University of San Jose Recoletos October 16, 2019

Environmental and Natural Resources Law Paul Arman T. Murillo

Francisco I. Chavez vs. Public Estate Authority and Amari Coastal Bay Development
Corporation
G.R. No. 133250. May 6, 2003
Facts: On November 20, 1973, the government, through the Commissioner of Public Highways,
signed a contract with the Construction and Development Corporation of the Philippines (CDCP)
to reclaim certain foreshore and offshore areas of Manila Bay. The contract also included the
construction of Phases I and II of the Manila-Cavite Coastal Road. CDCP obligated itself to carry
out all the works in consideration of fifty percent of the total reclaimed land.
On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree 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.” 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” under the Manila-Cavite Coastal
Road and Reclamation Project (MCCRRP).
On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517, granting
and transferring to PEA “the parcels of land so reclaimed under the Manila-Cavite Coastal Road
and Reclamation Project. On April 9, 1988, the Register of Deeds issued TCT 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-Cavite Coastal Road, Parañaque City. On
April 25, 1995, PEA entered into a Joint Venture Agreement with AMARI, a private corporation,
to develop the Freedom Islands.
Petitioner assails the sale to AMARI of lands of the public domain as a blatant violation of Section
3, Article XII of the 1987 Constitution prohibiting the sale of alienable lands of the public domain
to private corporations.
On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement. On May 28,
1999, the Office of the President under the administration of then President Joseph E. Estrada
approved the Amended JVA.
Several motions for reconsideration of the Supreme Court’s July 9, 2002 decision which declared
the amended JVA null and void ab initio were filed. The conclusions of said decision were
summarized by the Court as follows:
The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by
certificates of title in the name of PEA, are alienable lands of the public domain. PEA may lease
these lands to private corporations but may not sell or transfer ownership of these lands to private
corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership
limitations in the 1987 Constitution and existing laws.
The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of
the public domain until classified as alienable or disposable lands open to disposition and
declared no longer needed for public service. The government can make such classification and
declaration only after PEA has reclaimed these submerged areas. Only then can these lands
qualify as agricultural lands of the public domain, which are the only natural resources the
government can alienate. In their present state, the 592.15 hectares of submerged areas are
inalienable and outside the commerce of man.
Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34
hectares of the Freedom Islands, such transfer is void for being contrary to Section 3, Article XII
of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable
land of the public domain.
Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares of still
submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII
of the 1987 Constitution which prohibits the alienation of natural resources other than agricultural
lands of the public domain. PEA may reclaim these submerged areas. Thereafter, the government
can classify the reclaimed lands as alienable or disposable, and further declare them no longer
needed for public service. Still, the transfer of such reclaimed alienable lands of the public domain
to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution which prohibits
private corporations from acquiring any kind of alienable land of the public domain.
Issue: Whether or not the July 9, 2002 ruling of the Supreme Court should be reversed.
Held: No. Amari cannot claim good faith because even before Amari signed the Amended JVA
on March 30, 1999, petitioner had already filed the instant case on April 27, 1998 questioning
precisely the qualification of Amari to acquire the Freedom Islands. Even before the filing of this
petition, two Senate Committees had already approved on September 16, 1997 Senate
Committee Report No. 560 which concluded that the Freedom Islands are inalienable lands of
the public domain. Thus, Amari signed the Amended JVA knowing and assuming all the attendant
risks, including the annulment of the Amended JVA. Amari has also not paid to PEA the full
reimbursement cost incurred by PEA in reclaiming the Freedom Islands. Moreover, Amari does
not claim to have even initiated the reclamation of the 592.15 hectares of submerged areas
covered in the Amended JVA, or to have started to construct any permanent infrastructure on the
Freedom Islands. In short, Amari does not claim to have introduced any physical improvement or
development on the reclamation project that is the subject of the Amended JVA.
PEA cannot claim that it is “similarly situated” as the Bases Conversion Development Authority
(BCDA) which under R.A. No. 7227 is tasked to sell portions of the Metro Manila military camps
and other military reservations is incorrect. PEA took the place of DENR as the government
agency charged with leasing or selling reclaimed lands of the public domain. The reclaimed lands
being leased or sold by PEA are not private lands, in the same manner that DENR, when it
disposes of other alienable lands, does not dispose of private lands but alienable lands of the
public domain. Only when qualified private parties acquire these lands will the lands become
private lands. In the hands of the government agency tasked and authorized to dispose of
alienable or disposable lands of the public domain, these lands are still public, not private lands.
To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private
lands will sanction a gross violation of the constitutional ban on private corporations from acquiring
any kind of alienable land of the public domain. PEA will simply turn around and transfer several
hundreds of hectares of these reclaimed and still to be reclaimed lands to a single private
 corporation in only one transaction. This scheme will effectively nullify the constitutional ban in
Section 3, Article XII of the 1987 Constitution.

REPUBLIC v. COURT OF APPEALS

FACTS:
On June 22, 1957, RA 1899 was approved granting authority to all municipalities and
chartered cities to undertake and carry out at their own expense the reclamation by dredging,
filling, or other means, of any foreshore lands bordering them, and to establish, provide, construct,
maintain and repair proper and adequate docking and harbor facilities as such municipalities and
chartered cities may determine in consultation with the Secretary of Finance and the Secretary of
Public Works and Communications.

Pursuant to the said law, Ordinance No. 121 was passed by the city of Pasay for the reclamation
of foreshore lands within their jurisdiction and entered into an agreement with Republic Real
Estate Corporation for the said project.

Republic questioned the agreement. It contended, among others, that the agreement between
RREC and the City of Pasay was void for the object of the contract is outside the commerce of
man, it being a foreshore land.
Pasay City and RREC countered that the object in question is within the commerce of man
because RA 1899 gives a broader meaning on the term “foreshore land” than that in the definition
provided by the dictionary.

RTC rendered judgment in favour of Pasay City and RREC, and the decision was affirmed by the
CA with modifications.

ISSUE:
I. Whether or not the term “foreshore land” includes the submerged area.
II. Whether or not “foreshore land” and the reclaimed area is within the commerce of man.

HELD:
The Court ruled that it is erroneous and unsustainable to uphold the opinion of the
respondent court that the term “foreshore land” includes the submerged areas. To repeat, the
term "foreshore lands" refers to:
The strip of land that lies between the high and low water marks and that is alternately wet and
dry according to the flow of the tide.
A strip of land margining a body of water (as a lake or stream); the part of a seashore between
the low-water line usually at the seaward margin of a low-tide terrace and the upper limit of wave
wash at high tide usually marked by a beach scarp or berm. (Webster's Third New International
Dictionary)
The duty of the court is to interpret the enabling Act, RA 1899. In so doing, we cannot broaden its
meaning; much less widen the coverage thereof. If the intention of Congress were to include
submerged areas, it should have provided expressly. That Congress did not so provide could only
signify the exclusion of submerged areas from the term “foreshore lands.”
It bears stressing that the subject matter of Pasay City Ordinance No. 121, as amended by
Ordinance No. 158, and the Agreement under attack, have been found to be outside the
intendment and scope of RA 1899, and therefore ultra vires and null and void.