Macalinao, Romielyn P.

Subject: Constitutional Law 1

Topic: Legal Standinng
Title: CHAVEZ vs PUBLIC ESTATE AUTHORITY
Reference: G.R. No. 133250

July 9, 2002

FACTS
Last 1973, the government through the Commission of
Public Highways signed a contract with the Construction and
Development Corporation of the Philippines (CDCP) to reclaim
certain foreshore and offshore areas of Manila Bay.
Four years later, president Marcos issued PD No. 1084
creating the PEA, which was tasked to reclaim land, including
foreshore and submerged areas and to develop, improve, acquire
lease and sell any and all kinds of lands. On the same date,
President Marcos issued PD. 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).
President Marcos then issued a memorandum ordering PEA
to amend its contract with CDCP which stated that CDCP shall
transfer in favor of PEA the areas reclaimed by CDCP in the
MCCRRP.
Then in 1988 president Aquino issued Special Patent
granting and transferring to PEA parcels of land so reclaimed under
the MCCRRP. Subsequently she transferred in the name of PEA the
three reclaimed islands known as the Freedom Islands.
In 1995, PEA entered into a Joint Venture Agreement (JVA)
with AMARI, a private corporation, to develop the Freedom Islands

and this was done without public bidding then president Ramos
through Executive Secretary Ruben Torres approved the JVA.
Consequently, in 1996 Senate Pres.Maceda delivered a
privileged speech in the Senate and denounced the JVA as the
grandmother of all scams. As a result, the Senate conducted
investigations. Among the conclusions were:
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
President Ramos created the Legal Task Force to conduct a
study on the legality of the JVA in view of the Senate Committee
report.
PEA Director Nestor Kalaw and PEA Chairman ArsenioYulo
and former navy officer Sergio Cruz were members of the
negotiating panel. Frank Chavez filed petition for Mandamus stating
that the government stands to lose billions of pesos in the sale by
PEA of the reclaimed lands to AMARI and prays that PEA publicly
disclose the terms of the renegotiations of JVA. He cited that the
sale to AMARI is in violation of Article 12, Sec. 3 prohibiting sale of
alienable lands of the public domain to private corporations and
Article 2 Section 28 and Article 3 Sec. 7 of the Constitution on the
right to information on matters of public concern

Then PEA and AMARI signed Amended JVA which Pres.

Estrada approved.

ISSUES
1.

Whether or not the principal reliefs prayed for in the petition

are moot and academic because of the subsequent events?

2.

Whether or not the petition merits dismissal for failure to

observe the principle governing the hierarchy of courts?

3.

Whether or not the petition merits dismissal for non-

exhaustion of administrative remedies?

4.

Whether or not petitioner has locus standi to bring this suit?

5.

Whether or not the constitutional right to information

includes official information on on-going negotiations before a final

agreement?
RULINGS
1.

The prayer to enjoin the signing of the Amended JVA on

constitutional

grounds

necessarily

includes

preventing

its

implementation if in the meantime PEA and AMARI have signed one

in violation of the Constitution and if already implemented, to annul
the effects of an unconstitutional contract
2.

The principle of hierarchy of courts applies generally to cases

involving factual questions. The instant case raises constitutional

issues of transcendental importance to the public

3.

The principle of exhaustion of administrative remedies does

not apply when the issue involved is a purely legal or constitutional

question
4.

Petitioner has standing if petition is of transcendental public

importance and as such, there is the right of a citizen to bring a

taxpayers

suit

on

these

matters

of

transcendental

public

importance, the instant petition is anchored on the right of the

people to information and access to official records, documents and
papers a right guaranteed under Section 7, Article III of the 1987
Constitution. Petitioner, a former solicitor general, is a Filipino
citizen. Because of the satisfaction of the two basic requisites laid
down by decisional law to sustain petitioner's legal standing, i.e. (1)
the enforcement of a public right (2) espoused by a Filipino citizen,
we rule that the petition at bar should be allowed."
5.

The

constitutional

right

to

information

includes

official

information on on-going negotiations before a final contract and

must therefore constitute definite propositions by the government
and

should

not

cover

recognized

exceptions

like

privileged

information, military and diplomatic secrets and similar matters

affecting national security and public order.
The State policy of full transparency in all transactions
involving public interest reinforces the peoples right to information
on matters of public concern. PEA must prepare all the data and
disclose them to the public at the start of the disposition process,
long before the consummation of the contract. While the evaluation
or review is on-going, there are no official acts, transactions, or
decisions on the bids or proposals but once the committee makes

its official recommendation, there arises a definite proposition on

the part of the government.