidding at the
auction sale of any kind of alienable land of the
public domain.

The failure of public bidding conducted on December

10, 1991, by PEA involving only 407.84 hectares is
not a valid justification for a negotiated sale of 750
hectares, almost double the area publicly auctioned.

 Besides, the failure of public bidding happened more

than three years before the signing of the original
JVA on April 25, 1995. The economic situation in the
country had greatly improved during the intervening
period.

The Ban on Private corporations or associations

holding alienable lands of the public domain except
by lease is clear and absolute.

A private corporation, even one that undertakes the

physical reclamation of a government project, cannot
acquire reclaimed alienable lands of the public
domain in view of the constitutional ban.

Thus whatever repayment Scheme in the contract

entered by PEA if the contractor or developer is a
private corporation like AMARI can only be paid with
leaseholds on portions of the reclaimed lands to
avoid a direct collision with the Constitution.

The issuance of special patent and certificate of title

to PEA does convert the FREEDOM ISLAND into
private land contrary to what defendants contended.

The registration of lands of the public domain under

the Torrens system, by itself, cannot convert public
lands into private lands.

Several laws authorize lands of the public domain to

be registered under the Torrens System without
losing their character as public lands.

Such registration, however, is expressly subject to

the condition in 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."

The need for legislative authority prevents the

registered land of the public domain from becoming
private land that can be disposed of to qualified
private parties.

Whether the Amended JVA is a sale or a joint

venture, the fact remains that the Amended JVA
requires PEA to "cause the issuance and delivery of
the certificates of title conveying AMARI's Land
Share in the name of AMARI.

This stipulation still contravenes Section 3, Article

XII of the 1987 Constitution which provides that
private corporations "shall not hold such alienable
lands of the public domain except by lease.

The Court must perform its duty to defend and

uphold the Constitution, and therefore declares the
Amended JVA null and void ab initio.
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 better

right than what the registrant had prior to the
registration.

Seventh issue: whether the Court is the proper

forum to raise the issue of whether the Amended
JVA is grossly disadvantageous to the government.

Considering that the Amended JVA is null and void

ab initio, there is no necessity to rule on this last
issue. Besides, the Court is not a trier of facts, and
this last issue involves a determination of factual
matters