Case Chavez vs. PEA, Amari Chavez vs.

NHA, RBI
Promulgation July 9, 2002, En Banc Aug. 15, 2007, En Banc
President Arroyo Arroyo
Ponente Carpio Velasco
Justices Davide, Jr., C.J., Bellosillo, Puno, Vitug, Puno, C.J., Quisumbing, Ynares-
Kapunan, Mendoza, Panganiban, Santiago, Sandoval-Gutierrez, Austria-
Quisumbing, Ynares-Santiago, Martinez, Corona, Carpio Morales,
Sandoval-Gutierrez, Austria-Martinez, Azcuna, Tinga, Chico-Nazario, Garcia,
and Corona, JJ., concur. and Nachura, JJ., concur.
Carpio, J., no part.
Reyes, J., no part, Did not participate in
Deliberations.
Petitioner Frank Chavez, already ex-SolGen Frank Chavez, already ex-SolGen
Respondents Public Estates Authority (PEA) National Housing Authority (NHA)
* created on Feb. 1977 by Marcos

* tasked to:
1. reclaim, land, including foreshore
and submerged areas
2. develop, improve, acquire, xxx
lease and sell any and all kinds of land

* ban on 1973 Constitution on private

corporations from acquiring alienable
lands of public domain did not apply to
PEA because PEA is a fully-owned
government corporation
Property at lands reclaimed in the foreshore and
Issue offshore of the Manila Bay under the
Manila-Cavite Coastal Road and
Reclamation Project (MCCRRP)
Timeline Jan. 19, 1988 - C. Aquino issued
Special Patent No. 3517, granting and
transferring to PEA the parcels of land
so reclaimed under the MCCRRP

Apr. 9, 1988 - RoD of Paranaque

issued TCT Nos. 7309, 7311, 7312 in
the name of PEA covering the Freedom
Islands

Apr. 25, 1995 - PEA entered into JVA

with AMARI, a private corporation, to
develop the Freedom Islands. The JVA
also required the reclamation of
additional 250 hectares of submerged
areas. PEA and Amari entered into the
JVA through negotiation w/o public
bidding.

Apr. 28, 1995 - PEA BoD confirmed JVA

June 8, 1995 - Ramos, through

Executive Secretary Torres, approved
JVA

Nov. 29, 1996 - Sen. Maceda delivered

privilege speech calling
the JVA the "grandmother of all scams."
This resulted to the Senate
 investigation. The Senate reported
concluded that: (1) the reclaimed lands
PEA seeks to transfer to Amari are lands
of the public domain which the
government has not classified as
alienable and therefore PEA cannot
alienate these lands: (2) the certificates
of title covering the Freedom Islands are
void; and (3) the JVA is illegal. Ramos'
Legal Task Force upheld the legality of
the JVA.

Apr. 27, 1998 - Petition was filed

Mar. 30, 1999 - PEA and Amari signed

the Amended JVA

May 28, 1999 - Estrada approved the

Amended JVA
AGREEMENT JVA -- covers a reclamation area of 750
AT ISSUE hectares, 157.84 hectares of which have
been reclaimed, while the rest 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
PETITIONER'S 1. The government stands to lose
ARGUMENT billions of pesos in the sale by PEA of
the reclaimed lands to AMARI

2. PEA must publicly disclose the terms

of any renegotiation of the JVA, invoking
Section 28, Article II, and Section 7,
Article III, of the 1987 Constitution on
the right of the people to information on
matters of public concern

3. The sale to AMARI of lands of the

public domain is a blatant violation of
Section 3, Article XII of the 1987
Constitution prohibiting the sale of
alienable lands of the public domain to
private corporations.
ISSUES WHETHER THE PRINCIPAL RELIEFS
PRAYED FOR IN THE PETITION ARE
MOOT AND ACADEMIC BECAUSE OF
SUBSEQUENT EVENTS

Ruling: The signing of the Amended JVA

and its approval by the President cannot
operate to moot the petition because
PEA and Amari have still to implement
the Amended JVA. If the Amended JVA
violated the Constitution, which the
Petitioner asserted, then it is the Court's
duty to enjoin its implementation.
WHETHER THE PETITION MERITS
DISMISSAL FOR FAILING TO OBSERVE
THE PRINCIPLE GOVERNING THE
HIERARCHY OF COURTS
Ruling: The Court can resolve the case
without determining any factual issue
related to the case. The instant case is
also a petition for mandamus which falls
under the original jurisdiction of the
Supreme Court.
WHETHER THE PETITION MERITS
DISMISSAL FOR NON-EXHAUSTION OF
ADMINISTRATIVE REMEDIES

Ruling: Principle of exhaustion of

administrative remedies does not apply
in this case.
WHETHER PETITIONER HAS LOCUS
STANDI TO BRING THIS SUIT

Ruling: Petitioner has standing to bring

the taxpayer's suit. The case involves 2
constitutional issues: 1. the right of
citizens to information on matters of
public concern, and 2. the application of
a constitutional provision intended to
insure the equitable distribution of
alienable lands of the public domain
among Filipino citizens.
WHETHER THE CONSTITUTIONAL
RIGHT TO INFORMATION INCLUDES
OFFICIAL INFORMATION ON ON-
GOING NEGOTIATIONS BEFORE A
FINAL AGREEMENT

Ruling: The constitutional right to

information includes official information
on on-going negotiations before a final
contract.
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

PD No. 1085, which authorized the

issuance of special land patents
reclaimed by PEA from the foreshore or
submerged areas of Manila Bay, couple
with Pres. 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, and that these
lands are no longer needed for public
service.
WHETHER THE COURT IS THE
PROPER FORUM FOR RAISING THE
ISSUE OF WHETHER THE AMENDED
JOINT VENTURE AGREEMENT IS
 GROSSLY DISADVANTAGEOUS TO THE
GOVERNMENT

REGALIAN DOCTRINE
-- State owns all lands and waters of the public domain
-- started with Spain's conquest of the Philippines when ownership of the Philippines passed to the
Spanish Crown
-- the 1935, 1973, and 1987 Constitutions adopted the Regalian doctrine, substituting the King with
the State
-- incorporated in Art. 420 of the Civil Code

Ownership and Disposition of Reclaimed Lands

Spanish Law of
Waters of 1866 - allowed the reclamation of the sea
- provided that 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

Act No. 1654

(May 18, 1907) - provided for the lease, but not the sale, of reclaimed lands of the government to
corporations and individuals
- government should retain title to all lands reclaimed by the government
- private parties could lease lands reclaimed by the government only if these lands
were no longer needed for public purpose
- mandated public bidding in the lease of government reclaimed lands

* did not repeal Spanish Law of Waters, which stated that lands reclaimed from sea by private
parties with government permission remained private lands

Act No. 2874

(Nov. 29, 1919) - authorized the lease, but not the sale, of reclaimed lands of the government to
corporations and individuals
- Governor-General, upon recommendation of Agriculture and Natural Resources Sec.,
will classify lands of public domain into (a) alienable or disposable, (b) timber, and (c)
mineral lands
- limited alienable or disposable lands only to those lands which have been "officially
delimited and classified"
- also empowered Governor-General to classify disposable lands of the public domain
into government reclaimed, foreshore or marshy lands of the public domain, as well
as other non-agricultural lands
- mandated that disposable lands of the public domain classified as government
reclaimed, foreshore and marshy lands "shall be disposed of to private parties by
lease only and not otherwise" BUT these lands could be sold when the legislature
passes a law allowing their sale
- provides that lands not included in any of the foregoing classes, meaning "lands
reclaimed by the government, foreshore, and marshy lands," may be disposed of by
sale or lease

* RATIONALE behind lease only, and not sale: So that these lands will retain their inherent potential
as areas for public service.

* did not prohibit private parties from reclaiming parts of the sea pursuant to the Spanish Law of
Waters. Lands reclaimed from the sea by private parties with government permission remained private
lands.

1935 Consti - adopted Regalian doctrine

- barred alienation of all natural resources except public agricultural lands

What are included in natural resources?

 1. foreshore lands, which became inalienable by constitutional fiat, available only for lease for
25 years, renewable for another 25 years
2. foreshore lands when they are NOT reclaimed and reclassified as public agricultural lands

What are public agricultural lands?

1. foreshore lands that are reclaimed and reclassified as alienable public agricultural lands
2. government reclaimed and marshy lands of the public domain, being neither timber nor
mineral lands
3. industrial, commercial, residential and resettlement lands of the public domain
4. if the land of the public domain is neither timber nor mineral land

* Did not repeal the provision that government reclaimed and marshy lands of the public domain are
open for sale to private parties

Commonwealth
Act No. 141
(Nov. 7, 1936) - authorized the lease, but not the sale, of reclaimed lands of the government to
corporations and individuals

When can lands of public domain be alienable?

1. When the President classifies lands of the public domain into "alienable or disposable" lands
of the public domain
2. When the President declares what lands are open to disposition or concession
3. When there is no law reserving these lands for public or quasi-public uses

* CA No. 141 continues to this day (2002) as the general law governing the classification and
disposition of lands of the public domain

How can the government sell reclaimed and marshy lands to private parties?

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 that sale. In case of sale or
lease, public bidding is required. CA No. 141, which remains the general law governing classification
and disposition of lands of public domain did not repeal Sec. 5 of the Spanish Law of Waters, but the
reclaimed lands could become private lands only if classified as alienable agricultural land of the
public domain.

1950 Civil
Code - defined property of public dominion as:
1. those intended for public use
2. those intended for public service
3. those intended for the development of the national wealth

Again, the Civil Code reiterated the need for a formal declaration that the property of public dominion
is no longer needed for public use, public service, or for the development of the national wealth before
the same can be classified into patrimonial property.

1973 Consti - prohibited the alienation of all natural resources with the exception of “agricultural,
industrial or commercial, residential, and resettlement lands of the public domain.”
- limited the alienable of lands of public domain to individuals who were citizens of the
Philippines, THUS private corporations were NO longer allowed to acquire alienable
lands of public domain

1987 Consti - continued the constitutional ban of private corporations from acquiring alienable lands
of public domain

RATIONALE behind this constitutional ban: It strengthens the constitutional limitation on individuals
from acquiring more than the allowed area of alienable lands of the public domain. Without this
constitutional band, 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. The
constitutional intent is to transfer ownership of only a limited area of alienable land of the public
domain to a qualified individual.