Chavez vs Public Estate Authority

FACTS
On November 20, 1973, the government, through the Commission on Public Highways, signed a
contract with the Construction and Development Corporation of the Phils (CDCP)
On 1977 PD 1084 was issued by Marcos
o Creation of PEA
o Tasking PEA to:
Reclaim land, including foreshore and submerged areas
Develop, improve, acquire, lease and sell any and all kinds of lands
PD 1085 (issued on the same day as above)
o Transferring to PEA the lands reclaimed in the foreshore and offshore of Manila Bay
included in the Manila-Cavite Coastal Road and Reclamation Road (MCCRRP)
Marcos issued a Memorandum directing PEA to amend its contract with CDCP so that all future
works in MCCRRP shall be funded and owned by PEA
MOA between PEA and CDCP
o CDCP to undertake all reclamation, construction, and such other works in the
MCCRRP as may be agreed upon by the parties, to be paid on a unit price/lump sum
basis
o All financial requirement for such works shall be provided by PEA
o CDCP shall give up all its development rights and thereby agrees 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 the MCCRRP which have not yet been sold,
transferred or otherwise disposed by the CDCP, which consists approximately of
99,473 sq meters.
Aquino signed Special Patent granting and transferring to PEA parcels of land so reclaimed under
the MCCRRP containing a total area of 1,915,894 sq. meters.
Paraaque Certificates of Title to PEA covering Freedom Islands (southern portion of MCCR)
1,578,441 sq meters.
PEA entered into a JVA with AMARI to
o Develop Freedom Islands
o Reclaim an additional 250 hectares of submerged areas surrounding these islands to
complete the configuration in the Master Plan of the MCCRRP without public
bidding
Ramos approved the JVA through a ES Ruben Torres
Senate President Maceda delivered a speech: Grandmother of all scams
Investigation was conducted by the Senate
Senate Report No. 560:
o 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, therefore,
PEA cannot alienate
o Certificates of title covering the Freedom Islands are thus VOID
o JVA is illegal
Ramos issued Presidential Administrative Order creating a Legal Task Force to conduct a study
on the legality of the JVA in view of the Senate Report upheld the legality of the JVA
PDI and Today published reports that there were ongoing renegotiations between PEA and
AMARI under an order issued by Ramos
Zulueta and Chaves both filed a Petition for Preliminary Injunctions
o contending that the government is to lose billions of pesos in the sale in the sale of
PEA of the reclaimed lands to AMARI
o prayed that the terms of the renegotiation be made available to the public invoking
the right of the people to information on matters of public concern

PEA and AMARi signed the AJVA
Estrada approved the AJVA
The AJVA seeks to transfer title and ownership to 367.5 hectares of reclaimed lands and
submerged areas of Manila Bay to a single private corporation

AJVA
- Covers a reclamation area of 750 hectares. Only 157.84 hectares have been reclaimed, and the
rest of the 592.15 hectares are still submerged areas
- AMARI will reimburse PEA 1B for its actual cost in partially reclaiming the Freedom Island
- AMARI will complete, at its own expense, the reclamation of the Freedom Island
- AMARI will further shoulder all the reclamation costs of all the other areas still to be reclaimed
(592.15 hec)
- AMARI and PEA share 70% - 30% 367.5 hec will go to AMARI

ISSUES

I. Whether or not the principal relief are moot or academic because of subsequent
events

Prayer
o PEA to publicly disclose the terms and conditions of the on-going negotiations for a
new agreement.
o Enjoin PEA from privately entering into and/or executing any new agreement with
AMARI
MOOT AND ACADEMIC: PEA provided them with a signed AJVA containing the terms and
agreements & the president approved the amended AJVA
Petitioners principal basis: Section 3, Article XII
Norm: Agricultural lands are being sold to private corporations which acquired the lands from
private parties transferors calmed or could claim the right to judicial confirmation of their
imperfect titles
CASE: AMARI seeks to acquire from PEA, a public corporation, reclaimed lands and submerged
areas for non-agricultural purposes by purchase under PD 1084 (Charter of PEA) and Title II of
CA No. 141

II. Whether or not the AJVA for the transfer to AMARI of lands, reclaimed or to be
reclaimed violated the Constitution.
Basis:
1. Art. XII, Sec. 2
2. Regalian Doctrine
- State owns all lands, territories and waters of the public domain
- All lands that were not acquired from the Government, either by (1) purchase or
(2) grant, belong to the public domain
3. Spanish Law of Waters of 1866
- First statutory law governing the ownership and disposition of reclaimed lands in
the Philippines
- Allowed reclamation of land
- 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
4. CC of 1889
- Allowed for reclassification of property of public dominion into private property
- The legislative or executive must declare the property no longer needed for
public use or territorial defense before the government could lease or alienate the
property to private parties.
5. Act No. 1654(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
- Public bidding
- Sui generis available only for lease, unlike other public lands
6. Act No. 2874 (1919) Public Land Act
- Provided for the lease, but not the sale, of reclaimed lands of the government to
corporations and individuals
- Governor general must formally declare that the lands were not necessary for
public service, because government reclaimed, foreshore and marshy public
lands for non-agricultural purposes retain their inherent potential as areas for
public service
- Lands reclaimed from the sea by private parties with govt permission remained
private lands
7. 1935 Constitution
- Barred the alienation of all natural resources except public agricultural lands
foreshore lands became inalienable, available only for lease for 25 years
renewable for another 25 years
- --
8. Act No. 141 (1936) Public Land Act continues to this day as the general law
governing the classification and disposition of lands of the public domain
- Provided for the lease, but not the sale, of reclaimed lands of the government to
corporations and individuals
- President, upon recommendation of the Secretary of Agriculture and Commerce,
to classify lands into alienable/disposable lands of the public domain
- President, upon recommendation by the Secretary of Agriculture and Commerce,
to declare what lands are open to disposition/concession
- There must be no law reserving these lands for public or quasi-public uses
- Still prohibits the sale of government reclaimed, foreshore and marshy
disposable lands of public domain lease only
- 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 FOR SUCH SALE
9. PD 1084 PEA Charter
- Reclaim lands
- Lease and sell any and all kinds of lands

Foreshore and submerged lands indisputably belong to the public domain
Foreshore and submerged reclaimed classified as (agricultural lands) alienable lands
open to disposition declared no longer needed for public service
In order for PEA to SELL its reclaimed foreshore and submerged alienable lands of the
public domain, there must be a LEGISLATIVE AUTHORITY empowering PEA to sell these
lands.


Purpose of Ban:
- Equitably diffuse land ownership or to encourage owner-cultivatorship and the
economic family-size farm, Huge landholdings by corporations or private
persons had spawned social unrest.

III. Whether AMARI, a private corporation can acquire and own under the AJVA 367.5 hec
of the reclaimed foreshore and submerged areas in Manila Bat in view of Sec 2 & 3,
Art. XI?
Foreshore and submerged areas shall not be alienable, unless they are classified as
agricultural lands of the public domain
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 (as per
Sec 6 of Act 141, Pres. can classify lands)
Moreover, these lands cannot be classified as alienable or disposable if the law has
reserved them for public or quasi-public use
Reclaimed lands can be used as payment in kind only if the reclaimed land is first classified
as alienable or disposable land open to disposition, and then declared no longer needed for
public service
PD 1085 + Aquinos issuance of a special patent = OFFICIAL PROCLAMATION classifying
Freedom Islands as alienable
JVA covers not only the Freedom Islands
There is NO LEGISLATIVE or PRESIDENTIAL act classifying these submerged lands as
alienable or disposable lands of the pub domain open to disposition
Part of the reclaimed foreshore and submerged lands held by PEA would actually be
needed for public use or service since many of the functions imposed on PEA by its charter
constitute essential public service
Section 3 of EO 525, by declaring that all lands reclaimed by PEA shall belong to or be
owned by the PEA could not automatically operate to classify inalienable lands into
alienable or disposable lands of the public domain. Otherwise, reclaimed foreshore and
submerged lands of the public domain would automatically become alienable once
reclaimed by PEA, whether or not classified as alienable or disposable.
DENR decides whether areas under water, like foreshore or submerged areas of Manila
Ba, should be reclaimed or not PEA needs authorization from DENR before it can
undertake reclamation
DENR decides whether reclaimed lands of PEA should be classified as alienable
recommends to the Pres for the issuance of a Proclamation
DENR Sec. Factoran countersigned Special Patent
There is no express authority either on PD 1085 or EO 525 for PEA to sell its reclaimed
lands PEA may sell:
o Alienable or disposable lands of the pub domain to private individuals

CONCLUSION:
1. Reclaimed land of Freedom Island are alienable lands of the public domain
2. 592.15 hec of submerged areas in MB remain inalienable until classified otherwise
3. 77.34 hec of the Freedom Island, transferred to AMARI, is void Sec. 3, Art XII
4. Transfer of 290.156 hec of still submerged areas in MB is void Sec. 2, Art XII