CHAVEZ V PUBLIC ESTATES AUTHORITY

G.R. No: 133250

Petitioner/s: Francisco I. Chavez
Respondent/s: Public Estates Authority and Amari Coastal Bay Development Corporation
Ponente: J. Carpio
Action: Petition for Mandamus
Date: July 9, 2002

He contends that the government stands to lose billions of pesos in the JVA. He prayes for
public disclosure of the renegotiation of the JVA, invoking Constitutional right of the people to
information on matters of public concern. He also alleges that the JVA is against the
Constitutional prohibition on the sale of alienable lands of the public domain to public
corporations.
6. After a year, PEA and AMARI signed the Amended Joint Venture Agreement (Amended
JVA). Former President Estrada signed the Amended JVA.

FACTS

ISSUE 1

1. Former President Marcos tasked PEA through PD No 1084 to reclaim land, including
foreshore and submerged areas and to develop, improve, acquire, lease and sell any and all
kinds of lands. This resulted into an amendment of a previous contract with Construction and
Development Corporation of the Philippines (CDCP). Prior to PEA, CDCP was tasked to
reclaim certain forshore and offshore areas of Manila Bay. The amended contract now directs
CDCP to transfer to PEA all the development rights, title, interest and partitipation of CDCP in
the reclamation.

Whether or not the principal relies prayed for in the petition are moot and academic because
of subsequent events NO

2. Under former President Cory Aquino, titles of parcels of land reclaimed under Manila-Cavite
Coastal Road and Reclamation Project (MCCRRP) were transferred to PEA. This covers
three reclaimed islands known as the Freedom Islands.
3. PEA entered into a Joint Venture Agreement (JVA) with AMARI, a private corporation to
develop the Freedom Islands. This includes the reclamation of an additional 250 ha of
submerged areas surrounding these islands to complete the plan. The JVA was entered into
through negotiation without public bidding. Former President Fidel Ramos then approved the
JVA.
4. Senate President Ernesto Maceda denouced the JVA as the grandmother of all scams. The
Senate conducted a joint investigation and concluded that: (1) the reclaimed lands PEA seeks
to transfer to AMARI under the JVA are lands of public domain which the government has not
classified as alienable lands and therefore PEA cannot alienate these lands; (2) the
certificates of title covering the Freedom Islands are thus void, and (3) the JVA itself is illegal.
However, the Legal Task Force directed by Ramos upheld the legality of the JVA.
5. The petitioner in this case, Frank Chavez, as a taxpayer filed instant petition for mandamus
with prayer for the issuance of a writ of preliminary injunction and temporary restraining order.

Respondents: petition is moot and academic because AMARI furnished Chavez of the copy of
the signed Amended JVA. PEA also disclosed the renegotiations. It is also moot because the
Amended JVA is now approved by the President
Petitioner: presidential approval does not resolve the constitutional issue or remove it from the
ambit of judicial review.
HELD
1. Approval of the President does not render the petition moot and divest the Court of its
jurisdiction. The Amended JVA still has to be implemented. The petition is also based on a
violation of the Constitution. If proven unconstitutional, it is the duty of the Court to enjoin its
implementation, and if already implemented, to annul the effects of such unconstitutional
contract.
2. The petition is also a case of first impression. Jurisprudence covered agricultural land sold
to private corporations which acquired the lands from private parties. This case involves a
private corporation acquiring from a public corporation reclaimed lands and submerged areas
for non-agricultural purposes by purchase.
3. There is an urgency to resolve the constitutional issue because of the possible transfer of
title and ownership at any time.
ISSUE 2

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Whether or not the petition merits dismissal for failing to observe the principle governing the
hierarchy of courts NO
Respondets: Petitioner ignored judicial hierarcy by seeking relief directly from the Court. The
principle of hierarchy of courts applies generally to cases involving factual issues. The Court
cannot entertain this petition as it is not a trier of facts.
HELD
1. This petition raises constitutional issues of transcendental importance to the public. The
Court can resolve this case without determining any factual issue related to the case. It is aso
a petition for mandamus which falls under the original jurisdiction of the Court under Sec 5 Art
VIII of the Constitution.

Respondent: Chavez has not shown that PEA refused to disclose public information and that
he will suffer any concrete injury because of the implementation of the Amended JVA.
HELD
1. He has standing as a taxpayer and due to the issues transcendental importance. The
petition involves two constitutional issues: (1) right of citizens to information on matters of
public concern, and (2) equitable distribution of alienable lands of the public domain among
Filipino citizens.
ISSUE 5
Whether or not the constitutional right to information includes the official information on ongoing negotiations before a final agreement YES

ISSUE 3
Whether or not the petition merit dismissal for non-exhaustion of administrative remedies
NO
Respondents: Chavez did not ask them first for the information before going directly to court
for judicial intervention. It violates the principle of exhaustion of administrative remedies. It
also violates the rule that mandamus may issue only if there is no other plain, speedy and
adequate remedy in the ordinary course of law. This is also different from Taada v Tuvera
because that case involves an affirmative satutory duty under Article 2 of the Civil Code. PEA
claims that it has no affirmative statutory duty to disclose publicly information about its
renegotiation of the JVA.
HELD
1. Principle of exhaustion of administrative remedies does not apply when the issue involved
is a purely legal or constitutional question.
2. PEA was under a positive legal duty to disclose to the public the terms and conditions for
the sale of its lands. This is pursuant to Sec 79 of the Government Auditing Code requiring
public bidding in the disposition of government lands to private parties. PEA failed to make this
public disclosure because the original and the amended JVA were result of a negotiated
contract, not of a public bidding.
ISSUE 3

Whether or not petitioner has locus standi to bring this suit YES

Respondents: Public disclosure is limited to definite propositions of the government. It does

not include access to information in the exploratory stage as it will degrade the quality of
decision-making in government agencies.
HELD
1. The Constitution does not make a distinction between information on consummated
contract and information on on-going negotiations before a final contract. Otherwise, people
can never exercise the right if no contract is consummated, and if consummated, it may be too
late for the public to expose its defects.
2. However, right to information does not extend to matters recognized as privileged
information under the separation of powers. In this case, there is not claim by PEA that the
information demanded by petitioner is privileged information rooted in the separation of
powers.
ISSUE 6
Whether or not stipulations in the Amended JVA for the transfer to AMARI of lands, reclaimed
or to be reclaimed, violate the Constitution YES
HELD

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1. Brief history of classification and disposition of lands of public domain in the Philippines:

Regalian Doctrine holds that the King (now State) owns all lands and waters of the
public domain
Spanish Law of Waters of 1866 first statutory law governing the ownership and
disposition of reclaimed lands in the Philippines. The shores, bays, coves, inlets and
all waters within the maritime zone of the Spanish territory belonged to the public
domain for use. Land reclaimed from the sea belonged to the party undertaking
reclamation.
Article 339 of the Civil Code 1889: Property of public dominion referred to those
devoted to public use, or those belonging exclusively to the State, without being of
general public use, is employed in some public servise or development of national
wealth
Act No 1654 of the Phil Commission provided for the lease, but not the sale, of
reclaimed lands of the government to corporations and individuals. It mandated that
the government should retain title to all lands reclaimed by the government. It also
mandated the public bidding in the lease of government reclaimed lands.
Public Land Act or Act No 2874 authorized the lease, but not the sale, of reclaimed
lands of the government to corporations and individuals. It also authorized the
Governor-General to classify lands of the public domain into alienable or disposable.
Government prohibited sale, and only allowed lease, to reserve these lands for
some future public service.
1935 Constitution
Sec 1, Art XIII Natural resources, with the exception of public agricultural land,
shall not be alienated.
Sec 2, Art XIII No private corporation or association may acquire, lease, or hold
public agricultural lands xxx, nor may any individual acquire such lands by purchase
xxx, or by lease xxx (allowed within certain land size)
Commonwealth Act No 141 authorized the lease, but not the sale, of reclaimed
lands of the government to corporations and individuals. Before the government
could alienate or dispose of lands of the public domain, the President must first
officially classify these lands as alienable or disposable, and then declare them
open to disposition or concession. It also mandates the government to put to public
auction all leases or sales of alienable or disposable lands of the public domain. CA
No 141 has remained in effect at present.
Civil Code of 1950 (same as Civil Code of 1889)
1973 Constitution prohibits the alienation of all natural resources except
agricultural lands of the public domain. However, 1973 Constitution 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, may
no longer acquire alienable lands of the public domain unlike in 1935 Consti.
2. PD No 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public
domain. Foreshore areas covered and uncovered by the ebb and flow of the tide.
Submereged areas permanently under water regardless of ebb and flow of the tide. Both are
inalianable unless reclaimed, classified as alienable lands open to disposition, no longer need
for public service.
3. Rationale behind ban on corporation acquiring, except through lease, alienable lands of
public domain: To equitably diffuse land ownership or to encourage owner-cultivatorship and
the economic family-size famr and to prevent a recurrence of cases like the instant case.
Huge landholdings spawn social unrest. In practice, this ban strengthens limitation on
individuals from acquiring more than the allowed area by simply stting up a corporation to
acquire more land.
4. The Amended JVA covers a reclamation area of 750 hectares. Only 157. 84 ha have been
reclaimed. The rest are still submerged areas forming part of Manila Bay. Under the
agreement, AMARI will shoulder the reclamation of the freedom island and it will get 70% of
the usable area. AMARI wil acquire and own a maximum of 367.5 ha of reclaimed land wich
will be titled in its name.
5. PD No 1085, coupled with President Aquinos 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. Freedom Islands are thus alienable or
disposable lands of the public domain, open to disposition or concession to qualified parties.
However, at this time, the Freedom Islands were no longer part of Manila Bay but part of the
land mass after PEA had already reclaimed it. However, the additional 592.15 ha are still
submerged and forming part of the Manila Bay. There is also no legislative or presidential act
regarding these remaining areas.
6. Also, the mere physical act of reclamation of PEA of foreshore or submerged areas does
not make the reclaimed lands alienable or disposable lands of the public domain, much less
patrimonial lands of PEA. It still needs the authorization of DENR, which classifies lands of
public domain into alienable or disposable lands subject to the Presidents approval.
7. Absent two official acts a classification that these lands are alienable or disposable and
open to disposition and a declaration that these lands are not needed for public service, lands

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reclaimed by PEA remain inalienable lands of the public domain.

8. PEA is also mandated to call for a public bidding. Only if this failed that a negotiated sale is
allowed. The failure of the public bidding involving only 407.84 ha is not a valid justification for
a negotiated sale of 750 ha.
9. A private corporation, even one that undertakes the physical reclamation of a government
BOT project, cannot acquire reclaimed alienable lands of the public domain in view of the
constitutional ban.
10. Ownership of PEA of the said lands of public domain does not convert them to private
lands. Jurisprudence holding that there is conversion to private land upon the grant of the
patent or issuance of the certificate of title does not apply to government units like PEA.
DISPO
Amended JVA is null and void ab initio.
SUMMARY OF DECISION:
1. 157.84 ha of reclaimed lands comprising the Freedom Sialands are alienable lands of
public domain. PEA may only lease to private corporations, but not sell or transfer ownership.

2. The 592.15 ha of submerged areas of Manila Bay remain inalienable natural resources of
the public domain until classified as alienable or disposable lands open to disposition and
declared no longer needed for public service. As of now, this area is still inalienable and
outside the commerce of man.
3. Since the Amended JVA transfers to AMARI, a private corporation, ownership of 77.34 ha of
the Freedom Islands, the transfer is void for being contrary to Sec 3, Art XII of teh 1987
Constitution, which prohibits private corporations from acquiring any kind of alienable land of
the public domain.
NOTES
The subject matter of the Amended JVA, as stated in its second Whereas clause, consists of
three properties, namely:
1. Three partially reclaimed and substantially eroded islands along Emilio Aguinaldo
Boulevard in Paranaque and Las Pinas, Metro Manila, with a combined titled area of
1,578,441 square meters;
2. Another area of 2,421,559 square meters contiguous to the three islands; and
3. At AMARI's option as approved by PEA, an additional 350 hectares more or less to
regularize the configuration of the reclaimed area.

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