G.R. No. 133250. July 9, 2002.
* 1973 Constitution, covered agricultural lands sold to private corporations which
FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC ESTATES AUTHORITY
and AMARI COASTAL BAY DEVELOPMENT CORPORATION,
respondents.
Actions: Moot and Academic Issues: The signing of the Amended Joint Venture
Agreement (JVA) by the Public Estates Authority (PEA) and Amari Coastal Bay and
Development Corporation (AMARI) cannot operate to moot the petition and divest
the Court of its jurisdiction, as the prayer to enjoin the signing of the Amended JVA
on constitutional grounds necessarily includes preventing its implementation if in the
meantime PEA and AMARI have signed one in 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.—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 if in the meantime PEA and AMARI have signed one in violation of
the Constitution. Petitioner’s principal basis in assailing the renegotiation of the JVA
is its violation of Section 3, Article XII of the Constitution, which prohibits the
government from alienating lands of the public domain to private corporations. If the
Amended JVA indeed violates the Constitution, it is the duty of the Court to enjoin
its implementation, and if already implemented, to annul the effects of such
unconstitutional contract. The Amended JVA is not an ordinary commercial contract
but one which seeks to transfer title and ownership to 367.5 hectares of reclaimed
lands and submerged areas of Manila Bay to a single private corporation. It now
becomes more compelling for the Court to resolve the issue to insure the government
itself does not violate a provision of the Constitution intended to safeguard the
national patrimony. Supervening events, whether intended or accidental, cannot
prevent the Court from rendering a decision if there is a grave violation of the
Constitution. In the instant case, if the Amended JVA runs counter to the
Constitution, the Court can still prevent the transfer of title and ownership of
alienable lands of the public domain in the name of AMARI. 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.
Same: Same; The instant petition is a case of first impression since all previous
decisions of the Court involving Section 3, Article XII of the 1987 Constitution, or
its counterpart provision in the 1973 Constitution, covered agricultural lands sold to
private corporations which acquired the lands from private parties, while in the
instant case, a private corporation seeks to acquire from a public corporation,
reclaimed lands and submerged areas for non-agricultural purposes by purchase
under PD No. 1084 (charter of PEA) and Title II of CA No. 141.—The instant
petition is a case of first impression. All previous decisions of the Court involving
Section 3, Article XII of the 1987 Constitution, or its counterpart provision in the
acquired the lands from private parties. The transferors of the private corporations
claimed or could claim the right to judicial confirmation of their imperfect titles
under Title II of Commonwealth Act. 141 (“CA No. 141” for brevity). In the instant
case, AMARI seeks to acquire from PEA, a public corporation, reclaimed lands and
submerged areas for nonagricultural purposes by purchase under PD No. 1084
(charter of PEA) and Title II of CA No. 141. Certain undertakings by AMARI under
the Amended JVA constitute the consideration for the purchase. Neither AMARI nor
PEA can claim judicial confirmation of their titles because the lands covered by the
Amended JVA are newly reclaimed or still to be reclaimed. Judicial confirmation of
imperfect title requires open, continuous, exclusive and notorious occupation of
agricultural lands of the public domain for at least thirty years since June 12, 1945 or
earlier. Besides, the deadline for filing applications for judicial confirmation of
imperfect title expired on December 31, 1987.
Same: Hierarchy of Courts; The principle of hierarchy of courts applies generally to
cases involving factual questions, not to those raising constitutional issues of
transcendental importance to the public.—PEA and AMARI claim petitioner ignored
the judicial hierarchy by seeking relief directly from the Court. The principle of
hierarchy of courts applies generally to cases involving factual questions. As it is not
a trier of facts, the Court cannot entertain cases involving factual issues. The instant
case, however, raises constitutional issues of transcendental importance to the public.
The Court can resolve this case without determining any factual issue related to the
case. Also, the instant case is a petition for mandamus which falls under the original
jurisdiction of the Court under Section 5, Article VIII of the Constitution. We resolve
to exercise primary jurisdiction over the instant case.
Same; Same; Administrative Law; Exhaustion of Administrative Remedies; Right to
Information; Considering that PEA had an affirmative statutory duty to disclose to
the public the terms and conditions of the sale of its lands, and was even in breach of
this legal duty, petitioner had the right to seek direct judicial intervention.—The
original JVA sought to dispose to AMARI public lands held by PEA, a government
corporation. Under Section 79 of the Government Auditing Code, the disposition of
government lands to private parties requires public bidding. PEA was under a
positive legal duty to disclose to the public the terms and conditions for the sale of its
lands. The law obligated PEA to make this public disclosure even without demand
from petitioner or from anyone. PEA failed to make this public disclosure because
the original JVA, like the Amended JVA, was the result of a negotiated contract, not
of a public bidding. Considering that PEA had an affirmative statutory duty to make
the public disclosure,” and was even in breach of this legal duty, petitioner had the
right to seek direct judicial intervention.
Same; Same; Same; Same; Same; The principle of exhaustion of administrative
remedies does not apply when the issue involved is a purely legal or constitutional
question.—Moreover, and this alone is determinative of this issue, 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. We
rule that the principle of exhaustion of administrative remedies does not apply in the
instant case.
Same; Parties; Taxpayer’s Suits: A citizen has standing to bring this taxpayer’s suit
because the petition seeks to compel PEA to comply with its constitutional duties;
Where a petition for mandamus involves the enforcement of constitutional rights—to
information and to the equitable diffusion of natural resources—matters of
transcendental public importance, a citizen has the requisite locus standi.—The
petitioner has standing to bring this taxpayer’s suit because the petition seeks to
compel PEA to comply with its constitutional duties. There are two constitutional
issues involved here. First is the right of citizens to information on matters of public
concern. Second is the application of a constitutional provision intended to insure the
equitable distribution of alienable lands of the public domain among Filipino
citizens. The thrust of the first issue is to compel PEA to disclose publicly
information on the sale of government lands worth billions of pesos, information
which the Constitution and statutory law mandate PEA to disclose. The thrust of the
second issue is to prevent PEA from alienating hundreds of hectares of alienable
lands of the public domain in violation of the Constitution, compelling PEA to
comply with a constitutional duty to the nation. Moreover, the petition raises matters
of transcendental importance to the public. In Chavez v. PCGG, the Court upheld the
right of a citizen to bring a taxpayer’s suit on matters of transcendental importance to
the public, thus—* * * We rule that 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.
Right to Information; The twin provisions of the Constitution—right to information
on matters of public concern and policy of full transparency—seek to promote
transparency in policy-making and in the operations of the government, as well as
provide the people sufficient information to exercise effectively other constitutional
rights; An informed citizenry is essential to the existence and proper functioning of
any democracy.—These twin provisions 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. These twin provisions are essential to the exercise of freedom of expression.
If the government does not disclose its official acts, transactions and decisions to
citizens, whatever citizens say, even if expressed without any restraint, will be
speculative and amount to nothing. These twin provisions are also essential to hold
public officials “at all times x x x accountable to the people,” for unless citizens have
the proper information, they cannot hold public officials accountable for anything.
Armed with the right information, citizens can participate in public discussions
leading to the formulation of government policies and their effective implementation.
An informed citizenry is essential to the existence and proper functioning of any
democracy.
Same; Bids and Bidding; While information on, on-going evaluation or review of
bids or proposal being undertaken by the bidding or review committee is not
immediately accessible under the right to information, once the committee makes its
official recommendation, there arises a “definite proposition” on the part of the
government, and from this moment, the public’s right to information attaches, and
any citizen can access all the non-proprietary information leading to such definite
proposition.—We must first 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. Before the consummation of the
contract, PEA must, on its own and without demand from anyone, disclose to the
public matters relating to the disposition of its property. These include the size,
location, technical description and nature of the property being disposed of the terms
and conditions of the disposition, the parties qualified to bid, the minimum price and
similar information. PEA must prepare all these data and disclose them to the public
at the start of the disposition process, long before the consummation of the contract,
because the Government Auditing Code requires public bidding. If PEA fails to
make this disclosure, any citizen can demand from PEA this information at any time
during the bidding process. Information, however, 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. While the evaluation or
review is still ongoing, there are no “official acts, transactions, or decisions” on the
bids or proposals. 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
non-proprietary information leading to such definite proposition.
Same; The commissioners of the 1986 Constitutional Commission understood that
the right to information contemplates inclusion of negotiations leading to the
consummation of the transaction—requiring a consummated contract will keep the
public in the dark until the contract, which may be grossly disadvantageous to the
government or even illegal, becomes a fait accompli.—Contrary to AMARI’s
contention, the commissioners of the 1986 Constitutional Commission understood
that the right to information “contemplates inclusion of negotiations leading to the
consummation of the transaction.” Certainly, a consummated contract is not a
requirement for the exercise of the right to information. Otherwise, the people can
never exercise the right if no contract is consummated, and if one is consummated, it
may be too late for the public to expose its defects. Requiring a consummated
contract will keep the public in the dark until the contract, which may be grossly
disadvantageous to the government or even illegal, becomes a fait accompli. This
negates the State policy of full transparency on matters of public concern, a situation
which the framers of the Constitution could not have intended. Such a requirement
will prevent the citizenry from participating in the public discussion of any proposed
contract, effectively truncating a basic right enshrined in the Bill of Rights. We can
allow neither an emasculation of a constitutional right, nor a retreat by the State of its
avowed “policy of full disclosure of all its transactions involving public interest.”
Same; The right to information covers three categories of information which are
“matters of public concern,” namely, (1) official records, (2) documents and papers
pertaining to official acts, transactions and decisions, and (3) government research
data used in formulating policies.—The right covers three categories of information
which are “matters of public concern,” namely: (1) official records; (2) documents
and papers pertaining to official acts, transactions and decisions; and (3) government
research data used in formulating policies. The first category refers to any document
that is part of the public records in the custody of government agencies or officials.
The second category refers to documents and papers recording, evidencing,
establishing, confirming, supporting, justifying or explaining official acts,
transactions or decisions of government agencies or officials. The third category
refers to research data, whether raw, collated or processed, owned by the government
and used in formulating government policies.
Same; The information that a citizen may access on the renegotiation of the JVA
includes evaluation reports, recommendations, legal and expert opinions, minutes of
meetings, terms of reference and other documents attached to such reports or
minutes, all relating to the JVA.—The information that petitioner may access on the
renegotiation of the JVA includes evaluation reports, recommendations, legal and
expert opinions, minutes of meetings, terms of reference and other documents
attached to such reports or minutes, all relating to the JVA. However, the right to
information does not compel PEA to prepare lists, abstracts, summaries and the like
relating to the renegotiation of the JVA. The right only affords access to records,
documents and papers, which means the opportunity to inspect and copy them. One
who exercises the right must copy the records, documents and papers at his expense.
The exercise of the right is also subject to reasonable regulations to protect the
integrity of the public records and to minimize disruption to government operations,
like rules specifying when and how to conduct the inspection and copying. Same;
The right to information, however, does not extend to matters recognized as
privileged information under the separation of powers.—The right to information,
however, does not extend to matters recognized as privileged information under the
separation of powers. The right does not also apply to information on military and
diplomatic secrets, information affecting national security, and information on
investigations of crimes by law enforcement agencies before the prosecution of the
accused, which courts have long recognized as confidential. The right may also be
subject to other limitations that Congress may impose by law.
Same; The constitutional right to information includes official information on on-
going negotiations before a final contract, which information, however, must
constitute definite propositions by the government and should not cover recognized
exceptions like privileged information, military and diplomatic secrets and similar
matters affecting national security and public order.—We rule, therefore, that the
constitutional right to information includes official information on on-going
negotiations before a final contract. The information, however, must constitute
definite propositions by the government and should not cover recognized exceptions
like privileged information, military and diplomatic secrets and similar matters
affecting national security and public order. Congress has also prescribed other
limitations on the right to information in several legislations.
National Economy and Patrimony; Regalian Doctrine; Foreshore and Submerged
Areas; Reclamation Projects; Words and Phrases; The ownership of lands reclaimed
from foreshore and submerged areas is rooted in the Regalian doctrine which holds
that the State owns all lands and waters of the public domain.—The ownership of
lands reclaimed from foreshore and submerged areas is rooted in the Regalian
doctrine which holds that the State owns all lands and waters of the public domain.
Upon the Spanish conquest of the Philippines, ownership of all “lands, territories and
possessions” in the Philippines passed to the Spanish Crown. The King, as the
sovereign ruler and representative of the people, acquired and owned all lands and
territories in the Philippines except those he disposed of by grant or sale to private
individuals.
Same; Same; Same; Same; After the effectivity of the 1935 Constitution,
government reclaimed and marshy disposable lands of the public domain continued
to be only leased and not sold to private parties. These lands remained sui generis, as
the only alienable or disposable lands of the public domain the government could not
sell to private parties.—The State policy prohibiting the sale to private parties of
government reclaimed, foreshore and marshy alienable lands of the public domain,
first implemented in 1907 was thus reaffirmed in CA No. 141 after the 1935 Consti
tution took effect. The prohibition on the sale of foreshore lands, however, became a
constitutional edict under the 1935 Constitution. Foreshore lands became inalienable
as natural resources of the State, unless reclaimed by the government and classified
as agricultural lands of the public domain, in which case they would fall under the
classification of government reclaimed lands. After the effectivity of the 1935
Constitution, government reclaimed and marshy disposable lands of the public
domain continued to be only leased and not sold to private parties. These lands
remained sui generis, as the only alienable or disposable lands of the public domain
the government could not sell to private parties.
Same; Same; Same; Same; 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.—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. CA No. 141 does not authorize the President to
reclassify government reclaimed and marshy lands into other non-agricultural lands
under Section 59 (d). Lands classified under Section 59 (d) are the only alienable or
disposable lands for non-agricultural purposes that the government could sell to
private parties.
Same; Same; Same; Same; One reason for the congressional authority before lands
under Section 59 of CA No. 141 previously transferred to government units or
entities could be sold to private parties 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.—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. Otherwise, the transfer of lands for non-
agricultural purposes to government units and entities could be used to circumvent
constitutional limitations on ownership of alienable or disposable lands of the public
domain. In the same manner, such transfers could also be used to evade the statutory
prohibition in CA No. 141 on the sale of government reclaimed and marshy lands of
the public domain to private parties. Section 60 of CA No. 141 constitutes by
operation of law a lien on these lands.
Same; Same; Same; Same; 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, though any legis lative 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, such legislative authority could only benefit private individuals.—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. This legislative authority is necessary in view of Section 60 of CA No. 141,
which states—“Sec. 60. x x x; but the land so granted, donated or transferred to a
province, municipality, or branch or subdivision of the Government shall not be
alienated, encumbered or otherwise disposed of in a manner affecting its title, except
when authorized by Congress; x x x.” (Emphasis supplied) 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. Hence, such legislative authority could only benefit private
individuals.
Same; Same; Same; Same; The rationale behind the constitutional ban on
corporations from acquiring, except through lease, alienable lands of the public
domain is not well understood; In actual practice, the constitutional ban strengthens
the constitutional limitation on individuals from acquiring more than the allowed
area of alienable lands of the public domain; The constitutional intent, under the
1973 and 1987 Constitutions, is to transfer ownership of only a limited area of
alienable land of the public domain to a qualified individual.—The rationale behind
the constitutional ban on corporations from acquiring, except through lease, alienable
lands of the public domain is not well understood. * * * In actual practice, the
constitutional ban strengthens the constitutional limitation on individuals from
acquiring more than the allowed area of alienable 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 corporations to acquire
more alienable public lands. An individual could own as many corporations as his
means would allow him. An individual could even hide his ownership of a
corporation by putting his nominees as stockholders of the corporation. The
corporation is a convenient vehicle to circumvent the constitutional limitation on
acquisition by individuals of alienable lands of the public domain. The constitutional
intent, under the 1973 and 1987 Constitutions, is to transfer ownership of only a
limited area of alienable land of the public domain to a qualified individual. This
constitutional intent is safeguarded by the provision prohibiting corporations from
acquiring alienable lands of the public domain, since the vehicle to circumvent the
constitutional intent is removed. The available alienable public lands are gradually
decreasing in the face of an ever-growing population. The most effective way to
insure faithful adherence to this constitutional intent is to grant or sell alienable lands
of the public domain only to individuals. This, it would seem, is the practical benefit
arising from the constitutional ban.
Same; Same; Same; Same; The mere reclamation of certain 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.—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, waters x x x and other natural resources” and consequently “owned by the
State.” As such, foreshore and submerged areas “shall not be alienated,” unless they
are classified as “agricultural lands” of the public domain. 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. 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.
Same; Same; Same; Same; PD No. 1085, 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, open to disposition or concession to qualified parties.—PD No. 1085,
issued on February 4, 1977, authorized the issuance of special land patents for lands
reclaimed by PEA from the foreshore or submerged areas of Manila Bay. On January
19, 1988 then President Corazon C. Aquino issued Special Patent No. 3517 in the
name of PEA for the 157.84 hectares comprising the partially reclaimed Freedom
Islands. Subsequently, on April 9, 1999 the Register of Deeds of the Municipality of
Paranaque issued TCT Nos. 7309, 7311 and 7312 in the name of PEA pursuant to
Section 103 of PD No. 1529 authorizing the issuance of certificates of title
corresponding to land patents. To this day, these certificates of title are still in the
name of PEA. PD No. 1085, 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. PD No. 1085 and President Aquino’s issuance of a land patent 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.
Same; Same; Same; Same; Spanish Law of Waters of 1866; Under the Spanish Law
of Waters, a private person reclaiming from the sea without permission from the
State could not acquire ownership of the reclaimed land which would remain
property of public dominion like the sea it replaced.—Under Article 5 of the Spanish
Law of Waters of 1866, private parties could reclaim from the sea only with “proper
permission” from the State. Private parties could own the reclaimed land only if not
“otherwise provided by the terms of the grant of authority.” This clearly meant that
no one could reclaim from sea without permission from the State because the sea is
property of public dominion. It also meant that the State could grant or withhold
ownership of the reclaimed land because any reclaimed land, like the sea from which
it emerged, belonged to the State. Thus, a private person reclaiming from the sea
without permission from the State could not acquire ownership of the reclaimed land
which would remain property of public dominion like the sea it replaced. Article 5 of
the Spanish Law of Waters of 1866 adopted the time-honored principle of land
ownership that “all lands that were not acquired from the government, either by
purchase or by grant, belong to the public domain.”
Same; Same; Same; Same; Same; Article 5 of the Spanish Law of Waters must be
read together with laws subsequently enacted on the disposition of public lands.—
Article 5 of the Spanish Law of Waters must be read together with laws subsequently
enacted on the disposition of public lands. In particular, CA No. 141 requires that
lands of the public domain must first be classified as alienable or disposable before
the government can alienate them. These lands must not be reserved for public or
quasi-public purposes. Moreover, the contract between CDCP and the government
was executed after the effectivity of the 1973 Constitution which barred private
corporations from acquiring any kind of alienable land of the public domain. This
contract could not have converted the Freedom Islands into private lands of a private
corporation.
Same; Same; Same; Same; There is no legislative or Presidential act classifying the
additional 592.15 hectares submerged areas under the Amended JVA as alienable or
disposable lands of the public domain open to disposition—these areas form part of
the public domain, and in their present state are inalienable and outside the
commerce of man.—The Amended JVA covers not only the Freedom Islands, but
also an additional 592.15 hectares which are still submerged and forming part of
Manila Bay. There is no legislative or Presidential act classifying these submerged
areas as alienable or disposable lands of the public domain open to disposi tion.
These submerged areas are not covered by any patent or certificate of title. There can
be no dispute that these submerged areas form part of the public domain, and in their
present state are inalienable and outside the commerce of man. Until reclaimed from
the sea, these submerged areas are, under the Constitution, “waters x x x owned by
the State,” forming part of the public domain and consequently inalienable. Only
when actually reclaimed from the sea can these submerged areas be classified as
public agricultural lands, which under the Constitution are the only natural resources
that the State may alienate. Once reclaimed and transformed into public agricultural
lands, the government may then officially classify these lands as alienable or
disposable lands open to disposition. Thereafter, the government may declare these
lands no longer needed for public service. Only then can these reclaimed lands be
considered alienable or disposable lands of the public domain and within the
commerce of man.
Same: Same; Same; Same; Public Estates Authority; Under EO No. 525, in relation
to PD No. 3-A and PD No. 1084, PEA became the primary implementing agency of
the National Government to reclaim foreshore and submerged lands of the public
domain.—Section 1 of Executive Order No. 525 provides that PEA “shall be
primarily responsible for integrating, directing, and coordinating all reclamation
projects for and on behalf of the National Government.” The same section also states
that “[A]ll reclamation projects shall be approved by the President upon
recommendation of the PEA, and shall be undertaken by the PEA or through a
proper contract executed by it with any person or entity; x x x.” Thus, under EO No.
525, in relation to PD No. 3-A and PD No. 1084, PEA became the primary
implementing agency of the National Government to reclaim foreshore and
submerged lands of the public domain. EO No. 525 recognized PEA as the
government entity “to undertake the reclamation of lands and ensure their maximum
utilization in promoting public welfare and interests.” Since large portions of these
reclaimed lands would obviously be needed for public service, there must be a
formal declaration segregating reclaimed lands no longer needed for public service
from those still needed for public service.
Same; Same; Same; Same; Same; Section 3 of EO No. 525, by declaring that all
lands reclaimed by PEA “shall belong to or be owned by PEA could not
automatically operate to classify inalienable lands into alienable or disposable lands
of the public domain.—Section 3 of EO No. 525, by declaring that all lands
reclaimed by PEA “shall belong to or be owned by the PEA could not automatically
operate to classify inalienable lands into alienable or disposable lands of the public
domain. Otherwise, reclaimed foreshore and submerged lands of the public domain
would automatically become alienable once reclaimed by PEA, whether or not
classified as alienable or disposable.
Same; Same; Same; Same; Same; Department of Environment and Natural
Resources; As manager, conservator and overseer of the natural resources of the
State, DENR exercises “supervision and control over alienable and disposable public
lands.” PEA needs authorization from DENR before PEA can undertake reclamation
in Manila Bay, or in any part of the country; DENR is vested with the power to
authorize the reclamation of areas under water, while PEA is vested with the power
to undertake the physical reclamation of areas under water, whether directly or
through private contractors.—As manager, conservator and overseer of the natural
resources of the State, DENR exercises “supervision and control over alienable and
disposable public lands.” DENR also exercises “exclusive jurisdiction on the
management and disposition of all lands of the public domain.” Thus, DENR decides
whether areas under water, like foreshore or submerged areas of Manila Bay, should
be reclaimed or not. This means that PEA needs authorization from DENR before
PEA can undertake reclamation projects in Manila Bay, or in any part of the country.
DENR also exercises exclusive jurisdiction over the disposition of all lands of the
public domain. Hence, DENR decides whether reclaimed lands of PEA should be
classified as alienable under Sections 6 and 7 of CA No. 141. Once DENR decides
that the reclaimed lands should be so classified, it then recommends to the President
the issuance of a proclamation classifying the lands as alienable or disposable lands
of the public domain open to disposition. We note that then DENR Secretary
Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in compliance with
the Revised Administrative Code and Sections 6 and 7 of CA No. 141. In short,
DENR is vested with the power to authorize the reclamation of areas under water,
while PEA is vested with the power to undertake the physical reclamation of areas
under water, whether directly or through private contractors. DENR is also
empowered to classify lands of the public domain into alienable or disposable lands
subject to the approval of the President. On the other hand, PEA is tasked to develop,
sell or lease the reclaimed alienable lands of the public domain.
Same; Same; Same; Same; Same; Same; 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 reclaimed by PEA remain
inalienable lands of the public domain.—The mere physical act of reclamation by
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.
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. 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 reclaimed by
PEA remain inalienable lands of the public domain. Only such an official
classification and formal declaration can convert reclaimed lands into alienable or
disposable lands of the public domain, open to disposition under the Constitution,
Title I and Title III of CA No. 141 and other applicable laws.
Same; Same; Same; Same; Same; The constitutional ban on private corporations
from acquiring alienable lands of the public domain does not apply to the sale of
PEA’s patrimonial lands; While PEA may sell its alienable or disposable lands of the
public domain to private individuals, it cannot sell any of its alienable or disposable
lands of the public domain to private corporations.—PEA’s charter, however,
expressly tasks PEA “to develop, improve, acquire, administer, deal in, subdivide,
dispose lease and sell any and all kinds of lands x x x owned, managed, controlled
and/or operated by the government.” (Emphasis supplied) There is, therefore,
legislative authority granted to PEA to sell its lands, whether patrimonial or alienable
lands of the public domain. PEA may sell to private parties its patrimonial properties
in accordance with the PEA charter free from constitutional limitations. The
constitutional ban on private corporations from acquiring alienable lands of the
public domain does not apply to the sale of PEA’s patrimonial lands. PEA may also
sell its alienable or disposable lands of the public domain to private individuals
since, with the legislative authority, there is no longer any statutory prohibition
against such sales and the constitutional ban does not apply to individuals. PEA,
however, cannot sell any of its alienable or disposable lands of the public domain to
private corporations since Section 3, Article XII of the 1987 Constitution expressly
prohibits such sales. The legislative authority benefits only individuals. Private
corporations remain barred from acquiring any kind of alienable land of the public
domain, including government reclaimed lands.
Same; Same; Same; Same; Same; The provision in PD No. 1085 stating that portions
of the reclaimed lands could be transferred by PEA to the “contractor or his
assignees” would not apply to private corporations but only to individuals because of
the constitutional ban.—The provision in PD No. 1085 stating that portions of the
reclaimed lands could be transferred by PEA to the “contractor or his assignees”
(Emphasis supplied) would not apply to private corporations but only to individuals
because of the constitutional ban. Otherwise, the provisions of PD No. 1085 would
violate both the 1973 and 1987 Constitutions.
Same; Same; Same; Same; Same; Bids and Bidding; EO No. 654, which authorized
PEA “to determine the kind and manner of payment for the transfer” of its assets and
properties, does not exempt PEA from the requirement of public auction, but merely
authorizes PEA to decide the mode of payment, whether in kind or in installment,
but does not authorize PEA to dispense with public auction.—Assuming the
reclaimed lands of PEA are classified as alienable or disposable lands open to
disposition, and further declared no longer needed for public service, PEA would
have to conduct a public bidding in selling or leasing these lands. PEA must observe
the provisions of Sections 63 and 67 of CA No. 141 requiring public auction, in the
absence of a law exempting PEA from holding a public auction. Special Patent No.
3517 expressly states that the patent is issued by authority of the Constitution and PD
No. 1084, “supplemented by Commonwealth Act No. 141, as amended.” This is an
acknowledgment that the provisions of CA No. 141 apply to the disposition of
reclaimed alienable lands of the public domain unless otherwise provided by law.
Executive Order No. 654, which authorizes PEA “to determine the kind and manner
of payment for the transfer” of its assets and properties, does not exempt PEA from
the requirement of public auction. EO No. 654 merely authorizes PEA to decide the
mode of payment, whether in kind and in installment, but does not authorize PEA to
dispense with public auction.
Same; Same; Same; Same; Same; Same; 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.—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.
Same; Same; Same; Same; Same; Same; The failure of an earlier public bidding
involving only 407.84 hectares, is not a valid justification for a subsequent
negotiated sale of 750 hectares, almost double the area publicly auctioned.—The
original JVA dated April 25, 1995 covered not only the Freedom Islands and the
additional 250 hectares still to be reclaimed, it also granted an option to AMARI to
reclaim another 350 hectares. The original JVA, a negotiated contract, enlarged the
reclamation area to 750 hectares. The failure of public bidding on December 10,
1991, 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 on December 10, 1991, 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.
Same; Same; Same; Same; BOT Law (RA No. 6957); Local Government Code;
Under either the BOT Law or the Local Government Code, the contractor or
developer, if a corporate entity, can only be paid with lease-holds on portions of the
reclaimed land, and if the contractor or developer is an individual, portions of the
reclaimed land, not exceeding 12 hectares of non-agricultural lands, may be
conveyed to him in ownership.—Under either the BOT Law or the Local
Government Code, the contractor or developer, if a corporate entity, can only be paid
with leaseholds on portions of the reclaimed land. If the contractor or developer is an
individual, portions of the reclaimed land, not exceeding 12 hectares of
nonagricultural lands, may be conveyed to him in ownership in view of the
legislative authority allowing such conveyance. This is the only way these provisions
of the BOT Law and the Local Government Code can avoid a direct collision with
Section 3, Article XII of the 1987 Constitution.
Same; Same; Same; Same; Land Registration; 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 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.
Same; Same; Same; Same; Same; 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.—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. The transfer of
the Freedom Islands to PEA was made subject to the provisions of CA No. 141 as
expressly stated in Special Patent No. 3517 issued by then President Aquino, to wit:
“NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the
Philippines and in conformity with the provisions of Presidential Decree No. 1084,
supplemented by Commonwealth Act No. 141, as amended, there are hereby granted
and conveyed unto the Public Estates Authority the aforesaid tracts of land
containing a total area of one million nine hundred fifteen thousand eight hundred
ninety four (1,915,894) square meters; the technical description of which are hereto
attached and made an integral part hereof.” (Emphasis supplied)
Same; Same; Same; Same; The grant of legislative authority to sell public lands in
accordance with Section 60 of CA No. 141 does not automatically convert alienable
lands of the public domain into private or patrimonial lands—the alienable lands of
the public domain must be transferred to qualified private parties, or to government
entities not tasked to dispose of public lands, before these lands can become private
or patrimonial lands.—Alienable lands of the public domain held by government
entities under section 60 of CA No. 141 remain public lands because they cannot be
alienated or encumbered unless Congress passes a law authorizing their disposition.
Congress, however, cannot authorize the sale to private corporations of reclaimed
alienable lands of the public domain because of the constitutional ban. Only
individuals can benefit from such law. The grant of legislative authority to sell public
lands in accordance with Section 60 of CA No. 141 does not automatically convert
alienable lands of the public domain into private or patrimonial lands. The alienable
lands of the public domain must be transferred to qualified private parties, or to
government entities not tasked to dispose of public lands, before these lands can
become private or patrimonial lands. Otherwise, the constitutional ban will become
illusory if Congress can declare lands of the public domain as private or patrimonial
lands in the hands of a government agency tasked to dispose of public lands. This
will allow private corporations to acquire directly from government agencies
limitless areas of lands which, prior to such law, are concededly public lands.
Same; Same; Same; Same; Public Estates Authority; As the central implementing
agency tasked to undertake reclamation projects nationwide, with authority to sell
reclaimed lands, PEA took the place of DENR as the government agency charged
with leasing or selling reclaimed lands of the public domain.—As the central
implementing agency tasked to undertake reclamation projects nationwide, with
authority to sell reclaimed lands, PEA took the place of DENR as the government
agency charged with leasing or selling reclaimed lands of the public domain. The
reclaimed lands being leased or sold by PEA are not private lands, in the same
manner that DENR, when it disposes of other alienable lands, does not dispose of
private lands but alienable lands of the public domain. Only when qualified private
parties acquire these lands will the lands become private lands. In the hands of the
government agency tasked and authorized to dispose of alienable of disposable lands
of the public domain, these lands are still public, not private lands. Same; Same;
Same; Same; Same; The mere fact that alienable lands of the public domain are
transferred to PEA and issued land patents or certificates of title in PEA’s name does
not automatically make such lands private—to allow vast areas of reclaimed lands of
the public domain to be transferred to PEA as private lands will sanction a gross
violation of the constitutional ban on private corporations from acquiring any kind of
alienable land of the public domain.—PEA’s charter expressly states that PEA “shall
hold lands of the public domain” as well as “any and all kinds of lands.” PEA can
hold both lands of the public domain and private lands. Thus, the mere fact that
alienable lands of the public domain like the Freedom Islands are transferred to PEA
and issued land patents or certificates of title in PEA’s name does not automatically
make such lands private. To allow vast areas of reclaimed lands of the public domain
to be transferred to PEA as private lands will sanction a gross violation of the
constitutional ban on private corporations from acquiring any kind of alienable land
of the public domain. PEA will simply turn around, as PEA has now done under the
Amended JVA, and transfer several hundreds of hectares of these reclaimed and still
to be reclaimed lands to a single private corporation in only one transaction. This
scheme will effectively nullify the constitutional ban in Section 3, Article XII of the
1987 Constitution which was intended to diffuse equitably the ownership of
alienable lands of the public domain among Filipinos, now numbering over 80
million strong.
Same; Same; Same; Same; Same; Whether the Amended JVA is a sale or a joint
venture, the fact remains that the Amended JVA required PEA to “cause the issuance
and delivery of the certificates of title conveying AMARI’s Land Share in the name
of AMARI,” a stipulation contravening Section 3, Article XII of the 1987
Constitution—the transfer of title and ownership to AMARI clearly means that
AMARI will “hold” the reclaimed lands other than by lease, and the transfer of title
and ownership is a “disposition” of the reclaimed lands, a transaction considered a
sale or alienation under CA No. 141, the Government Auditing Code, and Section 3,
Article XII of the 1987 Constitution.—AMARI makes a parting shot that the
Amended JVA is not a sale to AMARI of the Freedom Islands or of the lands to be
reclaimed from submerged areas of Manila Bay. In the words of AMARI, the
Amended JVA “is not a sale but a joint venture with a stipulation for reimbursement
of the original cost incurred by PEA for the earlier reclamation and construction
works performed by the CDCP under its 1973 contract with the Republic.” Whether Manila Bay remain inalienable natural resources of the public domain. The transfer
the Amended JVA is a sale or a joint venture, the fact remains that the Amended (as embodied in a joint venture agreement) to AMARI, a private corporation,
JVA requires PEA to “cause the issuance and delivery of the certificates of title ownership of 77.34 hectares of the Freedom Islands, is void for being contrary to
conveying AMARI’s Land Share in the name of AMARI.” This stipulation still Section 3, Article XII of the 1987 Constitution which prohibits private corporations
contravenes Section 3, Article XII of the 1987 Constitution which provides that from acquiring any kind of alienable land of the public domain. Furthermore, since
private corporations “shall not hold such alienable lands of the public domain except the Amended JVA also seeks to transfer to Amari ownership of 290.156 hectares of
by lease.” The transfer of title and ownership to AMARI clearly means that AMARI still submerged areas of Manila Bay, such transfer is void for being contrary to
will “hold” the reclaimed lands other than by lease. The transfer of title and Section 2, Article XII of the 1987 Constitution which prohibits the alienation of
ownership is a “disposition” of the reclaimed lands, a transaction considered a sale or natural resources other than agricultural lands of the public domain.
alienation under CA No. 141, the Government Auditing Code, and Section 3, Article
XII of the 1987 Constitution.
Same; Same; Same; Same; Historically, lands reclaimed by the government are sui
generis, not available for sale to private parties unlike other alienable public lands—
reclaimed lands retain their inherent potential as areas for public use or public
service.—The Regalian doctrine is deeply implanted in our legal system. Foreshore
and submerged areas form part of the public domain and are inalienable. Lands
reclaimed from foreshore and submerged areas also form part of the public domain
and are also inalienable, unless converted pursuant to law into alienable or
disposable lands of the public domain. Historically, lands reclaimed by the
government are sui generis, not available for sale to private parties unlike other
alienable public lands. Reclaimed lands retain their inherent potential as areas for
public use or public service. Alienable lands of the public domain, increasingly
becoming scarce natural resources, are to be distributed equitably among our ever-
growing population. To insure such equitable distribution, the 1973 and 1987
Constitutions have barred private corporations from acquiring any kind of alienable
land of the public domain. Those who attempt to dispose of inalienable natural
resources of the State, or seek to circumvent the constitutional ban on alienation of
lands of the public domain to private corporations, do so at their own risk.
SPECIAL CIVIL ACTION in the Supreme Court. Mandamus.

384 SCRA 152 – Civil Law – Land Titles and Deeds – Lands of the Public Domain
The Public Estates Authority (PEA) is the central implementing agency tasked to
undertake reclamation projects nationwide. It took over the leasing and selling
functions of the DENR (Department of Environmental and Natural Resources)
insofar as reclaimed or about to be reclaimed foreshore lands are concerned.
PEA sought the transfer to the Amari Coastal Bay and Development Corporation, a
private corporation, of the ownership of 77.34 hectares of the Freedom Islands. PEA
also sought to have 290.156 hectares of submerged areas of Manila Bay to Amari.
ISSUE: Whether or not the transfer is valid.
HELD: No. To allow vast areas of reclaimed lands of the public domain to be
transferred to Amari as private lands will sanction a gross violation of the
constitutional ban on private corporations from acquiring any kind of alienable land
of the public domain.
The Supreme Court affirmed that 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. The 592.15 hectares of submerged areas of