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V PUBLIC ESTATES AUTHORITY AND AMARI COASTAL BAY FACTS: Nature: original Petition for Mandamus with prayer for writ of preliminary injunction and a temporary restraining order. Petition also seeks to compel the Public Estates Authority (PEA) to disclose all facts on PEAs then on-going renegotiations with Amari Coastal Bay and Development Corporation to reclaim portions of Manila Bay. The petition further seeks to enjoin PEA from signing a new agreement with AMARI involving such reclamation. 1973: The government through the Commission of Public Highways signed a contract with the Construction and Development Corporation of the Philippines (CDCP) to reclaim certain foreshore and offshore areas of Manila Bay 1977: President Marcos issued PD No. 1084 creating the PEA, which was tasked to reclaim land, including foreshore and submerged areas and to develop, improve, acquire x xx lease and sell any and all kinds of lands. On the same date, President Marcos issued PD. 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) 1981: Pres. Marcos issued a memorandum ordering PEA to amend its contract with CDCP which stated that CDCP shall transfer in favor of PEA the areas reclaimed by CDCP in the MCCRRP 1988: Pres. Aquino issued Special Patent granting and transferring to PEA parcels of land so reclaimed under the MCCRRP. Subsequently she transferred in the name of PEA the three reclaimed islands known as the Freedom Islands 1995: PEA entered into a Joint Venture Agreement (JVA) with AMARI, a private corporation, to develop the Freedom Islands and this was done without public bidding Pres. Ramos through Executive Secretary Ruben Torres approved the JVA 1996: Senate Pres.Maceda delivered a privileged speech in the Senate and denounced the JVA as the grandmother of all scams. As a result, the Senate conducted investigations. Among the conclusions were: 1. The reclaimed lands PEA seeks to transfer to AMARI under the JVA are lands of the public domain which the government has not classified as alienable lands and therefore PEA cannot alienate these lands; 2. The certificates of the title covering the Freedom Islands are thus void, and 3. The JVA itself is illegal 1997: Pres. Ramos created the Legal Task Force to conduct a study on the legality of the JVA in view of the Senate Committee report. 1998: The Philippine Daily Inquirer published reports on on-going renegotiations between PEA and AMARI
2
PEA
Director
Nestor
Kalaw
and
PEA
Chairman
ArsenioYulo
and
former
navy
officer
Sergio
Cruz
were
members
of
the
negotiating
panel
Frank
Chavez
filed
petition
for
Mandamus
stating
that
the
government
stands
to
lose
billions
of
pesos
in
the
sale
by
PEA
of
the
reclaimed
lands
to
AMARI
and
prays
that
PEA
publicly
disclose
the
terms
of
the
renegotiations
of
JVA.
He
cited
that
the
sale
to
AMARI
is
in
violation
of
Article
12,
Sec.
3
prohibiting
sale
of
alienable
lands
of
the
public
domain
to
private
corporations
and
Article
2
Section
28
and
Article
3
Sec.
7
of
the
Constitution
on
the
right
to
information
on
matters
of
public
concern
1999: PEA and AMARI signed Amended JVA which Pres. Estrada approved ISSUES: 1. WON the principal reliefs prayed for in the petition are moot and academic because of the subsequent events 2. WON the petition merits dismissal for failure to observe the principle governing the hierarchy of courts 3. WON the petition merits dismissal for non-exhaustion of administrative remedies 4. WON petitioner has locus standi to bring this suit 5. WON the constitutional right to information includes official information on on- going negotiations before a final agreement 6. WON 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; and 7. WON the court is the proper forum for raising the issue of whether the amended joint venture agreement is grossly disadvantageous to the government. o Threshold issue: whether AMARI, a private corporation, can acquire and own under the amended JVA 367.5 has. of reclaimed foreshore and submerged area in Manila Bay in view of Sections 2 & 3, Art. 12 of the 1987 constitution HELD (1) 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 and if already implemented, to annul the effects of an unconstitutional contract (2) The principle of hierarchy of courts applies generally to cases involving factual questions Reasoning: the instant case raises constitutional issues of transcendental importance to the public (3) The principle of exhaustion of administrative remedies does not apply when the issue involved is a purely legal or constitutional question (4) Petitioner has standing if petition is of transcendental public importance and as such, there is the right of a citizen to bring a taxpayers suit on these matters of transcendental public importance
3
(5)
The
constitutional
right
to
information
includes
official
information
on
on-going
negotiations
before
a
final
contract
and
must
therefore
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
Reasoning
The
State
policy
of
full
transparency
in
all
transactions
involving
public
interest
reinforces
the
peoples
right
to
information
on
matters
of
public
concern.
PEA
must
prepare
all
the
data
and
disclose
them
to
the
public
at
the
start
of
the
disposition
process,
long
before
the
consummation
of
the
contract.
While
the
evaluation
or
review
is
on-going,
there
are
no
official
acts,
transactions,
or
decisions
on
the
bids
or
proposals
but
once
the
committee
makes
its
official
recommendation,
there
arises
a
definite
proposition
on
the
part
of
the
government
(6)
In
a
form
of
a
summary:
o The
157.84
has.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
ownership
limitations
in
the
1987
Constitution
and
existing
laws.
o The
592.15
has.of
submerged
areas
of
Manila
Bay
remain
inalienable
natural
resources
of
the
public
domain
and
outside
the
commerce
of
man
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
o Since
the
Amended
JVA
seeks
to
transfer
to
AMARI,
a
private
corporation,
ownership
of
77.34
has.of
the
Freedom
Islands,
such
transfer
is
void
for
being
contrary
to
Section
3,
Article
12
of
the
1987
Constitution
which
prohibits
private
corporations
from
acquiring
any
kind
of
alienable
land
of
the
public
domain
o Since
the
Amended
JVA
also
seeks
to
transfer
to
AMARI
ownership
of
290.156
has.of
still
submerged
areas
of
Manila
Bay,
such
transfer
is
void
for
being
contrary
to
Section
2,
Article
12
of
the
1987
Constitution
which
prohibits
the
alienation
of
natural
resources
other
than
agricultural
lands
of
the
public
domain.
PEA
may
reclaim
these
submerged
areas.
Thereafter,
the
government
can
classify
the
reclaimed
lands
as
alienable
or
disposable,
and
further
declare
them
no
longer
needed
for
public
services.
Still,
the
transfer
of
such
reclaimed
alienable
lands
of
the
public
domain
to
AMARI
will
be
void
in
view
of
Section
3,
Article
12
that
prohibits
private
corporations
from
acquiring
any
kind
of
alienable
land
of
the
public
domain.
Reasoning:
CA
141
of
the
Philippine
National
Assembly
empowers
the
president
to
classify
lands
of
the
public
domain
into
alienable
or
disposable
(Sec.
6).The
President,
upon
recommendation
of
the
Secretary
of
Agriculture
and
Commerce,
shall
from
time
to
time
classify
the
lands
of
the
public
domain
into(a)
Alienable
of
disposable,
(b)
timber,
and
(c)
mineral
lands.
The
President
must
first
officially
classify
these
lands
as
alienable
or
disposable,
and
then
declare
them
open
to
disposition
or
concession.
4
Sec.
59
states
that
the
lands
disposable
under
this
title
shall
be
classified
as
follows:
(a)
Lands
reclaimed
by
the
Government
by
dredging,
filling,
or
other
means;
(b)
Foreshore;
(c)
Marshy
lands
(d)
Lands
not
included
in
any
of
the
foregoing
classes.
Sec.
61
states
that
the
lands
comprised
in
classes
(a),
(b)
and
(c)
of
section
59
shall
be
disposed
f
to
private
parties
by
lease
only
and
not
otherwise
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
suis
generic
as
the
only
alienable
or
disposable
lands
of
the
public
domain
the
government
could
not
sell
to
private
parties.
The
only
way
that
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.
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.
PD
No.
1085
and
President
Aquinos
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.
in
case
of
sale
or
lease
of
disposable
lands
of
the
public
domain,
a
public
bidding
is
required
1987
Constitution
declares
that
all
natural
resources
are
owned
by
the
State.
With
the
exception
of
agricultural
lands,
all
other
natural
resources
shall
not
be
alienated.
Article
12,
Sec.
3
states
that
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
25
years,
renewable
for
not
more
than
25
years,
and
not
to
exceed
1,000
has.in
area.
ration
behind
the
ban
on
corporations
from
acquiring
except
through
lease
is
not
well
understood.
If
the
purpose
is
to
equitably
diffuse
lands
ownership
then
the
Consti
could
have
simply
limited
the
size
of
alienable
lands
of
the
public
domain
that
corporations
could
acquire.
If
the
intent
were
to
encourage
owner- cultivatorship
and
the
economic
family-size
farm
and
to
prevent
a
recurrence
of
cases
like
the
instant
case,
then
placing
the
land
in
the
name
of
a
corporation
would
be
more
effective
in
preventing
the
break-up
of
farmlands.
If
the
farmland
were
registered
in
the
name
of
a
corporation,
upon
the
death
of
the
owner,
his
heirs
would
inherit
shares
in
the
corporation
instead
of
subdivided
parcels
of
the
farmland.
This
would
prevent
the
continuing
break- up
of
farmlands
into
smaller
and
smaller
plots
from
one
generation
to
the
next.
In
actual
practice
then,
this
ban
strengthens
the
consti
limitation
on
individuals
from
acquiring
more
than
the
allowed
area
of
alienable
lands
of
the
public
domain.
Without
the
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.
He
could
even
hide
his
ownership
of
a
corporation
by
putting
his
nominees
as
stockholders
of
the
corporation.
In the instant 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
5
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
PEAs
patent
or
certificates
of
title.
In
fact,
the
thrust
of
the
instant
petition
is
that
PEAs
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.i[102]
The
registration
of
lands
of
the
public
domain
under
the
Torrens
system,
by
itself,
cannot
convert
public
lands
into
private
lands.ii[103]
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)
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.iii[104]
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
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
6
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.
Furthermore,
PEAs
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
PEAs
name
does
not
automatically
make
such
lands
private.
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.
We
can
now
summarize
our
conclusions
as
follows:
1.
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.
2.
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.
3.
Since
the
Amended
JVA
seeks
to
transfer
to
AMARI,
a
private
corporation,
ownership
of
77.34
hectaresiv[110]
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.
4.
Since
the
Amended
JVA
also
seeks
to
transfer
to
AMARI
ownership
of
290.156
hectaresv[111]
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.
PEA
may
reclaim
these
submerged
areas.
7
Thereafter,
the
government
can
classify
the
reclaimed
lands
as
alienable
or
disposable,
and
further
declare
them
no
longer
needed
for
public
service.
Still,
the
transfer
of
such
reclaimed
alienable
lands
of
the
public
domain
to
AMARI
will
be
void
in
view
of
Section
3,
Article
XII
of
the
1987
Constitution
which
prohibits
private
corporations
from
acquiring
any
kind
of
alienable
land
of
the
public
domain.
Clearly,
the
Amended
JVA
violates
glaringly
Sections
2
and
3,
Article
XII
of
the
1987
Constitution.
Under
Article
1409vi[112]
of
the
Civil
Code,
contracts
whose
object
or
purpose
is
contrary
to
law,
or
whose
object
is
outside
the
commerce
of
men,
are
inexistent
and
void
from
the
beginning.
The
Court
must
perform
its
duty
to
defend
and
uphold
the
Constitution,
and
therefore
declares
the
Amended
JVA
null
and
void
ab
initio.