CHAVEZ vs.
PEA Novemb
1973 gov’t signed a contract with cdcp to reclaim certain areas of manila
bay
1977 pres marcos issued PD 1084 creating the PEA to reclaim land
including foreshore and submerged areas.
He aslo issued PD 1085 transferrign to PEA lands reclaimed in the
foreshore and offshore of Manila Bay under the Manila-Cavite Coastal
Road and Reclamation Project.
Jan 1088 PRes. Corazon Aquino issued special patent 3517 grantign to
PEA parcels of land reclaimed udner the MCCRRP
PAril 1988 ROD issued TCT in PEA’s name covering 3 islands (freedom
islands) with an ara of 157.841 hectares.
April 1995 PEA entered into a JVA with AMARI (private corporation) to
develop the freedom islands. This included reclamation of 250 hectares fo
submerged areas surroundign the island.
Investigations made into teh JVA and the committee on accountability
concluded that:
The reclaimed lands PEA seeks to transfer to AMARI via JVA are lands of
public domain which the government has not classified as alienable and
thus, PEA cannot alienate.
MArch 1999, JVA amended and approved by president Estrada.
Due to the approval of the Amended JVA by the Office of the President,
Chavez now prays that on "constitutional and statutory grounds the
renegotiated contract be declared null and void.
Issue:
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;
The Regalian Doctrine
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 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine
substituting, however, the State, in lieu of the King, as the owner of all
lands and waters of the public domain. The Regalian doctrine is the
foundation of 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."
Comparison of laws governing ownership and disposition of reclaimed
lands in the Philippines.
MAy Provided for lease, but not the sale, of reclaimed
1907 - lands of the government to corporations and
Act No. individuals.
1654
which authorized the lease, but not the sale, of
er 29, reclaimed lands of the government to corporations
1919 - and individuals.
Act 2874
(Public
Land Act)
Nov - authorized the lease, but not the sale, of reclaimed
1963 - lands of the government to corporations and
CA 141 individuals.
(Public
Land Act)
Spanish the shores, bays, coves, inlets and all waters within the
law of maritime zone of the Spanish territory belonged to the
waters public domain for public use.
1886
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.
Art 339, "Art. 339. Property of public dominion is –
Civil
code 1. That devoted to public use, such as roads, canals,
1889
rivers, torrents, ports and bridges constructed by the
State, riverbanks, shores, roadsteads, and that of a
similar character;
2. That belonging exclusively to the State which, without
being of general public use, is employed in some public
service, or in the development of the national wealth,
such as walls, fortresses, and other works for the
defense of the territory, and mines, until granted to
private individuals."
Property devoted to public use referred to property open
for use by the public. In contrast, property devoted to
public service referred to property used for some
specific public service and open only to those
authorized to use the property.
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. This
class of property constituted property of public dominion
although employed for some economic or commercial
activity to increase the national wealth.
Act No. On May 8, 1907, the Philippine Commission enacted
1654 of Act No. 1654 which regulated the lease of reclaimed
the and foreshore lands. The salient provisions of this law
Philippin were as follows:
e
Commis
"Section 1. The control and disposition of the
sion
foreshore as defined in existing law, and the title to all
Government or public lands made or reclaimed by
the Government by dredging or filling or otherwise
throughout the Philippine Islands, shall be retained by
the Government without prejudice to vested rights and
without prejudice to rights conceded to the City of
Manila in the Luneta Extension.
Act No. The salient provisions of Act No. 2874, on reclaimed national wealth, are classified as property of public
2874 of lands, were as follows: dominion.
the
Philippin
"Sec. 6. The Governor-General, upon the
e
recommendation of the Secretary of Agriculture and 1973 "Sec. 8. With the exception of agricultural, industrial
Legislat
Natural Resources, shall from time to time classify constituti or commercial, residential, and resettlement lands
ure
the lands of the public domain into – on of the public domain, natural resources shall not be
alienated,
(a) Alienable or disposable, 1935 1973
barred the alienation of all prohibited the
(b) Timber, and natural resources except alienation of all
"public agricultural lands." natural resources
with the exception
(c) Mineral lands, x x x. of "agricultural,
term "public agricultural
industrial or
lands" in the 1935
Sec. 7. For the purposes of the government and commercial,
Constitution encompassed
disposition of alienable or disposable public lands, the residential, and
industrial, commercial,
Governor-General, upon recommendation by the resettlement lands
residential and
Secretary of Agriculture and Natural Resources, of the public
resettlement lands of the
shall from time to time declare what lands are open domain
public domain.
to disposition or concession under this Act." If the land of public domain were neither timber
nor mineral land, it would fall under the
Sec. 8. Only those lands shall be declared open to classification of agricultural land of the public
disposition or concession which have been domain. Both the 1935 and 1973
officially delimited or classified Constitutions, therefore, prohibited the
alienation of all natural resources except
agricultural lands of the public domain.
"Sec. 11. No private corporation or association may
1935 Sec 1, Article XIII, Natural resources, with the hold alienable lands of the public domain except by
constituti exception of public agricultural land, shall not be lease
on alienated,

Section 2, Article XIII, No private corporation or

association may acquire, lease, or hold public
Authority under PD 1084 granted to PEA:
agricultural lands in excess of one thousand and
twenty four hectares, nor may any individual
acquire such lands by purchase in excess of one (a) To reclaim land, including foreshore and submerged areas, by
hundred and forty hectares, or by lease in excess of dredging, filling or other means, or to acquire reclaimed land;
one thousand and twenty-four hectares,
Commo empowers the President to classify lands of the public (b) To develop, improve, acquire, administer, deal in, subdivide,
nwealth domain into "alienable or disposable" dispose, lease and sell any and all kinds of lands, buildings, estates
Act No. and other forms of real property, owned, managed, controlled and/or
141 of operated by the government;
"Sec. 6. The President, upon the recommendation of
the
the Secretary of Agriculture and Commerce, shall
Philippin
from time to time classify the lands of the public (i) To hold lands of the public domain in excess of the area
e
domain into – permitted to private corporations by statute.
National
Assembl
y (a) Alienable or disposable, (j) To reclaim lands and to construct work across, or otherwise, any
stream, watercourse, canal, ditch, flume x x x.
Sec. 7. For the purposes of the administration and
disposition of alienable or disposable public lands, the PD No. 1084 authorizes PEA to reclaim both foreshore and
President, upon recommendation by the Secretary submerged areas of the public domain.
of Agriculture and Commerce, shall from time to
time declare what lands are open to disposition or
concession under this Act. Foreshore areas
are those covered and uncovered by the ebb and flow of the tide.

Sec. 8. Only those lands shall be declared open to

disposition or concession which have been
officially delimited and classified and, when
practicable, surveyed, and which have not been
reserved for public or quasi-public uses,
Thus, 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. There must be no law reserving these lands
for public or quasi-public uses.
The Civil Like the Civil Code of 1889, the Civil Code of 1950
Code of included as property of public dominion those properties
1950 of the State which, 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
Submerged areas
are those permanently under water regardless of the ebb and flow of
the tide.
Foreshore and submerged areas indisputably belong to the public
domain and are inalienable unless reclaimed, classified as alienable
lands open to disposition, and further declared no longer needed for
public service.
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 then, and until today, a fully owned government
corporation.
The constitutional ban applied then, as it still applies now, only to
"private corporations and associations." 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. This legislative authority is Rationale behind the constitutional ban:
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

"to equitably diffuse land ownership or to encourage
province, municipality, or branch or subdivision of the Government shall
'owner-cultivatorship and the economic family-size farm' and to prevent
not be alienated, encumbered or otherwise disposed of in a manner
a recurrence of cases like the instant case. Huge landholdings by
affecting its title, except when authorized by Congress; x x x."
corporations or private persons had spawned social unrest.(Ayog vs.
Cusi)”

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.
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.

AMARI will acquire and own a maximum of 367.5 hectares of

reclaimed land which will be titled in its name.
Dispositions under 1987 constitution

The Threshold Issue

Sec 2 - all natural resources are owned by teh state. With teh exception
of agricultural lands, all other natural resources shall not be alienated.
Sec 3 - Alienable lands of the public domain shall be limited to
agricultural lands. Private corporations or associations may not
hold such alienable lands of the public domain except by lease,
for a period not exceeding twenty-five years, renewable for not
more than twenty-five years, and not to exceed one thousand
hectares in area.
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 which state that:
"Section 2. All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the exception of agricultural
lands, all other natural resources shall not be alienated. x x x.

1935 1973 1987 xxx

banned private banned private

corporations corporations Section 3. x x x Alienable lands of the public domain shall be limited to
from acquiring from acquiring agricultural lands. Private corporations or associations may not
any kind of any kind of hold such alienable lands of the public domain except by lease, x
alienable land alienable land x x."(Emphasis supplied)
of the public of the public
domain. domain.

Allow private Allow private

corporations to corporations to Classification of Reclaimed Foreshore and Submerged Areas
hold alienable hold alienable
lands of the lands of the PLA, Sec 59:
public public
domain only domain only
reclaimed lands are classified as alienable and disposable lands
through through
of the public domain:
lease. lease.

general law general law general law 'Sec. 59. The lands disposable under this title shall be classified as
governing the governing the governing the follows:
lease to private lease to private lease to private
corporations of corporations of corporations of
(a) Lands reclaimed by the government by dredging, filling, or other
reclaimed, reclaimed, reclaimed,
means;
foreshore and foreshore and foreshore and
marshy marshy marshy
alienable lands alienable lands alienable lands Section 2, Article XII of the 1987 Constitution
of the public of the public of the public the foreshore and submerged areas of Manila Bay are part of the
domain is still domain is still domain is still "lands of the public domain, waters x x x and other natural resources"
CA No. 141 CA No. 141 CA No. 141 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.
Section 8 of CA No. 141
provides that "only those lands shall be declared open to disposition or
concession which have been officially delimited and classified."72 The
President has the authority to classify inalienable lands of the public
domain into alienable or disposable lands of the public domain, pursuant
to Section 6 of CA No. 141.
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.
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.
At the time then President Aquino issued Special Patent No. 3517, PEA
had already reclaimed the Freedom Islands although subsequently there
were partial erosions on some areas. The government had also
completed the necessary surveys on these islands. Thus, the Freedom
Islands were no longer part of Manila Bay but part of the land mass.
Section 3, Article XII of the 1987 Constitution classifies lands of the public
domain into "agricultural, forest or timber, mineral lands, and national
parks."
Being neither timber, mineral, nor national park lands, the reclaimed
Freedom Islands necessarily fall under the classification of agricultural
lands of the public domain. Under the 1987 Constitution, agricultural
lands of the public domain are the only natural resources that the State
may alienate to qualified private parties. All other natural resources, such
as the seas or bays, are "waters x x x owned by the State" forming part of
the public domain, and are inalienable pursuant to Section 2, Article XII of
the 1987 Constitution.
AMARI Claims that teh freedom islands are private islands because
CDCP reclaimed the islands under a cintract eith the Commissioner pf
public highways. It cited sec 5 of the Spanish law and argues that "if the
ownership of reclaimed lands may be given to the party constructing the
works, then it cannot be said that reclaimed lands are lands of the public
domain which the State may not alienate."
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.
The amended JVA covers not only the freedom islands but also an
additional 591.15 hectares which are still submerged and forming part of
manila bay. There is no legislative or presidential act classifying these
submerged areas as alienable.
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.
Registration of lands of public domain
PEA and AMARI contend that with the issuance of Special Patent No.
3517 and the corresponding certificates of titles, the 157.84 hectares
comprising the Freedom Islands have become private lands of PEA. In
support of their argument, they cited various cases which involved
petitions to cancel the land patents and the corresponding certificates
of titles issued to private parties and uniformly held that the Director
of Lands has no jurisdiction over private lands or that upon issuance of
the certificate of title the land automatically comes under the Torrens
System.
In this case, the only patent and certificates of title issued are those in
the name of PEA, a wholly government owned corporation performing
public as well as proprietary functions.
No patent or certificate of title has been issued to any private party.
No one is asking the Director of Lands to cancel PEA's patent or
certificates of title.
In fact, the thrust of the instant petition is that PEA's certificates of title
should remain with PEA, and the land covered by these certificates,
being alienable lands of the public domain, should not be sold to a
private corporation.
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.
Thus, the provisions of CA No. 141 apply to the Freedom Islands on
matters not covered by PD No. 1084. Section 60 of CA No. 141
prohibits, "except when authorized by Congress," the sale of alienable
lands of the public domain that are transferred to government units or
entities. Section 60 of CA No. 141 constitutes, under Section 44 of PD
No. 1529, a "statutory lien affecting title" of the registered land even if
not annotated on the certificate of title.
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.
SUMMARY:
1. The 157.84 hectares of reclaimed lands comprising teh freedom
islands - are alienable lands of public domain. PEA may lease these
lands to private corporations but may not sell or transfer ownership to
private corporations (See PD 1085 and issuance of special patent -
an official proclamation classifying the same as
alienable/disposable)
2. The 592.15 hectares of submerged areas of manila bay remain
inalienable natural resource of public domain until classified as alienable
and open to disposition and declared no longer needed for public service.
Only gov’t can make sure classification.declaration after PEA has
reclaimed these submerged areas.
Alienable lands of the public domain, or those available for alienation
or disposition, are part of the patrimonial properties of the State. They
are State properties available for private ownership except that their
appropriation is qualified by Sections 2 and 3 of Article XII of the
Constitution and the public land laws.

In their present state, the 592.15 hectares of submerged areas are
inalienable and outside the commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a private
corporation, ownership of 77.34 hectares110of 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.
Before lands of the public domain are declared available for private
acquisition, or while they remain intended for public use or for public
service or for the development of national wealth, they would partake
of properties of public dominion just like mines before their
concessions are granted, in which case, they cannot be alienated or
leased or otherwise be the object of contracts. In contrast, patrimonial
properties may be bought or sold or in any manner utilized with the
same effect as properties owned by private persons.

Lands of the private domain, being patrimonial properties, are valid

objects of contracts generally unfettered by the terms and conditions
set forth in Sections 2 and 3 of Article XII of the Constitution, which
refer only to lands of the public domain, nor by statutes for the
settlement, prescription or sale of public lands.

MAY 2003

New contention: Amari argues that the Decision should be made to

apply prospectively, not retroactively to cover the Amended JVA. Amari
argues that the existence of a statute or executive order prior to its being
adjudged void is an operative fact to which legal consequences are
attached, citing De Agbayani v. PNB.

Amari now claims that "assuming arguendo that Presidential Decree Nos.
1084 and 1085, and Executive Order Nos. 525 and 654 are inconsistent
with the 1987 Constitution, the limitation imposed by the Decision on
these decrees and executive orders should only be applied prospectively
from the finality of the Decision."

Amari’s reliance on De Agbayani and Spouses Benzonan is misplaced.

These cases would apply if the prevailing law or doctrine at the time of the
signing of the Amended JVA was that a private corporation could acquire
alienable lands of the public domain, and the Decision annulled the law or
reversed this doctrine. Obviously, this is not the case here.

Ruling:

1935 1973 1987

private corporations private corporations private corporations
allowed to acquire banned from holding, banned from holding,
alienable lands of the except by lease, except by lease,
public domain alienable lands of the alienable lands of the
public domain public domain

The prevailing law before, during and after the signing of the Amended
JVA is that private corporations cannot hold, except by lease, alienable
lands of the public domain. The Decision has not annulled or in any way
changed the law on this matter.

Cited in book: