Chavez v. Public Estates Authority (PEA) Digest

Facts

In 1973, Government signed a contract with CDCP to reclaim certain foreshore and offshore areas of Manila Bay, as well as roads. Pres. Marcos Sr. created Philippine Estates Authority (PEA) with the task to reclaim the land and transfer the title of the said Manila Bay reclaimed lands from CDCP to PEA. After EDSA Revolution, Pres. Aquino transferred more coastal projects to PEA. The ROD of Parañaque issued the title of the “Freedom Islands” in Parañaque under PEA. The said islands have a total of 157,841 hectares. In 1995, PEA entered into a Joint Venture (JV) with AMARI to develop the Freedom Islands.

However, the 1996 Senate opposed on the following grounds:

This means that PEA is also transferring the reclaimed lands not classified as alienable and disposable (A&D) to AMARI;
TCT issued by Parañaque ROD is void;
JVA with AMARI is illegal.

In April 1998, Frank Chavez, as a taxpayer, filed a petition with RTC with prayer for a writ of preliminary injunction among others. His grounds: It is 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; Government to lose billions of pesos in the sale of the reclaimed lands to AMARI.

In 1999, JVA between PEA and AMARI was signed and approved by Pres. Estrada.

Chavez now prays it be declared void due to “constitutional and statutory grounds”

Issue: Is the transfer of reclaimed lands to a private corporation constitutional?

Ruling: No, because of the absence of two official acts:

A classification that these lands are alienable or disposable and open to disposition
A declaration that these lands are not needed for public service, lands reclaimed by PEA remain inalienable lands of the public domain.

Historical approach

Regalian doctrine: Reclaimed lands from submerged areas are owned by the State. Constitutions adopted this doctrine, substituting the State in behalf of the King, as the owner of all lands and waters of the public domain. The King, as the sovereign ruler and representative of the people, acquired and owned all lands and territories in the Philippines except those he disposed of by grant or sale to private individuals. time-honored 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.”
CA 141: authorized the lease, but not the sale, of reclaimed lands of the government to corporations and individuals. CA No. 141 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: reclaimed land belonged to the party undertaking the reclamation, provided the government issued the necessary permit. Public property also refers to property employed to develop the national wealth. This provision that “property when no longer for public use or defense becomes patrimonial” was not self-executing. The legislature, or the executive department pursuant to law, must declare the property no longer needed before the government could lease or alienate the property to private parties.
Constitutions until 1987: declares that all natural resources are “owned by the State,” and except for alienable agricultural lands of the public domain, natural resources cannot be alienated.

The rationale behind the Constitutional Ban on private acquisition of alienable lands of public domain:

LIMITATION ON INDIVIDUALS. Limitation on individuals from acquiring more than the allowed area of alienable lands of the public domain.
PREVENT CIRCUMVENTION. Those who already acquired the maximum area of alienable lands of the public domain could easily set up corporations to acquire more alienable public lands.
DECREASING AVAILABILITY OF ALIENABLE PUBLIC LANDS DUE TO POPULATION GROWTH.

Reclamation does not convert inalienable to alienable

Article XII of the Constitution: Only agricultural lands of public lands may be alienated. “lands of the public domain, waters . . . and other natural resources” and consequently “owned by the State.” As such, foreshore and submerged areas “shall not be alienated,” unless they are classified as “agricultural lands” of the public domain.
There must be a law of presidential proclamation classifying these reclaimed lands as alienable. There must be a law or presidential proclamation officially classifying these reclaimed lands as alienable or disposable and open to disposition or concession.
Alienable that may not be acquired? If they are reserved for public use or quasi-public use.

AMARI: Freedom Islands are private lands because CDCP, then a private corporation, reclaimed the islands

Basis of Amari: Article 5 of the Spanish Law of Waters of 1866 “Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by the provinces, pueblos or private persons, with proper permission shall become the property of the party constructing such works, unless otherwise provided by the terms of the grant of authority.” (Italics supplied)
Court: private parties could reclaim from the sea only with “proper permission” Private parties could own the reclaimed land only if not “otherwise provided by the terms of the grant of authority.” Thus, a private person reclaiming from the sea without permission from the State could not acquire ownership of the reclaimed land which would remain property of public dominion like the sea it replaced.
Court: Contract with CDCP was executed after 1973 Constitution. This Constitution barred private corporations from acquiring alienable lands of public domain.

PEA: Section 60 of CA No. 141: Reclaimed lands “shall not be alienated, encumbered, or otherwise disposed of in a manner affecting its title, except when authorized by Congress: . . . .”

“It is not for the President to convey real property of the government on his or her own sole will. Any such conveyance must be authorized and approved by a law enacted by the Congress. It requires executive and legislative concurrence.”
Conveyance of reclaimed lands only apply to individuals, not corporations.

Decision: JV must stop.

WHEREFORE, the petition of Chavez is GRANTED. The Public Estates Authority and Amari Coastal Bay Development Corporation are PERMANENTLY ENJOINED from implementing the Amended Joint Venture Agreement which is hereby declared NULL and VOID ab initio.