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,
Paraaque 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.