Chavez v.

PEA and AMARI In 1973, the Commissioner of Public Highways signed a contract with the Construction and Development Corporation of the Philippines (CDCP) to reclaim foreshore and offshore areas of Manila Bay. It also included the construction of the Manila-Cavite Coastal Road. In 1977, Marcos issued PD No. 1084, creating the Public Estates Authority (PEA) and the same was authorized to reclaim land, including foreshore and submerged areas and to develop, improve, acquire, lease and sell any and all kinds of lands. Marcos also issued PD No. 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). In 1981, Marcos issued a memorandum directing PEA to amend its contract with CDCP so that all future works in MCCRRP shall be owned and funded by PEA. CDCP gave up al its development rights and agreed to cede and transfer in favor of PEA all of the rights, title, interest and participation of CDCP in and to all the areas of land reclaimed by CDCP in MCCRRP. In 1988, President Cory Aquino issued Special Patent No. 3517 granting and transferring to PEA the parcels of land so reclaimed under the MCCRRP. Subsequently, Register of Deeds issued TCT in the name of PEA covering the three reclaimed islands known as Freedom Islands. In 1995, Pea entered into a Joint Venture Agreement (JVA) with AMARI, a private corporation to develop the Freedom Islands. PEA and AMARI entered into the JVA through negotiation without public bidding. FVR through Executive Secretary Torres approved the JVA. In 1997, Senate President Maceda delivered privilege speech calling the JVA as the grandmother of all scams. The Senate investigated the JVA and came out with the following results: 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. In 1997, FVR created a Legal Task Force to conduct a study on the legality of the JVA in view of the Senate Report. The Task Force upheld the legality of the JVA. In 1998, the Philippine Daily Inquirer published reports that there were ongoing renegotiations between PEA and AMARI. PEA Director Kalaw and PEA Chairman Yulo and former navy officer Cruz were members of the negotiating panel. Frank Chavez as a taxpayer, filed the petition for mandamus with prayer for the issuance of a writ of preliminary injunction and TRO. Petitioner assails the sale to AMARI of lands of the public domain as a blatant violation of Section 3, Article XII of

the 1987 Constitution. In 1999, PEA and AMARI signed the Joint Venture Agreement. Erap approved such agreement. Due to such approval, Chavez also asked the court to declare such amended JVA null and void. ISSUES: W/N the stipulations in the Amended JVA for the transfer to AMARI of certain lands, reclaimed and still to be reclaimed, violate the Constitution/ W/N 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 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, 1987 Constitutions adopted the Regalian doctrine. Such doctrine is the foundation of the 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. The 1935 Constitution barred the alienation of all natural resources except public agricultural lands, which were the only natural resources the State could alienate. Foreshore lands, considered part of the States natural resources, became inalienable by constitutional fiat. Government reclaimed and marshy lands of the public domain, being neither timber nor mineral lands, fell under the classification of public agricultural lands. The 1935 Constitution did not prohibit individuals and corporations from acquiring government reclaimed and marshy lands of the public domain that were classified as agricultural lands. On November 7, 1936, the National Assembly passed Commonwealth Act No. 141, the Public Land Act, which authorized the lease, but not the sale of reclaimed lands of the government to corporations and individuals. CA 141 continues to this day as the general law governing the classification and disposition of lands of the public domain other than timber and mineral lands. Commonwealth Act 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. 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 of to private parties by lease only and not otherwise.

CA 141 also requires congressional authority before lands under Sec 59 could be sold to parties. Congressional authority is needed to make sure that the government does not sell lands to private parties in violation of constitutional or statutory limitations. The 1973 Constitution prohibited the alienation of all natural resources with the exception of agricultural industrial, or commercial, residential, and resettlement lands of the public domain. Both the 1935 and 1973 Constitutions prohibited the alienation of all natural resources except agricultural lands of public domain. The 1973 Constitution however limited the alienation of lands of the public domain to individuals who were citizens of the Philippines. Private corporations could hold alienable lands of the public domain only through lease. The 1987 Constitution continues the 1973 Constitution policy, banning private corporations from acquiring any kind of alienable land of the public domain. However, likes the 1973 Constitution, it allows private corporations to hold alienable lands of the public domain only through lease. Such 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. The Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares have been reclaimed and the rest (592.15 hectares) are still submerged areas forming part of Manila Bay. Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEAs actual cost in partially reclaiming the Freedom Islands. AMARI will continue at its own expense, the reclamation of the Freedom Islands. Title to AMARIs share will be issued in the name of AMARI. Under the Amended JVA, AMARI will own a total of 367.5 hectares, titled in its name. Under Sect 2 of Article XII, the foreshore and submerged areas of Manila Bay are part of the lands of the public domain, waters and other natural resources and consequently owned by the State. 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 such as alienable or disposable and open to disposition or concession. Section 8 of CA 141 provides that only those lands shall be declared open to disposition or concession which have been officially delimited and classified. Section 3, Article XII states 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. Once declared to be 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. 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 the PEA. The Freedom Islands were not classified as alienable or disposable. There was also no declaration that the lands were not needed for public service. PEAs charter allows it to sell its reclaimed lands. It 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 the PEAs patrimonial lands. PEA however cannot sell any of its alienable or disposable lands of the public domain to private corporations since Section3, Article XII of the Constitution prohibits such sales. 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 twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. In sum, (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 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 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. (3) Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34 hectares 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 (4) Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares 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 which prohibits private corporations from acquiring any kind of alienable land of the public domain. LAUREL V GARCIA GUTIERREZ; July 25, 1990 FACTS The subject property in this case (Roppongi) is one of the four (4) properties in Japan acquired by the Philippine government under the Reparations Agreement entered into with Japan in 1956, the other lots being: Nampeidai Property , Kobe Commercial Property, and Kobe Residential Property. The properties are part of the indemnification to the Filipino people for their losses in life and property and their suffering during World War II. The Reparations Agreement provides that reparations valued at $550 million would be payable in twenty (20) years in accordance with annual schedules of procurements to be fixed by the Philippine and Japanese governments. Rep. Act No. 1789, the Reparations Law, prescribes the national policy on procurement and utilization of reparations and development loans. The Roppongi property was acquired from the Japanese government under the Second Year Schedule. On August 1986, President Aquino created a committee to study the disposition/utilization of Philippine government properties in Tokyo and Kobe, Japan. On July 1987, the President issued Executive Order No. 296 entitling nonFilipino citizens or entities to avail of reparations' capital goods and services in the event of sale, lease or disposition. Amidst opposition by various sectors, the Executive pushed through with its decision to sell the reparations properties starting with the Roppongi lot. Petitioners have filed two petitions to stop the sale of the Roppongi property. ISSUES 1. WON the Roppongi property and others of its kind can be alienated by the Philippine Government 2. WON Executive Order No. 296, which entitles non- Filipino citizens or entities to avail of reparations' capital goods and services, is constitutional. WON EO 296 violate the following constitutional provisions: a. constitutional mandate to conserve and develop the national patrimony stated in the Preamble of the 1987 Constitution b. reservation of the ownership and acquisition of alienable lands of the public domain to Filipino citizens c. there is preference for Filipino citizens in the grant of rights, privileges and concessions covering the national economy and patrimony d. WON there is protection given to Filipino enterprises against unfair competition and trade practices e. WON there is guarantee of the right of the people to information on all matters of public concern f. WON there is declaration of the state policy of full public disclosure of all transactions involving public interest

HELD 1. NO, the Roponggi property is public domain. As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be alienated. Its ownership is a special collective ownership for general use and enjoyment, an application to the satisfaction of collective needs, and resides in the social group. 2. The Court does not ordinarily pass upon constitutional questions unless these questions are properly raised in appropriate cases and their resolution is necessary for the determination of the case. The Court will not pass upon a constitutional question although properly presented by the record if the case can be disposed of on some other ground such as the application of a statute or general law. Decision Petitions are GRANTED. A writ of prohibition is issued enjoining the respondents from proceeding with the sale of the Roppongi property in Tokyo, Japan.