+ All Categories
Home > Documents > amari case.doc

amari case.doc

Date post: 03-Apr-2018
Category:
Upload: officeofrfsmra
View: 234 times
Download: 0 times
Share this document with a friend

of 29

Transcript
  • 7/29/2019 amari case.doc

    1/29

    G.R. No. 133250 July 9, 2002FRANCISCO I. CHAVEZ, petitioner,vs.PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAYDEVELOPMENT CORPORATION, respondents.CARPIO, J. :This is an original Petition for Mandamus with prayer for a writ ofpreliminary injunction and a temporary restraining order. The petition seeksto compel the Public Estates Authority ("PEA" for brevity) to disclose all factson PEA's then on-going renegotiations with Amari Coastal Bay andDevelopment Corporation ("AMARI" for brevity) to reclaim portions of ManilaBay. The petition further seeks to enjoin PEA from signing a new agreementwith AMARI involving such reclamation.

    The Facts

    On November 20, 1973, the government, through the Commissioner ofPublic Highways, signed a contract with the Construction and DevelopmentCorporation of the Philippines ("CDCP" for brevity) to reclaim certainforeshore and offshore areas of Manila Bay. The contract also included theconstruction of Phases I and II of the Manila-Cavite Coastal Road. CDCPobligated itself to carry out all the works in consideration of fifty percent ofthe total reclaimed land.

    On February 4, 1977, then President Ferdinand E. Marcos issued PresidentialDecree No. 1084 creating PEA. PD No. 1084 tasked PEA "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 Presidential Decree No. 1085 transferring to

    PEA the "lands reclaimed in the foreshore and offshore of the Manila Bay"2under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP).

    On December 29, 1981, then President Marcos issued a memorandumdirecting PEA to amend its contract with CDCP, so that "[A]ll future works inMCCRRP x x x shall be funded and owned by PEA." Accordingly, PEA andCDCP executed a Memorandum of Agreement dated December 29, 1981,which stated:

    "(i) CDCP shall undertake all reclamation, construction, and suchother works in the MCCRRP as may be agreed upon by the parties,to be paid according to progress of works on a unit price/lump sum

    basis for items of work to be agreed upon, subject to priceescalation, retention and other terms and conditions provided for inPresidential Decree No. 1594. All the financing required for suchworks shall be provided by PEA.

    x x x

    (iii) x x x CDCP shall give up all its development rights and herebyagrees 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 landreclaimed by CDCP in the MCCRRP as of December 30, 1981 whichhave not yet been sold, transferred or otherwise disposed of byCDCP as of said date, which areas consist of approximately Ninety-Nine Thousand Four Hundred Seventy Three (99,473) squaremeters in the Financial Center Area covered by land pledge No. 5and approximately Three Million Three Hundred Eighty TwoThousand Eight Hundred Eighty Eight (3,382,888) square meters ofreclaimed areas at varying elevations above Mean Low Water Levellocated outside the Financial Center Area and the FirstNeighborhood Unit."3

    On January 19, 1988, then President Corazon C. Aquino issued SpecialPatent No. 3517, granting and transferring to PEA "the parcels of land soreclaimed under the Manila-Cavite Coastal Road and Reclamation Project(MCCRRP) containing a total area of one million nine hundred fifteenthousand eight hundred ninety four (1,915,894) square meters."Subsequently, on April 9, 1988, the Register of Deeds of the Municipality ofParaaque issued Transfer Certificates of Title Nos. 7309, 7311, and 7312,in the name of PEA, covering the three reclaimed islands known as the"Freedom Islands" located at the southern portion of the Manila-CaviteCoastal Road, Paraaque City. The Freedom Islands have a total land areaof One Million Five Hundred Seventy Eight Thousand Four Hundred andForty One (1,578,441) square meters or 157.841 hectares.

    On April 25, 1995, PEA entered into a Joint Venture Agreement ("JVA" forbrevity) with AMARI, a private corporation, to develop the Freedom Islands.The JVA also required the reclamation of an additional 250 hectares ofsubmerged areas surrounding these islands to complete the configuration inthe Master Development Plan of the Southern Reclamation Project-MCCRRP.PEA and AMARI entered into the JVA through negotiation without publicbidding.4 On April 28, 1995, the Board of Directors of PEA, in its ResolutionNo. 1245, confirmed the JVA.5 On June 8, 1995, then President Fidel V.Ramos, through then Executive Secretary Ruben Torres, approved the JVA.6

  • 7/29/2019 amari case.doc

    2/29

    On November 29, 1996, then Senate President Ernesto Maceda delivered aprivilege speech in the Senate and denounced the JVA as the "grandmotherof all scams." As a result, the Senate Committee on GovernmentCorporations and Public Enterprises, and the Committee on Accountability ofPublic Officers and Investigations, conducted a joint investigation. TheSenate Committees reported the results of their investigation in SenateCommittee Report No. 560 dated September 16, 1997.7 Among theconclusions of their report are: (1) the reclaimed lands PEA seeks to transfer

    to AMARI under the JVA are lands of the public domain which thegovernment has not classified as alienable lands and therefore PEA cannotalienate these lands; (2) the certificates of title covering the FreedomIslands are thus void, and (3) the JVA itself is illegal.

    On December 5, 1997, then President Fidel V. Ramos issued PresidentialAdministrative Order No. 365 creating a Legal Task Force to conduct a studyon the legality of the JVA in view of Senate Committee Report No. 560. Themembers of the Legal Task Force were the Secretary of Justice,8 the ChiefPresidential Legal Counsel,9 and the Government Corporate Counsel.10 TheLegal Task Force upheld the legality of the JVA, contrary to the conclusionsreached by the Senate Committees.11

    On April 4 and 5, 1998, the Philippine Daily Inquirerand Todaypublishedreports that there were on-going renegotiations between PEA and AMARIunder an order issued by then President Fidel V. Ramos. According to thesereports, PEA Director Nestor Kalaw, PEA Chairman Arsenio Yulo and retiredNavy Officer Sergio Cruz composed the negotiating panel of PEA.

    On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition forProhibition with Application for the Issuance of a Temporary RestrainingOrder and Preliminary Injunctiondocketed as G.R. No. 132994 seeking tonullify the JVA. The Court dismissed the petition "for unwarranted disregardof judicial hierarchy, without prejudice to the refiling of the case before theproper court."12

    On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity) as ataxpayer, filed the instant Petition for Mandamus with Prayer for theIssuance of a Writ of Preliminary Injunction and Temporary RestrainingOrder. Petitioner contends the government stands to lose billions of pesos inthe sale by PEA of the reclaimed lands to AMARI. Petitioner prays that PEApublicly disclose the terms of any renegotiation of the JVA, invoking Section28, Article II, and Section 7, Article III, of the 1987 Constitution on the rightof the people to information on matters of public concern. Petitioner assailsthe sale to AMARI of lands of the public domain as a blatant violation ofSection 3, Article XII of the 1987 Constitution prohibiting the sale ofalienable lands of the public domain to private corporations. Finally,

    petitioner asserts that he seeks to enjoin the loss of billions of pesos inproperties of the State that are of public dominion.

    After several motions for extension of time,13 PEA and AMARI filed theirComments on October 19, 1998 and June 25, 1998, respectively.Meanwhile, on December 28, 1998, petitioner filed an Omnibus Motion: (a)to require PEA to submit the terms of the renegotiated PEA-AMARI contract;(b) for issuance of a temporary restraining order; and (c) to set the case for

    hearing on oral argument. Petitioner filed a Reiterative Motion for Issuanceof a TRO dated May 26, 1999, which the Court denied in a Resolution datedJune 22, 1999.

    In a Resolution dated March 23, 1999, the Court gave due course to thepetition and required the parties to file their respective memoranda.

    On March 30, 1999, PEA and AMARI signed the Amended Joint VentureAgreement ("Amended JVA," for brevity). On May 28, 1999, the Office of thePresident under the administration of then President Joseph E. Estradaapproved the Amended JVA.

    Due to the approval of the Amended JVA by the Office of the President,petitioner now prays that on "constitutional and statutory grounds therenegotiated contract be declared null and void."14

    The IssuesThe issues raised by petitioner, PEA15 and AMARI16 are as follows:

    I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THEPETITION ARE MOOT AND ACADEMIC BECAUSE OF SUBSEQUENTEVENTS;

    II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TOOBSERVE THE PRINCIPLE GOVERNING THE HIERARCHY OFCOURTS;

    III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF ADMINISTRATIVE REMEDIES;

    IV. WHETHER PETITIONER HAS LOCUS STANDITO BRING THISSUIT;

  • 7/29/2019 amari case.doc

    3/29

    V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATIONINCLUDES OFFICIAL INFORMATION ON ON-GOINGNEGOTIATIONS BEFORE A FINAL AGREEMENT;

    VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINTVENTURE AGREEMENT FOR THE TRANSFER TO AMARI OFCERTAIN LANDS, RECLAIMED AND STILL TO BE RECLAIMED,VIOLATE THE 1987 CONSTITUTION; AND

    VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISINGTHE ISSUE OF WHETHER THE AMENDED JOINT VENTUREAGREEMENT IS GROSSLY DISADVANTAGEOUS TO THEGOVERNMENT.

    The Court's RulingFirst issue: whether the principal rel iefs prayed for in the petition are

    moot and academic because of subsequent events .The petition prays that PEA publicly disclose the "terms and conditions ofthe on-going negotiations for a new agreement." The petition also praysthat the Court enjoin PEA from "privately entering into, perfecting and/orexecuting any new agreement with AMARI."

    PEA and AMARI claim the petition is now moot and academic becauseAMARI furnished petitioner on June 21, 1999 a copy of the signed AmendedJVA containing the terms and conditions agreed upon in the renegotiations.Thus, PEA has satisfied petitioner's prayer for a public disclosure of therenegotiations. Likewise, petitioner's prayer to enjoin the signing of theAmended JVA is now moot because PEA and AMARI have already signed theAmended JVA on March 30, 1999. Moreover, the Office of the President hasapproved the Amended JVA on May 28, 1999.

    Petitioner counters that PEA and AMARI cannot avoid the constitutional issueby simply fast-tracking the signing and approval of the Amended JVA beforethe Court could act on the issue. Presidential approval does not resolve theconstitutional issue or remove it from the ambit of judicial review.

    We rule that the signing of the Amended JVA by PEA and AMARI and itsapproval by the President cannot operate to moot the petition and divest theCourt of its jurisdiction. PEA and AMARI have still to implement theAmended JVA. The prayer to enjoin the signing of the Amended JVA onconstitutional grounds necessarily includes preventing its implementation ifin the meantime PEA and AMARI have signed one in violation of the

    Constitution. Petitioner's principal basis in assailing the renegotiation of theJVA is its violation of Section 3, Article XII of the Constitution, whichprohibits the government from alienating lands of the public domain toprivate corporations. If the Amended JVA indeed violates the Constitution, itis the duty of the Court to enjoin its implementation, and if alreadyimplemented, to annul the effects of such unconstitutional contract.

    The Amended JVA is not an ordinary commercial contract but one which

    seeks to transfer ti tle and ownership to 367.5 hectares of reclaimedlands and submerged areas of Mani la Bay to a single privatecorporation . It now becomes more compelling for the Court to resolve theissue to insure the government itself does not violate a provision of theConstitution intended to safeguard the national patrimony. Superveningevents, whether intended or accidental, cannot prevent the Court fromrendering a decision if there is a grave violation of the Constitution. In theinstant case, if the Amended JVA runs counter to the Constitution, the Courtcan still prevent the transfer of title and ownership of alienable lands of thepublic domain in the name of AMARI. Even in cases where superveningevents had made the cases moot, the Court did not hesitate to resolve thelegal or constitutional issues raised to formulate controlling principles toguide the bench, bar, and the public.17

    Also, the instant petition is a case of first impression. All previous decisionsof the Court involving Section 3, Article XII of the 1987 Constitution, or itscounterpart provision in the 1973 Constitution,18 covered agricultural landssold to private corporations which acquired the lands from private parties.The transferors of the private corporations claimed or could claim the rightto judicial confirmation of their imperfect ti tles 19 under Title II ofCommonwealth Act. 141 ("CA No. 141" for brevity). In the instant case,AMARI seeks to acquire from PEA, a public corporation, reclaimed lands andsubmerged areas for non-agricultural purposes by purchase under PD No.1084 (charter of PEA) and Title III of CA No. 141. Certain undertakings byAMARI under the Amended JVA constitute the consideration for the

    purchase. Neither AMARI nor PEA can claim judicial confirmation of theirtitles because the lands covered by the Amended JVA are newly reclaimed orstill to be reclaimed. Judicial confirmation of imperfect title requires open,continuous, exclusive and notorious occupation of agricultural lands of thepublic domain for at least thirty years since June 12, 1945 or earlier.Besides, the deadline for filing applications for judicial confirmation ofimperfect title expired on December 31, 1987.20

    Lastly, there is a need to resolve immediately the constitutional issue raisedin this petition because of the possible transfer at any time by PEA to AMARIof title and ownership to portions of the reclaimed lands. Under theAmended JVA, PEA is obligated to transfer to AMARI the latter's seventypercent proportionate share in the reclaimed areas as the reclamation

  • 7/29/2019 amari case.doc

    4/29

    progresses. The Amended JVA even allows AMARI to mortgage at any timethe entire reclaimed area to raise financing for the reclamation project.21

    Second issue: whether the petition merits dismissal for fai l ing toobserve the principle governing the hierarchy of courts .

    PEA and AMARI claim petitioner ignored the judicial hierarchy by seekingrelief directly from the Court. The principle of hierarchy of courts appliesgenerally to cases involving factual questions. As it is not a trier of facts, theCourt cannot entertain cases involving factual issues. The instant case,however, raises constitutional issues of transcendental importance to thepublic.22 The Court can resolve this case without determining any factualissue related to the case. Also, the instant case is a petition for mandamuswhich falls under the original jurisdiction of the Court under Section 5,Article VIII of the Constitution. We resolve to exercise primary jurisdictionover the instant case.

    Third issue: whether the petition merits dismissal for non-exhaustionof administrative remedies.

    PEA faults petitioner for seeking judicial intervention in compelling PEA todisclose publicly certain information without first asking PEA the neededinformation. PEA claims petitioner's direct resort to the Court violates theprinciple of exhaustion of administrative remedies. It also violates the rulethat mandamus may issue only if there is no other plain, speedy andadequate remedy in the ordinary course of law.

    PEA distinguishes the instant case from Taada v. Tuvera23 where the Courtgranted the petition for mandamus even if the petitioners there did notinitially demand from the Office of the President the publication of thepresidential decrees. PEA points out that in Taada, the ExecutiveDepartment had an aff irmative statutory duty under Article 2 of the CivilCode

    24

    and Section 1 of Commonwealth Act No. 63825

    to publish thepresidential decrees. There was, therefore, no need for the petitioners inTaada to make an initial demand from the Office of the President. In theinstant case, PEA claims it has no affirmative statutory duty to disclosepublicly information about its renegotiation of the JVA. Thus, PEA assertsthat the Court must apply the principle of exhaustion of administrativeremedies to the instant case in view of the failure of petitioner here todemand initially from PEA the needed information.

    The original JVA sought to dispose to AMARI public lands held by PEA, agovernment corporation. Under Section 79 of the Government AuditingCode,26 the disposition of government lands to private parties requires publicbidding. PEA was under a positive legal duty to disclose to the publ ic

    the terms and conditions for the sale of i ts lands . The law obligated PEAto make this public disclosure even without demand from petitioner or fromanyone. PEA failed to make this public disclosure because the original JVA,like the Amended JVA, was the result of a negotiated contract, not of apublic bidding. Considering that PEA had an affirmative statutory duty tomake the public disclosure, and was even in breach of this legal duty,petitioner had the right to seek direct judicial intervention.

    Moreover, and this alone is determinative of this issue, the principle ofexhaustion of administrative remedies does not apply when the issueinvolved is a purely legal or constitutional question.27 The principal issue inthe instant case is the capacity of AMARI to acquire lands held by PEA inview of the constitutional ban prohibiting the alienation of lands of the publicdomain to private corporations. We rule that the principle of exhaustion ofadministrative remedies does not apply in the instant case.

    Fourth issue: whether petitioner has locus standi to bring this suitPEA argues that petitioner has no standing to institute mandamusproceedings to enforce his constitutional right to information without a

    showing that PEA refused to perform an affirmative duty imposed on PEA bythe Constitution. PEA also claims that petitioner has not shown that he willsuffer any concrete injury because of the signing or implementation of theAmended JVA. Thus, there is no actual controversy requiring the exercise ofthe power of judicial review.

    The petitioner has standing to bring this taxpayer's suit because the petitionseeks to compel PEA to comply with its constitutional duties. There are twoconstitutional issues involved here. First is the right of citizens to informationon matters of public concern. Second is the application of a constitutionalprovision intended to insure the equitable distribution of alienable lands ofthe public domain among Filipino citizens. The thrust of the first issue is tocompel PEA to disclose publicly information on the sale of government landsworth billions of pesos, information which the Constitution and statutory lawmandate PEA to disclose. The thrust of the second issue is to prevent PEAfrom alienating hundreds of hectares of alienable lands of the public domainin violation of the Constitution, compelling PEA to comply with aconstitutional duty to the nation.

    Moreover, the petition raises matters of transcendental importance to thepublic. In Chavez v. PCGG ,28 the Court upheld the right of a citizen to bringa taxpayer's suit on matters of transcendental importance to the public, thus-

  • 7/29/2019 amari case.doc

    5/29

    "Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth of the Marcoses is an issue of 'transcendentalimportance to the public.' He asserts that ordinary taxpayers havea right to initiate and prosecute actions questioning the validity ofacts or orders of government agencies or instrumentalities, if theissues raised are of 'paramount public interest,' and if they'immediately affect the social, economic and moral well being ofthe people.'

    Moreover, the mere fact that he is a citizen satisfies therequirement of personal interest, when the proceeding involves theassertion of a public right, such as in this case. He invokes severaldecisions of this Court which have set aside the procedural matteroflocus standi, when the subject of the case involved publicinterest.

    x x x

    In Taada v. Tuvera, the Court asserted that when the issueconcerns a public right and the object of mandamus is to obtain the

    enforcement of a public duty, the people are regarded as the realparties in interest; and because it is sufficient that petitioner is acitizen and as such is interested in the execution of the laws, heneed not show that he has any legal or special interest in the resultof the action. In the aforesaid case, the petitioners sought toenforce their right to be informed on matters of public concern, aright then recognized in Section 6, Article IV of the 1973Constitution, in connection with the rule that laws in order to bevalid and enforceable must be published in the Official Gazette orotherwise effectively promulgated. In ruling for the petitioners'legal standing, the Court declared that the right they sought to beenforced 'is a public right recognized by no less than thefundamental law of the land.'

    Legaspi v. Civil Service Commission, while reiterating Taada,further declared that 'when a mandamus proceeding involves theassertion of a public right, the requirement of personal interest issatisfied by the mere fact that petitioner is a citizen and, therefore,part of the general 'public' which possesses the right.'

    Further, inAlbano v. Reyes, we said that while expenditure ofpublic funds may not have been involved under the questionedcontract for the development, management and operation of theManila International Container Terminal, 'public interest [was]definitely involved considering the important role [of the subject

    contract] . . . in the economic development of the country and themagnitude of the financial consideration involved.' We concludedthat, as a consequence, the disclosure provision in the Constitutionwould constitute sufficient authority for upholding the petitioner'sstanding.

    Similarly, the instant petition is anchored on the right of the peopleto information and access to off icial records, documents and papers

    a right guaranteed under Section 7, Article III of the 1987Constitution. Petitioner, a former solicitor general, is a Filipinocitizen. Because of the satisfaction of the two basic requisites laiddown 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."

    We rule that since the instant petition, brought by a citizen, involves theenforcement of constitutional rights - to information and to the equitablediffusion of natural resources - matters of transcendental public importance,the petitioner has the requisite locus standi.

    Fifth issue: whether the constitutional r ight to information includesoff icial information on on-going negotiations before a f inalagreement.

    Section 7, Article III of the Constitution explains the people's right toinformation on matters of public concern in this manner:

    "Sec. 7. The right of the people to information on matters of publicconcern shall be recognized. Access to off icial records, and todocuments, and papers pertaining to off icial acts,transactions, or decisions, as well as to government researchdata used as basis for policy development, shall be afforded the

    citizen, subject to such limitations as may be provided by law."(Emphasis supplied)

    The State policy of full transparency in all transactions involving publicinterest reinforces the people's right to information on matters of publicconcern. This State policy is expressed in Section 28, Article II of theConstitution, thus:

    "Sec. 28. Subject to reasonable conditions prescribed by law, theState adopts and implements a pol icy of ful l publ ic disclosure ofal l i ts transactions involving publ ic interest." (Emphasissupplied)

  • 7/29/2019 amari case.doc

    6/29

    These twin provisions of the Constitution seek to promote transparency inpolicy-making and in the operations of the government, as well as providethe people sufficient information to exercise effectively other constitutionalrights. These twin provisions are essential to the exercise of freedom ofexpression. If the government does not disclose its official acts, transactionsand decisions to citizens, whatever citizens say, even if expressed withoutany restraint, will be speculative and amount to nothing. These twinprovisions are also essential to hold public officials "at all times x x x

    accountable to the people,"29

    for unless citizens have the proper information,they cannot hold public officials accountable for anything. Armed with theright information, citizens can participate in public discussions leading to theformulation of government policies and their effective implementation. Aninformed citizenry is essential to the existence and proper functioning of anydemocracy. As explained by the Court in Valmonte v. Belmonte, Jr .30

    "An essential element of these freedoms is to keep open acontinuing dialogue or process of communication between thegovernment and the people. It is in the interest of the State thatthe channels for free political discussion be maintained to the endthat the government may perceive and be responsive to thepeople's will. Yet, this open dialogue can be effective only to theextent that the citizenry is informed and thus able to formulate itswill intelligently. Only when the participants in the discussion areaware of the issues and have access to information relating theretocan such bear fruit."

    PEA asserts, citing Chavez v. PCGG ,31 that in cases of on-going negotiationsthe right to information is limited to "definite propositions of thegovernment." PEA maintains the right does not include access to "intra-agency or inter-agency recommendations or communications during thestage when common assertions are still in the process of being formulatedor are in the 'exploratory stage'."

    Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or before the closing of the transaction. To support itscontention, AMARI cites the following discussion in the 1986 ConstitutionalCommission:

    "Mr. Suarez. And when we say 'transactions' which should bedistinguished from contracts, agreements, or treaties or whatever,does the Gentleman refer to the steps leading to the consummationof the contract, or does he refer to the contract itself?

    Mr. Ople: The 'transactions' used here, I suppose is genericand therefore, i t can cover both steps leading to a contractand already a consummated contract, Mr. Presiding Off icer.Mr. Suarez: This contemplates inclusion of negotiationslead ing to the consummation of the transact ion.Mr. Ople: Yes, subject only to reasonable safeguards on thenational interest.Mr. Suarez: Thank you."32 (Emphasis supplied)

    AMARI argues there must first be a consummated contract before petitionercan invoke the right. Requiring government officials to reveal theirdeliberations at the pre-decisional stage will degrade the quality of decision-making in government agencies. Government officials will hesitate toexpress their real sentiments during deliberations if there is immediatepublic dissemination of their discussions, putting them under all kinds ofpressure before they decide.

    We must first distinguish between information the law on public biddingrequires PEA to disclose publicly, and information the constitutional right toinformation requires PEA to release to the public. Before the consummationof the contract, PEA must, on its own and without demand from anyone,disclose to the public matters relating to the disposition of its property.These include the size, location, technical description and nature of theproperty being disposed of, the terms and conditions of the disposition, theparties qualified to bid, the minimum price and similar information. PEAmust prepare all these data and disclose them to the public at the start ofthe disposition process, long before the consummation of the contract,because the Government Auditing Code requires publ ic bidding . If PEA failsto make this disclosure, any citizen can demand from PEA this information at

    any time during the bidding process.

    Information, however, on on-going evaluation or review of bids orproposals being undertaken by the bidding or review committee is notimmediately accessible under the right to information. While the evaluationor review is still on-going, there are no "official acts, transactions, ordecisions" on the bids or proposals. However, once the committee makes itsoff icial recommendation, there arises a "definite proposition" on the partof the government. From this moment, the public's right to informationattaches, and any citizen can access all the non-proprietary informationleading to such definite proposition. In Chavez v. PCGG ,33 the Court ruledas follows:

  • 7/29/2019 amari case.doc

    7/29

    "Considering the intent of the framers of the Constitution, webelieve that it is incumbent upon the PCGG and its officers, as wellas other government representatives, to disclose sufficient publicinformation on any proposed settlement they have decided to takeup with the ostensible owners and holders of ill-gotten wealth.Such information, though, must pertain to definite propositionsof the government, not necessarily to intra-agency or inter-agency recommendations or communications during the stage

    when common assertions are still in the process of beingformulated or are in the "exploratory" stage. There is need, ofcourse, to observe the same restrictions on disclosure ofinformation in general, as discussed earlier such as on mattersinvolving national security, diplomatic or foreign relations,intelligence and other classified information." (Emphasis supplied)

    Contrary to AMARI's contention, the commissioners of the 1986Constitutional Commission understood that the right to information"contemplates inclusion of negotiations leading to the consummationof the transaction." Certainly, a consummated contract is not arequirement for the exercise of the right to information. Otherwise, thepeople can never exercise the right if no contract is consummated, and if

    one is consummated, it may be too late for the public to expose itsdefects.1wphi1.nt

    Requiring a consummated contract will keep the public in the dark until thecontract, which may be grossly disadvantageous to the government or evenillegal, becomes a fait accompli. This negates the State policy of fulltransparency on matters of public concern, a situation which the framers ofthe Constitution could not have intended. Such a requirement will preventthe citizenry from participating in the public discussion of any proposedcontract, effectively truncating a basic right enshrined in the Bill of Rights.We can allow neither an emasculation of a constitutional right, nor a retreatby the State of its avowed "policy of full disclosure of all its transactions

    involving public interest."

    The right covers three categories of information which are "matters of publicconcern," namely: (1) official records; (2) documents and papers pertainingto official acts, transactions and decisions; and (3) government researchdata used in formulating policies. The first category refers to any documentthat is part of the public records in the custody of government agencies orofficials. The second category refers to documents and papers recording,evidencing, establishing, confirming, supporting, justifying or explainingofficial acts, transactions or decisions of government agencies or off icials.The third category refers to research data, whether raw, collated orprocessed, owned by the government and used in formulating governmentpolicies.

    The information that petitioner may access on the renegotiation of the JVAincludes evaluation reports, recommendations, legal and expert opinions,minutes of meetings, terms of reference and other documents attached tosuch reports or minutes, all relating to the JVA. However, the right toinformation does not compel PEA to prepare lists, abstracts, summaries andthe like relating to the renegotiation of the JVA.34 The right only affordsaccess to records, documents and papers, which means the opportunity toinspect and copy them. One who exercises the right must copy the records,

    documents and papers at his expense. The exercise of the right is alsosubject to reasonable regulations to protect the integrity of the publicrecords and to minimize disruption to government operations, like rulesspecifying when and how to conduct the inspection and copying.35

    The right to information, however, does not extend to matters recognized asprivileged information under the separation of powers.36 The right does notalso apply to information on military and diplomatic secrets, informationaffecting national security, and information on investigations of crimes bylaw enforcement agencies before the prosecution of the accused, whichcourts have long recognized as confidential.37 The right may also be subjectto other limitations that Congress may impose by law.

    There is no claim by PEA that the information demanded by petitioner isprivileged information rooted in the separation of powers. The informationdoes not cover Presidential conversations, correspondences, or discussionsduring closed-door Cabinet meetings which, like internal deliberations of theSupreme Court and other collegiate courts, or executive sessions of eitherhouse of Congress,38 are recognized as confidential. This kind of informationcannot be pried open by a co-equal branch of government. A frankexchange of exploratory ideas and assessments, free from the glare ofpublicity and pressure by interested parties, is essential to protect theindependence of decision-making of those tasked to exercise Presidential,Legislative and Judicial power.39 This is not the situation in the instant case.

    We rule, therefore, that the constitutional right to information includesofficial information on on-going negotiations before a final contract. Theinformation, however, must constitute definite propositions by thegovernment and should not cover recognized exceptions like privilegedinformation, military and diplomatic secrets and similar matters affectingnational security and public order.40 Congress has also prescribed otherlimitations on the right to information in several legislations.41

    Sixth issue: whether stipulations in the Amended JVA for the transferto AMARI of lands, reclaimed or to be reclaimed, violate the

    Constitution.

  • 7/29/2019 amari case.doc

    8/29

    The Regal ian Doctr ineThe ownership of lands reclaimed from foreshore and submerged areas isrooted in the Regalian doctrine which holds that the State owns all lands andwaters of the public domain. Upon the Spanish conquest of the Philippines,ownership of all "lands, territories and possessions" in the Philippines passedto the Spanish Crown.42 The King, as the sovereign ruler and representativeof the people, acquired and owned all lands and territories in the Philippines

    except those he disposed of by grant or sale to private individuals.

    The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrinesubstituting, however, the State, in lieu of the King, as the owner of all landsand waters of the public domain. The Regalian doctrine is the foundation ofthe time-honored principle of land ownership that "all lands that were notacquired from the Government, either by purchase or by grant, belong tothe public domain."43 Article 339 of the Civil Code of 1889, which is nowArticle 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 theownership and disposition of reclaimed lands in the Philippines. On May 18,1907, the Philippine Commission enacted Act No. 1654 which provided fo rthe lease, but not the sale, of reclaimed lands of the government tocorporations and individuals. Later, on November 29, 1919, the PhilippineLegislature approved Act No. 2874, the Public Land Act, which authorizedthe lease, but not the sale, of reclaimed lands of the government tocorporations and individuals. On November 7, 1936, the NationalAssembly passed Commonwealth Act No. 141, also known as the PublicLand Act, which authorized the lease, but not the sale, of reclaimedlands of the government to corporations and individuals . CA No. 141continues to this day as the general law governing the classification anddisposition of lands of the public domain.

    The Spanish Law of Waters of 1866 and the C iv i l Code of 1889Under the Spanish Law of Waters of 1866, the shores, bays, coves, inletsand all waters within the maritime zone of the Spanish territory belonged tothe public domain for public use.44 The Spanish Law of Waters of 1866allowed the reclamation of the sea under Article 5, which provided asfollows:

    "Article 5. Lands reclaimed from the sea in consequence of worksconstructed by the State, or by the provinces, pueblos or privatepersons, with proper permission, shall become the property of the

    party constructing such works, unless otherwise provided by theterms of the grant of authority."

    Under the Spanish Law of Waters, land reclaimed from the sea belonged tothe party undertaking the reclamation, provided the government issued thenecessary permit and did not reserve ownership of the reclaimed land to theState.

    Article 339 of the Civil Code of 1889 defined property of public dominion asfollows:

    "Art. 339. Property of public dominion is

    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 ofgeneral public use, is employed in some public service, or in thedevelopment of the national wealth, such as walls, fortresses, andother works for the defense of the territory, and mines, untilgranted to private individuals."

    Property devoted to public use referred to property open for use by thepublic. In contrast, property devoted to public service referred to propertyused for some specific public service and open only to those authorized touse the property.

    Property of public dominion referred not only to property devoted to publicuse, but also to property not so used but employed to develop thenational wealth . This class of property constituted property of publicdominion although employed for some economic or commercial activity to

    increase the national wealth.

    Article 341 of the Civil Code of 1889 governed the re-classification ofproperty of public dominion into private property, to wit:

    "Art. 341. Property of public dominion, when no longer devoted topublic use or to the defense of the territory, shall become a part ofthe private property of the State."

    This provision, however, was not self-executing. The legislature, or theexecutive department pursuant to law, must declare the property no longer

  • 7/29/2019 amari case.doc

    9/29

    needed for public use or territorial defense before the government couldlease or alienate the property to private parties.45

    Act No. 1654 of the Phi l ippine CommissionOn May 8, 1907, the Philippine Commission enacted Act No. 1654 whichregulated the lease of reclaimed and foreshore lands. The salient provisionsof this law were as follows:

    "Section 1. The control and disposition of the foreshore asdefined in existing law, and the ti tle to al l Government or publ iclands made or recla imed by the Government by dredg ing orfil l ing or otherwise throughout the Philippine Islands, shal l beretained by the Government without prejudice to vested rightsand without prejudice to rights conceded to the City of Manila inthe Luneta Extension.

    Section 2. (a) The Secretary of the Interior shall cause allGovernment or public lands made or reclaimed by the Governmentby dredging or filling or otherwise to be divided into lots or blocks,

    with the necessary streets and alleyways located thereon, and shallcause plats and plans of such surveys to be prepared and filed withthe Bureau of Lands.

    (b) Upon completion of such plats and plans the Governor-General shal l give notice to the publ ic that such parts of thelands so made or reclaimed as are not needed for publ icpurposes wi l l be leased for commercial and businesspurposes, x x x.x x x

    (e) The leases above provided for shal l be disposed of to thehighest and best bidder therefore, subject to such regulationsand safeguards as the Governor-General may by executive orderprescribe." (Emphasis supplied)

    Act No. 1654 mandated that the government should retain ti tle to al ll ands recla imed by the government. The Act also vested in thegovernment control and disposition of foreshore lands. Private parties couldlease lands reclaimed by the government only if these lands were no longerneeded for public purpose. Act No. 1654 mandated publ ic bidding in thelease of government reclaimed lands. Act No. 1654 made governmentreclaimed lands sui generis in that unlike other public lands which the

    government could sell to private parties, these reclaimed lands wereavailable only for lease to private parties.

    Act No. 1654, however, did not repeal Section 5 of the Spanish Law ofWaters of 1866. Act No. 1654 did not prohibit private parties from reclaimingparts of the sea under Section 5 of the Spanish Law of Waters. Landsreclaimed from the sea by private parties with government permissionremained private lands.

    Act No. 2874 of the Phi l ippine LegislatureOn November 29, 1919, the Philippine Legislature enacted Act No. 2874, thePublic Land Act.46 The salient provisions of Act No. 2874, on reclaimed lands,were as follows:

    "Sec. 6. The Governor-General , upon the recommendation ofthe Secretary of Agriculture and Natural Resources, shal lfrom time to time classify the lands of the publ ic domain into

    (a) Alienable or disposable,(b) Timber, and

    (c) Mineral lands, x x x.

    Sec. 7. For the purposes of the government and disposition ofalienable or disposable public lands, the Governor-General , uponrecommendation by the Secretary of Agr icu l ture and NaturalResources, shal l from time to time declare what lands areopen to disposition or concession under this Act."Sec. 8. Only those lands shal l be declared open to dispositionor concession which have been off icial ly del imited orclassif ied x x x.x x x

    Sec. 55. Any tract of land of the public domain which, being neithertimber nor mineral land, shall be classified as suitable forresidential purposes or for commercial , industr ial , or otherproductive purposes other than agricultural purposes , andshall be open to disposition or concession, shall be disposed ofunder the provisions of this chapter, and not otherwise.

  • 7/29/2019 amari case.doc

    10/29

    Sec. 56. The lands disposable under this ti tle shal l beclassif ied as fol lows:

    (a) Lands recla imed by the Government by dredg ing,f i l l ing, or other means ;(b) Foreshore;(c) Marshy lands or lands covered with water borderingupon the shores or banks of navigable lakes or rivers;

    (d) Lands not included in any of the foregoing classes.

    x x x.

    Sec. 58. The lands comprised in classes (a), (b), and (c) ofsection f i fty-six shal l be disposed of to private parties bylease on ly and not otherwise, as soon as the Governor-General , upon recommendation by the Secretary ofAgriculture and Natural Resources, shal l declare that thesame are not necessary for the publ ic service and are open todisposition under this chapter. The lands included in class (d)may be disposed of by sale or lease under the provisions ofthis Act." (Emphasis supplied)

    Section 6 of Act No. 2874 authorized the Governor-General to "classify landsof the public domain into x x x alienable or disposable"47 lands. Section 7 ofthe Act empowered the Governor-General to "declare what lands are opento disposition or concession." Section 8 of the Act limited alienable ordisposable lands only to those lands which have been "officially delimitedand classified."

    Section 56 of Act No. 2874 stated that lands "disposable under this title48

    shall be classified" as government reclaimed, foreshore and marshy lands,as well as other lands. All these lands, however, must be suitable forresidential, commercial, industrial or other productive non-agriculturalpurposes. These provisions vested upon the Governor-General the power toclassify inalienable lands of the public domain into disposable lands of thepublic domain. These provisions also empowered the Governor-General toclassify further such disposable lands of the public domain into governmentreclaimed, foreshore or marshy lands of the public domain, as well as othernon-agricultural lands.

    Section 58 of Act No. 2874 categorically mandated that disposable lands ofthe public domain classified as government reclaimed, foreshore and marshylands "shal l be disposed of to private parties by lease only and nototherwise." The Governor-General, before allowing the lease of these landsto private parties, must formally declare that the lands were "not necessaryfor the public service." Act No. 2874 reiterated the State policy to lease andnot to sell government reclaimed, foreshore and marshy lands of the publicdomain, a policy first enunciated in 1907 in Act No. 1654. Government

    reclaimed, foreshore and marshy lands remained sui generis, as the onlyalienable or disposable lands of the public domain that the governmentcould not sell to private parties.

    The rationale behind this State policy is obvious. Government reclaimed,foreshore and marshy public lands for non-agricultural purposes retain theirinherent potential as areas for public service. This is the reason thegovernment prohibited the sale, and only allowed the lease, of these landsto private parties. The State always reserved these lands for some futurepublic service.

    Act No. 2874 did not authorize the reclassification of government reclaimed,

    foreshore and marshy lands into other non-agricultural lands under Section56 (d). Lands falling under 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 legislaturepassed a law al lowing their sale.49

    Act No. 2874 did not prohibit private parties from reclaiming parts of the seapursuant to Section 5 of the Spanish Law of Waters of 1866. Landsreclaimed from the sea by private parties with government permissionremained private lands.

    Dispositions under the 1935 ConstitutionOn May 14, 1935, the 1935 Constitution took effect upon its ratification bythe Filipino people. The 1935 Constitution, in adopting the Regalian doctrine,declared in Section 1, Article XIII, that

    "Section 1. All agricultural, timber, and mineral lands of the publicdomain, waters, minerals, coal, petroleum, and other mineral oils,all forces of potential energy and other natural resources of thePhilippines belong to the State, and their disposition, exploitation,development, or utilization shall be limited to citizens of thePhilippines or to corporations or associations at least sixty percentum of the capital of which is owned by such citizens, subject to

  • 7/29/2019 amari case.doc

    11/29

    any existing right, grant, lease, or concession at the time of theinauguration of the Government established under thisConstitution. Natural resources, with the exception of publ icagricultural land, shal l not be al ienated , and no license,concession, or lease for the exploitation, development, or utilizationof any of the natural resources shall be granted for a periodexceeding twenty-five years, renewable for another twenty-fiveyears, except as to water rights for irrigation, water supply,

    fisheries, or industrial uses other than the development of waterpower, in which cases beneficial use may be the measure and limitof the grant." (Emphasis supplied)

    The 1935 Constitution barred the alienation of all natural resources exceptpublic agricultural lands, which were the only natural resources the Statecould alienate. Thus, foreshore lands, considered part of the State's naturalresources, became inalienable by constitutional fiat, available only for leasefor 25 years, renewable for another 25 years. The government couldalienate foreshore lands only after these lands were reclaimed and classifiedas alienable agricultural lands of the public domain. Government reclaimedand marshy lands of the public domain, being neither timber nor minerallands, fell under the classification of public agricultural lands.50 However,

    government reclaimed and marshy lands, although subject to classificationas disposable public agricultural lands, could only be leased and not sold toprivate parties because of Act No. 2874.

    The prohibition on private parties from acquiring ownership of governmentreclaimed and marshy lands of the public domain was only a statutoryprohibition and the legislature could therefore remove such prohibition. The1935 Constitution did not prohibit individuals and corporations fromacquiring government reclaimed and marshy lands of the public domain thatwere classified as agricultural lands under existing public land laws. Section2, Article XIII of the 1935 Constitution provided as follows:

    "Section 2. No private corporation or association may acquire,lease, or hold publ ic agricultural lands in excess of onethousand and twenty four hectares , nor m ay any ind ividualacquire such lands by purchase in excess of one hundred andforty hectares, or by lease in excess of one thousand andtwenty- four hectares, or by homestead in excess of twenty-fourhectares. Lands adapted to grazing, not exceeding two thousandhectares, may be leased to an individual, private corporation, orassociation." (Emphasis supplied)

    Still, after the effectivity of the 1935 Constitution, the legislature did notrepeal Section 58 of Act No. 2874 to open for sale to private partiesgovernment reclaimed and marshy lands of the public domain. On the

    contrary, the legislature continued the long established State policy ofretaining for the government title and ownership of government reclaimedand marshy lands of the public domain.

    Commonweal th Act No . 141 of the Ph i l ippine National AssemblyOn November 7, 1936, the National Assembly approved Commonwealth ActNo. 141, also known as the Public Land Act, which compiled the thenexisting laws on lands of the public domain. CA No. 141, as amended,remains to this day the existing general law governing the classificationand disposition of lands of the public domain other than timber and minerallands.51

    Section 6 of CA No. 141 empowers the President to classify lands of thepublic domain into "alienable or disposable"52 lands of the public domain,which prior to such classification are inalienable and outside the commerceof man. Section 7 of CA No. 141 authorizes the President to "declare whatlands are open to disposition or concession." Section 8 of CA No. 141 statesthat the government can declare open for disposition or concession onlylands that are "officially delimited and classified." Sections 6, 7 and 8 of CA

    No. 141 read as follows:

    "Sec. 6. The Pres ident, upon the recommendation of theSecretary of Agriculture and Commerce, shal l from time totime classify the lands of the publ ic domain into

    (a) Al ienable or disposable ,(b) Timber, and

    (c) Mineral lands,

    and may at any time and in like manner transfer such lands fromone class to another,53 for the purpose of their administration anddisposition.

    Sec. 7. For the purposes of the administration and disposition ofalienable or disposable public lands, the President, uponrecommendation by the Secretary of Agriculture andCommerce, shal l f rom t ime to t ime declare what lands areopen to disposition or concession under this Act.Sec. 8. Only those lands shal l be declared open to dispositionor concession which have been off icial ly del imited and

  • 7/29/2019 amari case.doc

    12/29

    classif ied and, when practicable, surveyed, and which have notbeen reserved for publ ic or quasi-publ ic uses, nor appropriatedby the Government, nor in any manner become private property,nor those on which a private right authorized and recognized bythis Act or any other valid law may be claimed, or which, havingbeen reserved or appropriated, have ceased to be so. x x x."

    Thus, before the government could alienate or dispose of lands of the public

    domain, the President must first officially classify these lands as alienable ordisposable, and then declare them open to disposition or concession. Theremust be no law reserving these lands for public or quasi-public uses.

    The salient provisions of CA No. 141, on government reclaimed, foreshoreand marshy lands of the public domain, are as follows:

    "Sec. 58. Any tract of land of the publ ic domain which, beingneither timber nor mineral land, is intended to be used forresidential purposes or for commercial , industr ial , or otherproductive purposes other than agricultural, and is open todisposition or concession, shal l be disposed of under theprovisions of this chapter and not otherwise .Sec. 59. The lands disposable under this ti tle shal l beclassif ied as fol lows:

    (a) Lands recla imed by the Government by dredg ing,f i l l ing, or other means;(b) Foreshore;(c) Marshy lands or lands covered with water borderingupon the shores or banks of navigable lakes or rivers;

    (d) Lands not included in any of the foregoing classes.

    Sec. 60. Any tract of land comprised under this title may be leasedor sold, as the case may be, to any person, corporation, orassociation authorized to purchase or lease public lands foragricultural purposes. x x x.

    Sec. 61. The lands comprised in classes (a), (b), and (c) ofsection f i fty-nine shal l be disposed of to private parties bylease on ly and not otherwise, as soon as the President, uponrecommendation by the Secretary of Agriculture, shal l declare

    that the same are not necessary for the publ ic service and areopen to disposition under this chapter. The lands included inclass (d) may be disposed of by sale or lease under theprovisions of this Act." (Emphasis supplied)

    Section 61 of CA No. 141 readopted, after the effectivity of the 1935Constitution, Section 58 of Act No. 2874 prohibiting the sale of governmentreclaimed, foreshore and marshy disposable lands of the public domain. All

    these lands are intended for residential, commercial, industrial or other non-agricultural purposes. As before, Section 61 allowed only the lease of suchlands to private parties. The government could sell to private parties onlylands falling under Section 59 (d) of CA No. 141, or those lands for non-agricultural purposes not classified as government reclaimed, foreshore andmarshy disposable lands of the public domain. Foreshore lands, however,became inalienable under the 1935 Constitution which only allowed thelease of these lands to qualified private parties.

    Section 58 of CA No. 141 expressly states that disposable lands of the publicdomain intended for residential, commercial, industrial or other productivepurposes other than agricultural "shal l be disposed of under theprovisions of this chapter and not otherwise ." Under Section 10 of CANo. 141, the term "disposition" includes lease of the land. Any disposition ofgovernment reclaimed, foreshore and marshy disposable lands for non-agricultural purposes must comply with Chapter IX, Title III of CA No. 141, 54

    unless a subsequent law amended or repealed these provisions.

    In his concurring opinion in the landmark case ofRepubl ic Real EstateCorporation v. Court of Appeals ,55 Justice Reynato S. Puno summarizedsuccinctly the law on this matter, as follows:

    "Foreshore lands are lands of public dominion intended for publicuse. So too are lands reclaimed by the government by dredging,filling, or other means. Act 1654 mandated that the control and

    disposition of the foreshore and lands under water remained in thenational government. Said law allowed only the 'leasing' ofreclaimed land. The Public Land Acts of 1919 and 1936 alsodeclared that the foreshore and lands reclaimed by the governmentwere to be "disposed of to private parties by lease only and nototherwise." Before leasing, however, the Governor-General, uponrecommendation of the Secretary of Agriculture and NaturalResources, had first to determine that the land reclaimed was notnecessary for the public service. This requisite must have been metbefore the land could be disposed of. But even then, theforeshore and lands under water were not to be al ienatedand sold to private parties. The disposition of the reclaimed

  • 7/29/2019 amari case.doc

    13/29

    land was only by lease. The land remained property of theState." (Emphasis supplied)

    As observed by Justice Puno in his concurring opinion, "Commonwealth ActNo. 141 has remained in effect at present."

    The State policy prohibiting the sale to private parties of governmentreclaimed, foreshore and marshy alienable lands of the public domain, first

    implemented in 1907 was thus reaffirmed in CA No. 141 after the 1935Constitution took effect. The prohibition on the sale of foreshore lands,however, became a constitutional edict under the 1935 Constitution.Foreshore lands became inalienable as natural resources of the State, unlessreclaimed by the government and classified as agricultural lands of thepublic domain, in which case they would fall under the classification ofgovernment reclaimed lands.

    After the effectivity of the 1935 Constitution, government reclaimed andmarshy disposable lands of the public domain continued to be only leasedand not sold to private parties.56 These lands remained sui generis, as theonly alienable or disposable lands of the public domain the government

    could not sell to private parties.

    Since then and until now, the only way the government can sell to privateparties government reclaimed and marshy disposable lands of the publicdomain is for the legislature to pass a law authorizing such sale. CA No. 141does not authorize the President to reclassify government reclaimed andmarshy lands into other non-agricultural lands under Section 59 (d). Landsclassified under Section 59 (d) are the only alienable or disposable lands fornon-agricultural purposes that the government could sell to private parties.

    Moreover, Section 60 of CA No. 141 expressly requires congressionalauthority before lands under Section 59 that the government previously

    transferred to government units or entities could be sold to private parties.Section 60 of CA No. 141 declares that

    "Sec. 60. x x x The area so leased or sold shall be such as shall, inthe judgment of the Secretary of Agriculture and NaturalResources, be reasonably necessary for the purposes for whichsuch sale or lease is requested, and shall not exceed one hundredand forty-four hectares: Provided, however, That this limitationshall not apply to grants, donations, or transfers made to aprovince, municipality or branch or subdivision of the Governmentfor the purposes deemed by said entities conducive to the publicinterest; but the land so granted, donated, or transferred to aprovince, municipal i ty or branch or subdivis ion of the

    Government shal l not be al ienated, encumbered, or otherwisedisposed of in a manner affecting its ti tle, except whenauthorized by Congress: x x x." (Emphasis supplied)

    The congressional authority required in Section 60 of CA No. 141 mirrors thelegislative authority required in Section 56 of Act No. 2874.

    One reason for the congressional authority is that Section 60 of CA No. 141

    exempted government units and entities from the maximum area of publiclands that could be acquired from the State. These government units andentities should not just turn around and sell these lands to private parties inviolation of constitutional or statutory limitations. Otherwise, the transfer oflands for non-agricultural purposes to government units and entities couldbe used to circumvent constitutional limitations on ownership of alienable ordisposable lands of the public domain. In the same manner, such transferscould also be used to evade the statutory prohibition in CA No. 141 on thesale of government reclaimed and marshy lands of the public domain toprivate parties. Section 60 of CA No. 141 constitutes by operation of law alien on these lands.57

    In case ofsale or lease of disposable lands of the public domain fallingunder Section 59 of CA No. 141, Sections 63 and 67 require a public bidding.Sections 63 and 67 of CA No. 141 provide as follows:

    "Sec. 63. Whenever it is decided that lands covered by this chapterare not needed for public purposes, the Director of Lands shall askthe Secretary of Agriculture and Commerce (now the Secretary ofNatural Resources) for authority to dispose of the same. Uponreceipt of such authority, the Director of Lands shall give notice bypublic advertisement in the same manner as in the case of leasesor sales of agricultural public land, x x x.

    Sec. 67.The lease or sale shal l be made by oral bidding; and

    adjudication shal l be made to the highest bidder . x x x."(Emphasis supplied)

    Thus, CA No. 141 mandates the Government to put to public auction allleases or sales of alienable or disposable lands of the public domain.58

    Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repealSection 5 of the Spanish Law of Waters of 1866. Private parties could stillreclaim portions of the sea with government permission. However, thereclaimed land could become private land only i f classif ied asal ienable agricultural land of the publ ic domain open to disposition

  • 7/29/2019 amari case.doc

    14/29

    under CA No. 141. The 1935 Constitution prohibited the alienation of allnatural resources except public agricultural lands.

    The Civi l Code of 1950The Civil Code of 1950 readopted substantially the definition of property ofpublic dominion found in the Civil Code of 1889. Articles 420 and 422 of theCivil 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 ofthe national wealth.

    x x x.

    Art. 422. Property of public dominion, when no longer intended forpublic use or for public service, shall form part of the patrimonialproperty of the State."

    Again, the government must formally declare that the property of publicdominion is no longer needed for public use or public service, before thesame could be classified as patrimonial property of the State.59 In the caseof government reclaimed and marshy lands of the public domain, thedeclaration of their being disposable, as well as the manner of theirdisposition, is governed by the applicable provisions of CA No. 141.

    Like the Civil Code of 1889, the Civil Code of 1950 included as property ofpublic dominion those properties of the State which, without being for publicuse, are intended for public service or the "development of the nat ionalweal th." Thus, government reclaimed and marshy lands of the State, even ifnot employed for public use or public service, if developed to enhance thenational wealth, are classified as property of public dominion.

    Dispositions under the 1973 ConstitutionThe 1973 Constitution, which took effect on January 17, 1973, likewiseadopted the Regalian doctrine. Section 8, Article XIV of the 1973Constitution stated that

    "Sec. 8. All lands of the public domain, waters, minerals, coal,petroleum and other mineral oils, all forces of potential energy,fisheries, wildlife, and other natural resources of the Philippinesbelong to the State. With the exception of agricultural,industr ial or commercial , residential , and resettlement landsof the publ ic domain, natural resources shal l not be al ienated ,and no license, concession, or lease for the exploration,development, exploitation, or utilization of any of the natural

    resources shall be granted for a period exceeding twenty-fiveyears, renewable for not more than twenty-five years, except as towater rights for irrigation, water supply, fisheries, or industrial usesother than the development of water power, in which cases,beneficial use may be the measure and the limit of the grant."(Emphasis supplied)

    The 1973 Constitution prohibited the alienation of all natural resources withthe exception of "agricultural, industrial or commercial, residential, andresettlement lands of the public domain." In contrast, the 1935 Constitutionbarred the alienation of all natural resources except "public agriculturallands." However, the term "public agricultural lands" in the 1935Constitution encompassed industrial, commercial, residential and

    resettlement lands of the public domain.60 If the land of public domain wereneither timber nor mineral land, it would fall under the classification ofagricultural land of the public domain. Both the 1935 and 1973Constitutions, therefore, prohibited the al ienation of al l naturalresources except agricultural lands of the publ ic domain .The 1973 Constitution, however, limited the alienation of lands of the publicdomain to individuals who were citizens of the Philippines. Privatecorporations, even if wholly owned by Philippine citizens, were no longerallowed to acquire alienable lands of the public domain unlike in the 1935Constitution. Section 11, Article XIV of the 1973 Constitution declared that

    "Sec. 11. The Batasang Pambansa, taking into accountconservation, ecological, and development requirements of thenatural resources, shall determine by law the size of land of thepublic domain which may be developed, held or acquired by, orleased to, any qualified individual, corporation, or association, andthe conditions therefor. No private corporation or associationmay hold al ienab le lands of the pub l i c domain except bylease not to exceed one thousand hectares in area nor may anycitizen hold such lands by lease in excess of five hundred hectaresor acquire by purchase, homestead or grant, in excess of twenty-four hectares. No private corporation or association may hold bylease, concession, license or permit, timber or forest lands andother timber or forest resources in excess of one hundred thousand

  • 7/29/2019 amari case.doc

    15/29

    hectares. However, such area may be increased by the BatasangPambansa upon recommendation of the National Economic andDevelopment Authority." (Emphasis supplied)

    Thus, under the 1973 Constitution, private corporations could hold alienablelands of the public domain only through lease. Only individuals could nowacquire alienable lands of the public domain, and private corporationsbecame absolutely barred from acquir ing any kind of al ienable land ofthe publ ic domain . The constitutional ban extended to all kinds of alienablelands of the public domain, while the statutory ban under CA No. 141applied only to government reclaimed, foreshore and marshy alienable landsof the public domain.

    PD No. 1084 Creating the Publ ic Estates AuthorityOn February 4, 1977, then President Ferdinand Marcos issued PresidentialDecree No. 1084 creating PEA, a wholly government owned and controlledcorporation with a special charter. Sections 4 and 8 of PD No. 1084, vestsPEA with the following purposes and powers:

    "Sec. 4. Purpose. The Authority is hereby created for the followingpurposes:

    (a) To reclaim land, including foreshore and submergedareas, by dredging, f i l l ing or other means, or to acquirereclaimed land;(b) To develop, improve, acquire, administer, deal in, subdivide,dispose, lease and sel l any and al l kinds of lands , buildings,estates and other forms of real property, owned, managed,controlled and/or operated by the government;

    (c) To provide for, operate or administer such service as may benecessary for the efficient, economical and beneficial utilization ofthe above properties.

    Sec. 5. Powers and functions of the Authority. The Authority shall,in carrying out the purposes for which it is created, have thefollowing powers and functions:

    (a)To prescribe its by-laws.

    x x x

    (i) To hold lands of the publ ic domain in excess of the areapermitted to private corporations by statute.

    (j) To reclaim lands and to construct work across, or otherwise,any stream, watercourse, canal, ditch, flume x x x.

    x x x

    (o) To perform such acts and exercise such functions as may benecessary for the attainment of the purposes and objectives hereinspecified." (Emphasis supplied)

    PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areasof the public domain. Foreshore areas are those covered and uncovered bythe ebb and flow of the tide.61 Submerged areas are those permanentlyunder water regardless of the ebb and flow of the tide.62 Foreshore andsubmerged areas indisputably belong to the public domain63 and areinalienable unless reclaimed, classified as alienable lands open to disposition,and further declared no longer needed for public service.

    The ban in the 1973 Constitution on private corporations from acquiringalienable lands of the public domain did not apply to PEA since it was then,and until today, a fully owned government corporation. The constitutionalban applied then, as it still applies now, only to "private corporations andassociations." PD No. 1084 expressly empowers PEA "to hold lands of thepubl ic domain" even "in excess of the area permitted to privatecorporations by statute." Thus, PEA can hold ti tle to private lands, aswel l as ti tle to lands of the publ ic domain.In order for PEA to sell its reclaimed foreshore and submerged alienablelands of the public domain, there must be legislative authority empoweringPEA to sell these lands. This legislative authority is necessary in view of

    Section 60 of CA No.141, which states

    "Sec. 60. x x x; but the land so granted, donated or transferred toa province, municipality, or branch or subdivision of theGovernment shall not be alienated, encumbered or otherwisedisposed of in a manner affecting its title, except whenauthorized by Congress; x x x." (Emphasis supplied)

    Without such legislative authority, PEA could not sell but only lease itsreclaimed foreshore and submerged alienable lands of the public domain.Nevertheless, any legislative authority granted to PEA to sell its reclaimedalienable lands of the public domain would be subject to the constitutional

  • 7/29/2019 amari case.doc

    16/29

    ban on private corporations from acquiring alienable lands of the publicdomain. Hence, such legislative authority could only benefit privateindividuals.

    Dispositions under the 1987 ConstitutionThe 1987 Constitution, like the 1935 and 1973 Constitutions before it, hasadopted the Regalian doctrine. The 1987 Constitution declares that all

    natural resources are "owned by the State," and except for alienableagricultural lands of the public domain, natural resources cannot bealienated. Sections 2 and 3, Article XII of the 1987 Constitution state that

    "Section 2. All lands of the public domain, waters, minerals, coal,petroleum and other mineral oils, all forces of potential energy,fisheries, forests or timber, wildlife, flora and fauna, and othernatural resources are owned by the State. Wi th the exceptionof agricultural lands, al l other natural resources shal l not beal ienated . The exploration, development, and utilization of naturalresources shall be under the full control and supervision of theState. x x x.

    Section 3. Lands of the public domain are classified intoagricultural, forest or timber, mineral lands, and national parks.Agricultural lands of the public domain may be further classified bylaw according to the uses which they may be devoted. Alienablelands of the publ ic domain shal l be l imited to agriculturallands. Private corporations or associations may not hold suchal ienable lands of the publ ic domain except by lease, for aperiod not exceeding twenty-f ive years, renewable for notmore than twenty- f ive years , and not to exceed one thousandhectares in area . Citizens of the Philippines may lease not morethan five hundred hectares, or acquire not more than twelvehectares thereof by purchase, homestead, or grant.

    Taking into account the requirements of conservation, ecology, anddevelopment, and subject to the requirements of agrarian reform,the Congress shall determine, by law, the size of lands of the publicdomain which may be acquired, developed, held, or leased and theconditions therefor." (Emphasis supplied)

    The 1987 Constitution continues the State policy in the 1973 Constitutionbanning private corporations from acquir ing any kind of al ienable land ofthe publ ic domain . Like the 1973 Constitution, the 1987 Constitution allowsprivate corporations to hold alienable lands of the public domain onlythrough lease. As in the 1935 and 1973 Constitutions, the general law

    governing the lease to private corporations of reclaimed, foreshore andmarshy alienable lands of the public domain is still CA No. 141.

    The Rationale behind the Constitutional BanThe rationale behind the constitutional ban on corporations from acquiring,except through lease, alienable lands of the public domain is not wellunderstood. During the deliberations of the 1986 Constitutional Commission,

    the commissioners probed the rationale behind this ban, thus:

    "FR. BERNAS: Mr. Vice-President, my questions have reference topage 3, line 5 which says:

    `No private corporation or association may hold alienable lands ofthe public domain except by lease, not to exceed one thousandhectares in area.'

    If we recall, this provision did not exist under the 1935Constitution, but this was introduced in the 1973 Constitution. Ineffect, it prohibits private corporations from acquiring alienablepublic lands. But i t has not been very clear in jurisprudencewhat the reason for this is . In some of the cases decided in 1982and 1983, i t was indicated that the purpose of this is toprevent large landholdings . Is that the intent of this provision?

    MR. VILLEGAS: I think that is the spirit of the provision.

    FR. BERNAS: In existing decisions involving the Iglesia ni Cristo,there were instances where the Iglesia ni Cristo was not allowed toacquire a mere 313-square meter land where a chapel stoodbecause the Supreme Court said it would be in violation of this."(Emphasis supplied)

    In Ayog v. Cus i,64 the Court explained the rationale behind thisconstitutional ban in this way:

    "Indeed, one purpose of the constitutional prohibition againstpurchases of public agricultural lands by private corporations is toequitably diffuse land ownership or to encourage 'owner-cultivatorship and the economic family-size farm' and to prevent arecurrence of cases like the instant case. Huge landholdings bycorporations or private persons had spawned social unrest."

  • 7/29/2019 amari case.doc

    17/29

    However, if the constitutional intent is to prevent huge landholdings, theConstitution could have simply limited the size of alienable lands of thepublic domain that corporations could acquire. The Constitution could havefollowed the limitations on individuals, who could acquire not more than 24hectares of alienable lands of the public domain under the 1973Constitution, and not more than 12 hectares under the 1987 Constitution.

    If the constitutional intent is to encourage economic family-size farms,

    placing the land in the name of a corporation would be more effective inpreventing the break-up of farmlands. If the farmland is registered in thename of a corporation, upon the death of the owner, his heirs would inheritshares in the corporation instead of subdivided parcels of the farmland. Thiswould prevent the continuing break-up of farmlands into smaller and smallerplots from one generation to the next.

    In actual practice, the constitutional ban strengthens the constitutionallimitation on individuals from acquiring more than the allowed area ofalienable lands of the public domain. Without the constitutional ban,individuals who already acquired the maximum area of alienable lands of thepublic domain could easily set up corporations to acquire more alienablepublic lands. An individual could own as many corporations as his meanswould allow him. An individual could even hide his ownership of acorporation by putting his nominees as stockholders of the corporation. Thecorporation is a convenient vehicle to circumvent the constitutional limitationon acquisition by individuals of alienable lands of the public domain.

    The constitutional intent, under the 1973 and 1987 Constitutions, is totransfer ownership of only a limited area of alienable land of the publicdomain to a qualified individual. This constitutional intent is safeguarded bythe provision prohibiting corporations from acquiring alienable lands of thepublic domain, since the vehicle to circumvent the constitutional intent isremoved. The available alienable public lands are gradually decreasing in theface of an ever-growing population. The most effective way to insure faithful

    adherence to this constitutional intent is to grant or sell alienable lands ofthe public domain only to individuals. This, it would seem, is the practicalbenefit arising from the constitutional ban.

    The Amended Joint Venture AgreementThe subject matter of the Amended JVA, as stated in its second Whereasclause, consists of three properties, namely:

    1. "[T]hree partially reclaimed and substantially eroded islandsalong Emilio Aguinaldo Boulevard in Paranaque and Las Pinas,

    Metro Manila, with a combined titled area of 1,578,441 squaremeters;"

    2. "[A]nother area of 2,421,559 square meters contiguous to thethree islands;" and

    3. "[A]t AMARI's option as approved by PEA, an additional 350hectares more or less to regularize the configuration of the

    reclaimed area."65

    PEA confirms that the Amended JVA involves "the development of theFreedom Islands and further reclamation of about 250 hectares x x x," plusan option "granted to AMARI to subsequently reclaim another 350 hectaresx x x."66

    In short, the Amended JVA covers a reclamation area of 750 hectares. Only157.84 hectares of the 750-hectare reclamation project have beenrecla imed, and the rest of the 592.15 hectares are s t i l l submergedareas forming part of Mani la Bay .Under the Amended JVA, AMARI will reimburse PEA the sum ofP1,894,129,200.00 for PEA's "actual cost" in partially reclaiming theFreedom Islands. AMARI will also complete, at its own expense, thereclamation of the Freedom Islands. AMARI will further shoulder all thereclamation costs of all the other areas, totaling 592.15 hectares, still to bereclaimed. AMARI and PEA will share, in the proportion of 70 percent and 30percent, respectively, the total net usable area which is defined in theAmended JVA as the total reclaimed area less 30 percent earmarked forcommon areas. Title to AMARI's share in the net usable area, totaling 367.5hectares, will be issued in the name of AMARI. Section 5.2 (c) of theAmended JVA provides that

    "x x x, PEA shall have the duty to execute without delay thenecessary deed of transfer or conveyance of the title pertaining toAMARI's Land share based on the Land Allocation Plan. PEA, whenrequested in writing by AMARI, shal l then cause the issuanceand del ivery of the proper certi f icates of ti tle coveringAMARI's Land Share in the name of AMARI , x x x; provided,that if more than seventy percent (70%) of the titled area at anygiven time pertains to AMARI, PEA shall deliver to AMARI onlyseventy percent (70%) of the titles pertaining to AMARI, until suchtime when a corresponding proportionate area of additional landpertaining to PEA has been titled." (Emphasis supplied)

  • 7/29/2019 amari case.doc

    18/29

    Ind isputab ly, under the Amended JVA AMARI wi l l acqui re and own amaximum of 367.5 hectares of reclaimed land which wi l l be ti tled ini ts name.To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint venture PEA's statutory authority, rights and privileges toreclaim foreshore and submerged areas in Manila Bay. Section 3.2.a of theAmended JVA states that

    "PEA hereby contributes to the joint venture its rights andprivileges to perform Rawland Reclamation and HorizontalDevelopment as well as own the Reclamation Area, therebygranting the Joint Venture the full and exclusive right, authorityand privilege to undertake the Project in accordance with theMaster Development Plan."

    The Amended JVA is the product of a renegotiation of the original JVA datedApril 25, 1995 and its supplemental agreement dated August 9, 1995.

    The Threshold IssueThe threshold issue is whether AMARI, a private corporation, can acquireand own under the Amended JVA 367.5 hectares of reclaimed foreshore andsubmerged areas in Manila Bay in view of Sections 2 and 3, Article XII of the1987 Constitution which state that:

    "Section 2. All lands of the public domain, waters, minerals, coal,petroleum, and other mineral oils, all forces of potential energy,fisheries, forests or timber, wildlife, flora and fauna, and othernatural resources are owned by the State. With the exception ofagricultural lands, al l other natural resources shal l not beal ienated . x x x.x x x

    Section 3. x x x Alienable lands of the public domain shall belimited to agricultural lands. Private corporations or associationsmay not hold such al ienable lands of the publ ic domainexcept by lease , x x x."(Emphasis supplied)

    Classif ication of Reclaimed Foreshore and Submerged Areas

    PEA readily concedes that lands reclaimed from foreshore or submergedareas of Manila Bay are alienable or disposable lands of the public domain.In its Memorandum,67 PEA admits that

    "Under the Public Land Act (CA 141, as amended), reclaimedlands are classif ied as al ienable and disposable lands of thepubl ic domain:

    'Sec. 59. The lands disposable under this title shall beclassified as follows:

    (a) Lands reclaimed by the government by dredging,filling, or other means;

    x x x.'" (Emphasis supplied)

    Likewise, the Legal Task Force68 constituted under PresidentialAdministrative Order No. 365 admitted in its Report and Recommendation tothen President Fidel V. Ramos, "[R]eclaimed lands are classif ied asal ienable and disposable lands of the publ ic domain ."69 The Legal TaskForce concluded that

    "D. Conclusion

    Reclaimed lands are lands of the public domain. However, bystatutory authority, the rights of ownership and disposition overreclaimed lands have been transferred to PEA, by virtue of whichPEA, as owner, may validly convey the same to any qualifiedperson without violating the Constitution or any statute.

    The constitutional provision prohibiting private corporations fromholding public land, except by lease (Sec. 3, Art. XVII,70 1987Constitution), does not apply to reclaimed lands whose ownershiphas passed on to PEA by statutory grant."

    Under Section 2, Article XII of the 1987 Constitution, the foreshore andsubmerged areas of Manila Bay are part of the "lands of the public domain,waters x x x and other natural resources" and consequently "owned by theState." As such, foreshore and submerged areas "shall not be alienated,"unless they are classified as "agricultural lands" of the public domain. Themere reclamation of these areas by PEA does not convert these inalienablenatural resources of the State into alienable or disposable lands of the publicdomain. There must be a law or presidential proclamation officiallyclassifying these reclaimed lands as alienable or disposable and open to

  • 7/29/2019 amari case.doc

    19/29

    disposition or concession. Moreover, these reclaimed lands cannot beclassified as alienable or disposable if the law has reserved them for somepublic or quasi-public use.71

    Section 8 of CA No. 141 provides that "only those lands shall be declaredopen to disposition or concession which have been off icial ly del imited andclassif ied."72 The President has the authority to classify inalienable lands ofthe public domain into alienable or disposable lands of the public domain,

    pursuant to Section 6 of CA No. 141. In Laurel vs. Garcia,73

    the ExecutiveDepartment attempted to sell the Roppongi property in Tokyo, Japan, whichwas acquired by the Philippine Government for use as the Chancery of thePhilippine Embassy. Although the Chancery had transferred to anotherlocation thirteen years earlier, the Court still ruled that, under Article 42274 ofthe Civil Code, a property of public dominion retains such character untilformally declared otherwise. The Court ruled that

    "The fact that the Roppongi site has not been used for a long timefor actual Embassy service does not automatically convert it topatrimonial property. Any such conversion happens only if theproperty is withdrawn from public use (Cebu Oxygen and AcetyleneCo. v. Bercilles, 66 SCRA 481 [1975]. A property continues to bepart of the publ ic domain, not avai lable for privateappropriation or ownership 'unti l there is a formal declarationon the par t of the government to wi thdraw i t f rom beingsuch ' (Ignacio v. Director of Lands, 108 Phil. 335 [1960]."(Emphasis supplied)

    PD No. 1085, issued on February 4, 1977, authorized the issuance of specialland patents for lands reclaimed by PEA from the foreshore or submergedareas of Manila Bay. On January 19, 1988 then President Corazon C. Aquinoissued Special Patent No. 3517 in the name of PEA for the 157.84 hectarescomprising the partially reclaimed Freedom Islands. Subsequently, on April9, 1999 the Register of Deeds of the Municipality of Paranaque issued TCT

    Nos. 7309, 7311 and 7312 in the name of PEA pursuant to Section 103 ofPD No. 1529 authorizing the issuance of certificates of title corresponding toland patents. To this day, these certificates of title are still in the name ofPEA.

    PD No. 1085, coupled with President Aquino's actual issuance of a specialpatent covering the Freedom Islands, is equivalent to an officialproclamation classifying the Freedom Islands as alienable or disposablelands of the public domain. PD No. 1085 and President Aquino's issuance ofa land patent also constitute a declaration that the Freedom Islands are nolonger needed for public service. The Freedom Is lands are thus al ienab leor disposable lands of the publ ic domain, open to disposition orconcession to qual i f ied parties .

    At the time then President Aquino issued Special Patent No. 3517, PEA hadalready reclaimed the Freedom Islands although subsequently there werepartial erosions on some areas. The government had also completed thenecessary surveys on these islands. Thus, the Freedom Islands were nolonger part of Manila Bay but part of the land mass. Section 3, Article XII ofthe 1987 Constitution classifies lands of the public domain into "agricultural,forest or timber, mineral lands, and national parks." Being neither timber,mineral, nor national park lands, the reclaimed Freedom Islands necessarily

    fall under the classification of agricultural lands of the public domain. Underthe 1987 Constitution, agricultural lands of the public domain are the onlynatural resources that the State may alienate to qualified private parties. Allother natural resources, such as the seas or bay


Recommended