Chavez vs PEA

Parties Involved:
- Public Estates Authority (PEA for brevity)
- Amari Coastal Bay and Development Corporation (AMARI for brevity)
- Construction and Development Corporation of the Philippines (CDCP for brevity)
Other Terms:
Manila-Cavite Coastal Road and Reclamation Project (MCCRRP).
Joint Venture Agreement (JVA)
Facts:
In the 1970s, the government, through the Commissioner of Public Highways,
signed a contract with the CDCP to reclaim certain foreshore and offshore areas of
Manila Bay. also included the construction of Phases I and II of the Manila-Cavite
Coastal Road. CDCP obligated itself to carry out all the works in consideration of fifty
percent of the total reclaimed land.
On February 4, 1977, then Pres. Ferdinand E. Marcos issued PD No. 1084
creating PEA. PD No. 1084 tasked PEAs purpose is to reclaim land, including
foreshore and submerged areas, and to develop, improve, acquire, x x x lease and sell
any and all kinds of lands.[1] On the same date, then President Marcos issued
PD No. 1085 transferring to PEA the lands reclaimed in the foreshore and offshore of
the Manila Bay[2] under the Manila-Cavite Coastal Road and Reclamation Project
(MCCRRP).
In the.1980s, then Pres Corazon C. Aquino issued Special Patent No. 3517,
granting and transferring to PEA the parcels of land so reclaimed containing a total area
(1,915,894) square meters. As well as the issuance by, the Register of Deeds of the
Municipality of Pararaque TCTs of the three reclaimed islands known as the Freedom
Islands with a total land area 157.841 hectares.
On 1995, PEA entered into a Joint Venture Agreement (JVA for brevity) with
AMARI, a private corporation, to develop the Freedom Islands. The JVA also required
the reclamation of an additional 250 hectares of submerged areas

there was negotiation without public bidding. then President Fidel V. Ramos, through
then Executive Secretary Ruben Torres, approved the JVA. [6]
On November 29, 1996, then Senate President Ernesto Maceda delivered a
privilege speech in the Senate and denounced the JVA as the grandmother of all
scams. As a result, they conducted a joint investigation. conclusions of their report are:
(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.
President Fidel V. Ramos issued a Legal Task Force to conduct a study on the
legality of the JVA and such legality was upheld.
On April 27, 1998, petitioner Frank I. Chavez (Petitioner for brevity) as a taxpayer,
filed the instant Petition for Mandamus with Prayer for the Issuance of a Writ of
Preliminary Injunction and Temporary Restraining Order. Among others 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 prohibiting the sale of alienable lands of the public
domain to private corporations.
There were six issues involved. But only with regards to the sixth issue.
ISSUE:
Sixth issue: whether stipulations in the Amended JVA for the transfer to
AMARI of lands, reclaimed or to be reclaimed, violate the Constitution.
Court discussed: The Regalian Doctrine
The ownership of lands involved rooted in the Regalian doctrine which holds that
the State owns all lands and waters of the public domain. Under Spanish law,
ownership of all lands, territories and possessions in the Philippines passed to the
Spanish Crown - The King.
The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting,
however, the State, in lieu of the King, as the owner of all lands and waters of the public
domain. The Regalian doctrine is the foundation of the time-honored principle of land
ownership that all lands that not acquired from the Government , belong to the public
domain.[43] Article 339 of the Civil Code of 1889, which is now Article 420 of the Civil
Code of 1950, incorporated the Regalian doctrine.

Ownership and Disposition of Reclaimed Lands

The Spanish Law of Waters of 1866 was the first statutory law governing the
ownership and disposition of reclaimed lands in the Philippines. On May 18, 1907, the
Philippine Commission enacted Act No. 1654 which provided for the lease, but not the
sale, of reclaimed lands of the government to corporations and individuals.
Later, on November 1919, the Philippine Legislature approved Act No. 2874, the
Public Land Act, which authorized the lease, but not the sale, of reclaimed lands of
the government to corporations and individuals. On November 1936 came
Commonwealth Act No. 141, also known as the Public Land Act, which authorized the
lease, but not the sale, of reclaimed lands of the government to corporations and
individuals. which continues to this day as the general law governing the classification
and disposition of lands of the public domain.

The Spanish Law of Waters of 1866 and the Civil Code of 1889
Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all
waters within the maritime zone of the Spanish territory belonged to the public domain
for public use. The said law mentions:
Article 5. Lands reclaimed from the sea in consequence of works constructed by
the Stateshall become the property of the party constructing such works.
Under the Spanish Law of Waters, 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.
Article 339 of the Civil Code of 1889 defined property of public dominion as
follows:
Art. 339. Property of public dominion (consists two kinds)
1. That devoted to public use, such as roads, canals, rivers, torrents, ports
and bridges constructed by the State, riverbanks, shores, roadsteads, and
that of a similar character;

2. That belonging exclusively to the State which, without being of general

public use, is employed in some public service, or in the development of
the national wealth, such as walls, fortresses, and other works for the
defense of the territory, and mines, until granted to private individuals.
Article 341 of the same Code of 1889 governed the re-classification of property of public
dominion into private property, to wit:
Art. 341. Property of public dominion, when no longer devoted to public use, shall
become a part of the private property of the State.
There was also Act No. 1654 of the Philippine Commission
Which provides for the reclamation of the foreshore lands by the govt shall be retained
by the govt.And when the govt declares them not for public use, it can dispose of them
by leasing thru public bidding.
Act No. 2874, the Public Land Act provides for the classification of lands of public
domain such as alienable or disposable.
Again they can only be disposed only thru lease and not sale BUT. Section 56
(d) were the only lands for non-agricultural purposes the government could sell to
private parties. Thus, under Act No. 2874, the government could not sell government
reclaimed, foreshore and marshy lands to private parties, unless the legislature
passed a law allowing their sale

The Civil Code of 1950

The Civil Code of 1950 readopted substantially the definition of property of public
dominion found in the Civil Code of 1889. Articles 420 and 422 of the Civil Code of 1950
state that
Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and others of similar
character;
(2) Those which belong to the State, without being for public use, and are intended
for some public service or for the development of the national wealth.

x x x.
Art. 422. Property of public dominion, when no longer intended for public use or for
public service, shall form part of the patrimonial property of the State.
the government must formally declare that the property of public dominion is no
longer needed for public use or public service, before the same could be classified
as patrimonial property of the State. In the case of government reclaimed and marshy
lands of the public domain, the declaration of their being disposable, as well as the
manner of their disposition, is governed by the applicable provisions of CA No. 141.

We can now summarize our conclusions 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 still 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 hectares[110] 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 hectares[111] 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. Under Article 1409[112] of the Civil Code, contracts whose object or
purpose is contrary to law, or whose object is outside the commerce of men, are
inexistent and void from the beginning. The Court must perform its duty to defend and
uphold the Constitution, and therefore declares the Amended JVA null and void ab
initio

Rep. of the Phil vs Naguiat

Facts:

There is an application for registration of title to four (4) parcels of land located in
Panan, Botolan, Zambales by Celestina Naguiat that she is the owner of the said
parcels of land having acquired them by purchase from the LID Corporation which
likewise acquired the same from other persons and their predecessors-in-interest who
have been in possession thereof for more than thirty (30) years; and that to the best of
her knowledge, said lots suffer no mortgage or encumbrance of whatever kind nor is
there any person having any interest, legal or equitable, or in possession thereof.
Petitioners opposed said application that the applicants claim of ownership in fee simple
on the basis of Spanish title or grant can no longer be availed of . . .; and that the
parcels of land applied for are part of the public domain belonging to the Republic of the
Philippines not subject to private appropriation.
The RTC rendered judgement in favor of Naguiat and CA assailed the decision, that
such ownership is an open, continuous and exclusive occupation, and the lower courts
assumed that it was already alienable or disposable. Citing previous cases that, upon
the completion of the requisite period of possession, the lands in question cease to be
public land and become private property.
Petitioners contend in the case before the SC, that the lands are yet to be declassified
from forest or timber zone to alienable or disposable property.
Public forest lands or forest reserves, unless declassified and released by positive act of
the Government so that they may form part of the disposable agricultural lands of the
public domain, are not capable of private appropriation.
ISSUE:
whether or not the areas in question have ceased to have the status of forest or other
inalienable lands of the public domain.
RULING:
No. the Public Land Act (Sec. 6) and the Constitution (Sec 2 of Art. XII, Constitution, the
Regalian Doctrine) classifying lands of the public domain into agricultural, forest or
timber, mineral lands and national parks, do not necessarily refer to a large tract of
wooded land or an expanse covered by dense growth of trees and underbrush. As we
stated in Heirs of Amunategui [9]A forested area classified as forest land of the public domain does not lose such
classification simply because loggers or settlers have stripped it of its forest
cover. Parcels of land classified as forest land may actually be covered with grass or
planted to crops by kaingin cultivators or other farmers. Forest lands do not have to be
on mountains or in out of the way places. xxx. The classification is merely descriptive of

its legal nature or status and does not have to be descriptive of what the land actually
looks like.
The Court further ruled that all lands not appearing to be of private dominion remain
unalienable and belong to the State under Regalian Doctrine. the Court has made it a
point to stress, when appropriate, that declassification of forest and mineral lands,
as the case may be, and their conversion into alienable and disposable lands
need an express and positive act from the government.

Laurel vs Garcia
Facts:
The subject property in this case is one of the 4 properties in Japan acquired by the
Philippine government under the Reparations Agreement entered into with Japan,
the Roppongi property.. It consists of the land and building for the Chancery of the
Philippine Embassy. As intended, it became the site of the Philippine Embassy until the
latter was transferred to Nampeidai when the Roppongi building needed major repairs.
President Aquino created a committee to study the disposition/utilization of Philippine
government properties in Tokyo and Kobe, Japan.
The President issued EO 296 entitling non-Filipino citizens or entities to avail of
separations' capital goods and services in the event of sale, lease or disposition.
Issues: Whether or not the Chief Executive, her officers and agents, have the authority
and jurisdiction, to sell the Roppongi property.
Ruling: The nature of the Roppongi lot as property for public service is expressly
spelled out. It is dictated by the terms of the Reparations Agreement and the
corresponding contract of procurement which bind both the Philippine government and
the Japanese government.
There can be no doubt that it is of public dominion unless it is convincingly shown that
the property has become patrimonial. This, the respondents have failed to do.
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. The purpose is not to serve the State as a juridical person, but the
citizens; it is intended for the common and public welfare and cannot be the object of
appropration. (Taken from 3 Manresa, 66-69; cited in Tolentino, Commentaries on the
Civil Code of the Philippines, 1963 Edition, Vol. II, p. 26).

The applicable provisions of the Civil Code are:

ART. 419. Property is either of public dominion or of private ownership.
ART. 420. The following things are property of public dominion
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks shores roadsteads, and others of similar
character;
(2) Those which belong to the State, without being for public use, and are intended for
some public service or for the development of the national wealth.
ART. 421. All other property of the State, which is not of the character stated in the
preceding article, is patrimonial property.
The Roppongi property is correctly classified under paragraph 2 of Article 420 of the
Civil Code as property belonging to the State and intended for some public service.
The fact that the Roppongi site has not been used for a long time for actual
Embassy service does not automatically convert it to patrimonial property. Any
such conversion happens only if the property is withdrawn from public use (Cebu
Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]). A property continues to
be part of the public domain, not available for private appropriation or ownership until
there is a formal declaration on the part of the government to withdraw it from being
such.
And Under Sec 79 (f) and Sec 48 Book 1 Administrative Code conveyances by the govt
as party need to be authorized and approved by law passed by Congress. It is not upon
the President to convey valuable real property of the government on his or her
own sole will.

Sec of DENR vs. Yap

Facts:

On April 14, 1976, (DENR) approved the National Reservation Survey of

Boracay Island,[6] which identified several lots as being occupied or claimed by
named persons.[7]
On November 10, 1978, then President Ferdinand Marcos issued
Proclamation No. 1801[8] declaring Boracay Island, among other islands, caves and
peninsulas in the Philippines, as tourist zones and marine reserves under the
administration of the Philippine Tourism Authority (PTA).
Mayor Jose S. Yap questioned Proclamation No. 1801 and PTA Circular No
3-82, et al filed a petition for declaratory relief as it raised doubts on their right to
secure titles over their occupied lands. They declared that they themselves, or
through their predecessors-in-interest, had been in open, continuous, exclusive,
and notorious possession and occupation in Boracay since June 12, 1945, or
earlier since time immemorial. They declared their lands for tax purposes and paid
realty taxes on them[
Respondents-claimants posited that Proclamation No. 1801 and its
implementing Circular did not place Boracay beyond the commerce of man. Since
the Island was classified as a tourist zone, it was susceptible of private
ownership. Under Section 48(b) of Commonwealth Act (CA) No. 141, otherwise
known as the Public Land Act, they had the right to have the lots registered in
their names through judicial confirmation of imperfect titles.
The RTC ruled in favor of Respondents that neither Proclamation No. 1801

nor PTA Circular No. 3-82 mentioned that lands in Boracay were
inalienable or could not be the subject of disposition. [18] The
Circular itself recognized private ownership of lands. [19]The trial
court cited Sections 87[20] and 53[21] of the Public Land Act as basis
for acknowledging private ownership of lands in Boracay and that
only those forested areas in public lands were declared as part of
the forest reserve. CA assailed the decision.

Issue:

Won Respondents have the right to acquire title to their occupied

lands in Boracay
Ruling:
NO. there was no such law order or proclamation classifying boracay into an
agricultural land susceptible to be alienated.
The court applied the Regalian Doctrine and the power of the executive to classify
lands of public domain
In the 1935 Constitution, the lands are classified into: agricultural or forest or timber.
In the 1973 Constitution it is further classified into: industrial, commercial, residential,
mineral and such other classes provided by law. Then the 1987 Constitution

reverted to the 1935 Constitution classification with one addition:

national parks. Of these, only agricultural lands may be
alienated.[44] Prior to Proclamation No. 1064 of May 22,
2006, Boracay Island had never been
expressly
and
administratively classified under any of these grand
divisions. Boracay was an unclassified land of the public domain.
Such was considered as public forest.
In the 1935 Constitution, CA No. 141 amended Act No. 2874. To
this day, CA No. 141, as amended, remains as the existing
general law governing the classification and disposition of lands of
the public domain other than timber and mineral lands and
privately owned lands which reverted to the State.
the burden of proof in overcoming the presumption of State
ownership of the lands of the public domain is on the person
applying for registration (or claiming ownership), must prove that
the land subject of the application is alienable or disposable.
However there must be the essential requisite of the existing
positive act of the government declaring land of the public
domain as alienable and disposable.
The continued possession and considerable investment of private
claimants do not automatically give them a vested right in

Boracay. Nor do these give them a right to apply for a title to the
land they are presently occupying.