Chavez vs.

PEA

Facts: President Marcos issued PD No. 1084 creating PEA (Public Estates Authority). Its
tasks are to reclaim land, including foreshore and submerged areas and to develop,
improve, acquire, lease and sell any and all kinds of lands. On the same date, President
Marcos issue Presidential Decree No. 1085 transferring to PEA the "lands reclaimed in
the foreshore and offshore of the Manila Bay" under the Manila-Cavite Coastal Road and
Reclamation Project (MCCRRP). CDCP and PEA entered into an agreement that all
future projects under the MCRRP would be funded and owned by PEA.
By 1988, President Aquino issued Special Patent No. 3517 transferring lands to PEA.
It was followed by the transfer of three Titles (7309, 7311 and 7312) by the Register of
Deeds of Paranaque to PEA covering the three reclaimed islands known as the
FREEDOM ISLANDS.
PEA and AMARI entered into the JVA through negotiation without public bidding. On
April 28, 1995, the Board of Directors of PEA, in its Resolution No. 1245, confirmed the
JVA. On June 8, 1995, then President Fidel V. Ramos, through then Executive Secretary
Ruben Torres, approved the JVA.
Petitioner Frank J. Chavez filed case as a taxpayer praying for mandamus, a writ of
preliminary injunction and a TRO against the sale of reclaimed lands by PEA to AMARI
and from implementing the JVA. Following these events, under President Estradas
admin, PEA and AMARI entered into an Amended JVA and Mr. Chaves claim that the
contract is null and void.

Issue: Whether or not the transfer to AMARI lands reclaimed or to be reclaimed as part
of the stipulations in the JVA between AMARI and PEA violate Sec. 3 Art. XII of the 1987
Constitution

Ruling: Yes. It is null and void for violating the Sec.3 of Article 12, of the 1987 constitution.
On the issue of Amended JVA as violating the constitution:

The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered
by certificates of title in the name of PEA, are alienable lands of the public domain. PEA
may lease these lands to private 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 existing laws.

The 592.15 hectares 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. The government can make
such classification and declaration only after PEA has 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 592.15
hectares of submerged areas are inalienable and outside the commerce of man.
Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of
77.34 hectares110 of the Freedom Islands, such transfer is void for being contrary to
Section 3, Article XII of the 1987 Constitution which prohibits private corporations from
acquiring any kind of alienable land of the public domain.

Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156
hectares111 of still submerged areas of Manila Bay, such transfer is void for being
contrary to Section 2, Article XII of the 1987 Constitution which prohibits the alienation of
natural resources other than agricultural lands of the public domain.