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Chavez vs PEA and Amari Coastal Bay Development Corporation

G.R. No. 133250. July 9, 2002


Facts: Public Estates Authority (PEA) is a wholly government-owned and controlled
corporation which is the primary implementing agency of the National Government
to reclaim foreshore and submerged lands of the public domain. By virtue of a
Special Patent issued by President Corazon Aquino, the Register of Deeds of the
Paranaque, in April 1988, issued certificates of title, in the name of PEA, covering
three reclaimed islands known as the Freedom Islands located at the southern
portion of the Manila-Cavite Coastal Road, Paranaque City. The Freedom Islands
have a total land area of 157.841 hectares.
In April 1995, PEA entered into a Joint Venture Agreement (JVA) with AMARI, a
private corporation, to develop the Freedom Islands. 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 of the
Southern Reclamation Project-Manila Cavite Coastal Road Reclamation Project. The
JVA was later amended giving AMARI an option to reclaim an additional 350
hectares of submerged area. Part of the consideration for AMARIs work is the
conveyance of 70% of the total net usable reclaimed area equivalent to 367.5
hectares, title of which will be in AMARIs name.
Issue: Whether or not AMARI, a private corporation, can acquire and own under the
Amended JVA 367.5 hectares of reclaimed foreshore and submerged areas in Manila
Bay
Held: No. AMARI as a private corporation cannot acquire the reclaimed Freedom
Islands, though alienable lands of the public domain, except by lease, as provided
under Section 3, Article XII of the Constitution. The still submerged areas (i.e., the
more or less additional 250 and 350 hectares of submerged areas) in Manila Bay are
inalienable lands of the public domain; as such, they are beyond the commerce of
man, as provided under Section 2, Article XII of the Constitution.
The reclaimed Freedom Islands: The assignment to PEA of the ownership and
administration of the reclaimed areas in Manila Bay, 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. They also constitute a declaration that the
Freedom Islands are no longer needed for public service. The Freedom Islands are
thus alienable or disposable lands of the public domain, open to disposition or
concession to qualified parties.
The submerged areas: The mere reclamation of foreshore and submerged areas by
PEA does not convert these inalienable natural resources of the State into alienable
or disposable lands of the public domain. There must be a law or presidential
proclamation officially classifying these reclaimed lands as alienable or disposable
and open to disposition or concession. Moreover, these reclaimed lands cannot be

classified as alienable or disposable if the law has reserved them for some public or
quasi-public use.
PEAs authority to sell: 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 the requirement under CA No. 141.
Without such legislative authority, PEA could not sell but only lease its reclaimed
foreshore and submerged alienable lands of the public domain. PEAs Charter grants
it such express legislative authority to sell its lands, whether patrimonial or
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. Hence, such legislative authority could only benefit
private individuals.
Registration of alienable lands of the public domain: Registration of land under Act
No. 496 or PD No. 1529 does not vest in the registrant private or public ownership 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 better right than what the
registrant had prior to the registration. The registration of lands of the public
domain under the Torrens system, by itself, cannot convert public lands into private
lands. Jurisprudence holding that upon the grant of the patent or issuance of the
certificate of title the alienable land of the public domain automatically becomes
private land cannot apply to government units and entities like PEA.
Lands registered under Act No. 496 or PD No. 1529 are not exclusively private or
patrimonial lands. Lands of the public domain may also be registered pursuant to
existing laws. Several laws authorize lands of the public domain to be registered
under the Torrens System or Act No. 496, now PD No. 1529, without losing their
character as public lands. For instance,
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Under the Revised Administrative Code of 1987, private property


purchased by the National Government for expansion of an airport may be
titled in the name of the government agency tasked to administer the
airport. Private property donated to a municipality for use as a town plaza
or public school site may likewise be titled in the name of the
municipality. 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 requirement or provision in any existing law
for the de-registration of land from the Torrens System.

Private lands taken by the Government for public use under its power of
eminent domain become unquestionably part of the public
domain. Nevertheless, Section 85 of PD No. 1529 authorizes the Register
of Deeds to issue in the name of the National Government new certificates
of title covering such expropriated lands.