Chavez vs. Public Estate Authority

Facts:

Government through the Commissioner of Public Highways signed a contract with the CDCP (Construction and Development Corporation of the Philippines) to reclaim certain foreshore and offshore areas of Manila Bay and for the construction of the Manila-Cavite Coastal Road.

Then President Marcos, issued PD creating PEA and tasked to reclaimed land, including foreshore and submerge areas and to developed, improve acquire, lease and sell any and all kinds of lands

Another PD was issued, transferring to PEA the lands reclaimed in the foreshore and offshore of Manila Bay under Manila-Cavite Coastal Road and Reclamation Project (MCCRRP)

Thereafter, Pres. Aquino issued Special Patent No. 3517, granting and transferring to PEA “the parcels of land so reclaimed under the MCCRRP”. A TCT was also issued in the name of PEA covering 3 reclaimed islands known as the "Freedom Islands" (157.84 hectares) located at the southern portion of the Manila-Cavite Coastal Road, Parañaque City, which were part of these lands acquired by PEA.

PEA entered into a Joint Venture Agreement (JVA) with AMARI (AMARI Coastal Bay and Development Corporation), a private corporation, to develop the Freedom Islands.

However, the JVA also required the reclamation of an additional 250 hectares of submerged areas surrounding these islands to complete the configuration in the Master Development Plan of the Southern Reclamation Project-MCCRRP.

PEA and AMARI entered into the JVA through negotiation without public bidding. On June 8, 1995, then President Fidel V. Ramos, through then Executive Secretary

Ruben Torres, approved the JVA. On November 29, 1996, then Senate President Maceda delivered a privilege speech

denouncing the JVA as the "grandmother of all scams." Thus the Senate Committees investigated on the matter and concluded (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 title covering the Freedom Islands are thus void, and (3) the JVA itself is illegal.

Petitioner Frank Chavez, as a taxpayer, filed the instant Petition for Mandamus with Prayer for Issuance of a Writ of Preliminary Injunction and TRO.

March 30, 1999, PEA and AMARI signed an Amended Joint Agreement, which was approved by Pres. Estrada.

Issue:Whether or not the 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

Ruling:

NO, the Supreme Court summarized its ruling 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 hectares110 of the Freedom Islands, such transfer is void for being contrary to Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain.

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