G.R. No. 133250. May 6, 2003.

FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC ESTATES AUTHORITY

and AMARI COASTAL BAY DEVELOPMENT CORPORATION,
respondents.
Courts; Judges; Inhibition and Disqualification of Judges;The rule is that a
motion to inhibit must be denied if filed after a member of the Court had already
given an opinion on the merits of the case.—The motion to inhibit Justice Carpio
must be denied for three reasons. First, the motion to inhibit came after Justice
Carpio had already rendered his opinion on the merits of the case. The rule is
that a motion to inhibit must be denied if filed after a member of the Court had
already given an opinion on the merits of the case, the rationale being that “a
litigant cannot be permitted to speculate upon the action of the Court x x x (only
to) raise an objection of this sort after a decision has been rendered.”
_______________

* EN BANC.
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2 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
Same; Same; Same; Judges and justices are not disqualified from
participating in a case just because they have written legal articles on the law
involved in the case.—Judges and justices are not disqualified from participating
in a case just because they have written legal articles on the law involved in the
case. As stated by the Court in Republic v. Cocofed,—The mere fact that, as a
former columnist, Justice Carpio has written on the coconut levy will not
disqualify him, in the same manner that jurists will not be disqualified just
because they may have given their opinions as textbook writers on the question
involved in a case.
Supreme Court; Judgments; Prospective Application of Judgments; Natural
Resources; Reliance on De Agbayani v. PNB, 38 SCRA 429 (1971) and Benzonan
v. Court of Appeals, 205 SCRA 515 (1992), is misplaced, as these cases would
apply if the prevailing law or doctrine at the time of the signing of the Amended
Joint Venture Agreement (JVA) was that a private corporation could acquire
alienable lands of the public domain, and the Decision annulled the law or
reversed this doctrine—the prevailing law before, during and after the signing of
the Amended JVA is that private corporations cannot hold, except by lease,
alienable lands of the public domain.—Amari’s reliance on De
Agbayani and Spouses Benzonan is misplaced. These cases would apply if the
prevailing law or doctrine at the time of the signing of the Amended JVA was
that a private corporation could acquire alienable lands of the public domain, and
the Decision annulled the law or reversed this doctrine. Obviously, this is not the
case here. Under the 1935 Constitution, private corporations were allowed to
acquire alienable lands of the public domain. But since the effectivity of the 1973
Constitution, private corporations were banned from holding, except by lease,
alienable lands of the public domain. The 1987 Constitution continued this
constitutional prohibition. The prevailing law before, during and after the
signing of the Amended JVA is that private corporations cannot hold, except by
lease, alienable lands of the public domain. The Decision has not annulled or in
any way changed the law on this matter. The Decision, whether made retroactive
or not, does not change the law since the Decision merely reiterates the law that
prevailed since the effectivity of the 1973 Constitution. Thus, De Agbayani,
which refers to a law that is invalidated by a decision of the Court, has no
application to the instant case.
Natural Resources; Reclamation Projects; Government-Owned and
Controlled Corporations; Public Estates Authority (PEA);Bases Conversion
Development Authority (BCDA); PEA and BCDA, Distinguished; While PEA is the
central implementing agency tasked to undertake reclamation projects
nationwide. BCDA is an entirely different government entity which is authorized
by law to sell specific government lands that have long been declared by
presidential proclamations as military reservations for use by the different service
of the armed forces under the Department of National
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VOL. 403, MAY 6, 2003 3
Chavez vs. Public Estates Authority
Defense.—PEA is the central implementing agency tasked to undertake
reclamation projects nationwide. PEA took the place of Department of
Environment and Natural Resources (“DENR” for brevity) as the government
agency charged with leasing or sellingall reclaimed lands of the public
domain. In the hands of PEA, which took over the leasing and selling functions of
DENR, reclaimed foreshore lands are public lands in the same manner that these
same lands would have been public lands in the hands of DENR. BCDA is an
entirely different government entity. BCDA is authorized by law to
sell specific government lands that have long been declared by presidential
proclamations as military reservations for use by the different services of the
armed forces under the Department of National Defense. BCDA’s mandate is
specific and limited in area, while PEA’s mandate is general and national. BCDA
holds government lands that have been granted to end-user government
entities—the military services of the armed forces. In contrast, under Executive
Order No. 525, PEA holds the reclaimed public lands, not as an end-user entity,
but as the government agency “primarily responsible for integrating, directing,
and coordinating all reclamation projects for and on behalf of the National
Government.”
Same; Well-settled is the doctrine that public land granted to an end-user
government agency for a specific public use may subsequently be withdrawn by
Congress from public use and declared patrimonial property to be sold to private
parties.—InLaurel v. Garcia, cited in the Decision, the Court ruled that land
devoted to public use by the Department of Foreign Affairs, when no longer
needed for public use, may be declared patrimonial property for sale to private
parties provided there is a law authorizing such act. Well-settled is the doctrine
that public land granted to an end-user government agency for a specific public
use may subsequently be withdrawn by Congress from public use and declared
patrimonial property to be sold to private parties. R.A. No. 7227 creating the
BCDA is a law that declares specific military reservations no longer needed for
defense or military purposes and reclassifies such lands as patrimonial property
for sale to private parties.
Same; Government owned lands, as long as they are patrimonial property,
can be sold to private parties, whether Filipino citizens or qualified private
corporations; Once converted to patrimonial property, the land may be sold by the
public or municipal corporation to private parties, whether Filipino citizens or
qualified private corporations.—Government owned lands, as long they are
patrimonial property, can be sold to private parties, whether Filipino citizens or
qualified private corporations. Thus, the so-called Friar Lands acquired by the
government under Act No. 1120 are patrimonial property which even private
corporations can acquire by purchase. Likewise, reclaimed alienable lands of the
public domain if sold or transferred to a public or municipal corporation for a
monetary consid-
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4 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
eration become patrimonial property in the hands of the public or municipal
corporation. Once converted to patrimonial property, the land may be sold by the
public or municipal corporation to private parties, whether Filipino citizens or
qualified private corporations.
Same; AMARI is not precluded from recovering from PEA in the proper
proceedings, on a quantum meruit basis, whatever it may have incurred in
implementing the Amended JVA prior to its declaration of nullity.—Despite the
nullity of the Amended JVA, Amari is not precluded from recovering from PEA in
the proper proceedings, on a quantum meruit basis, whatever Amari may have
incurred in implementing the Amended JVA prior to its declaration of nullity.

BELLOSILLO, J., Separate Concurring and Dissenting Opinion:

Right to Information; Nothing can be more empowering than to compel access

to all information relevant to the negotiation of government contracts including
but not limited to the negotiation of government contracts including but not
limited to evaluation reports, recommendations, legal and expert opinions,
minutes of meetings, terms of reference and other documents attached to such
reports or minutes, all relating to any proposed undertaking.—First, my
concurrence. I am happy that this Court has stuck to a civil libertarian’s honesty
and transparency in government service when interpreting the ambit of the
people’s right to information on matters of public concern. Nothing can be more
empowering on this aspect than to compel access to all information relevant to
the negotiation of government contracts including but not limited to evaluation
reports, recommendations, legal and expert opinions, minutes of meetings, terms
of reference and other documents attached to such reports or minutes, all
relating to any proposed undertaking. This to me encourages our people to watch
closely the proprietary acts of State functionaries which more often than not,
because they have been cloaked in technical jargon and speculation due to the
absence of verifiable resource materials, have been left unaccounted for public
debate and searching inquiry.
Natural Resources; Reclamation Projects; Since the baseless anxiety about
the Amended Joint Venture Agreement (AJVA) lies only in the mode of recompense
for AMARI, and the AJVA offers an abundance of means to get it done, even
granting that the ponencia has correctly understood the law to prevent
permanently the transfer of reclaimed lands to AMARI, no reason could sanely
justify voiding the entire contract and eternally deny a party its due for its
onerous activities.—But the AJVA, which is basically a specie of an “I do, you
give” contract, is severable in the sense that AMARI’s share in the project need
not be paid in parcels of the reclaimed land but also in cash. The majority cannot
set this alternative aside since lawyers for AMARI are also interested in this
substitute option if all else
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Chavez vs. Public Estates Authority
fail. Another tame solution, so they say, is for the Public Estates Authority
to hold title to the reclaimed lands until transferred to a qualified transferee.
This too is possible in the name of equity. To be sure, the prestation in the PEA-
AMARI contract is not contrary to law or public policy since the government
stands to be benefited by AMARI’s part of the bargain while the latter must in
turn be compensated for its efforts; in the present context service and
compensation, “I do, you give” are certainly not illegal considerations. Since the
baseless anxiety about the AJVA lies only in the mode of recompense for AMARI,
and the AJVA offers an abundance of means to get it done, even granting that
theponencia has correctly understood the law to prevent permanently the
transfer of reclaimed lands to AMARI, no reason could sanely justify voiding the
entire contract and eternally deny a party its due for its onerous activities. As we
have held in Republic v. Court of Appeals, x x x it appearing that something
compensable was accomplished by them, following the applicable provision of law
and hearkening to the dictates of equity, that no one, not even the government
shall unjustly enrich oneself/itself at the expense of another, we believe and so
hold, that Pasay City and RREC should be paid for the said actual work done and
dredge-fill poured in x x x x
Same; Same; Lands of the private domain, being patrimonial properties, are
valid objects of contracts generally unfettered by the terms and conditions set forth
in Secs. 2 and 3 of Art. XII of the Constitution which refer only to lands of the
public domain, nor by statutes for the settlement, prescription or sale of public
lands.—Alienable lands of the public domain, or those available for alienation or
disposition, are part of the patrimonial properties of the State. They are State
properties available for private ownership except that their appropriation is
qualified by Secs. 2 and 3 of Art. XII of the Constitution and the public land laws.
Before lands of the public domain are declared available for private acquisition,
or while they remain intended for public use or for public service or for the
development of national wealth, they would partake of properties of public
dominion just like mines before their concessions are granted, in which case,
they cannot be alienated or leased or otherwise be the object of contracts. In
contrast, patrimonial properties may be bought or sold or in any manner utilized
with the same effect as properties owned by private persons. Lands of the private
domain, beingpatrimonial properties, are valid objects of contracts generally
unfettered by the terms and conditions set forth in Secs. 2 and 3 of Art. XII of
the Constitution, which refer only to lands of the public domain, nor by statutes
for the settlement, prescription or sale of public lands.
Same; Same; Reclaimed lands are lands sui generis, and precisely because of
this characterization we cannot lump them up in one telling swoop as lands of the
public domain without due regard for vested rights as well as joint executive and
legislative intent to provide otherwise.—Re-
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6 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
claimed lands are lands sui generis, as the majority would rule, and
precisely because of this characterization we cannot lump them up in one telling
swoop as lands of the public domain without due regard, for vested rights as well
as joint executive and legislative intent to provide otherwise. For, after all, it is the
executive and legislative powers that determine land classification. To illustrate,
in Province of Zamboanga del Norte v. City of Zamboanga this Court took note of
the diverging “norms” provided by laws, i.e., the Civil Code and the Law of
Municipal Corporations, in classifying municipal lands into
either public orpatrimonial, and held that “applying the norm obtaining under
the principles constituting the Law of Municipal Corporations, all those x x x
properties in question which are devoted to public service are deemed public; the
rest remain patrimonial. Under this norm, to be considered public, it is enough
that the property be held and devoted for governmental purposes like local
administration, public education, public health, etc.” Clearly, the categorization
of government lands depends upon legislative intent which the courts must
implement.
Same; Same; The transfer of the Freedom Islands to the PEA under PD 1085
(both of the 50% owned by CDCP and the other half owned by the Republic) does
not alter the description of the reclaimed lands—they remain lands of the private
domain.—The transfer of the Freedom Islands to the PEA under PD 1085 (both
the fifty percent (50%) owned by CDCP and the other half owned by the
Republic) does not alter the description of the reclaimed lands—they
remain lands of the private domain. In fact, the conveyance bolsters such
characterization: fifty percent (50%) was obtained from a private owner, CDCP,
hence subsuming it under the private domain. The other fifty percent (50%)
belonging to the Republic is given to PEA in exchange for a participation in the
latter’s equity.
Same; Same; By official measures making the reclaimed lands available for
the ownership of private corporations as transferees, the portions of land
reclaimed by CDCP were not intended by the executive and legislative branches of
government as proper authorities for such purpose to be labeled alienable lands of
the public domain but lands of the private domain, hence, generally not subject to
the strictures of Secs. 2 and 3 of Art. XII of the Constitution.—Evidently, by these
official measures making the reclaimed lands available for the ownership of
private corporations as transferees, the portions of land reclaimed by DCP were
not intended by the executive and legislative branches” government as proper
authorities for such purpose to be labeledalienable lands of the public
domain but lands of the private domain, hence, generally not subject to the
strictures of Secs. 2 and 3 of Art. XII of the Constitution. There is none of the
intention to devote them to public use in order that they may be considered as
properties till of the public domain. As it is “only the executive and possibly the
legislative department that have the authority and the power to make the
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VOL. 403, MAY 6, 2003 7
Chavez vs. Public Estates Authority
declaration that said property is no longer required for public use,” or for
that matter, already belongs to the private domain,and with the declaration
having been made by enlisting the claimed lands as pieces of assets available for
commercial use, they continue as private lands of the State when transferred to
PEA, and from the latter as mode of compensation for AMARI in the assailed
AJVA.
Same; Same; The proscription of Secs. 2 and 3 Art. XII of the Constitution
finds no application in the instant case, especially as regards the 157.84 hectares
of reclaimed lands comprising the Freedom Islands since this real estate is not of
the public domain but of the private domain; Reclaimed lands are not plain and
simple patches of the earth as agricultural, timber or mineral lands are, in the
full sense of being products of nature, but are the result of the intervention of man
just like in the extraction of mineral resources, i.e., gold, oil, petroleum, etc.—The
proscription of Secs. 2 and 3 of Art. XII the Constitution finds no application in
the instant case, especially as regards the 157.84 hectares of reclaimed lands
comprising the Freedom Islands. As explained above, this real estate is not of
the public domain but of theprivate domain. In the same way, the various public
land laws in their essential parts do not govern the alienation of the Freedom
Islands. What is more, reclaimed lands are not plain and simple patches of the
earth as agricultural, timber or mineral lands are, in the full sense of being
products of nature, but are the results of the intervention of man just like in the
extraction of mineral resources, i.e., gold, oil, petroleum, etc. Landform
encompasses only six (6) major categories: high mountains, low mountains, hills,
plains with high relief features, plains of moderate relief and plains of slight
relief. The terrain types identified by this system are established by a uniform
set of descriptive properties, and nowhere do we read therein reclaimed lands.
The origin of our islands as other islands in the western Pacific is believed to be
“the upholdings of ancient continental rocks with deep troughs between
representing downfolds or down-dropped blocks x x x [h]ence, the elevations of
those islands x x x which rest upon submarine platforms has been aided by
deformation of the earth’s crust”—or islands were not created through the
process of reclamation but through natural formation.
 Same; Same; There is nothing essentially wrong with the agreement between
PEA and AMARI in that the latter would receive a portion of the reclamation
project if successful—this is a common payment scheme for such service done; We
do not have to be confused regarding the nature of the lands yet to be reclaimed—
they are meant to serve legitimate commercial ends, hence, lands of the private
domain intended by both the executive and legislative branches of government to
be used as commercial assets.—There is nothing essentially wrong with the
agreement between PEA and AMARI in that the latter would receive a portion of
the reclamation project if successful. This is common payment scheme for such
service done. It
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8 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
is recognized under the Spanish Law of Waters and authorized by the PEA
charter as well as by RA 6957. The assailed AJVA is not awarding AMARI a
portion of the Manila Bay, a property of public dominion, but a fraction of the
land to be uplifted from it, a land of the private domain. While the reclamation
project concerns a future thing or one having potential existence, it is
nonetheless a legitimate object of a contract. We do not have to be confused
regarding the nature of the lands yet to be reclaimed. They are the same as
the Freedom Islands. Both are meant to serve legitimate commercial ends,
hence, lands of the private domainintended by both the executive and legislative
branches of government to be used as commercial assets. This objective is
obvious from PD 1084 which empowers PEA to “enter into, make, perform and
carry out contracts of every class and description, including loan agreements,
mortgages and other types of security arrangements, necessary or incidental to
the realization of its purposes with any person, firm or corporation, private or
public, and with any foreign government or entity.” Executive Order No.
525 (1979) provides that “[a]ll lands reclaimed by PEA shall belong to or be
owned by the PEA which shall be responsible for its administration,
development, utilization disposition in accordance with the provisions of
Presidential Decree No. 1084. Any and all income that the PEA may derive from
the sale, lease or use of reclaimed lands shall be used in accordance with the
provisions of Presidential Decree No. 1084.” Finally, EO 654(1981) mandates
that “[i]n the disposition its assets and properties, the Authority shall have the
authority to determine the kind and manner of payment for the transfer thereof
to any third party.” Since the principal task of PEA is to reclaim lands or to
approve the execution of it by others, its power to contract must necessarily
involve dealings with the reclaimed lands.
Same; Same; Words, and Phrases; The nomenclature attached to reclaimed
lands as belonging to the public domain is statutory origin—this means, and
ought to import, that the category may change according to legislative intent;
Nothing sacrosanct like a constitutional injunction exists that reclaimed lands be
always classified as lands of the public domain.—Admittedly, our public land
laws classify reclaimed lands as alienable lands of the public domain. Under such
taxonomy, the real estate would fall within the prohibition against ownership by
private corporations under Secs. 2 and 3, Art. XII, of the Constitution. Under the
public land laws, the mode of disposing them is mainly through lease, or if titled
in the name of a government entity, by sale but only to individual persons. But
herein lies the rub—the nomenclature attached to reclaimed lands as belonging
to the public domain isstatutory in origin. This means, and ought to import, that
the category may change according to legislative intent. The power to make laws
includes the power to alter and real them. Nothing sacrosanct like a
constitutional injunction exists that reclaimed lands be always classified as lands
of the public domain; the class is statu-
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VOL. 403, MAY 6, 2003 9
Chavez vs. Public Estates Authority
tory in foundation and so it may change accordingly, as it was modified for
purposes of the mandate of the Public Estates Authority.
Same; Same; Same; Land Registration; As a matter of ordinary land
registration practice, a special patent is a “patent to grant, cede, and convey full
ownership of alienable and disposable lands formerly covered by a reservation or
lands of the public domain” and is issued upon the “promulgation of a special law
or act of Congress or by the Secretary of Environment and Natural Resources as
authorized by an Executive Order of the President;” In the absence of a general
law on the authority of the President to transfer to a government corporation real
property belonging to the Republic, PD 1085 is free to choose the means of
conveying government lands from the Republic to PEA, a government corporation,
whether by special patent or otherwise without adjusting their character as lands
of private domains.—As a matter of ordinary land registration practice, a special
patent is a “patent to grant, cede, and convey full ownership of alienable and
disposable lands formerly covered by a reservation or lands of the public domain”
and is issued upon the “promulgation of a special law or act of Congress or by the
Secretary of Environment and Natural Resources as authorized by an Executive
Order of the President.” This meaning of a “special patent” cannot override the
overwhelming executive and legislative intent manifest in PDs 1084 and 1085 to
make the reclaimed lands available for contract purposes. What is important in
the definition of “special patent” is the grant by law of a property of the Republic
for the full ownership of the grantee while the classification of the land is not at
all decisive in such description since the “special law or act of Congress” or the
“Executive Order” may classify the subject land differently, as is done in the
instant case. Thus, the Department of Environment and Natural Resources
(DENR), through the Reservation and Special Land Grants Section of the Land
Management Division, is tasked to issue special patents in favor of “government
agencies pursuant to special laws, proclamations, and executive orders x x x
(italics supplied),” Verily, in the absence of a general law on the authority of the
President to transfer to a government corporation real property belonging to the
Republic,PD 1085 is free to choose the means of conveying government lands
from the Republic to PEA, a government corporation, whether by special patent
or otherwise without adjusting their character as lands of private domain.
 Same; Same; Same; There should be no fear calling reclaimed lands “lands
of the private domain” and making them available for disposition if this be the
legislative intent—we must not hamstring both the Executive and Congress from
making full use of reclaimed lands as an option in following economic goals by the
declaration made in the ponencia.—Indeed, there should be no fear calling
reclaimed lands “lands of the private domain” and making them available for
disposition if this be the legislative intent. The situation is no different from the
trade of mineral products
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1 SUPREME COURT REPORTS ANNOTATED
0
Chavez vs. Public Estates Authority
such as gold, copper, oil or petroleum. Through joint ventures that are
allowed under the Constitution, our government disposes minerals like private
properties. At the end of the pendulum, if we refer to reclaimed lands as lands of
the public domain inalienableexcept to individual persons, then it is time to end
all reclamation projects because these efforts entail too much expense and no
individual person would have the capital to undertake it himself. We must not
hamstring both the Executive and Congress from making full use of reclaimed
lands as an option in following economic goals by the declaration made in
the ponencia. Courts; Judgments; Right to Information; Giving petitioner a full
recognition of his right to access matters of public concern is a correct step in the
appropriate direction, and anything beyond that, as the ponencia has done
previously, is ivory-tower and unaccountable interventionism at its worst.—
Giving petitioner Chavez a full recognition of his right to access matters of public
concern is a correct step in the appropriate direction. Theponencia should have
cut and cut clean there as we must do now. Anything beyond that, as
the ponencia has done previously, is ivory-tower and unaccountable
interventionism at its worst.

PUNO, J., Separate Opinion:

Supreme Court; Judgments; Prospective Application of Judgments; I

respectfully submit that the plea of AMARI for a prospective application of the
Court’s decision of 26 July 2002 deserves serious attention—the submission of
AMARI that it believed in good faith that its Amended Joint Venture Agreement
(AJVA) does not suffer from an legal infirmity should not be dismissed with a
cavalier attitude.—I respectfully submit that the plea of the private respondent
AMARI for a prospective application of our Decision of July 26, 2002 deserves
serious attention. From the mosaic of facts, it appears that private respondent is
a Philippine corporation whose capital structure includes a heavy mix of public
investment and foreign equity. It further appears that respondent AMARI did
not conclude its Amended Joint Venture Agreement (AJVA) with the
government, thru the public respondent Public Estates Authority (PEA) without
exercising the due diligence required by law. Private respondent AMARI claims
and the records support it, that its AJVA passed the proverbial eye of the needle
before it was approved by the Chief Executive of the country. The submission of
private respondent AMARI that it believed in good faith that its AJVA does not
suffer from any legal infirmity should not be dismissed with a cavalier attitude.
Same; Same; Same; Undoubtedly, the Court’s Decision of 26 July 2002 is one
of first impression, and as such it is not unexpected that it will cause serious
unsettling effects on property rights which could have already assumed the color
of vested rights.—In sum, the records give color to the
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VOL. 403, MAY 6, 2003 11
Chavez vs. Public Estates Authority
claim respondent AMARI that it should not be blamed when it
consummated the JVA and AJVA with its co-respondent PEA. It relied on our
laws enacted under the 1935, 1973 and 1987 Constitutions and their
interpretations by the executive departments spanning the governments of
former Presidents Aquino, Ramos and Estrada, all favorable to the said JVA and
AJVA. Finding no legal impediments to these contracts, it claims to have
invested some P9 billion on the reclamation project. Should this P9 billion
investment just come to naught? The answer, rooted in the concept of
fundamental fairness and anchored on equity, is in the negative. Undoubtedly,
our Decision of July 26, 2002 is one of first impression as the ponente himself
described it. As one of first impression, it is not unexpected that it will cause
serious unsettling effects on property rights which could have already assumed
the color of vested rights. Our case law is no stranger to these situations. It has
consistently held that new doctrines should only apply prospectively to avoid
inequity and social injustice.
Same; Same; Same; The plea for prospectivity is based on the ground that
our Decision is novel not because it bars private corporations from acquiring
alienable lands for the public domain except by lease but because for the first time
we held, among others, that joint venture agreements cannot allow entities
undertaking reclamation of lands to be paid with portions of the reclaimed
lands.—With due respect, the plea for prospectivity is based on the ground that
our Decision is novel not because it bars private corporations like respondent
AMARI from acquiring alienable lands of the public domain except by lease but
becausefor the first time we held, among others, that joint venture
agreements cannot allow entities undertaking reclamation of lands to be paid
with portions of the reclaimed lands. This is thefirst case where we are
interpreting that portion of section 2, Article XII of the Constitution which states
that “x x x the exploration, development, and utilization of natural resources
shall be under the full control and supervision of the State. TheState may
directly undertake such activities, or it may enter intoco-production, joint
venture, or production sharing agreements with Filipino citizens or corporations
or associations at least sixtyper centum of whose capital is owned by such
citizens. Such agreements may be for a period not exceeding twenty-five years,
renewable for not more than twenty-five years and under such terms and
conditions as may be provided by law.” Indisputably,this part of section 2, Article
XII of the 1987 Constitution is new as it is neither in the 1973 or 1935
Constitutions. Undoubtedly too,our Decision goes against the grain of
understanding of the said provision on the part of the Executive and Legislative
Departments of our government. The disquieting effects of our Decision
interpreting said provision in a different light cannot be gainsaid.
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1 SUPREME COURT REPORTS ANNOTATED
2
Chavez vs. Public Estates Authority
Same; Same; Due Process; The majority cannot condemn AMARI of acting in
bad faith on the basis of patently inadmissible evidence without running afoul of
the rudimentary requirements of due process.—The allegation that respondent
AMARI has not complied with its obligation to PEA is a matter that cannot be
resolved in the case at bar. If at all it can be raised, it is PEA that should raise it
in a proper action for breach of contract or specific performance. This Court is not
a trier of facts and it cannot resolve these allegations that respondent AMARI
violated its contract with PEA. The majority cannot condemn respondent AMARI
of acting bad faith on the basis of patently inadmissible evidence without running
afoul of the rudimentary requirements of due process. At the very least, the
majority should hear respondent AMARI on the issue of its alleged bad faith
before condemning it to certain bankruptcy.
Same; Same; Same; Unjust Enrichment; AMARI may not be paid with
reclaimed lands, but it can be recompensed in some other ways such as in cash;
The government will be unjustly enriched if it will not be made to compensate
AMARI for the expenses it incurred in reclaiming the lands subject of the case at
bar.—This is not all. There is another dimension of unfairness and inequity
suffered by respondent AMARI as a consequence of our Decision under
reconsideration. It cannot be denied that respondent AMARI spent substantial
amount of money (the claim is P9 billion), fulfilling its obligation under the
AJVA, i.e., provide the financial, technical, logistical, manpower, personnel and
managerial requirements of the project. Our Decision is silent as a sphinx
whether these expenses should be reimbursed. Respondent AMARI may not be
paid with reclaimed lands, but it can be remunerated in some other ways such as
in cash. Our omission to order that respondent AMARI be paid commensurate to
its expenses does not sit well with our decision in Republic of the Philippines vs.
CA and Republic Estate Corporation, et al.where we held: x x x Although Pasay
City and RREC did not succeed in their undertaking to reclaim any area within
the subject reclamation project, it appearing that something compensable was
accomplished by them, following the applicable provision of law and hearkening
to the dictates of equity, that no one, not even the government shall unjustly
enrich oneself/itself at the expense of another, we believe, and so hold, that Pasay
City and RREC should be paid for the said actual work done and dredge-fill
poured in . . . ” Needless to state, the government will be unjustly enriched if it will
not be made to compensate the respondent AMARI for the expenses it incurred in
reclaiming the lands subject of the case at bar.
Same; Same; Prospective Effect of Judgments; We should strive for
consistency for rights and duties should be resolved with reasonable predictability
and cannot be adjudged by the luck of lottery.—We should strive for consistency
for rights and duties should be resolved with reasonable predictability and
cannot be adjudged by the luck of a lottery. Just a
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VOL. 403, MAY 6, 2003 13
Chavez vs. Public Estates Authority
month ago or on March 20, 2003 this Court en banc resolved a motion for
reconsideration in Land Bank vs. Arlene de Leon, et al., G.R. No. 143275. In this
case, we resolved unanimously to give aprospective effect to our Decision which
denied LBP’s petition for review. Written by our esteemed colleague, Mr. Justice
Corona, our resolution held: “Be that as it may, we deem it necessary to clarify
our Decision’s application to and effect on LBP’s pending cases filed as ordinary
appeals before the Court of Appeals. It must first be stressed that the instant
case poses a novel issue; our Decision herein will be a landmark ruling on the
proper way appeal decisions of Special Agrarian Courts. Before this case reached
us, LBP had no authoritative guideline on how to appeal decisions of Special
Agrarian Courts considering the seemingly conflicting provisions of Sections 60
and 61 of RA 6657. More importantly, the Court of Appeals has rendered
conflicting decisions on this precise issue. On the strength of Land Bank of the
Philippines vs. Hon. Feliciano Buenaventura, penned by Associate Justice
Salvador Valdez, Jr. of the Court of Appeals, certain decisions of the appellate
court held that an ordinary appeal is the proper mode. On the other hand, a
decision of the same court, penned by Associate Justice Romeo Brawner and
subject of the instant review, held that the proper mode of appeal is a petition for
review. In another case, the Court of Appeals also entertained an appeal by the
DAR filed as a petition for review. On account of the absence of jurisprudence
interpreting Sections 60 and 61 of RA 6657 regarding the proper way to appeal
decisions of Special Agrarian Courts as well as the conflicting decisions of (the)
Court of Appeals thereon, LBP cannot be blamed for availing of the wrong mode.
Based on its own interpretation and reliance on the Buenaventura ruling. LBP
acted on the mistaken belief that an ordinary appeal is the appropriate manner
to question decisions of Special Agrarian Courts. Hence, in the light of the
aforementioned circumstances, we find it proper to emphasize the prospective
application of our Decision dated September 10, 2002. A prospective application
of our Decision is not only grounded on equity and fair play but also based on the
constitutional tenet that rules of procedure shall not impair substantive rights.
Same; Same; Private Enterprise; We cannot invite investors and then
decapitate them without due process of law.—Our Decision under reconsideration
has a far reaching effect on persons and entities similarly situated as the
respondent AMARI. Since time immemorial, we have allowed private
corporations to reclaim lands in partnership with government. On the basis of
age-old laws and opinions of the executive, they entered into contracts with
government similar to the contracts in the case at bar and they invested huge
sums of money to help develop our economy. Local banks and even international
lending institutions have lent their financial facilities to support these
reclamation projects which government could not undertake by itself in view of
its scant resources. For them to lose their invaluable property rights when they
relied in good faith on these unbro-
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1 SUPREME COURT REPORTS ANNOTATED
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Chavez vs. Public Estates Authority
ken stream of laws of congress passed pursuant to our 1935, 1973 and 1987
Constitutions and executive interpretations is a disquieting prospect. We cannot
invite investors and then decapitate them without due process of law.

YNARES-SANTIAGO, J., Dissenting Opinion:

Natural Resources; Reclamation Projects; Prior statutes evince a legislative

intent to characterize reclaimed lands as alienable public lands; Inasmuch as
reclaimed lands are not public lands, the provisions of the Constitution
prohibiting the acquisition by private corporations of lands of the public domain
do not apply.—Clearly, all the foregoing statutes evince a legislative intent to
characterize reclaimed lands as alienable public lands. In other words, there was
never an intention to categorize reclaimed lands as inalienable lands of the
public domain; rather they were expressly made private property of the National
Government subject to disposition to the person who undertook the reclamation
works. Inasmuch as reclaimed lands are not public lands, the provisions of the
Constitution prohibiting the acquisition by private corporations of lands of the
public domain do not apply. In the same vein, the Court, in Director of Lands v.
Intermediate Appellate Court, et al., held that public lands which have become
private may be acquired by private corporations.
Same; Same; Obligations and Contracts; It has been opined, and
persuasively so, that the object of a contract is either the thing, right or service
which is the subject matter of the obligation arising from the contract—the object
is not necessarily a physical thing that by its very nature cannot be the subject of a
contract; The proper object is the service that was to be rendered by AMARI, which
is the act of reclamation; Surely, reclamation, in and of itself, is neither contrary
to law, morals, good customs, public order nor to public policy.—The main
decision states that the Amended JVA is void because its “object” is contrary law,
morals, good customs, public order or public policy, and that the “object” is also
outside the commerce of man, citing as authority Article 1409 of the Civil Code.
However, it has been opined, and persuasively so, that the object of a contract is
either the thing, right or service which is the subject matter of the obligation
arising from the contract. In other words, the object of the contract is not
necessarily a physical thing that by its very nature cannot be the subject of a
contract. The object of a contract can, as it appears so in this case, contemplate a
service. I submit, therefore, that the object herein is not the reclaimed land, no
matter how much emotion these piles of wet soil have stirred up. The proper
object is the service that was to be rendered by Amari, which is the act of
reclamation. Surely, reclamation, in and of itself, is neither contrary to law,
morals, good customs, public order nor to public policy. The act of reclamation is
most certainly not outside the commerce of man. It is a vital service utilized by
the Republic to increase
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VOL. 403, MAY 6, 2003 15
Chavez vs. Public Estates Authority
the national wealth and, therefore, cannot be cited as an improper object
that could serve to invalidate a contract.
Same; Same; Same; If it is the contemplated transfer of lands of the public
domain to a private corporation which renders the Amended JVA constitutionally
infirm, then resort to the alternative prestation referred to in the Amended JVA
will cure the contract.—It is actually upon this provision of the Amended JVA
that its validity hinges. If it is the contemplated transfer of lands of the public
domain to a private corporation which renders the Amended JVA constitutionally
infirm, then resort to the alternative prestation referred to in this provision will
cure the contract. The Civil Code provision on alternative obligations reads as
follows: Art. 1199. A person alternatively bound by different prestations shall
completely perform one of them. The creditor cannot be compelled to receive part
of one and part of the other undertaking. In an alternative obligation, there is
more than one object, and the fulfillment of one is sufficient, determined by the
choice of the debtor who generally has the right of election. From the point of
view of Amari, once it fulfills its obligations under the Amended JVA, then it
would be entitled to its stipulated share of the Joint Venture Profits. In this
instance, Amari would stand as creditor, with PEA as the debtor who has to
choose between two payment forms: 70% of the Joint Venture Profits, in the form
of cash or a corresponding portion of the land reclaimed. Since it has been ruled
that the transfer of any of the reclaimed lands to Amari would be
unconstitutional, one of the prestations of this alternative obligation has been
rendered unlawful. In such case, the following Civil Code provision becomes
pertinent: Art. 1202. The debtor shall lose the right of choice when among the
prestations whereby he is alternatively bound, only one is practicable.
Same; Same; Same; In an alternative obligation, the fact that one of the
prestations is found to be unlawful does not result in the total nullity of the
contract; If the stipulations can be separated from each other, then those which
are void will not have any effect, but those which are valid will be enforced.—We
must also remember that, in an alternate obligation, the fact that one of the
prestations is found to be unlawful not result in the total do nullity of the
Amended JVA. The Civil Code provides: Art. 1420. In case of a divisible contract,
it the illegal terms can be separated from the legal ones, the latter may be
enforced. As a general rule, Article 1420 is allied if there are several stipulations
in the contract, some of which are valid and some void. If the stipulations can be
separated from each other, then those which are void will not have any effect, but
those which are valid will be enforced. In case of doubt, the contract must be
considered as divisible or separable. The contract itself provides for severability
in case any of its provisions are deemed invalid. Curiously, the main decision
makes no mention of the alternative form of payment provided for in Section 1.1
(g) of the Amended JVA. A reading of the main decision would
 16
1 SUPREME COURT REPORTS ANNOTATED
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Chavez vs. Public Estates Authority
lead one to conclude that the transfer of reclaimed land is the only form of
payment contemplated by the parties. In truth, the questionable provisions of the
Amended JVA can be excised without going against the intent of the parties or
the nature of the contract. Removing all references to the transfer of reclaimed
land to Amari or its transferees will leave us with a simple contract for
reclamation services, to be paid for in cash.
Same; Same; Same; Unjust Enrichment; Declaring the Amended JVA
completely null and void would result in the unjust enrichment of the state.—It
should also be noted that declaring the Amended JVA to be completely null and
void would result in the unjust enrichment of the state. The Civil Code provision
on human relations states: Art. 19. Every person must, in the exercise of his
rights and in the performance of his duties, act with justice, give everyone his
due, and observe honesty and good faith.
Same; Same; The ruling laid down by the Decision that—“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 land”—is not
based on any previous jurisprudence, nor is it spelled out in any law.—Most
significantly, the ruling laid down by the Decision that: “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 land,” is not
based on any previous jurisprudence, nor is it spelled out in any law. It is the
result of process of induction and interpretation of several laws which have not
been set side by side in such a manner before. This pronouncement has never
been made before, and yet now it is law. So when the Decision claimed that it,
“does not change the law,” and that it, “merely reiterates the law that prevailed
since the effectivity of the 1973 Constitution,” we believe such a statement to be
inaccurate, to say the least.
Supreme Court; Judgments; Prospective Application of Judgments; Since
new doctrines, which constitute new law, are espoused in the Decision, these
should be subject to the general rule under the Civil Code regarding prospective
application.—Since new doctrines, which constitute new law, are espoused in the
Decision, these should be subject to the general rule under the Civil Code
regarding prospective application: Art. 4. Laws shall have no retroactive effect,
unless the contrary is provided. Moreover, lex prospicit, non respicit—the law
looks forward not backward. If decisions that repeal the rulings in older ones are
given only prospective application, why should not doctrines that resolve
questions of first impression be treated in like manner? Therefore, it is my
considered view that, if the amended JVA should be nullified, the ruling must be
given prospective effect and all vested rights under contracts executed during the
validity thereof must be respected.
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 Chavez vs. Public Estates Authority
Same; Same; Zeal in the pursuit of justice is admirable, especially amid the
cynicism and pessimism that has prevailed among out people in recent times, in
our pursuit of righteousness, but we must not lose sight of our duty to dispense
justice with an even hand, always mindful that where we tread, the rights of
others may be trampled upon underfoot.—The foregoing are basic principles in
civil law which have been brushed aside in the wake of this Court’s hasten to
stamp out what it deems unjust. Zeal in the pursuit of justice is admirable, to say
the least, especially amid the cynicism and pessimism that has prevailed among
our people in recent times. However, in our pursuit of righteousness, we must not
lose sight of our duty to dispense justice with an even hand, always mindful that
where we tread, the rights of others may be trampled upon underfoot.

SANDOVAL-GUTIERREZ, J., Dissenting Opinion:

Supreme Court, Judgments; A dissent is of value because it is “an appeal to

the brooding spirit of the law, to the intelligence of a future day, when a later
decision may possibly correct the error into which the dissenting judge believes the
court to have been betrayed.”—Chief Justice Charles Evans Hughes of the United
States Supreme Court stated that a dissent is of value because it is “an appeal to
the brooding spirit of the law, to the intelligence of a future day, when a later
decision may possibly correct the error into which dissenting judge believes the
court to have been betrayed.”
Natural Resources; While I joined in the initial grant of the petition, I
realized, however, that the tenor of our interpretation of the constitutional
prohibition on the acquisition of reclaimed lands by private corporations is so
absolute and circumscribed as to defeat the basic objectives of its provisions on
“The National Economy and Patrimony.”—While I joined in the initial grant of
the petition, I realized, however, that the tenor of our interpretation of the
Constitutional prohibition on the acquisition of reclaimed lands by private
corporations is so absolute and circumscribed as to defeat the basic objectives of
its provisions on “The National Economy and Patrimony.” The Constitution is a
flexible and dynamic document. It must be interpreted to meet its objectives
under the complex necessities of the changing times. Provisions intended to
promote social and economic goals are capable of varying interpretations. My
view happens to differ from that of the majority. I am confident however, that the
demands of the nation’s economy and the needs of the majority of our people will
bring the majority Decision and this Dissenting Opinion to a common
understanding. Always, the goals of the Constitution must be upheld, not
defeated nor diminished.
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1 SUPREME COURT REPORTS ANNOTATED
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Chavez vs. Public Estates Authority
Same; Reclamation Projects; Investments on the scale of reclamation projects
entail huge amounts of money, and it is a reality that only private corporations
can raise such amounts.—Infrastructure building is a function of the government
and ideally should be financed exclusively by public funds. However, present
circumstances show that this cannot be done. Thus, private corporations are
encouraged to invest in income generating national construction ventures.
Investments on the scale of reclamation projects entail huge amounts of money.
It is a reality that only private corporations can raise such amounts. In the
process, they assist this country in its economic development. Consequently, our
government should not take arbitrary action against these corporate developers.
Obviously, the courts play a key role in all disputes arising in this area of
national development.
Same; Same; Statutory Construction; Statutes must be so construed and
harmonized with other statutes as to form a uniform system of jurisprudence.—It
is a fundamental rule that if two or more laws govern the same subject, every
effort to reconcile and harmonize them must be taken. Interpretare et concordare
legibus est optimus interpretandi. Statutes must be so construed and harmonized
with other statutes as to form a uniform system of jurisprudence. However, if
several laws cannot be harmonized, the earlier statute must yield to the later
enactment. The later law is the latest expression of the legislative will.
Therefore, it is PD 1084 and PD 1085 which apply to the issues in this case.
Same; Same; Same; If harmonization and giving effect to the provisions of
both sets of laws is not possible, the special law should be made to prevail over the
general law, as it evinces the legislative intent more clearly.—Moreover, the laws
cited in our Decision are general laws which apply equally to all the individuals
or entities embraced by their provisions. The provisions refer to public lands in
general. Upon the other hand, PD 1084 and PD 1085 are special laws which
relate to particular economic activities, specific kinds of land and a particular
group of persons. Their coverage is specific and limited. More specifically, these
special laws apply to land reclaimed from Manila Bay by private corporations. If
harmonization and giving effect to the provisions of both sets of laws is not
possible, the special law should be made to prevail over the general law, as it
evinces the legislative intent more clearly. The special law is a specific enactment
of the legislature which constitutes an exception to the general statute.
Same; Same; Land reclaimed from the sea cannot fall under any of the last
three categories because it is neither forest or timber, mineral, nor park land—it
is, therefore, agricultural land.—Under the Constitution, lands of the public
domain are classified into agricultural, forest or timber, mineral lands, and
natural parks. Land reclaimed from the sea cannot fall
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Chavez vs. Public Estates Authority
under any of the last three categories because it is neither forest or timber,
mineral, nor park land. It is, therefore, agricultural land. Agricultural land of the
public domain may be alienated.However, the Constitution states that private
corporations may not hold such alienable land except by lease. It follows that
AMARI, being a private corporation, cannot hold any reclaimed area. But let it be
made clear that PD 1084 transfers the public agricultural land formed by
reclamation to the “ownership and administration” of PEA, a government owned
corporation. The transfer is not to AMARI, a private corporation, hence, the
constitutional prohibition does not apply. Corollarily, under PD 1085, PEA is
empowered to subsequently transfer to the contractor portion or portions of the
land reclaimed or to be reclaimed.
Same; Same; As PEA does not exercise sovereign functions of government
since it handles business activities for the government, the property in its hands,
not being of public dominion, is held in a patrimonial capacity which PEA may
sell to private corporations without violating the Constitution.—Does the
Constitution restrain PEA from effecting such transfer to a private corporation?
Under Article 421 of the Civil Code, all property of the State which is not of
public dominion is patrimonial. PEA does not exercise sovereign functions of
government. It handles business activities for the government. Thus, the property
in its hands, not being of public dominion, is held in a patrimonial capacity. PEA,
therefore, may sell this property to private corporations without violating the
Constitution. It is relevant to state that there is no constitutional obstacle to the
sale of real estate held by government owned corporations, like the National
Development Corporation, the Philippine National Railways, the National Power
Corporation, etc. to private corporations. Similarly, why should PEA, being a
government owned corporation, be prohibited to sell its reclaimed lands to
private corporations?
Same; Same; I take exception to the view of the majority that after the
enactment of the 1935 Constitution, Section 58 of Act 2874 continues to be
applicable up to the present and that the long established state policy is to retain
for the government title and ownership of government reclaimed land—this
simply is an inaccurate statement of current government policy.—I take exception
to the view of the majority that after the enactment of the 1935 Constitution,
Section 58 of Act 2874 continues to be applicable up to the present and that the
long established state policy is to retain for the government title and ownership
of government reclaimed land. This simply is an inaccurate statement of current
government policy. When a government decides to reclaim the land, such as the
area comprising and surrounding the Cultural Center Complex and other parts
of Manila Bay, it reserves title only to the roads, bridges, and spaces allotted for
government buildings. The rest is designed, as early as the drawing board stage,
for sale and use as commercial, industrial, entertainment or services-
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Chavez vs. Public Estates Authority
oriented ventures. The idea of selling lots and earning money for the
government is the motive why the reclamation was planned and implemented in
the first place.
Same; Same; Private Enterprise; It would be most unfair and a violation of
procedural and substantive rights to encourage investors, both Filipino and
foreign, to form corporations, build infrastructures, spend money and efforts only
to be told that the invitation to invest is unconstitutional or illegal with absolutely
no indication of how they could be compensated for their work.—May I point out
that there are other planned or on-going reclamation projects in the Philippines.
The majority opinion does not only strike down the Joint Venture Agreement
(JVA) between AMARI and PEA but will also adversely affect or nullify all other
reclamation agreements in the country. I doubt if government financial
institutions, like the Development Bank of the Philippines, the Government
Service Insurance System, the Social Security System or other agencies, would
risk a major portion of their funds in a problem-filled and highly speculative
venture, like reclamation of land still submerged under the sea. Likewise, there
certainly are no private individuals, like business tycoons and similar
entrepreneurs, who would undertake a major reclamation project without using
the corporate device to raise and disburse funds and to recover the amounts
expended with a certain margin of profits. And why should corporations part
with their money if there is no assurance of payment, such as a share in the land
reclaimed or to be reclaimed? It would be most unfair and a violation of
procedural and substantive rights to encourage investors, both Filipino and
foreign, to form corporations, build infrastructures, spend money and efforts only
to be told that the invitation to invest is unconstitutional or illegal with
absolutely no indication of how they could be compensated for their work.
Right to Information; Contracts; I believe that PEA does not have to reveal
what was going on from the very start and during the negotiations with a private
party—as long as the parties have the legal capacity to enter into a valid contract
over an appropriate subject matter, they do not have to make public, especially to
competitors, the initial bargaining, the give-and-take arguments, the mutual
concessions, the moving from one position to another, and other preliminary steps
leading to the drafting and execution of the contract; At any rate, recent
developments appear to have mooted this issue, and anything in the Decision
which apparently pinpointing the stage where the right to information appears is
obiter.—It has to be stressed that the petition does not actually assail the validity
of the JVA between PEA and AMARI. The petition mainly seeks to compel PEA
to disclose all facts on the then on-going negotiations with respondent AMARI
with respect to the reclamation of portions of Manila Bay. Petitioner relies on the
Constitutional provision that the right of the people to information on matters of
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VOL. 403, MAY 6, 2003 21
Chavez vs. Public Estates Authority
public concern shall be recognized and that access to papers pertaining to
official transactions shall be afforded the citizen. I believe that PEA does not
have to reveal what was going on from the very start and during the negotiations
with a private party. As long as the parties have the legal capacity to enter into a
valid contract over an appropriate subject matter, they do not have to make
public, especially to competitors, the initial bargaining, the give-and-take
arguments, the mutual concessions, the moving from one position to another, and
other preliminary steps leading to the drafting and execution of the contract. As
in negotiations leading to a treaty or international agreement, whether sovereign
or commercial in nature, a certain amount of secrecy is not only permissible but
compelling. At any rate, recent developments appear to have mooted this issue,
and anything in the Decision which apparently approves publicity during
ongoing negotiations without pinpointing the stage where the right to
information appears is obiter. The motions for reconsideration all treat the JVA
as a done thing, something already concrete, if not finalized.

MOTION FOR RECONSIDERATION of the decisions of the Supreme

Court.

The facts are stated in the resolution of the Court.

Francisco I. Chavez for and in his own behalf.
Romulo, Mabanta, Buenaventura, Sayoc & Delos Angeles for Central
Bay Reclamation, etc.
Abello, Concepcion, Regala, & Cruz for movants Foreign Investors
Italian-Thai Dev’t. & Centasia etc.
Azcuna, Yorac, Sarmiento, Arroyo & Chua Law Offices for Amari
Coastal Bay, etc.
Zaldy V. Trespeses for intervenor Prime Orion Phils., Inc.
Sugay Law for movants Rolando S. Atienza, et al.
RESOLUTION

CARPIO, J.:

For resolution of the Court are the following motions: (1) Motion to Inhibit
and for Re-Deliberation filed by respondent Amari Coastal Bay
Development Corporation (“Amari” for brevity) on September 13, 2002, (2)
Motion to Set Case for Hearing on Oral
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22 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
Argument filed by Amari on August 20, 2002; (3) Motion for
Reconsideration and Supplement to Motion for Reconsideration filed by
Amari on July 26, 2002 and August 20, 2002, respectively; (4) Motion for
Reconsideration and Supplement to Motion for Reconsideration filed by
respondent Public Estates Authority (“PEA” for brevity) on July 26, 2002
and August 8, 2002, respectively; and (5) Motion for Reconsideration
and/or Clarification filed by the Office of the Solicitor General on July 25,
2002. Petitioner Francisco I. Chavez filed on November 13, 2002 his
Consolidated Opposition to the main and supplemental motions for
reconsideration.
To recall, the Court’s decision of July 9, 2002 (“Decision” for brevity) on
the instant case states in its summary:
We can now summarize our conclusions as follows:

1. 1.The 157.84 hectares of reclaimed lands comprising the Freedom Islands,

now covered by certificates of title in the name of PEA, are alienable
lands of the public domain.PEA may lease these lands to private
 corporations but may not sell or transfer ownership of these lands to
private corporations. PEA may only sell these lands to Philippine
citizens, subject to the ownership limitations in the 1987 Constitution
and existing laws.
2. 2.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
areinalienable and outside the commerce of man.
3. 3.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. 4. 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

23
VOL. 403, MAY 6, 2003 23
Chavez vs. Public Estates Authority

1. declare them no longer needed for public service. Still, the transfer of such
reclaimed alienable lands of the public domain to AMARI will be void in
view of Section 3, Article XII of the 1987 Constitution which prohibits
private corporations from acquiring any kind of alienable land of the
public domain.

Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of
the 1987 Constitution. Under Article 1409 of the Civil Code, contracts whose
“object or purpose is contrary to law,” or whose “object is outside the commerce of
men,” are “inexistent and void from the beginning.” The Court must perform its
duty to defend and uphold the Constitution, and therefore declares the Amended
JVA null and void ab initio.
Amari seeks the inhibition of Justice Antonio T. Carpio,ponente of the
Decision, on the ground that Justice Carpio, before his appointment to the
Court, wrote in his Manila Times column of July 1, 1997, “I have always
maintained that the law requires the public bidding of reclamation
projects.” Justice Carpio, then a private law practitioner, also stated in the
same column, “The Amari-PEA reclamation contract is legally flawed
because it was not bid out by the PEA.” Amari claims that because of
these statements Justice Carpio should inhibit himself “on the grounds of
bias and prejudgment” and that the instant case should be “re-
deliberated” after being assigned to a newponente.
The motion to inhibit Justice Carpio must be denied for three
reasons. First, the motion to inhibit came after Justice Carpio had already
rendered his opinion on the merits of the case. The rule is that a motion to
inhibit must be denied if filed after a member of the Court had already
given an opinion on the merits of the case, the rationale being that “a
1

litigant cannot be permitted to speculate upon the action of the Court x x x

(only to) raise an objection of this sort after a decision has been
rendered.” Second, as can be readily gleaned from the summary of the
Decision quoted above, the absence of public bidding is not one of theratio
decidendi of the Decision which is anchored on violation of specific
provisions of the Constitution. The absence of public bidding was not
raised as an issue by the parties. The absence of public bidding was
mentioned in the Decision only to complete the discussion on the law
affecting reclamation contracts for the guidance of public officials. At any
_______________

1 Limpin, Jr. v. Intermediate Appellate Court, 161 SCRA 83 (1988);Araneta v.

Dinglasan, 84 Phil. 368 (1949).
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24 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
rate, the Office of the Solicitor General in its Motion for
Reconsideration concedes that the absence of public bidding in the
disposition of the Freedom Islands rendered the Amended JVA null and
void. Third, judges and justices are not disqualified from participating in
2

a case just because they have written legal articles on the law involved in
the case. As stated by the Court in Republic v. Cocofed, — 3

The mere fact that, as a former columnist, Justice Carpio has written on the
coconut levy will not disqualify him, in the same manner that jurists will not be
disqualified just because they may have given their opinions as textbook writers
on the question involved in a case.
Besides, the subject and title of the column in question was “The CCP
reclamation project” and the column referred to the Amari-PEA contract
only in passing in one sentence.
Amari’s motion to set the case for oral argument must also be denied
since the pleadings of the parties have discussed exhaustively the issues
involved in the case.
The motions for reconsideration reiterate mainly the arguments
already discussed in the Decision. We shall consider in this Resolution
only the new arguments raised by respondents.
 In its Supplement to Motion for Reconsideration, Amari argues that the
Decision should be made to apply prospectively, not retroactively to cover
the Amended JVA. Amari argues that the existence of a statute or
executive order prior to its being adjudged void is an operative fact to
which legal consequences are attached, citing De Agbayani v. PNB, thus: 4

x x x. It does not admit of doubt that prior to the declaration of nullity such
challenged legislative or executive act must have been in force and had to be
complied with. This is so as until after the judiciary, in an appropriate case,
declares its invalidity, it is entitled to obedience and respect. Parties may have
acted under it and may have changed their positions. What could be more fitting
than that in a subsequent litigation regard be had to what has been done while
such legislative or executive act was in operation and presumed to be valid in all
respects. It is now
_______________

2 Motion for Reconsideration of the Office of the Solicitor General, p. 3.

3 En Banc Resolution of February 26, 2002.
4 38 SCRA 429 (1971).
25
VOL. 403, MAY 6, 2003 25
Chavez vs. Public Estates Authority
accepted as a doctrine that prior to its being nullified, its existence as a fact must
be reckoned with. This is merely to reflect awareness that precisely because the
judiciary is the governmental organ which has the final say on whether or not a
legislative or executive measure is valid, a period of time may have elapsed
before it can exercise the power of judicial review that may lead to a declaration
of nullity. It would be to deprive the law of its quality of fairness and justice then,
if there be no recognition of what had transpired prior to such adjudication.
In the language of an American Supreme Court decision: “The actual
existence of a statute, prior to such a determination [of unconstitutional-ity], is
an operative fact and may have consequences which cannot justly be ignored.
The past cannot always be erased by a new judicial declaration. The effect of the
subsequent ruling as to invalidity may have to be considered in various
aspects,—with respect to particular relations, individual and corporate, and
particular conduct, private and official.” This language has been quoted with
approval in a resolution inAraneta v. Hill and the decision in Manila Motor Co.,
Inc. v. Flores. x x x.
xxx
x x x That before the decision they were not constitutionally infirm was
admitted expressly. There is all the more reason then to yield assent to the now
prevailing principle that the existence of a statute or executive order prior to its
being adjudged void is an operative fact to which legal consequences are
attached.
Amari now claims that “assuming arguendo that Presidential Decree Nos.
1084 and 1085, and Executive Order Nos. 525 and 654 are inconsistent
with the 1987 Constitution, the limitation imposed by the Decision on
these decrees and executive orders should only be applied prospectively
from the finality of the Decision.”
Amari likewise asserts that a new doctrine of the Court cannot operate
retroactively if it impairs vested rights. Amari maintains that the new
doctrine embodied in the Decision cannot apply retroactively on those who
relied on the old doctrine in good faith, citing Spouses Benzonan v. Court
of Appeals, thus:5

At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as
amended was that enunciated in Monge andTupas cited above. The petitioners
Benzonan and respondent Pe and the DBP are bound by these decisions for
pursuant to Article 8 of the Civil Code “judicial decisions applying or interpreting
the laws or the Constitution shall form a part of the legal system of the
Philippines.” But while our decisions
_______________

5 205 SCRA 515 (1992).

26
26 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
form part of the law of the land, they are also subject to Article 4 of the Civil
Code which provides that “laws shall have no retroactive effect unless the
contrary is provided.” This is expressed in the familiar legal maxim lex prospicit,
non respicit,the law looks forward not backward. The rationale against
retroactivity is easy to perceive. The retroactive application of a law usually
divests rights that have already become vested or impairs the obligations of
contract and hence, is unconstitutional (Francisco v. Certeza, 3 SCRA
565 [1961]).
The same consideration underlies our rulings giving only prospective effect to
decisions enunciating new doctrines. Thus, we emphasized in People v.
Jabinal, 55 SCRA 607 [1974] x x x when a doctrine of this Court is overruled and
a different view is adopted, the new doctrine should be applied prospectively and
should not apply to ‘parties’ who had relied on the old doctrine and acted on the
faith thereof.
There may be special cases where weighty considerations of equity and social
justice will warrant a retroactive application of doctrine to temper the harshness
of statutory law as it applies to poor farmers or their widows and orphans. In the
present petitions, however, we find no such equitable considerations. Not only
did the private respondent apply for free agricultural land when he did not need
it and he had no intentions of applying it to the noble purposes behind the law,
he would now repurchase for only P327,995.00, the property purchased by the
petitioners in good faith for P1,650,000.00 in 1979 and which, because of
improvements and the appreciating value of land must be worth more than that
amount now.
The buyers in good faith from DBP had a right to rely on our rulings
in Monge and Tupas when they purchased the property from DBP in 1979 or
thirteen (13) years ago. Under the rulings in these two cases, the period to
repurchase the disputed lot given to respondent Pe expired on June 18, 1982. He
failed to exercise his right. His lost right cannot be revived by relying on the 1988
case of Belisario. The right of petitioners over the subject lot had already become
vested as of that time and cannot be impaired by the retroactive application of
the Belisario ruling.
Amari’s reliance on De Agbayani and Spouses Benzonan is misplaced.
These cases would apply if the prevailing law or doctrine at the time of the
signing of the Amended JVA was that a private corporation could acquire
alienable lands of the public domain, and the Decision annulled the law or
reversed this doctrine. Obviously, this is not the case here.
Under the 1935 Constitution, private corporations were allowed to
acquire alienable lands of the public domain. But since the effectivity of
the 1973 Constitution, private corporations were banned from holding,
except by lease, alienable lands of the public domain.
27
VOL. 403, MAY 6, 2003 27
Chavez vs. Public Estates Authority
The 1987 Constitution continued this constitutional prohibition. The
prevailing law before, during and after the signing of the Amended JVA is
that private corporations cannot hold, except by lease, alienable lands of
the public domain. The Decision has not annulled or in any way changed
the law on this matter. The Decision, whether made retroactive or not,
does not change the law since the Decision merely reiterates the law that
prevailed since the effectivity of the 1973 Constitution. Thus, De
Agbayani,which refers to a law that is invalidated by a decision of the
Court, has no application to the instant case.
Likewise, Spouses Benzonan is inapplicable because it refers to a
doctrine of the Court that is overruled by a subsequent decision which
adopts a new doctrine. In the instant case, there is no previous doctrine
that is overruled by the Decision. Since the case of Manila Electric
Company v. Judge Castro Bartolome, decided on June 29, 1982, the Court
6

has applied consistently the constitutional provision that private

corporations cannot hold, except by lease, alienable lands of the public
domain. The Court reiterated this in numerous cases, and the only dispute
in the application of this constitutional provision is whether the land in
question had already become private property before the effectivity of the
1973 Constitution. If the land was already private land before the 1973
7

Constitution because the corporation had possessed it openly,

continuously, exclusively and adversely for at least thirty years since June
12, 1945 or earlier, then the corporation could apply for judicial
confirmation of its imperfect title. But if the land remained
_______________

6 114 SCRA 799 (1982).

7 Republic v. CA and Iglesia ni Cristo, and Republic v. Cendaña and Iglesia ni Cristo, 119
SCRA 449 (1982); Republic v. Villanueva and Iglesia ni Cristo, 114 SCRA 875 (1982); Director
of Lands v. Lood, 124 SCRA 460(1983); Republic v. Iglesia ni Cristo, 128 SCRA
44 (1984); Director of Lands v. Hermanos y Hermanas de Sta. Cruz de Mayo, Inc., 141 SCRA
21(1986); Director of Lands v. IAC and Acme Plywood & Veneer Inc., 146 SCRA
509 (1986); Republic v. IAC and Roman Catholic Bishop of Lucena,168 SCRA
165 (1988); Natividad v. CA, 202 SCRA 493 (1991); Villaflor v. CA and Nasipit Lumber
Co., 280 SCRA 297 (1997). In Ayog v. Cusi, Jr.,118 SCRA 492 (1982), the Court did not apply
the constitutional ban in the 1973 Constitution because the applicant corporation, Biñan
Development Co., Inc., had fully complied with all its obligations and even paid the full
purchase price before the effectivity of the 1973 Constitution, although the sales patent was
issued after the 1973 Constitution took effect.
28
28 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
public land upon the effectivity of the 1973 Constitution, then the
corporation could never hold, except by lease, such public land.
Indisputably, the Decision does not overrule any previous doctrine of the
Court.
The prevailing doctrine before, during and after the signing of the
Amended JVA is that private corporations cannot hold, except by lease,
alienable lands of the public domain. This is one of the two main reasons
why the Decision annulled the Amended JVA. The other main reason is
that submerged areas of Manila Bay, being part of the sea, are inalienable
and beyond the commerce of man, a doctrine that has remained
immutable since the Spanish Law on Waters of 1886. Clearly, the Decision
merely reiterates, and does not overrule, any existing judicial doctrine.
Even on the characterization of foreshore lands reclaimed by the
government, the Decision does not overrule existing law or doctrine. Since
the adoption of the Regalian doctrine in this jurisdiction, the sea and its
foreshore areas have always been part of the public domain. And since the
enactment of Act No. 1654 on May 18, 1907 until the effectivity of the
1973 Constitution, statutory law never allowed foreshore lands reclaimed
by the government to be sold to private corporations. The 1973 and 1987
Constitution enshrined and expanded the ban to include any alienable
land of the public domain.
There are, of course, decisions of the Court which, while recognizing a
violation of the law or Constitution, hold that the sale or transfer of the
land may no longer be invalidated because of “weighty considerations of
equity and social justice.” The invalidation of the sale or transfer may also
8

be superfluous if the purpose of the statutory or constitutional ban has

been achieved. But none of these cases apply to Amari.
Thus, the Court has ruled consistently that where a Filipino citizen
sells land to an alien who later sells the land to a Filipino, the invalidity of
the first transfer is corrected by the subsequent sale to a
citizen. Similarly, where the alien who buys the land
9

_______________
 8 Spouses Benzonan v. Court of Appeals, note 5.
9 United Church Board for World Ministries v. Sebastian, 159 SCRA 446 (1988); Sarsosa
Vda. de Barsobia v. Cuenco, 113 SCRA 547 (1982);Godinez v. Pak Luen, 120 SCRA
223 (1983); Vasquez v. Giap and Li Seng Giap & Sons, 96 Phil. 447 (1955).
29
VOL. 403, MAY 6, 2003 29
Chavez vs. Public Estates Authority
subsequently acquires Philippine citizenship, the sale is validated since
the purpose of the constitutional ban to limit land ownership to Filipinos
has been achieved. In short, the law disregards the constitutional
10

disqualification of the buyer to hold land if the land is subsequently

transferred to a qualified party, or the buyer himself becomes a qualified
party. In the instant case, however, Amari has not transferred the
Freedom Islands, or any portion of it, to any qualified party. In fact, Amari
admits that title to the Freedom Islands still remains with PEA. 11

The Court has also ruled consistently that a sale or transfer of the land
may no longer be questioned under the principle of res judicata, provided
the requisites for res judicata are present. Under this principle, the
12

courts and the parties are bound by a prior final decision, otherwise there
will be no end to litigation. As the Court declared inToledo-Banaga v.
Court of Appeals, “once a judgement has become final and executory, it
13

can no longer be disturbed no matter how erroneous it may be.” In the

instant case, there is no prior final decision adjudicating the Freedom
Islands to Amari.
There are, moreover, special circumstances that disqualify Amari from
invoking equity principles. 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
14

September 16, 1997 Senate Committee Report No. 560. This Report
concluded, after a well-publicized investigation into PEA’s sale of the
Freedom
_______________

10 Lee v. Republic, G.R. No. 128195, October 3, 2001, 366 SCRA 524;Yap v. Maravillas, 121
SCRA 244 (1983); De Castro v. Teng, 129 SCRA 85(1984).
11 Amari’s Motion for Reconsideration, p. 10.
12 Republic v. Court of Appeals, G.R. No. 101115, August 22, 2002, 387 SCRA 549; Firestone
Ceramics v. Court of Appeals, 313 SCRA 522 (1999);Herrera v. Canlas, 310 SCRA
318 (1999); People’s Homesite and Housing Corporation v. Mencias, 20 SCRA
1031 (1967); Galvez v. Tuason, 10 SCRA 344 (1964).
13 302 SCRA 331 (1999).
14 Committee on Government Corporations and Public Enterprises, and Committee on
Accountability of Public Officers and Investigations.
30
30 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
Islands to Amari, 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. Amari states that it has paid
PEA only P300,000,000.00 out of the P1,894,129,200.00 total
15

reimbursement cost agreed upon in the Amended JVA. 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. And yet Amari claims that it had already spent a
“whopping P9,876,108,638.00” as its total development cost as of June 30,
2002. Amari does not explain how it spent the rest of the
16

P9,876,108,638.00 total project cost after paying PEA P300,000,000.00.

Certainly, Amari cannot claim to be an innocent purchaser in good faith
and for value.
In its Supplement to Motion for Reconsideration, PEA claims 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. PEA’s comparison
is incorrect. The Decision states as follows:
As the central implementing agency tasked to undertake reclamation projects
nationwide, with authority to sell reclaimed lands, 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.
_______________

15 Amari’s Motion for Reconsideration, p. 49.

16 Ibid., p. 50.
31
VOL. 403, MAY 6, 2003 31
Chavez vs. Public Estates Authority
PEA is the central implementing agency tasked to undertake reclamation
projects nationwide. PEA took the place of Department of Environment
and Natural Resources (“DENR” for brevity) as the government agency
charged with leasing or selling all reclaimed lands of the public domain. In
the hands of PEA, which took over the leasing and selling functions of
DENR, reclaimed foreshore lands are public lands in the same manner
that these same lands would have been public lands in the hands of
DENR.BCDA is an entirely different government entity. BCDA is
authorized by law to sell specific government lands that have long been
declared by presidential proclamations as military reservations for use by
the different services of the armed forces under the Department of
National Defense. BCDA’s mandate is specific and limited in area, while
PEA’s mandate is general and national. BCDA holds government lands
that have been granted to end-user government entities—the military
services of the armed forces. In contrast, under Executive Order No. 525,
PEA holds the reclaimed public lands, not as an end-user entity, but as
the government agency “primarily responsible for integrating, directing,
and coordinating all reclamation projects for and on behalf of the National
Government.”
In Laurel v. Garcia, cited in the Decision, the Court ruled that land
17

devoted to public use by the Department of Foreign Affairs, when no

longer needed for public use, may be declared patrimonial property for
sale to private parties provided there is a law authorizing such act. Well-
settled is the doctrine that public land granted to an end-user government
agency for a specific public use may subsequently be withdrawn by
Congress from public use and declared patrimonial property to be sold to
private parties. R.A. No. 7227 creating the BCDA is a law that declares
specific military reservations no longer needed for defense or military
purposes and reclassifies such lands as patrimonial property for sale to
private parties.
Government owned lands, as long they are patrimonial property, can be
sold to private parties, whether Filipino citizens or qualified private
corporations. Thus, the so-called Friar Lands acquired by
_______________

17 187 SCRA 797 (1990); See also Ignacio v. Director of Lands, 108 Phil. 335 (1960); Cebu
Oxygen & Acetylene Co., Inc. v. Bercilles, 66 SCRA 481(1975).
32
32 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
the government under Act No. 1120 are patrimonial property which even 18

private corporations can acquire by purchase. Likewise, reclaimed

alienable lands of the public domain if sold or transferred to a public or
municipal corporation for a monetary consideration become patrimonial
property in the hands of the public or municipal corporation. Once
converted to patrimonial property, the land may be sold by the public or
municipal corporation to private parties, whether Filipino citizens or
qualified private corporations.
 We reiterate what we stated in the Decision is the rationale for treating
PEA in the same manner as DENR with respect to reclaimed foreshore
lands, thus:
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, as PEA has now done under the Amended
JVA, 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 which was intended to diffuse equitably the ownership of
alienable lands of the public domain among Filipinos, now numbering over 80
million strong.
This scheme, if allowed, can even be applied to alienable agricultural lands of
the public domain since PEA can “acquire x x x any and all kinds of lands.” This
will open the floodgates to corporations and even individuals acquiring hundreds,
if not thousands, of hectares of alienable lands of the public domain under the
guise that in the hands of PEA these lands are private lands. This will result in
corporations amassing huge landholdings never before seen in this country—
creating the very evil that the constitutional ban was designed to prevent. This
will completely reverse the clear direction of constitutional development in this
country. The 1935 Constitution allowed private corporations to acquire not more
than 1,024 hectares of public lands. The 1973 Constitution prohibited private
corporations from acquiring any kind of public land, and the 1987 Constitution
has unequivocally reiterated this prohibition.
_______________

18 Central Capiz v. Ramirez, 40 Phil. 883 (1920); Jacinto v. Director of Lands, 49 Phil.
853 (1926); Pugeda v. Trias, 4 SCRA 849 (1962); De la Cruz v. De la Cruz, 130 SCRA
666 (1984).
33
VOL. 403, MAY 6, 2003 33
Chavez vs. Public Estates Authority
Finally, the Office of the Solicitor General and PEA argue that the cost of
reclaiming deeply submerged areas is “enormous” and “it would be
difficult for PEA to accomplish such project without the participation of
private corporations.” The Decision does not bar private corporations
19

from participating in reclamation projects and being paid for their services
in reclaiming lands. What the Decision prohibits, following the explicit
constitutional mandate, is for private corporations to acquire reclaimed
lands of the public domain. There is no prohibition on the directors,
officers and stockholders of private corporations, if they are Filipino
citizens, from acquiring at public auction reclaimed alienable lands of the
public domain. They can acquire not more than 12 hectares per individual,
and the land thus acquired becomes private land.
 Despite the nullity of the Amended JVA, Amari is not precluded from
recovering from PEA in the proper proceedings, on a quantum
meruit basis, whatever Amari may have incurred in implementing the
Amended JVA prior to its declaration of nullity.
WHEREFORE, finding the Motions for Reconsideration to be without
merit, the same are hereby DENIED with FINALITY. The Motion to
Inhibit and for Re-Deliberation and the Motion to Set Case for Hearing on
Oral Argument are likewise DENIED.
SO ORDERED.
Davide, Jr. (C.J.), Vitug, Panganiban, Quisumbing,Austria-
Martinez, Carpio-Morales and Callejo, Sr., JJ.,concur.
Bellosillo, J., Please see separate opinion, Concuring and
dissenting
Puno, J., Please see separate opinion.
Ynarez-Santiago, J., Please see dissenting opinion.
Sandoval-Gutierrez, J., Please see my dissenting opinion.
Corona, J., I dissent.
Azcuna, J., I take no part.
_______________

19 OSG’s Motion for Reconsideration, pp. 22-24; PEA’s Supplement to Motion for
Reconsideration, p. 12.
34
34 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
SEPARATE OPINION,
CONCURRING AND DISSENTING
And in the naked light I saw
Ten thousand people, maybe more.
People talking without speaking,
People hearing without listening,
People writing songs that voices never share
And no one dared
Disturb the sound of silence.

—Paul Simon, Sound of Silence

BELLOSILLO, J.:

A STEREOTYPICAL ACTION, AN ARCHETYPAL RESPONSE, A

MATTER OF DUE PROCESS—a motion for reconsideration relieves the
pressure of mistakes shrouded in the mystified body of putative
precedents. It serves the traditional and standard procedure for a second
chance not only in favor of party-litigants but the courts as well, before
taking that great leap of faith into stare decisiswhere even our errors are
etched as rules of conduct or, as our conscious choice would have it, into
the jural postulate of a civilized society where men are able to assume that
they may control, for purposes beneficial to them, what they have created by
their own labor and what they have acquired under the existing social and
economic order. With such opportunity presenting itself in the instant
case, I am up to the task of scrutinizing a monumental challenged to the
course of economic decision-making inherent not in the mandate of this
Court but in those of the accountable political branches of our government
whose long-standing discretion we have thrashed—a perfunctory
acquiescence amidst the disturbing sound of silence is certainly feckless
and inappropriate.
First, my concurrence. I am happy that this Court has stuck to a civil
libertarian’s honesty and transparency in government service when
interpreting the ambit of the people’s right to information on matters of
public concern. Nothing can be more empowering on this aspect than to
compel access to all information relevant to the negotiation of government
contracts including but not limited to evaluation reports,
recommendations, legal and expert opinions, minutes of meetings, terms
of reference and other documents attached to such reports or minutes, all
relating to any proposed undertaking. This to me encourages our people to
watch closely the
35
VOL. 403, MAY 6, 2003 35
Chavez vs. Public Estates Authority
proprietary acts of State functionaries which more often than not, because
they have been cloaked in technical jargon and speculation due to the
absence of verifiable resource materials, have been left unaccounted for
public debate and searching inquiry.
Having said what is positively remarkable about theponencia, let me
discuss the crux of my dissent.
Firstly, as explained by the contracting parties now adversely affected
by the Decision to nullify ab initio theAmended Joint Venture Agreement
(AJVA), there is no reason to go that far to prove a point. I agree with
them. According to the ponencia the AJVA was intended to—
x x x develop the Freedom Islands. The JVA also required the reclamation of an
additional 250 hectares of submerged areas surrounding these islands to
complete the configuration in the Master Development Plan of the Southern
Reclamation Project-MCCRRP x x x x The subject matter of the Amended JVA,
as stated in its second Whereas clause, consists of three properties, namely: 1.
‘[T]hree partially reclaimed and substantially eroded islands along Emilio
Aguinaldo Boulevard in Parañaque and Las Piñas, Metro Manila, with a
combined titled area of 1,578,441 square meters,’ 2. ‘[A]nother area of 2,421,559
square meters contiguous to the three islands’; and 3. ‘[A]t AMARI’s option as
approved by PEA, an additional 350 hectares more or less to regularize the
configuration of the reclaimed area.’ PEA confirms that the Amended JVA
involves “the development of the Freedom Islands and further reclamation of
about 250 hectares . . .,” plus an option ‘granted to AMARI to subsequently
reclaim another 350 hectares . . .’ In short, the Amended JVA covers a
reclamation area of 750 hectares. Only 157.84 hectares of the 750-hectare
reclamation project have been reclaimed, and the rest of the 592.15 hectares are
still submerged areas forming part of Manila Bay. Under the Amended JVA,
AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA’s ‘actual cost’
in partially reclaiming the Freedom Islands. AMARI will also complete, at its
own expense, the reclamation of the Freedom Islands. AMARI will further
shoulder all the reclamation costs of all the other areas, totaling 592.15 hectares,
still to be reclaimed. AMARI and PEA will share, in the proportion of 70 percent
and 30 percent, respectively, the total net usable area which is defined in the
Amended JVA as the total reclaimed area less 30 percent earmarked for common
areas. Title to AMARI’s share in the net usable area, totaling 367.5 hectares, will
be issued in the name of AMARI. Section 5.2 (c) of the Amended JVA provides
that—‘. . ., PEA shall have the duty to execute without delay the necessary deed
of transfer or conveyance of the title pertaining to AMARI’s land share based on
the Land Allocation Plan. PEA, when requested in writing by AMARI, shall then
cause the issuance and delivery of the proper certifi-
36
36 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
cates of title covering AMARI’s Land Share in the name of AMARI,. . .; provided,
that if more than seventy percent (70%) of the titled area at any given time
pertains to AMARI, PEA shall deliver to AMARI only seventy percent (70%) of
the titles pertaining to AMARI, until such time when a corresponding
proportionate area of additional land pertaining to PEA has been titled.’
Indisputably, under the Amended JVA AMARI will acquire and own a maximum
of 367.5 hectares of reclaimed land which will be titled in its name. To implement
the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint
venture PEA’s statutory authority, rights and privilege to reclaim foreshore and
submerged areas in Manila Bay. Section 3.2.a of the Amended JVA states that—
‘PEA hereby contributes to the joint venture its rights and privileges to perform
Rawland Reclamation and Horizontal Development as well as own the
Reclamation Area, thereby granting the Joint Venture the full and exclusive
right, authority and privilege to undertake the Project in accordance with the
Master Development Plan.’ The Amended JVA is the product of a renegotiation of
the original JVA dated April 25, 1995 and its supplemental agreement dated
August 9, 1995. 1

But the AJVA, which is basically a specie of an “I do, you give” contract, is
severable in the sense that AMARI’s share in the project need not be paid
in parcels of the reclaimed land but also in cash. The majority cannot set
this alternative aside since lawyers for AMARI are also interested in this
substitute option if all else fail. Another tame solution, so they say, is for
2

the Public Estates Authority to hold title to the reclaimed lands until
transferred to a qualified transferee. This too is possible in the name of
3

equity. To be sure, the prestation in the PEA-AMARI contract is not

contrary to law or public policy since the government stands to be
benefited by AMARI’s part of the bargain while the latter must in turn be
compensated for its efforts; in the present context service and
compensation, “I do, you give” are certainly not illegal considerations.
Since the baseless anxiety about the AJVA lies only in the mode of
recompense for AMARI, and the AJVA offers an abundance of means to
get it done, even granting that the ponencia has correctly understood the
law to prevent permanently the transfer of reclaimed lands to AMARI, no
reason could sanely justify voiding the
_______________

1 Decision, pp. 3, 44-45.

2 Rollo, p. 622.
3 Ibid.
37
VOL. 403, MAY 6, 2003 37
Chavez vs. Public Estates Authority
entire contract and eternally deny a party its due for its onerous activities.
As we have held in Republic v. Court of Appeals, 4

x x x it appearing that something compensable was accomplished by them,

following the applicable provision of law and hearkening to the dictates of equity,
that no one, not even the government shall unjustly enrich oneself/itself at the
expense of another, we believe and so hold, that Pasay City and RREC should be
paid for the said actual work done and dredg-fill poured in x x x x
Secondly, I am not comfortable with the idea of forever withholding
reclaimed lands as unmoving assets in our developmental concerns.
Government lands are classified in a number of ways. They may
be lands of the public domain, either alienable orinalienable, or lands of
the private domain, which refer to “land belonging to and owned by the
state as a private individual, without being devoted for public use, public
service or the development of national wealth x x x similar to patrimonial
properties of the State.” Under the Civil Code, government lands can
5

either be properties of the public dominion, or 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, or
those which belong to the State, without being for public use, intended for
some public service or for the development of the national
wealth; or patrimonial properties of the State, i.e.,properties other
6

than properties of the public dominion or former properties of the public

dominion that are no longer intended for public use or for public
service. Clearly, the government owns real estate which is part of the
7

“public lands” or alienable lands of the public domain and other real estate
which is not a part thereof.
Alienable lands of the public domain, or those available for alienation
or disposition, are part of the patrimonial properties of the State. They are
8

State properties available for private ownership

_______________
 4 G.R. No. 103882, 25 November 1998, 299 SCRA 199, 238.
5 DENR AO 20-98, re: “Revised Rules and Regulations on the Conduct of Appraisal of
Public Lands and Other Patrimonial Properties of the Government.”
6 Civil Code, Art 420.
7 Id., Arts. 421 and 422.
8 II Tolentino, Civil Code of the Philippines 38 (1992).
38
38 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
except that their appropriation is qualified by Secs. 2 and 3 of Art. XII of
the Constitution and the public land laws. Before lands of the public
9

domain are declared available for private acquisition, or while they

remain intended for public use or for public service or for the development
of national wealth, they would partake of properties of public
dominion just like mines before their concessions are granted, in which 10

case, they cannot be alienated or leased or otherwise be the object of

contracts. In contrast,patrimonial properties may be bought or sold or in
11

any manner utilized with the same effect as properties owned by private
persons. Lands of the private domain, beingpatrimonial properties, are
12

valid objects of contracts generally unfettered by the terms and conditions

set forth in Secs. 2 and 3 of Art. XII of the Constitution,
_______________

9 Sec. 2 reads in part, “[a]ll 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 other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. The exploration,
development, and utilization of natural resources shall be under the full control and
supervision of the State. The State may directly undertake such activities, or it may enter into
co-production, joint venture, or production-sharing agreements with Filipino citizens, or
corporations associations at least sixty per centum of whose capital is owned by such citizens.
Such agreements may be for a period not exceeding twenty-five years, renewable for not more
than twenty-five years, and under such terms and conditions as may be provided by law. In
cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power beneficial use may be the measure and limit of the grant x x x,”
while Sec. 3 provides “[l]ands of the public domain are classified into agricultural, forest or
timber, mineral lands, and national parks. Agricultural lands of the public domain may be
further classified by law according to the uses to which they may be devoted. Alienable lands
of the public domain shall be limited to agricultural lands. Private corporations or
associations may not hold such alienable lands of the public domain except by lease, for a
period not exceeding twenty-five years, renewable for not more than twenty-five years, and
not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more
than five hundred hectares, or acquire not more than twelve hectares thereof by purchase,
homestead, or grant.”
10 Tolentino, supra.
11 Montano v. Insular Government, 22 Phil. 572 (1909).
 12 Manila Lodge No. 761 v. Court of Appeals, No. L-41001, 30 September 1976, 73 SCRA
162.
39
VOL. 403, MAY 6, 2003 39
Chavez vs. Public Estates Authority
which refer only to lands of the public domain, nor by statutes for the
settlement, prescription or sale of public lands.
The ponencia classified the reclaimed land herein involved to be lands
of the public domain. Thus, as summarized in the ponencia sought to be
reconsidered—

1. 1.The 157.84 hectares of reclaimed lands comprising the Freedom

Islands, now covered by certificates of title in the name of PEA, are
alienable lands of the public domain. PEA may lease these lands to
private corporations but may not sell or transfer ownership of
these lands to private corporations. PEA may only sell these lands
to Philippine citizens, subject the ownership limitations in the
1987 Constitution and existing laws.
2. 2.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.
3. 3.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.
4. 4.Since the Amended JVA also seeks 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 need 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. 13
This is where I also disagree. Reclaimed lands are lands sui generis, as the
majority would rule, and precisely because of this
_______________

13 Decision, pp. 73-74.

40
40 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
characterization we cannot lump them up in one telling swoop as lands of
the public domain without due regard, for vested rights as well as joint
executive and legislative intent to provide otherwise. For, after all, it is the
executive and legislative powers that determine land classification. To 14

illustrate, in Province of Zamboanga del Norte v. City of Zamboanga this 15

Court took note of the diverging “norms” provided by laws, i.e., the Civil
Code and the Law of Municipal Corporations, in classifying municipal
lands into either public or patrimonial, and held that “applying the norm
obtaining under the principles constituting the Law of Municipal
Corporations, all those x x x properties in question which are devoted to
public service are deemed public; the rest remain patrimonial. Under this
norm, to be considered public, it is enough that the property be held and
devoted for governmental purposes like local administration, public
education, public health, etc.” Clearly, the categorization of government
lands depends upon legislative intent which the courts must implement.
The Freedom Islands was reclaimed by the Construction and
Development Corporation of the Philippines (CDCP) pursuant to a
contract with the Republic whereby the former in exchange for its efforts
would receive fifty percent (50%) of the total reclaimed land. This
arrangement is authorized under Art. 5 of the Spanish Law of
Waterswhich provides, “[l]ands reclaimed from the sea in consequence of
works constructed by the State, or by the provinces, pueblos or private
persons, with proper permission, shall become the property of the party
constructing such works, unless otherwise provided by the terms of the
grant of authority,” and by PD 3-A (1973) stating that, “[t]he provisions of
any law to the contrary notwithstanding, the reclamation of areas under
water, whether foreshore or inland, shall be limited to the National
Government or any person authorized by it under a proper contract (italics
supplied) Both statutes are still effective since either one repeals the other
but only a modification is inserted in that reclamation by a private
contractor must now be governed by a “contract.” As the standing
laws, i.e., Art. 5 of the Spanish Law of Waters andPD 3-A, treat reclaimed
lands as proper objects for disposition whether by grant of authority or
contract, such reclaimed lands as they
_______________

14 Laurel v. Garcia, G.R. Nos. 92013 and 92047, 25 July 1990, 187 SCRA 797.
15 No. L-24440, 28 March 1968, 22 SCRA 1334, 1342.
 41
VOL. 403, MAY 6, 2003 41
Chavez vs. Public Estates Authority
have been acquired by the State by means of a contract are not properties
of public dominion but patrimonial lands of the State that it can dispose,
and lands of the private domain that the State may alienate to anyone
since the statutes make no restriction altogether.
The reclaimed lands pertaining to CDCP under the contract with the
Republic are private properties of CDCP. The Republic is authorized to
convey them to CDCP, a corporation duly organized and registered under
the laws of the Philippines, and the lands themselves are products of
16

CDCP’s efforts, money and expertise. When CDCP acquires property, it

does so in its private capacity in the course of the exercise of its corprate
powers as a juridical entity and acting as an ordinary person capable of
entering into contracts or making transactions for the transmission of title
or other real rights. Under Art. 712 of the Civil Code, ownership and
17

other real rights over property are acquired and transmitted by tradition
in consequence of certain contracts. In fact, PD 1085 (1977) acknowledges 18

the existence of rights in favor of CDCP and conditions the transfer of

assets from CDCP to PEA upon the recognition and respect for “the rights
and interests of the Construction and Development Corporation of the
Philippines pursuant to the aforesaid contract and furthermore, upon the
transfer of “such portion or portions of the land reclaimed or to be
reclaimed as provided for in the above-mentioned contract” to the
contractor or his assignees.
The rest of the lands reclaimed by CDCPs Freedom Islands but
belonging to the Republic under the contracti.e., the other fifty percent
(50%) thereof, are lands of the private domain. The reason is simple: this
fifty percent (50%) to which the Republic is entitled is only an extension of
the other fifty percent (50%) that went to
_______________

16 See PD 1113 (1977) entitled “Granting the Construction and Development Corporation of
the Philippines (CDCP) a Franchise to Operate, Construct and Maintain Toll Facilities in the
North and South Luzon Toll Expressways and for Other Purposes.”
17 See Salas v. Jarencio, No. 1-29788, 30 August 1972, 46 SCRA 734.
18 PD 1085 is entitled “Conveying the Land Reclaimed in the Foreshore and Offshore of the
Manila Bay (The Manila-Cavite Coastal Road Project) as Property of the Public Estates
Authority as well as Rights and Interest with Assumption of Obligations in the Reclamation
Contract Covering Areas of the Manila Bay between the Republic of the Philippines and the
Construction and Development Corporation of the Philippines.”
42
42 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
CDCP as its private property in consideration of its reclamation. An
“extension,” signifies enlargement in any direction—in length, breadth, or
circumstance. Thus, inManila Lodge No. 761 v. Court of Appeals we
19 20

held: “[i]f the reclaimed area is an extension of the Luneta, then it is of the
same nature or character the old Luneta. Anent this matter, it has been
said that a power to extend (or continue an act or business) cannot
authorize a transaction that is totally distinct.” Moreover, as in the case of
lands obtained in escheat proceedings or succession which are properties
of the private domain, the reclaimed lands are procured through the
contract between the Republic and CDCP without which they would not
have come into being.
The transfer of the Freedom Islands to the PEA underPD 1085 (both
the fifty percent [50%] owned by CDCP and the other half owned by the
Republic) does not alter the description of the reclaimed lands—they
remain lands of the private domain. In fact, the conveyance bolsters such
characterization: fifty percent (50%) was obtained from a private owner,
CDCP, hence subsuming it under the private domain. The other fifty 21

percent (50%) belonging to the Republic is given to PEA in exchange for a

participation in the latter’s equity. As explained in DOJ Opinion No. 026,
s. 1994, which answers negatively whether the President may transfer
gratuitously the title of the Republic over all lands within the Old Bilibid
Compound (OBC) in favor of the PEA, subject to the existing valid private
rights if there be any, to form part of PEA’s proj-ect-related asset pool—
First and foremost, PEA’s Charter delimits the contributions of the National
Government to the PEA which are to be compensated by the equivalent number of
shares of stocks of the PEA in the name of the Republic (Secs. 7 and 15, P.D.
1084). The proposed gratuitous transfer of valuable national government
property of the PEA by a Presidential Proclamation would go beyond the amount
of the contribution/exposure of the National Government to the capital of the
PEA as prescribed by law and do away with the consideration therefor that is the
equivalent number of
_______________

19 Manila Lodge No. 761 v. Court of Appeals, supra, citing 15-Words and Phrases, p. 614,
citing Mayor, etc. of Monroe vs. Quachita Parish, 17 So. 498, 499, 47 La Ann. 1061.
20 See Note 12 at p. 181.
21 See Pindangan Agricultural Co., Inc. v. Dans, No. L-14591, 26 September 1962, 6 SCRA 14.
43
VOL. 403, MAY 6, 2003 43
Chavez vs. Public Estates Authority
shares of stocks of the PEA to be issued in the name of the National Government.
Accordingly, the said proposal would run counter to the provisions of the
abovementioned Charter, or amount to an amendment of the said law (italics
supplied).
Consequently, under LOI 1390 (1984), accelerate the development of the
First Neighborhood Unit Project within the Manila-Cavite Coastal Road
Project, an excess of the reclaimed land was ceded by PEA to the Marina
Properties Corporation. Administrative Order No. 348 (1997) authorized
PEA to undertake “pursuant to its charter (PD 1084 and PD 1085)
ancillary reclamation works to put in place the drainage canals and
outfalls and to negotiate andenter into such agreements including land-
swapping, on a value for value basis, as may be necessary for the
acquisition of rights-of-way (ROW) for the said major roads drainage
canals in order that these are undertaken at no cost or budgetary outlay on
the part of PEA or the National Government (italics
supplied)” Subsequently, AO No. 397(1998) of then President Ramos
22

settled claims of CDCP against PEA by conveying portions of the lands

previously reclaimed under CDCP’s contract with the Republic.
Evidently, by these official measures making the reclaimed lands
available for the ownership of private corporations as transferees, the
portions of land reclaimed by DCP were not intended by the executive and
legislative branches” government as proper authorities for such purpose to
be labeled alienable lands of the public domainbut lands of the private
domain, hence, generally not subject to the strictures of Secs. 2 and 3 of
Art. XII of theConstitution. There is none of the intention to devote them
to public use in order that they may be considered as properties still of the
public domain. As it is “only the executive and possibly the legislative
23

department that have the authority and the power to make the
declaration that said property is no longer required for public use,” or for 24

that matter, already belongs to the private domain, and with the
declaration having been made by enlisting the
_______________

22 AO 348 is entitled “Directing the Public Estates Authority to Adopt Measures for the
Immediate Implementation of the Boulevard 2000 Framework Plan to Alleviate the Problems
of Traffic and Flooding in the Area during the Rainy Season.”
23 Manila Lodge No. 761 v. Court of Appeals, supra; see Montano v. Insular Government,
supra.
24 Ibid.
44
44 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
claimed lands as pieces of assets available for commercial use, they
continue as private lands of the State when transferred to PEA, and from
the latter as mode of compensation for AMARI in the assailed AJVA.
The authority to dispose of government lands is a strongindicium of the
patrimonial composition of the properties. Ownership is the right to enjoy
25

and dispose of a thing without further limitations than those established

by law, and jus disponendi of one’s property is an attribute of ownership.
This is clear from PD 1084 (1977), the charter of PEA which states as
among the purposes thereof to “reclaim land, including foreshore and
submerged areas, by dredging, filling or other means, or to acquire
reclaimed lands,” or to “develop, improve, acquire, administer, deal in,
subdivide, dispose, lease and sell any and all kinds of lands, buildings,
estates and other forms of real property, owned, managed, controlled
and/or operated by the government.” To this end, PEA was empowered to
“purchase, lease, build, alter, construct, erect, enlarge, occupy, manage,
sell, mortgage, dispose of or otherwise deal in, buildings of every kind and
character whatsoever, whether belonging to, or to be acquired by the
Authority.”
Significantly, to stress the legislative intent to segregate
PEA’s patrimonial lands or lands of the private domainwhich are being
used as assets in its commercial undertakings from the realm of alienable
lands of the public domain, PD 1084 purposely vested it with the right to
“hold lands of the public domain in excess of [the] area permitted to
private corporations by statute.” In the sameDOJ Opinion No. 026, s.
1994 mentioned above, it is articulated although ruefully that the power of
PEA to dispose of its assets constitutes adequate legal basis under Sec. 48,
Chapt. 12, Bk. I, of EO 292, the Administrative Code of 1997, as well as 26

under our ruling in Laurel v. Garcia that “[i]t is not for the President to
27

convey valuable real property of the government on his or her own sole
will x x x [a]ny such conveyance must be authorized and approved by a
law enacted by Congress x x x [i]t requires executive
_______________

25 Manila Lodge No. 761 v. Court of Appeals, supra.

26 This provision reads: “Whenever real property of the Government isauthorized by law to
be conveyed, the deed of conveyance shall be executed in behalf of the government by the
following x x x x (italics supplied)”
27 See Note 14 at p. 812.
45
VOL. 403, MAY 6, 2003 45
Chavez vs. Public Estates Authority
and legislative concurrence” for PEA to exercise validly such mandate.
The proscription of Secs. 2 and 3 of Art. XII of theConstitution finds no
application in the instant case, especially as regards the 157.84 hectares of
reclaimed lands comprising the Freedom Islands. As explained above, this
real estate is not of the public domain but of theprivate domain. In the
same way, the various public land laws in their essential parts do not
govern the alienation of the Freedom Islands. What is more, reclaimed
lands are not plain and simple patches of the earth as agricultural, timber
or mineral lands are, in the full sense of being products of nature, but are
the results of the intervention of man just like in the extraction of mineral
resources, i.e., gold, oil, petroleum, etc. Landform encompasses only six (6)
major categories: high mountains, low mountains, hills, plains with high
relief features, plains of moderate relief and plains of slight relief. The 28

terrain types identified by this system are established by a uniform set of

descriptive properties, and nowhere do we read therein reclaimed lands.
The origin of our islands as other islands in the western Pacific is believed
to be “the upholdings of ancient continental rocks with deep troughs
between representing downfolds or down-dropped blocks x x x [h]ence, the
elevations of those islands x x x which rest upon submarine platforms has
been aided by deformation of the earth’s crust” —our islands were not
29

created through the process of reclamation but through natural formation.

In fact, reclaimed lands are the result of man’s interference with
nature. They are not akin to land categories as we know them but more
representative of the exploitation of natural resources coupled with the
inventiveness of man. As mentioned above, the more relevant comparisons
would be the exploration and utilization of mineral resources that are
turned over to the private contractor in exchange for certain fees and
royalties. To be sure, the constitu-
30

_______________

28 The Social Science I Committee, University of the Philippines, Foundations of Behavioral

Science: A Book of Readings 11 (1987).
29 Id., at p. 24.
30 See e.g. RA 7942 (1995) entitled “An Act Instituting a New System of Mineral Resources
Exploration, Development, Utilization, and Conservation” stating “[a] mineral agreement
shall grant to the contractor the exclusive right to conduct mining operations and to extract
all mineral resources found in the contract area.”
46
46 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
tional injunction in Sec. 2 of Art. XII that “[w]ith the exception of
agricultural lands, all other natural sources shall not be alienated” was
never intended to restrict our leaders in the executive branch to require in
mineral agreements a stipulation “requiring the Contractor to dispose of
the minerals and by-products produced at the highest market price and to
negotiate for more advantageous terms and conditions subject to the right
to enter into long-term sales or marketing contracts or foreign exchange
and commodity hedging contracts which the Government acknowledges to
be acceptable x x x x (italics supplied)” 31

Without doubt, what applies to reclamation projects is this portion of

Sec. 2, Art. XII of the Constitution—
x x x [t]he exploration, development, and utilization of natural resources shall be
under the full control and supervision of the State. The State may directly
undertake such activities, or it may enter into coproduction, joint venture; or
production-sharing agreements with Filipino citizens, or corporations or
associations at least sixty per centum of whose capital is owned by such citizens.
Such agreements [are] x x x under such terms and conditions as may be provided
by law (italics supplied).”
The clause “under such terms and conditions as may be provided by law”
refers to the standing laws affecting reclaimed lands, such as the PEA
charter. The orientation to this portion of Sec. 2 explains why in most
executive issuances and statutes relating to reclamation of lands we would
read references to joint venture or production-sharing agreements. Hence,
in EO 405 (1997) Authorizing the Philippine Ports Authority (PPA) to
Reclaim and Develop Submerged Areas Vested in the PPA For Port-Related
Purposes, it was noted in the “Whereas” Clauses that land reclamation and
development projects are capital intensive infrastructure enterprises
requiring huge financial outlays through joint venture agreements. In this
light, we ought to resolve the instant reclamation project according to the
clear intendment of the executive and legislative branches of government
to handle reclaimed lands as patrimonial properties and lands of the
private domain of the State.
_______________

31 DENR AO 40-96, is entitled: “Revised Implementing Rules and Regulations of Republic

Act No. 7942, otherwise known as the ‘Philippine Mining Act 1995.’ ”
47
VOL. 403, MAY 6, 2003 47
Chavez vs. Public Estates Authority
As regards the real character of reclaim lands, Sec. 302 ofRA
7160 (1991) provides that “[t]he contractor shall be entitled to a
32

reasonable return of its investment in accordance with its bid proposal as

accepted by the local government unit concerned x x x x In case of land
reclamation or construction of industrial estates, the repayment plan may
consist of the grant of a portion or percentage of the reclaimed land or the
industrial estate constructed.” Under Sec. 6 of RA 6957 (1990), “the 33

contractor shall be entitled to a reasonable return of its investment and

operating and maintenance costs x x x x In the case of land reclamation or
the building of industrial estates, the repayment scheme may consist of
the grant of a portion or percentage of the reclaimed land or industrial
estate built, subject to the constitutional requirements with respect to the
ownership of lands.” The mention of the “constitutional requirements” in
RA 6957 has to do with the equity composition of the corporate recipient of
the land, i.e., “corporations or associations at least sixty per centum of
whose capital is owned by such citizens” and not to the outright
prohibition against corporate ownership oflands of the public domain. It 34

is also important to note that a “contractor” is any “individual, firm,

partnership, corporation, association or other organization, or any
combination of any thereof,” thus qualifying AMARI to receive a portion
35

of the reclaimed lands.

There is nothing essentially wrong with the agreement between PEA
and AMARI in that the latter would receive a portion of the reclamation
project if successful. This is a common payment scheme for such service
done. It is recognized under the Spanish Law of Waters and authorized by
the PEA charter as well as by RA 6957. The assailed AJVA is not
awarding AMARI a portion of the Manila Bay, a property of public
dominion, but a fraction of the land to be uplifted from it, a land of the
private domain.While the
_______________
 32 The Local Government Code of 1991.
33 This is the Build, Operate and Transfer Law.
34 See 8 February 1990 and 26 March 1990, 12th Congress, Regular Session, S.B. No. 1285,
pp. 9-12, 32-33.
35 Republic Act 4566 (1965) entitled “An Act Creating the Philippine Licensing Board for
Contractors, Prescribing Its Powers, Duties and Functions, Providing Funds Therefor, and for
Other Purposes.”
48
48 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
reclamation project concerns a future thing or one having potential
existence, it is nonetheless a legitimate object of a contract. 36

We do not have to be confused regarding the nature of the lands yet to

be reclaimed. They are the same as theFreedom Islands. Both are meant
to serve legitimate commercial ends, hence, lands of the private
domainintended by both the executive and legislative branches of
government to be used as commercial assets. This objective is obvious
from PD 1084 which empowers PEA to “enter into, make, perform and
carry out contracts of every class and description, including loan
agreements, mortgages and other types of security arrangements,
necessary or incidental to the realization of its purposes with any person,
firm or corporation, private or public, and with any foreign government or
entity.” Executive Order No. 525(1979) provides that “[a]ll lands
37

reclaimed PEA shall belong to or be owned by the PEA which shall be

responsible for its administration, development, utilization or disposition
in accordance with the provisions of Presidential Decree No. 1084. Any
and all income that the PEA may derive from the sale, lease or use of
reclaimed lands shall be used in accordance with the provisions of
Presidential Decree No. 1084.” Finally, EO 654 (1981) mandates that “[i]n
38

the disposition of its assets and properties, the Authority shall have the
authority to determine the kind and manner of payment for the transfer
thereof to any third party.” Since the principal task of PEA is to reclaim
lands or to approve the execution of it by others, its power to contract
must necessarily involve dealings with the reclaimed lands.
Admittedly, our public land laws classify reclaimed lands as alienable
lands of the public domain. Under such taxonomy, the real estate would
39

fall within the prohibition against ownership by

_______________

36 Civil Code, Arts. 1347 and 1461.

37 EO 525 is entitled: “Designating the Public Estates Authority as the Agency Primarily
Responsible for all Reclamation Projects.”
38 EO 654 is entitled: “Further Defining Certain Functions and Powers of the Public
Estates Authority.”
39 CA 141 (1936), Sec. 59 which states: “The lands disposable under this title shall be
classified as follows: (a) Lands reclaimed by the Government by dredging, filing, or other
means x x x;” Act No. 2874 (1919), Sec. 56 which provides: “The lands disposable under this
title shall be classified as follows: (a) Lands reclaimed by the Government by dredging, filing,
or other means x x x x”
49
VOL. 403, MAY 6, 2003 49
Chavez vs. Public Estates Authority
private corporations under Secs. 2 and 3, Art. XII, of
theConstitution. Under the public land laws, the mode of disposing them
is mainly through lease, or if titled in the name of a government entity, by
sale but only to individual persons. But herein lies the rub—the
nomenclature attached to reclaimed lands as belonging to the public
domain is statutory in origin. This means, and ought to import, that the
category may change according to legislative intent. The power to make
laws includes the power to alter and re-peal them. Nothing sacrosanct like
a constitutional injunction exists that reclaimed lands bealways classified
as lands of the public domain; the class is statutory in foundation and so it
may change accordingly, as it was modified for purposes of the mandate of
the Public Estates Authority.
The issuance of a “special patent” under PD 1085, i.e., “Special Land
Patent/Patents shall be issued by the Secretary of Natural Resources in
favor of the Public Estate Authority without prejudice to the subsequent
transfer to the contractor or his assignees of such portion or portions of the
land reclaimed or to be reclaimed as provided for in the above-mentioned
contract x x x [o]n the basis of such patents, the Land Registration
Commission shall issue the corresponding certificates of title,” does not
mean that the reclaimed lands prior to such “special patent” are classified
as lands of the public domain.
As a matter of ordinary land registration practice, a special patent is a
“patent to grant, cede, and convey full ownership of alienable and
disposable lands formerly covered a reservation or lands of the public
domain” and is issued upon the “promulgation of a special law or act of
Congress or by the Secretary of Environment and Natural Resources as
authorize by an Executive Order of the President.” This meaning of a 40

“special patent” cannot override the overwhelming executive and

legislative intent manifest in PDs 1084 and 1085 to make the reclaimed
lands available for contract purposes. What is important in the definition
of “special patent” is the grant by law of a property of the Republic for the
full ownership of the grantee while the classification of the land is not at
all decisive in such description since the “special law or act of Congress” or
the “Executive Order” may classify the subject land differently, as is done
in the instant case. Thus, the Department of Envi-
_______________

40 DENR Manual for Land Disposition, p. 3.

50
50 SUPREME COURT REPORTS ANNOTATED
 Chavez vs. Public Estates Authority
ronment and Natural Resources (DENR), through the Reservation and
Special Land Grants Section of the Land Management Division, is tasked
to issue special patents in favor of “government agencies pursuant to
special laws, proclamations, and executive orders x x x {italics
supplied),” Verily, in the absence of a general law on the authority of the
41

President to transfer to a government corporation real property belonging

to the Republic, PD 1085 is free to choose the means of conveying
42

government lands from the Republic to PEA, a government corporation,

whether by special patent or otherwise without adjusting their character
as lands of private domain.
Additionally, nothing momentous can be deduced from the participation
of the Secretary of Natural Resources in the signing of the “special patent”
since he is by law, prior to the transfer of the reclaimed lands to PEA, the
land officer of the Republic for lands of the private domain as may be
gleaned from Sec. 1 of Act 3038, the general law dealing with the
disposition of lands of the private domain, i.e., “[t]he Secretary of
43

Agriculture and Natural Resources is hereby authorized to sell or lease

land of the private domain of the Government of the Philippines Islands x
x x.” This is because under the organization of the DENR, the Land
44

Management Division is charged with the “planning formulating, and

recommending policies for the sound management and disposition of x x x
friar lands, patrimonial properties of the government, and other lands
under the region’s administration as well as guidelines on land use and
classification,” while the Reservation and Special
_______________

41 Id., at p. 6.
42 DOJ Opinion No. 026, s. 1994, promulgated by Sec. of Justice Franklin M. Drilon.
43 Act 3038, Sec. 2 reads: “The sale or lease of the land referred to in the preceding section
shall, if such land is agricultural, be made in the manner and subject to the limitations
prescribed in chapters five and six, respectively, of said Public Land Act, and if it be classified
differently in conformity with the provisions of chapter nine of said Act: Provided, however,
That the land necessary for the public service shall be exempt from the provision of this Act.”
44 See also PD 461 (1974) entitled “Reorganizing the Department of Agriculture and
Natural Resources into two Departments, Namely: Department of Agriculture and
Department of Natural Resources, Amending for this Purpose Chapter I, Part VIII of the
Integrated Reorganization Plan.”
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VOL. 403, MAY 6, 2003 51
Chavez vs. Public Estates Authority
Land Grants Section thereof prepares the special patents proposed to be
issued in favor of “government agenciespursuant to special laws,
proclamations, and executive orders x x x (italics supplied)” 45

The reference to a “special patent” is called for since the conveyance of

the reclaimed lands begins with the Republic not with PEA. Once the
transfer of the reclaimed lands is perfected by the issuance of special land
patents signed by the Secretary of Natural Resources in favor of PEA,
thesubsequent disposition thereof, e.g. the transfer from PEA to AMARI,
falls within the coverage of PEA’s charter and cognate laws. The reason is
that PEA is henceforth the owner of all lands reclaimed by it or by virtue
of its authority “which shall be responsible for its administration,
development, utilization or disposition in accordance with the provisions of
Presidential Decree No. 1084.” Significantly, for the registration of
46

reclaimed lands alienated by PEA pursuant to its mandate, it is only

necessary to file with the Register of Deeds the “instrument of alienation,
grant, patent or conveyance” whereupon a certificate of title shall be
entered as in other cases of registered land and an owner’s duplicate
issued to the grantee.
Indeed, there should be no fear calling reclaimed lands“lands of the
private domain” and making them available for disposition if this be the
legislative intent. The situation is no different from the trade of mineral
products such as gold, copper, oil or petroleum. Through joint ventures
that are allowed under the Constitution, our government disposes
minerals like private properties. At the end of the pendulum, if we refer to
reclaimed lands as lands of the public domain inalienable except to
individual persons, then it is time to end all reclamation projects because
these efforts entail too much expense and no individual person would have
the capital to undertake it himself. We must not hamstring both the
Executive and Congress from making full use of reclaimed lands as an
option in following economic goals by the declaration made in
the ponencia.
And what about rights that have been vested in private corporations in
the meantime? In the words of Dean Roscoe Pound, “[i]n civilized society
men must be able to assume that they may control, for purposes beneficial
to themselves, what they have discovered
_______________

45 DENR Manual For Land Disposition at pp. 5-6.

46 EO 525 (1979).
52
52 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
and appropriated to their own use, what they have created by their own
labor and what they have required under the existing social and economic
order. This is a jural postulate of civilized society as we know it. The law
of property in the widest sense, including incorporeal property and the
growing doctrines as to protection of economically advantageous relations,
gives effect to the social want or demand formulated in the postulate.” It
47

appears we have not accounted for the rights of others who are not even
involved in the instant case.
 The underlying issue is about trust and confidence in our government.
If we want to deal with the perceived mistrust in the motivation of our
leaders, the solution rests elsewhere. In the same manner that we do not
have to scorch the face to treat a pimple, so must we not prevent executive
and legislative intent from disposing reclaimed lands, which in the first
place had to be “constructed” so it would exist, very much unlike the
permanent patches of earth that we should rightly control.
Giving petitioner Chavez a full recognition of his right to access
matters of public concern is a correct step in the appropriate direction.
The ponencia should have cut and cut clean there as we must do now.
Anything beyond that, as the ponencia has done previously, is ivory-tower
and unaccountable interventionism at its worst.
PREMISES CONSIDERED, I vote to GRANT theMotions for
Reconsideration and DISMISS the Petition for Mandamus with prayer for
a writ of preliminary injunction and a temporary restraining
order EXCEPT as to the right of petitioner Francisco I. Chavez to have
access to all information relevant to the negotiation of government
contracts including but not limited to evaluation reports,
recommendations, legal and expert opinions, minutes of meetings, terms
of reference and other documents attached to such reports or minutes, all
relating to any proposed legitimate undertaking, which shall at all times
be respected, without prejudice to any appropriate action the petitioner
may hereafter take in the premises.
_______________

47 An Introduction to the Philosophy of Law 192 (1922).

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VOL. 403, MAY 6, 2003 53
Chavez vs. Public Estates Authority
SEPARATE OPINION

PUNO, J.:

I respectfully submit that the plea of the private respondent AMARI for a
prospective application of our Decision of July 26, 2002 deserves serious
attention. From the mosaic of facts, it appears that private respondent is a
Philippine corporation whose capital structure includes a heavy mix of
public investment and foreign equity. It further appears that respondent
AMARI did not conclude its Amended Joint Venture Agreement (AJVA)
with the government, thru the public respondent Public Estates Authority
(PEA) without exercising the due diligence required by law. Private
respondent AMARI claims and the records support it, that its AJVA
passed the proverbial eye of the needle before it was approved by the Chief
Executive of the country.
The submission of private respondent AMARI that it believed in good
faith that its AJVA does not suffer from any legal infirmity should not be
dismissed with a cavalier attitude. First, respondent AMARI contends
that it relied on the unbroken opinions of the Department of Justice
allowing the entity that undertook the reclamation project to be paid with
part of the reclaimed lands. It calls our attention to DOJ Opinion No. 130,
dated July 15, l939,given under the 1935 Constitution, and rendered by no
less than the eminent Chief Justice Jose Abad Santos, then the Secretary
of Justice, to the effect that “reclaimed land belong to the entity or person
constructing the work for the reclamation of the land,” viz:
“Section 1, Article XII of the Constitution classifies lands of the public domain in
the Philippines into agricultural, timber and mineral. This is the basic
classification adopted since the enactment of the Act of Congress of July 1, 1902,
known as the Philippine Bill. At the time of the adoption of the Constitution of
the Philippines, the term “Agricultural public lands” had, therefore, acquired a
technical meaning in our public land laws. The Supreme Court of the Philippines
in the leading case of Mapa vs. Insular Government, 10 Phil. 175, held that the
phrase ‘agricultural public lands’ means those public lands acquired from Spain
which are neither timber or mineral lands. This definition has been followed by
our Supreme Court in many subsequent cases (Montano vs. Ins. Gov’t, 12 Phil.
572) by prescribing distinct rules as to their disposition. Lands added to the
shore by accretion belong to the State while lands reclaimed belong to the entity
or person constructing the work for the reclamation of the land.”
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54 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
The advent of the 1973 and the 1987 Constitutions does not appear to
have changed the opinion of the DOJ. Secondly, respondent AMARI avers
1

that Congress has consistently enacted laws allowing portions of

reclaimed lands to be paid to whoever undertook the work. These laws
passed under the 1935 Constitution are, among others, the following:

1. “(i)Rep. Act No. 161 (1947) which authorizes the City of Bacolod to
undertake reclamation and own the reclaimed lands;
2. (ii)Rep. Act No. 287 (1948) which authorizes the Municipality of
Catbalogan, Samar to undertake reclamation and own the
reclaimed lands;
3. (iii)Rep. Act No. 1132 (1954) which also authorizes the City of
Bacolod to lease out or sell reclaimed lands;
4. (iv)Rep. Act No. 3857 (1964), as amended by Rep. Act No. 4654
(1966), which authorizes Cebu to reclaim lands and own the
reclaimed lands;
5. (v)Rep. Act No. 4663 (1966) which authorizes the Cagayan De Oro
Port Authority to undertake reclamation and own the reclaimed
lands;

_______________
 1 Private respondent cites DOJ Opinion No. 100 dated July 13, 1994 rendered by then
Secretary of Justice Franklin Drilon, holding:
x x x Water is a natural resource, the development, exploitation or utilization of which is reserved for
citizens of the Philippines, or corporations or associations at least 60% of the capital of which is owned by
such citizens (Opinion No. 243, Secretary of justice, s. 1989).
x x x The appropriation of waters is the acquisition of rights over the use of waters or the taking or
divesting of waters from natural source in the manner and for any purpose allowed by law (Art. 9, id.).
It may be observed, however, that while the Water Code imposes a nationality requirement for the
grant of water permits, the same refers to the privilege “to appropriate and use water.” We have
consistently interpreted this to mean the extraction of water directly from its natural source. However,
once removed therefrom, they cease to be part of the natural resources of the country and are subject of
ordinary commerce and they can be acquired by foreigners (Sec. of Justice Opn. No. 55, s. 1939; No. 173, s.
1984; No. 243, s. 1989).
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VOL. 403, MAY 6, 2003 55
Chavez vs. Public Estates Authority

1. (vi)Rep. Act No. 4776 (1966) which provides for the authority of
Tacloban City to undertake reclamation and to lease, sell or barter
such reclaimed land;
2. (vii)Rep. Act No. 4850 (1966) which authorizes the Laguna Lake
Development Authority to undertake reclamation and to own such
reclaimed land;
3. (viii)Rep. Act No. 5412 (1968) which authorizes General Santos City
to undertake reclamation and to own such reclaimed land;
4. (ix)Rep. Act No. 5518 (1969) which authorizes the city of Oroquieta
to undertake reclamation and to own such reclaimed land;
5. (x)Rep. Act No. 5519 (1969) which authorizes the City of Mandaue
to undertake reclamation and to own such reclaimed land;
6. (xi)Rep. Act No. 5798 (1969) which authorizes the City of
Dumaguete to undertake reclamation and to own such reclaimed
land;
7. (xii)Rep. Act No. 5956 (1969) [An Act Making the Municipality of
Dapa, Province of Surigao Del Norte, a Sub-Port of Entry, and
Authorizing the Appropriation of the Necessary Funds for the
Operation of a Customs Service Therein] which authorizes the City
to undertake reclamation and to own such reclaimed land.”

The same kind of laws was passed by Congress under the 1973 and 1987
Constitutions. Respondent AMARI cites, among others, the following laws:

1. “(i)Exec. Order No. 1086 (1986) [Tondo Foreshore Area], as

amended by Proclamation No. 39 (1992), which provides that
reclaimed lands shall be owned by the National Housing
Authority;
 2. (ii)Rep. Act No. 6957 (1990) [Build-Operate-Transfer Law] which
provides that in case of reclamation, the repayment scheme may
consist of a grant of a portion of the reclaimed land;
3. (iii)Rep. Act No. 7160 (1992) [Bases Conversion Development
Authority] which authorizes the BCDA to reclaim lands and to
own the reclaimed lands;
4. (iv)Rep. Act No. 7621 (1992) [Cebu Port Authority] which authorizes
the Cebu Port Authority to reclaim lands and to own the reclaimed
lands.”

Republic Act No. 6957, enacted in 1990, otherwise known as the Build-
Operate-and-Transfer Law (BOT Law), as amended by R.A. No. 7718, is of
great significance to the case at bar. The Senate deliberations on the law
clearly show that in case of reclamation undertakings, the repayment
scheme may consist of the grant of a
56
56 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
portion of the reclaimed land. I quote the pertinent deliberations, viz.:
2

“x x x
The President Pro Tempore. We are still in the period of interpellations.
Senator Gonzales. Mr. President.
The President Pro Tempore. Senator Gonzales is recognized.
Senator Gonzales. Mr. President, may I be permitted to ask a few
questions from the distinguished Sponsor.
Senator Ziga. Yes, Mr. President.
The President Pro Tempore. Please proceed.
Senator Gonzales. Mr. President, Section 6 provides for the repayment
scheme. It provides here for the financing, construction, operation, and
maintenance of any infrastructure project undertaken pursuant to the
provisions of this Act, the contractor shall be entitled to a reasonable
return of his investment, operating and maintenance costs in
accordance with the bid proposal of the contractor as accepted by the
concerned contracting infrastructure agency or local government unit
and incorporated in the contract terms and conditions. This repayment
scheme is to be effected by authorizing the contractor to charge and
collect reasonable tolls, fees and rentals for the use of the project
facilities, et cetera. May I know, distinguished colleague, whether this
repayment scheme is exclusive, in the sense that the repayment here
would always consist in authorizing the contractor to charge and collect
reasonable tools, fees, or rentals for the use of the project facilities?
Senator Ziga. Exclusive to the . . .?
Senator Gonzales. Exclusive in the sense that no other repayment scheme
may be pursued or adopted?
Senator Ziga. Yes, Mr. President.
Senator Gonzales. If it be so, Mr. President, I notice that, among others,
the project that can be the subject of the build-operate-and-transfer
scheme are land reclamations.
Senator Ziga. That is correct, Mr. President.
Senator Gonzales. Now, in land reclamation, does the distinguished
Gentleman expect that the one or the builder or con-
_______________

2 CP-Senare, TSP, 8 February 1990, 12th Congress, Regular Session, S.B. No. 1285 pp. 9-
12.
57
VOL. 403, MAY 6, 2003 57
Chavez vs. Public Estates Authority
tractor who effects or undertakes the reclamation project will be merely
repaid or will be required to recoup his investments, plus profits, and
otherwise, by imposing tolls,That is not the usual arrangement as far as
land reclamation is concerned.
Senator Ziga. Yes, Mr. President, “Tolls” here are concentrated more on
horizontal constructions, such as roads and bridges.
Senator Gonzales. Yes, Mr. President, but undoubtedly, the priority
projects here would be land reclamation. In land reclamation, the usual
arrangement is that there should be a certain percentage of the
reclaimed area that would be under the ownership of the Government.
On the other hand, a certain percentage of the land area reclaimed
would go to the contractor or the reclaiming entity.
Senator Ziga. Yes, Mr. President.
Senator Gonzales. If as the Gentleman now say that Section 6, which is
the repayment scheme, is exclusive, then that would not be allowable
and we cannot effect land reclamation.
Senator Ziga. Yes, Mr. President, I believe that there is a little bit of
difference that probably this concept, that the Gentleman put into light
here by the reclamation project, could be met under the build-and-
transfer scheme only.
Senator Gonzales. Yes, Mr. President the build-and-transfer scheme, but
there is no question that they are already covered, either by the build-
operate-and-transfer scheme and build-and-transfer scheme. The
question is repayment. How will the contractor be able to recoup his
investments, plus reasonable returns of whatever amount that he had
invested for the purpose? I think, the distinguished Gentleman is
agreeable that the imposition of tolls, fees, and rentals would not be
appropriate.
Senator Ziga. In reclamation.
Senator Gonzales. Yes, Mr. President
Senator Ziga. Yes, Mr. President, believe that there is a space for
improvement on these reclamation-projects.
Senator Gonzales. So, we can provide for another scheme of repayment
outside of the repayment scheme as provided for in Section 6 of the bill
now.
Senator Ziga. Yes, Mr. President.
Senator Gonzales. Now, would a foreign entity, probably, wholly owned by
foreigners, be authorized to engage in land reclamation?
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58 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
Senator Ziga. In the earlier interpellation, we have stated that the issue
of the sharing of 60:40 is one of the acceptable points of amendment. I
believe that, in this bill, we are still covered by that ratio. As of now,
this bill intends that it can only allow contractor or developers, whether
they be private corporations, but with the requirements of the
Constitution as to foreign participation.
Senator Gonzales. Yes, Mr. President. Because, in Section 2, paragraph
(a) provides:
. . . any private individual, partnership corporation or firm desiring to
undertake the construction and operation of any of the infrastructure
facilities mentioned in Section 3 of this Act. The private individual
contractor/developer must be a Filipino citizen. For a corporation,
partnership or firm, 75 percent of the capital must be owned by the
citizens of the Philippines in accordance with Letter of Instructions No.
630.
My problem here is in land reclamation, Mr. President. Normally, the
arrangement here is that a certain percentage goes to the Government,
and a certain percentage of the reclaimed land would go to the developer
or the contractor. Now, would the distinguished Gentleman require a
75:25 percent ratio as far as the ownership of stocks are concerned, while
the Constitution allows a 60:40 ratio as far as ownership of the land is
concerned?
Senator Ziga. Mr. President, we have stated that the requirements of the
Constitution would be adhered to.
Senator Gonzales. I see. So it would be sufficient that an entity, a
corporation, or a partnership that undertakes a land reclamation
project be owned on the basis of the 60:40 ratio between Filipino
citizens and foreigners.
Senator Ziga. Yes, that is correct, Mr. President.
Senator Gonzales. All of these would require undoubtedly amendments in
this bill. Would the distinguished Gentleman be willing to, at least,
consider these amendments at the opportune time?
Senator Ziga. Yes, Mr. President.
Senator Gonzales. Thank you, Mr. President.”
On the basis of his interpellations, Senator Gonzales then introduced the
following amendment which was accepted by Senator Ziga and approved by the
Senate, viz:
3
_______________

3 Ibid.
59
VOL. 403, MAY 6, 2003 59
Chavez vs. Public Estates Authority
“GONZALES AMENDMENT

Senator Gonzales. Mr. President, between lines 8 and 9, I am proposing a new

paragraph which would read as follows:
IN CASE OF LAND RECLAMATION OR THE BUILDING OF INDUSTRIAL ESTATES,
THE REPAYMENT SCHEME MAY CONSIST OF THE GRANT OF A PORTION OR
PERCENTAGE OF THE RECLAIMED LAND OR INDUSTRIAL ESTATE BUILT
SUBJECT TO CONSTITUTIONAL REQUIREMENT WITH RESPECT TO THE
OWNERSHIP OF LANDS.’
Because, Mr. President, the repayment scheme includes all of these—payment of
tolls, fees, rentals, and charges. But in case of land reclamation, that is not the
ordinary arrangement. Usually, the compensation there takes the form of a
portion or a percentage of the reclaimed land. And I would apply it all, as far as
the building of industrial estates is concerned. Of course, we have to respect the
constitutional provision that only Filipino citizens or corporations—at least, 60
percent of the capital of which is owned by citizens of the Philippines—may
acquire or own lands.
The President. What is the pleasure of the Sponsor?
Senator Ziga. Accepted, Mr. President.
Mr. President. Is there any objection? Any comment? (Silence) Hearing none, the
same is approved.
Senator Gonzales. Thank you, Mr. President.”

Section 6 of R.A. No. 6957 (BOT Law), as amend, thus provides:

“Section 6. Repayment Scheme.—For the financing, construction, operation and

maintenance of any infrastructure project undertaken through the Build-
Operate-and-Transfer arrangement or any of its variations pursuant to the
provisions of this Act, the project proponent shall be repaid by authorizing it to
charge and collect reasonable tolls, fees, and rentals for the use of the project
facility not exceeding those incorporated in the contract and, where
applicable, the proponent may likewise be repaid in the form of a share in the
revenue of the project or other nonmonetary payments, such as, but not limited to,
the grant of a portion or percentage of the reclaimed land, subject to the
constitutional requirements with respect to the ownership of land . . .”
The Rules and Regulations implementing R.A. No. 6957 (BOT Law), as
amended, likewise provide:
60
60 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
“Sec. 12.13 Repayment Scheme
 xxx
“Where applicable, the proponent may likewise be repaid in the form of a
share in the revenue of the project or other non-monetary payments, such as, but
not limited to the grant of commercial development rights or the grant of a
portion or percentage of the reclaimed land, subject to the constitutional
requirement that only Filipino citizens or in the case of corporations only those
with at least 60% Filipino equity will be allowed to own land.”
But this is not all. Respondent AMARI points to P.D. No. 1085, the charter
of the respondent PEA, which conveyed to it the reclaimed lands within
the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP)
including the lands subject of the case at bar and which authorized
respondent PEA to dispose of said lands. Pursuant to existing laws, rules,
and regulations, it appears that respondent PEA has the discretion to pay
the entity reclaiming the lands a portion or percentage of said lands. P.D.
No. 1085 pertinently provides:
“WHEREAS, the National Government acting through the Department of Public
Highways is presently undertaking pursuant to the provisions of Section 3(m) of
Republic Act No. 5137, as amended by Presidential Decree No. 3-A, the
reclamation of a portion of the foreshore and offshore areas the Manila Bay from
the Cultural Center of the Philippines passing through Pasay City, Parañaque,
Las Piñas, Zapote, Bacoor up to Cavite City;
WHEREAS, in the implementation of the above-cited laws bidding was held
for the reclamation work and the corresponding contract awarded to the
Construction and Development Corporation of the Philippines;
WHEREAS, it is in the public interest to convert the land reclaimed into a
modern city and develop it into a governmental, commercial, residential and
recreational complex and this is better accomplished through a distinct entity
organized for the purpose;
NOW, THEREFORE, I FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
decree and order the following:
The land reclaimed in the foreshore and offshore area of Manila Bay pursuant
to the contract for the reclamation and construction of the Manila-Cavite Coastal
Road Project between the Republic of the Philippines and the Construction and
Development Corporation of the Philippines dated November 20, 1973 and/or any
other contract or reclamation cover-
61
VOL. 403, MAY 6, 2003 61
Chavez vs. Public Estates Authority
ing the same area is hereby transferred, conveyed and assigned to the ownership
and administration of the Public Estates Authority established pursuant to P.D.
No. 1084; Provided, however, That the rights and interest of the Construction
and Development Corporation of the Philippines pursuant to the aforesaid
contract shall be recognized and respected.
Henceforth, the Public Estates Authority shall exercise the rights and assume
the obligations of the Republic of the Philippines (Department of Public
Highways) arising from, or incident to, the aforesaid contract between the
Republic of the Philippines and the Construction and Development Corporation
in the Philippines.
In consideration of the foregoing transfer and assignment, the Public Estates
Authority shall issue in favor of the Republic of the Philippines the
corresponding shares of stock in said entity with an issued value of said shares of
stock shall be deemed fully paid and non-assessable. The Secretary of Public
Highways and the General Manager of the Public Estates Authority shall
execute such contracts or agreements, including appropriate agreements with the
Construction and Development Corporation of the Philippines, as may be
necessary to implement the above.
Special land patent/patents shall be issued by the Secretary of Natural
Resources in favor of the Public Estates Authority without prejudice to the
subsequent transfer to the contractor or his assignees of such portion or portions
of the land reclaimed or to be reclaimed as provided for in the above-mentioned
contract. On the basis of such patents, the Land Registration Commission shall
issue the corresponding certificates of title.”
Former President Corazon C. Aquino also implemented P.D. No. 1085 by
issuing Special Patent No. 3517 ceding absolute rights over the said
properties to respondent PEA, which rights include the determination
whether to use parts of the reclaimed lands as compensation to the
contractor, viz:
“TO ALL TO WHOM THESE PRESENTS SHALL COME, GREETINGS:

WHEREAS, under Presidential Decree No. 1085 dated February 4, 1977

the ownership and administration of certain reclaimed lands have been
transferred, conveyed and assigned to the Public Estates Authority, a
government entity created by virtue of Presidential Decree No. 1084 dated
February 4, 1977, subject to the terms and conditions imposed in said
Presidential Decree No. 1085;
WHEREAS, pursuant to said decree the parcels of land so reclaimed
under the Manila-Cavite Coastal Road and Reclamation Project
(MCCRRP) of the Public Estates Authority consist of a total area of
62
62 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
1,915,894 square meters surveyed under Plans RL-13-000002 to RL-13-
000005 situated in the Municipality of Parañaque;
NOW, THEREFORE, KNOW YE, that by authority of the Constitution
of the Philippines and in conformity with the provisions thereof and of
Presidential Decree No. 1085, supplemented by Commonwealth Act No.
141, as amended, there are hereby granted and conveyed unto the Public
Estates Authority the aforesaid tracts of land containing a total area of
one million nine hundred fifteen thousand eight hundred ninety-four
(1,915,894) square meters; the technical descriptions of which are hereto
attached and made an integral part hereof;
 TO HAVE AND TO HOLD the said tracts of land, with appurtenances
thereunto of right belonging unto the Public Estates Authority, subject to
private rights, if any there be, and to the condition that the said land shall
be used only for the purposes authorized under Presidential Decree No.
1085;
IN TESTIMONY WHEREOF, and by authority vested in me by law, I,
CORAZON C. AQUINO, President of the Philippines, hereby caused these
letters to be made patent and the seal of the Republic of the Philippines to
be hereunto affixed.”
Respondent AMARI further claims that the administration of
former President Fidel V. Ramos upheld the legality of the original
JVA. On the other hand, it alleges that theamended JVA was the subject
of prior exhaustive study and approval by the Office of the General
Corporate Counsel, and the Government Corporate Monitoring and
Coordinating Committee composed of the Executive Secretary of Finance,
Secretary of Budget and Management, Secretary of Trade and Industry,
the NEDA Director-General, the head of the Presidential Management
Staff, the Governor of the Bangko Sentral ng Pilipinas and the Office of
the President. The amended JVA was executed on March 30, 1999 and
4

approved on May 28, 1999 under the administration of former President

Joseph E. Estrada. 5

In sum, the records give color to the claim of respondent AMARI that it
should not be blamed when it consummated the JVA and AJVA with its
co-respondent PEA. It relied on our laws enacted under the 1935, 1973
and 1987 Constitutions and their interpretations by the executive
departments spanning the governments of former Presidents Aquino,
Ramos and Estrada, all favorable to the
_______________

4 Supplement to Motion for Reconsideration, p. 16.

5 Ibid.
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Chavez vs. Public Estates Authority
said JVA and AJVA. Finding no legal impediments to these contracts, it
claims to have invested some P9 billion on the reclamation project.
Should this P9 billion investment just come to naught? The answer,
rooted in the concept of fundamental fairness and anchored on equity, is in
the negative. Undoubtedly, our Decision of July 26, 2002 is one of first
impression as the ponente himself described it. As one of first impression,
it is not unexpected that it will cause serious unsettling effects on property
rights which could have already assumed the color of vested rights. Our
case law is no stranger to these situations. It has consistently held that
new doctrines should only apply prospectively to avoid inequity and social
injustice. Thus in Co vs. Court of Appeals, et al., this Court, thru Chief
6

Justice Andres Narvasa, held:

“The principle of prospectivity of statutes, original or amendatory, has been
applied in many case: These include: Buyco v. PNB, 961,(sic) 2 SCRA 682 (June
30, 1961), holding that Republic Act No. 1576 which divested the Philippine
National Bank of authority to accept back pay certificates in payment of loans,
does not apply to an offer of payment made before effectivity of the act; Lagardo
v. Masaganda, et al., 5 SCRA 522 (June 30, 1962), ruling that RA 2613, as
amended by RA 3090 on June, 1961, granting to inferior courts jurisdiction over
guardianship cases, could not be given retroactive effect, in the absence of a
saving clause; Larga v. Ranada, Jr., 64 SCRA 18, to the effect that Sections 9
and 10 of Executive Order No. 90, amending Section 4 of PD 1752, could have no
retroactive application; People v. Que PO Lay, 94 SCRA 640, holding that a
person cannot be convicted of violating Circular No. 20 of the Central Bank,
when the alleged violation occurred before publication of the Circular in the
Official Gazette;Baltazar v. CA, 104 SCRA 619, denying retroactive application
to P.D. No. 27 decreeing the emancipation of tenants from the bondage of the soil,
and P.D. No. 316 prohibiting ejectment of tenants from rice and corn farm
holdings, pending the promulgation of rules and regulations implementing P.D.
No. 27;Nilo v. Court of Appeals, 128 SCRA 519, adjudging that RA 6389 which
removed ‘personal cultivation’ as a ground for the ejectment of a tenant cannot be
given retroactive effect in the absence of a statutory statement for
retroactivity; Tac-An v. CA,129 SCRA 319, ruling that the repeal of the old
Administrative Code by RA 4252 could not accorded retroactive effect; Ballardo
v. Borromeo, 161 SCRA 500, holding that RA 6389 should have only prospective
appli-
_______________

6 227 SCRA 444, 448-455 (1993).

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64 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
cation (see also Bonifacio v. Dizon, 117 SCRA 294 and Balatbat v. CA, 205 SCRA
419).
The prospectivity principle has also been made to apply to administrative
rulings and circulars, to wit: ABS-CBN Broadcasting Corporation v.
CTA, October 12, 1981, 108 SCRA 142, holding that a circular or ruling of the
Commissioner of Internal Revenue may not be given retroactive effect adversely
to a taxpayer; Sanchez v. COMELEC, 193 SCRA 317, ruling that Resolution No.
90-0590 of the Commission on Elections, which directed the holding of recall
proceedings, had no retroactive application; Romualdez v. CSC, 197 SCRA 168,
where it was ruled that CSC Memorandum Circular No. 29, s. 1989 cannot be
given retrospective effect so as to entitle to permanent appointment an employee
whose temporary appointment had expired before the Circular was issued.
The principle of prospectivity has also been applied to judicial decisions which,
‘although in themselves not laws, are nevertheless evidence of what the laws
mean (this being) the reason why under Article 8 of the New Civil Code, Judicial
decisions applying or interpreting the laws or the Constitution shall form a part
of the legal system.’
So did this Court hold, for example, in People v. Jabinal, 55 SCRA 607, 611:
‘It will be noted that when appellant was appointed Secret Agent by the Provincial
Government in 1962, and Confidential Agent by the Provincial Commander in 1964, the
prevailing doctrine on the matter was that laid down by Us in People v.
Macarandang (1959) and People v. Lucero (1958). Our decision in People v.
Mapa, reversing the aforesaid doctrine, came only in 1967. The sole question in this
appeal is; should appellant be acquitted on the basis of our rulings
in Macarandang and Luceco, or should his conviction stand in view of the complete
reversal of the Macarandang and Lucero in Mapa?
Decisions of this Court, although in themselves not laws, are
nevertheless evidence what the laws mean, and this is the reason why
under Article 8 of the New Civil Code, ‘Judicial decisions applying or
interpreting the laws or the Constitution shall form a part of the legal
system.’ The interpretation upon a law was originally passed, since this
Court’s construction merely established the contemporaneous legislative
intent that the law thus construed intends to effectuate. The settled rule
supported by numerous authorities is a restatement of the legal
maxim‘legis interpretatio legis vim obtinet’—the interpretation placed
upon the written law by a competent court has the force of law. The
doctrine laid down in Lucero and Macarandang was part of the
jurisprudence, hence, of the law of the land, at the time appellant was
found in possession of the firearm in question and when he was arraigned
by the trial court. It is true that
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Chavez vs. Public Estates Authority
the doctrine was overruled in the Mapa case in 1967, but when doctrine of this Court is
overruled and a different view is adopted, the new doctrine should be applied
prospectively, and should not apply to parties who had relied on the old doctrine and
acted on the faith thereof. This is specially true in the construction and application of
criminal laws, where it is necessary that the punishability of an act be reasonably
foreseen for the guidance of society.’
So, too, did the Court rule in Spouses Gauvain and Bernardita Benzonan v.
Court of Appeals, et al. (G.R. No. 97973) andDevelopment Bank of the Philippines
v. Court of Appeals, et al.(G.R. No. 97998), January 27, 1992, 205 SCRA 515, 527-
528:
‘We sustain the petitioner’s position. It is undisputed that the subject lot was mortgaged
to DBP as the highest bidder at a foreclosure sale on June 18, 1977, and then sold to the
petitioners on September 29, 1979.
At that time, the prevailing jurisprudence interpreting section 119 of
R.A. 141 as amended was that enunciated in Monge and Tupas cited
above. The petitioners Benzonan and respondents Pe and the DBP are
bound by these decisions for pursuant to Article 8 of the Civil Code
‘judicial decisions applying or interpreting the laws or the Constitution
shall form a part of the legal system of the Philippines.’ But while our
decisions form part of the law of the land, they are also subject to Article 4
of the Civil Code which provides that ‘laws shall have no retroactive effect
unless the contrary is provided.’ This is expressed in the familiar legal
maxim lex prospicit, non respicit, the law looks forward not backward. The
rationale against retroactivity is easy to perceive. The retroactive
application of a law usually divests rights that have already become
vested or impairs the obligations of contract and hence, is unconstitutional
(Francisco v. Certeza, 3 SCRA 565 [1061 (sic)]).
The same consideration underlies our rulings giving only prospective
effect to decisions enunciating new doctrines. Thus, we emphasized
inPeople v. Jabinal, 55 SCRA 607 [1974] when a doctrine of this Court is
overruled and a different view is adopted, the new doctrine should be
applied prospectively and should not apply to parties who had relied on
the old doctrine and acted on the faith thereof.’
A compelling rationalization of the prospectivity principle of judicial decisions
is well set forth in the oft-cited case of Chicot County Drainage Dist. v. Baxter
States Bank, 308 US 371, 374 [1940]. The Chicot doctrine advocates imperative
necessity to take account of the actual existence of a statute prior to its
nullification, as an operative fact negating acceptance of “a principle of absolute
retroactive invalidity.”
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66 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
Thus, in this Court’s decision in Tañada v. Tuvera, promulgated on April 24,
1985—which declared ‘that presidential issuances of general application, which
have not been published, shall have no force and effect,’ and as regards which
declaration some members of the Court appeared ‘quit apprehensive about the
possible unsettling effect (the) decision might have on acts done in reliance on
the validity of those presidential decrees’—the Court said:
The answer is all too familiar. In similar situations in the past this Court had taken the
pragmatic and realistic course set forth in Chicot County Drainage District vs. Baxter
States Bank (308 U.S. 371, 374) to wit:
‘The courts below have proceeded on the theory that the Act of Congress, having been found to be
unconditional, was not a law; that it was inoperative, conferring no rights and imposing no duties,
and hence affording no basis for the challenged decree. Norton Shellby County, 118 US 425,
442; Chicago, I, & L. Ry, Co. v. Hackett, 228 U.S 559, 566. It is quite clear, however, that such
broad statements as to the effect of a determination of unconstitutionality must be taken with
qualifications. The actual existence of a statute, prior to such a determination, is an operative fact
and may have consequences which cannot justly be ignored. The past cannot always be erased by a
new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be
considered in various aspects—with respect to particular conduct, private and official. Questions of
rights claimed to have become vested, of status, or prior determinations deemed to have finality and
acted upon accordingly, public policy in the light of the nature both of the statute and of its previous
application, demand examination. These questions are among the most difficult of those which
have engaged the attention of courts, state and federal, and it is manifest from numerous decisions
that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified.’
Much earlier, in De Agbayani v. PNB, 38 SCRA 429—concerning the effects of
the invalidation of “Republic Act No. 342, the moratorium legislation, which
continued Executive Order No. 32, issued by the then President Osmeña,
suspending the enforcement of payment of all debts and other monetary
obligations payable by war sufferers,” and which had been “explicitly held
in Rutter v. Esteban (93 Phil. 68 [1953]) (to be) in 1953 unreasonable, and
oppressive, and should not be prolonged a minute longer”—the Court made
substantially the same observations, to wit:
‘The decision now on appeal reflects the orthodox view that an unconstitutional act, for
that matter an executive order or a munici-
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VOL. 403, MAY 6, 2003 67
Chavez vs. Public Estates Authority
pal ordinance likewise suffering from the infirmity, cannot be the source of any legal
rights or duties. Nor can it justify any official act taken under it. Its repugnancy to the
fundamental law once judicially declared results in its being to all intents and purposes a
mere scrap of paper. It is understandable why it should be so, the Constitution being
supreme and paramount. Any legislative or executive act contrary to its terms cannot
survive.
Such a view has support in logic and possesses the merit of simplicity.It
may it however be sufficiently realistic. It does not admit of doubt that
prior to the declaration of nullity challenged legislative or executive
actmust have been in force and had to be complied with. This is so as until
after the judiciary, in an appropriate case, declares its invalidity, it is
entitled to obedience and respect. Parties may have acted under it and
may have changed their positions. What could be more fitting than that in
a subsequent litigation regard be had to what has been done while such
legislative or executive act was in operation and presumed to be valid in all
respects. It is now accepted as a doctrine that prior to its being nullified,
its existence as a fact must be reckoned with. This is merely to reflect
awareness that precisely because the judiciary is the governmental organ
which has the final say on whether or not a legislative or executive
measure is valid, a period of time may have elapsed before it can exercise
the power of judicial review that may lead to a declaration of nullity. It
would be to deprive the law of its quality of fairness and justice then, if
there be no recognition of what had transpired prior to such adjudication.
In the language of an American Supreme Court decision: The actual
existence of a statute, prior to such a determination [of
unconstitutionality] is an operative fact and may have consequences which
cannot justly be ignored. The past cannot always be erased by a new
judicial declaration. The effect of the subsequent ruling as to invalidity
may have to be considered in various aspects,—with respect to particular
relations, individual and corporate, and particular conduct, private and
official (Chicot County Drainage Dist. v. Baxter States Bank,308 US 371,
374 [1940]). This language has been quoted with approval in a resolution
in Araneta v. Hill (93 Phil. 1002 [1953]) and the decision inManila Motor
Co., Inc. v. Flores (99 Phil. 738 [1956]). An even more recent instance is
the opinion of Justice Zaldivar speaking for the Court in Fernandez v.
Cuerva and Co. (L-21114, Nov. 28, 1967, 21 SCRA 1095).
Again, treating of the effect that should be given to its decision in Olaguer v.
Military Commission No. 34,—declaring invalid criminal proceedings conducted
during the martial law regime against civilians, which had resulted in the
conviction and incarceration of numerous persons—this Court, in Tan vs.
Barrios, 190 SCRA 686, at p. 700, ruled as follows:
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68 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
‘In the interest of justice and consistency, we hold that Olaguer should, in principle, be
applied prospectively only to future cases and cases still ongoing or not yet final when
that decision was promulgated. Hence, there should be no retroactive nullification of final
judgments, whether of conviction or acquittal, rendered by military courts against
civilians before the promulgation of the Olaguer decision. Such final sentences should not
be disturbed by the State. Only in particular cases where the convicted person or the
State shows that there was serious denial of constitutional rights of the accused, should
the nullity of the sentence be declared and a retrial be ordered based on the violation of
the constitutional rights of the accused, and not on the Olaguer doctrine. If a retrial is no
longer possible, the accused should be released since the judgment against him is null on
account of the violation of his constitutional rights and denial of due process.
The trial of thousands of civilians for common crimes before the
military tribunals and commissions during the ten-year period of martial
rule (1971-1981) which were created under general orders issued by
President Marcos in the exercise of his legislative powers is an operative
fact that may not just be ignored. The belated declaration in 1987 of the
unconstitutionality and invalidity of those proceedings did not erase the
reality of their conquences which occurred long before our decision in
Olaguer was promulgated and which now prevent us from carrying
Olaguer to the limit of its logic. Thus did this Court rule in Municipality
of Malabang v. Benito, 27 SCRA 533, where the question arose as to
whether the nullity of creation of a municipality by executive order wiped
out all the acts of the local government abolished.’
It would seem, then, that the weight of authority is decidedly in favor of the
proposition that the Court’s decision of September 21, 1987 in Que v. People, 154
SCRA 160 (1987)—i.e., that a check issued merely to guarantee the performance
of an obligation is nevertheless covered by B.P. Blg. 22—should not be given
retrospective effect to the prejudice of the petitioner and other persons similarly
situated, who relied on the official opinion of the Minister of Justice that such a
check did not fall within the scope of B.P. Blg. 22.”
Despite the stream of similar decisions, the majority holds that it would
have been sympathetic to the plea for a prospective application of our
Decision “x x x if the prevailing law or doctrine at the time of the signing
of the amended JVA was that a private corporation could acquire alienable
lands of the public domain and the
69
VOL. 403, MAY 6, 2003 69
Chavez vs. Public Estates Authority
Decision annulled the law or reversed the doctrine.” It explains that
7

“under the 1935 Constitution, private corporations were allowed to acquire

alienable lands of the public domain. But since the effectivity of the 1973
Constitution, private corporations were banned from holding, except by
lease, alienable lands of the public domain. The 1987 Constitution
continued this constitutional prohibition.” 8

I beg to disagree. We should put section 2 of Article XII of the

Constitution in its proper perspective. It provides:
“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 other natural resources are owned by the State. With the
exception of agricultural lands, all other natural resources shall not be
alienated. The exploration, development, and utilization of natural resources shall
be under the full control and supervision of the State. The State may directly
undertake such activities, or it may enter into co-production, joint venture, or
production-sharing agreements with Filipino citizens, or corporations or
associations at least sixty per centum of whose capital is owned by such
citizens. Such agreements may be for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and under such terms and
conditions as may be provided by law.In cases of water rights for irrigation,
water supply, fisheries, or industrial uses other than the development of water
power, beneficial use may be the measure and limit of the grant.” (Emphasis
supplied.)
With due respect, the plea for prospectivity is based on the ground that
our Decision is novel not because it bars private corporations like
respondent AMARI from acquiring alienable lands of the public domain
except by lease but because for the first time we held, among others,
that joint venture agreements cannot allow entities undertaking
reclamation of lands to be paid with portions of the reclaimed lands. This
is the first case where we are interpreting that portion of section 2, Article
XII of the Constitution which states that “ x x x the exploration,
development, and utilization of natural resources shall be under the full
control and supervision of the State. TheState may directly undertake
such activities, or it may enter into co-production, joint venture, or
production sharing agreements with Filipino citizens or corporations or
associations at least sixty per centum of whose capital is owned by such
_______________

7 Resolution, p. 6.
8 Ibid.
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70 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
citizens. Such agreements may be for a period not exceeding twenty-five
years, renewable for not more than twenty-five years and under such
terms and conditions as may be provided by law.” Indisputably, this part
of section 2, Article XII of the 1987 Constitution is new as it is neither in
the 1973 or 1935 Constitutions. Undoubtedly too, our Decision goes
against the grain of understanding of the said provision on the part of the
Executive and Legislative Departments of our government. The disquieting
effects of our Decision interpreting said provision in a different light
cannot be gainsaid.
The majority concedes that in Benzonan, we held that the sale or
9

transfer of the land involved in said case may no longer be invalidated

because of “weighty considerations of equity and social
justice.” Nonetheless, the majority holds that there are “special
10

circumstances that disqualify AMARI from invoking equity

principles,” viz.: 11

“There are, moreover, special circumstances that disqualify Amari from invoking
equity principles. 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. This Report concluded, after a well-publicized investigation into
PEA’s sale of the Freedom Islands to Amari, 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. Amari states that it has paid PEA only
P300,000,000.00 out of the P1,894,129,200.00 total reimbursement cost agreed
upon in the Amended JVA. 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. And yet Amari claims that it had already spent a
“whopping
_______________

9 Op. Cit.
10 Resolution, p. 8.
11 Id., p. 9.
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VOL. 403, MAY 6, 2003 71
Chavez vs. Public Estates Authority
P9,876,108,638.00 as its total development costs as of June 30, 2002. Amari does
not explain how it spent the rest of the P9,876,108,638.00 total project cost after
paying PEA P300,000,000.00. Certainly, Amari cannot claim to be an innocent
purchaser in good faith and for value.”
Again, with due respect, I beg to disagree. The alleged facts and factors
cited by the majority do not provide sufficient basis to condemn
respondent AMARI of bad faith. First, the petition at bar was
filed before the amended JVA was consummated. As alleged by the
petitioner, he filed the petition to: 12

“x x x
5.1 Compel respondent to make public all documents, facts and data related to
or in connection with the ongoing RENEGOTIATIONS between respondents PEA
and AMARI, and
5.2 Enjoin respondents from privately entering into perfecting and/or
executing any new agreement with AMARI.”
Petitioner invoked section 7, Article III of the Constitution which
recognizes the right of people to information on matters of public concern
and section 28, Article II of the Constitution which provides that the State
adopts and implements a policy of full public disclosure of all its
transactions involving public interest. In fine, the amended JVA was yet
inexistent at the time the petition at bar was filed and could not provide a
basis for a finding of bad faith on the part of respondent AMARI. Secondly,
Senate Committee Report No. 560 also pertains to the original
JVA. Precisely because of the report, former President Ramos issued
Presidential Order No. 365 which established a presidential legal task
force to study the legality of the original JVA. The legal task force did not
reach the same conclusions as the Senate. In any event, theoriginal JVA
was renegotiated and was approved by former President Estrada on May
28, 1999 following intensive review by the Office of the General Corporate
Counsel and the Government Corporate Monitoring and Coordinating
Committee which, as aforestated, is composed of the Executive Secretary,
the Secretary of Finance, the Secretary of Budget and Management, the
Secretary of Trade and Industry, the NEDA Director General, the Head of
the Presidential Management Staff and the Governor of the Bangko
Sentral ng Pilipinas and the Office of the President. To be sure, the value
of
_______________

12 Petition, p. 5.
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72 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
Senate Report No. 560 is not as proof of good or bad faith of any party but
as a study in aid of legislation. As a legislative body, the Senate does not
determine adjudicative facts. Thirdly, the allegation that respondent
AMARI has not complied with its obligation to PEA is a matter that
cannot be resolved in the case at bar. If at all it can be raised, it is PEA
that should raise it in a proper action for breach of contract or specific
performance. This Court is not a trier of facts and it cannot resolve these
allegations that respondent AMARI violated its contract with PEA. The
majority cannot condemn respondent AMARI of acting bad faith on the
basis of patently inadmissible evidence without running afoul of the
rudimentary requirements of due process. At the very least, the majority
should hear respondent AMARI on the issue of its alleged bad faith before
condemning it to certain bankruptcy.
This is not all. There is another dimension of unfairness and inequity
suffered by respondent AMARI as a consequence of our Decision under
reconsideration. It cannot be denied that respondent AMARI spent
substantial amount of money (the claim is P9 billion), fulfilling its
obligation under the AJVA, i.e., provide the financial, technical, logistical,
manpower, personnel and managerial requirements of the project. Our
Decision is silent as a sphinx whether these expenses should be reimbursed.
Respondent AMARI may not be paid with reclaimed lands, but it can be
remunerated in some other ways such as in cash. Our omission to order
that respondent AMARI be paid commensurate to its expenses does not sit
well with our decision in Republic of the Philippines vs. CA and Republic
Estate Corporation, et al. where we held:
13

“x x x
Although Pasay City and RREC did not succeed in their undertaking to
reclaim any area within the subject reclamation project, it appearing that
something compensable was accomplished by them, following the applicable
provision of law and hearkening to the dictates of equity, that no one, not even
the government shall unjustly enrich oneself/itself at the expense of another, we
believe, and so hold, that Pasay City and RREC should be paid for the said actual
work done and dredge-fill poured in . . . ”
Needless to state, the government will be unjustly enrichedif it will not be
made to compensate the respondent AMARI for the
_______________

13 299 SCRA 199 (1998).

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VOL. 403, MAY 6, 2003 73
Chavez vs. Public Estates Authority
expenses it incurred in reclaiming the lands subject of the case at bar.
We should strive for consistency for rights and duties should be
resolved with reasonable predictability and cannot be adjudged by the
luck of a lottery. Just a month ago or on March 20, 2003 this Court en
banc resolved amotion for reconsideration in Land Bank vs. Arlene de
Leon, et al., G.R. No. 143275. In this case, we resolvedunanimously to give
a prospective effect to our Decision which denied LBP’s petition for review.
Written by our esteemed colleague, Mr. Justice Corona, our resolution
held:
“Be that as it may, we deem it necessary to clarify our Decision’s application to
and effect on LBP pending cases filed as ordinary appeals before the Court of
Appeals. It must first be stressed that the instant case poses a novel issue; our
Decision herein will be a landmark ruling on the proper way to appeal decisions
of Special Agrarian Courts. Before this case reached us, LBP had no
authoritative guideline on how to appeal decisions of Special Agrarian Courts
considering the seemingly conflicting provisions of Sections 60 and 61 of RA
6657.
More importantly, the Court of Appeals has rendered conflicting decisions on
this precise issue. On the strength of Land Bank of the Philippines vs. Hon.
Feliciano Buenaventura, penned by Associate Justice Salvador Valdez, Jr. of the
Court of Appeals, certain decisions of the appellate court held that an ordinary
appeal is the proper mode. On the other hand, a decision of the same court,
penned by Associate Justice Romeo Brawner and subject of the instant review,
held that the proper mode of appeal is a petition for review. In another case, the
Court of Appeals also entertained an appeal by the DAR filed as a petition for
review.
On account of the absence of jurisprudence interpreting Sections 60 and 61 of
RA 6657 regarding the proper way to appeal decisions of Special Agrarian Courts
as well as the conflicting decisions of (the) Court of Appeals thereon, LBP cannot
be blamed for availing of the wrong mode. Based on its own interpretation and
reliance on the Buenaventura ruling, LBP acted on the mistaken belief that an
ordinary appeal is the appropriate manner to question decisions of Special
Agrarian Courts.
Hence, in the light of the aforementioned circumstances, we find it proper to
emphasize the prospective application of our Decision dated September 10, 2002.
A prospective application of our Decision is not only grounded on equity and fair
play but also based on the constitutional tenet that rules of procedure shall not
impair substantive rights.
In accordance with our constitutional power to review rules of procedure of
special courts, our Decision in the instant case actually lays down a rule of
procedure, specifically a rule on the proper mode of appeal from
74
74 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
decisions of Special Agrarian Courts. Under Section 5 (5), Article VIII of the 1987
Philippine Constitution, rules of procedure shall not diminish, increase modify
substantive rights. In determining whether a rule of procedure affects
substantive rights, the test is laid down in Fabian vs. Desierto, which provides
that:
‘[I]n determining whether a rule prescribed by the Supreme Court, for the practice and
procedure of the lower courts, abridges, enlarges, or modifies any substantive right, the
test is whether the rule really regulates procedure, that is, the judicial process for
enforcing rights and duties recognized by substantive law and for justly administering
remedy and redress for a disregard or infraction of them. If the rule takes away a vested
right, it is not procedural. If the rule creates a right such as the right to appeal, it may be
classified as a substantive matter, but if it operates as a means of implementing an
existing right then the rule deals merely with procedure.’
We hold that our Decision, declaring a petition for review as the proper
mode of appeal from judgments of Special Agrarian Courts, is a rule of
procedure which affects substantive rights. If our ruling is given
retroactive application, it will prejudice LBP’s right to appeal because
pending appeals in the Court of Appeals will be dismissed outright on
mere technicality thereby sacrificing the substantial merits thereof. It
would be unjust to apply a new doctrine to a pending case involving a
party who already invoked a contrary view and who acted in good faith
thereon prior to the issuance of said doctrine.”
Our Decision under reconsideration has a far reaching effect on persons
and entities similarly situated as the respondent AMARI. Since time
immemorial, we have allowed private corporations to reclaim lands in
partnership with government. On the basis of age-old laws and opinions of
the executive, they entered into contracts with government similar to the
contracts in the case at bar and they invested huge sums of money to help
develop our economy. Local banks and even international lending
institutions have lent their financial facilities to support these reclamation
projects which government could not undertake by itself in view of its
scant resources. For them to lose their invaluable property rights when
they relied in good faith on these unbroken stream of laws of congress
passed pursuant to our 1935, 1973 and 1987 Constitutions and executive
interpretations is a disquieting prospect. We cannot invite investors and
then decapitate them without due process of law.
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VOL. 403, MAY 6, 2003 75
Chavez vs. Public Estates Authority
I vote to give prospective application to our Decision of July 26, 2002.
DISSENTING OPINION

YNARES-SANTIAGO, J.:

The moving force behind the main decision is sound. It proceeds from
policies embodied in our Constitution this seek to guard our natural
resources from the exploitation of the few and to put our precious land
under the stewardship of the common Filipino. Yet we, perched upon our
lofty seat in the heights of Olympus, cannot close our eyes to the far-
reaching effects that the decision will have. Neither can we pretend that
practical realities supported by our legal system have to be conceded.
These considerations are so basic that we cannot ignore them. They
represent very fundamental rules of law, upon which decades of Philippine
jurisprudence have been built.
I, for one, refuse to close my eyes or remain silent.
The sweeping invalidation of the Amended Joint Venture Agreement
(JVA) between the Public Estates Authority (PEA) and Amari Coastal Bay
Development Corporation (hereinafter, Amari) has left me ill at ease. The
draft resolution and the main decision have taken great pains to explain
the majority position with copious research and detailed exposition.
However, scant consideration was given to the fact that P9,876,108,638.00
had already been spent by the private respondent and that the voiding of
the Amended JVA would compel all the parties to return what each has
received. I submit that there was no need to resort to such a drastic
1

measure.
First of all, a historical analysis of the laws affecting reclaimed lands
indicates that the same have been treated by laws as alienable.
Article 5 of the Spanish Law of Waters of 1866 reads:
Lands reclaimed from the sea in consequence of works constructed by the State,
or by the provinces, pueblos, or private persons, with proper permission, shall
become the property of the party constructing such works, unless otherwise
provided by the terms of the grant of authority.
_______________

1 IV TOLENTTNO 632, (1990 ed.), citing Perez Gonzalez Alguer; I-II Enneccerus, Kipp &
Wolff 364-366; 3 Von Turh 311; 3 Fabres 231.
76
76 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
The foregoing clearly mandates that reclaimed property shall belong to
the party who undertook the works. It was on the basis of this provision of
law that the Manila Port Area, which was developed from land dredged by
the Department of Public Works and Communications during the
construction of the Manila South Harbor, became private property of the
National Government and registered in its name under the Torrens
system.
Republic Act No. 1899, an Act to Authorize the Reclamation of
Foreshore Lands by Chartered Cities and Municipalities, provided:
Sec. 2. Any and all lands reclaimed, as herein provided, shall be the property of
the respective municipalities or chartered cities;Provided, however, That the new
foreshore along the reclaimed areas shall continue to be the property of the
National Government.
Again on the basis of the above provisions Pasay City Government entered
into a reclamation contract with the Republic Resources Realty
Corporation under which a portion of the reclaimed land shall be conveyed
to the latter corporation. However, before the reclamation was completed,
2

then President Ferdinand E. Marcos issued Presidential Decree No. 3-A,

which provided:
The provisions of any law to the contrary notwithstanding, the reclamation of
areas under water, whether foreshore or inland, shall be limited to the National
Government or any person authorized by it under a proper contract.
All reclamations made in violation of this provision shall be forfeited to the
State without need of judicial action.
 Contracts for reclamation still legally existing or whose validity has been
accepted by the National Government shall be taken over by the National
Government on the basis of quantum meruit, for proper prosecution of the project
involved by administration.
Thus, the Pasay reclamation project was taken over by the National
Government. Later, the Department of Public Works and Highways
(DPWH) entered into a contract with the Construction and Development
Corporation of the Philippines (CDCP) for the reclamation of the same
area and agreed on a sharing arrangement of the land to be reclaimed.
_______________

2 See Republic v. Court of Appeals, 359 Phil. 530, 299 SCRA 199 (1998).
77
VOL. 403, MAY 6, 2003 77
Chavez vs. Public Estates Authority
In 1979, PD 1084 was issued, creating the PEA. EO 525 was issued,
Section 3 of which states:
All lands reclaimed by PEA shall belong to or be owned by the PEA which shall
be responsible for its administration, development, utilization or disposition in
accordance with the provisions of Presidential Decree No. 1084. Any and all
income that the PEA may derive from the sale, lease or use of reclaimed lands
shall be used in accordance with the provisions of Presidential Decree No. 1084.
Clearly, all the foregoing statutes evince a legislative intent to
characterize reclaimed lands as alienable public lands. In other words,
there was never an intention to categorize reclaimed lands as inalienable
lands of the public domain; rather they were expressly made private
property of the National Government subject to disposition to the person
who undertook the reclamation works.
Inasmuch as reclaimed lands are not public lands, the provisions of the
Constitution prohibiting the acquisition by private corporations of lands of
the public domain do not apply. In the same vein, the Court, in Director of
Lands v. Intermediate Appellate Court, et al., held that public lands which
3

have become private may be acquired by private corporations. This dictum

is clearly enunciated by Chief Justice Claudio Teehankee in his concurring
opinion, viz:
Such ipso jure conversion into private property of public lands publicly held
under a bona fide claim of acquisition or ownership is the public policy of the Act
and is so expressly stated therein. By virtue of such conversion into private
property, qualified corporations may lawfully acquire them and there is no
“alteration or defeating” of the 1973 Constitution’s prohibition against
corporations holding or acquiring title to lands of the public domain, as claimed
in the dissenting opinion, for the simple reason that no public lands are involved.
4

Indeed, the Government has the authority to reclaim lands, converting

them into its own patrimonial property. It can contract out the
reclamation works and convey a portion of the reclaimed land by way of
compensation.
_______________

3 G.R. No. 73002, 29 December 1986, 146 SCRA 509.

4 Id., at pp. 526-527.
78
78 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
Secondly, the reason behind the total nullifification of the Amended JVA
must be reexamined. I believe there is some confusion with regard to its
infirmities. We must remember that the Amended JVA is a contract and,
as such, is governed by the Civil Code provisions on Contracts, the
essential requisites of which are laid out in the following provision:
Art. 1318. There is no contract unless the following requisites concur:

1. (1)Consent of the contracting parties;

2. (2)Object certain which is the subject matter of the contract;
3. (3)Cause of the obligation which is established. 5

The main decision states that the Amended (JVA is void because its
“object” is contrary law, morals, good customs, public order or public
policy, and that the “object” is also outside the commerce of man, citing as
authority Article 1409 of the Civil Code. However, it has been opined, and
persuasively so, that the object of a contract is either the thing, right or
service which is the subject matter of the obligation arising from the
contract. In other words, the object of the contract is not necessarily a
6

physical thing that by its very nature cannot be the subject of a contract.
The object of a contract can, as it appears so in this case, contemplate a
service. I submit, therefore, that the object herein is not the reclaimed
land, no matter how much emotion these piles of wet soil have stirred up.
The proper object is the service that was to be rendered by Amari, which is
the act of reclamation. Surely, reclamation, in and of itself, is neither
contrary to law, morals, good customs, public order nor to public policy.
The act of reclamation is most certainly not outside the commerce of man.
It is a vital service utilized by the Republic to increase the national wealth
and, therefore, cannot be cited as an improper object that could serve to
invalidate a contract.
Furthermore, in Section 1.1 (g) of the Amended JVA, the term “Joint
Venture Proceeds” is defined as follows:
_______________

5 Emphasis supplied.
6 IV Tolentino, Commentaries and Jurisprudence on the Civil Code of the
Philippines (Quezon City, 1991), p. 520.
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VOL. 403, MAY 6, 2003 79
Chavez vs. Public Estates Authority
“Joint Venture Proceeds” shall refer to all proceeds, whether land or money or
their equivalent arising from the project or from the sale, lease or any other form
or disposition or from the allocation of the Net Usable Area of the Reclamation
Area.
It is actually upon this provision of the Amended JVA that its validity
hinges. If it is the contemplated transfer of lands of the public domain to a
private corporation which renders the Amended JVA constitutionally
infirm, then resort to the alternative prestation referred to in this
provision will cure the contract. The Civil Code provision on alternative
obligations reads as follows:
Art. 1199. A person alternatively bound by different prestations shall completely
perform one of them.
The creditor cannot be compelled to receive part of one and part of the other
undertaking.
In an alternative obligation, there is more than one object, and the
fulfillment of one is sufficient, determined by the choice of the debtor who
generally has the right of election. From the point of view of Amari, once it
7

fulfills its obligations under the Amended JVA, then it would be entitled to
its stipulated share of the Joint Venture Profits. In this instance, Amari
would stand as creditor, with PEA as the debtor who has to choose
between two payment forms: 70% of the Joint Venture Profits, in the form
of cash or a corresponding portion of the land reclaimed. Since it has been
8

ruled that the transfer of any of the reclaimed lands to Amari would be
unconstitutional, one of the prestations of this alternative obligation has
9

been rendered unlawful. In such case, the following Civil Code provision
becomes pertinent:
Art. 1202. The debtor shall lose the right of choice when among the prestations
whereby he is alternatively bound, only one is practicable.
If all the prestations, except one, are impossible or unlawful, it follows
that the debtor can choose and perform only one. The obligation ceases to
be alternative, and is converted into a simple obli-
_______________

7 Id., p. 203.
8 Amended Joint Venture Agreement, Sections 1.1 (g) and 5.1, Private Respondent’s Annex
“B”.
9 Chavez v. Public Estates Authority, G.R. No. 133250, 9 July 2002, 384 SCRA 152.
80
80 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
gation to perform the only feasible or practicable prestation. Even if PEA 10

had insisted on paying Amari with tracts of reclaimed land, it could not
have done so, since it had no right to choose undertakings that are
impossible or illegal. 11
 We must also remember that, in an alternate obligation, the fact that
one of the prestations is found to be unlawful does not result in the total
nullity of the Amended JVA. The Civil Code provides:
Art. 1420. In case of a divisible contract, if the illegal terms can be separated
from the legal ones, the latter may be enforced.
As a general rule, Article 1420 is allied if there are several stipulations in
the contract, some of which are valid and some void. If the stipulations can
be separated from each other, then those which are void will not have any
effect, but those which are valid will be enforced. In case of doubt, the
contract must be considered as divisible or separable. The contract itself 12

provides for severability in case any of its provisions are deemed

invalid. Curiously, the main decision makes no mention of the alternative
13

form of payment provided for in Section 1.1 (g) of the Amended JVA. A
reading of the main decision would lead one to conclude that the transfer
of reclaimed land is the only form of payment contemplated by the
parties. In truth, the questionable provisions of the Amended JVA can be
14

excised without going against the intent of the parties or the nature of the
contract. Removing all references to
_______________

10 Supra note 2, at p. 209.

11 Legarda v. Miailhe, 88 Phil. 637 (1951).
12 Supra note 2, at p. 642, citing 4 Llema 93.
13 Amended Joint Venture Agreement, Section 7.4, Private Respondent’s Annex B.
14 Chavez v. Public Estates Authority, supra.
The decision states:
xxx xxx xxx
AMARI and PEA will share, in the proportion of 70 percent and 30 percent, respectively, the total net
usable area which is defined in the Amended JVA as the total reclaimed area less 30 percent earmarked
for common areas.
xxx xxx xxx
Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5 hectares of
reclaimed land which will be titled in its name. (Emphasis in the original)
81
VOL. 403, MAY 6, 2003 81
Chavez vs. Public Estates Authority
the transfer of reclaimed land to Amari or its transferees will leave us
with a simple contract for reclamation services, to be paid for in cash.
It should also be noted that declaring the Amended JVA to be
completely null and void would result in the unjust enrichment of the
state. The Civil Code provision on human relations states:
Art. 19. Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due,and observe honesty and good
faith. 15

Again, in Republic v. Court of Appeals, it was the finding of this Court

16

that the reclamation efforts of the Pasay City government and the RREC
resulted in “something compensable.” Mr. Justice Reynato Puno explained
it best in his concurring opinion:
Given all the facts, Pasay City and RREC cannot be left uncompensated. The
National Government should not be unjustly enriched at the expense of Pasay
City and RREC. Pasay City and RREC deserve to be compensated quantum
meruit and on equitable consideration for their work. 17

Following the applicable provision of law and hearkening to the dictates of

equity, that no one, not even the government, shall unjustly enrich himself
at the expense of another, I believe that Amari and its successors in
18

interest are entitled to equitable compensation for their proven efforts, at

least in the form of cash, as provided for under the Amended JVA.
At this juncture, I wish to express my concern over the draft
resolution’s pronouncement that the Court’s Decision can be made to
apply retroactively because “(t)he Decision, whether made retroactive or
not, does not change the law since the Decision merely reiterates the law
that prevailed since the effectivity of the 1973 Constitution.” This
statement would hold true for the constitutions, statutes and other laws
involved in the case that existed before the Decision was rendered.
However, the issues involved are
_______________

15 Emphasis supplied.
16 359 Phil. 530; 299 SCRA 199 (1998).
17 Republic v. Court of Appeals, 359 Phil. 530; 299 SCRA 199 (1998) (concurring opinion of
Puno, J.), citing Civil Code, art. 19.
18 Republic v. Court of Appeals, supra.
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82 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
so novel that even the esteemed ponente concedes that this case is one of
first impression.
For example, Section 3 of E.O. 525 declares that:
All lands reclaimed by PEA shall belong to or be owned by the PEA which shall
be responsible for its administration, development, utilization or disposition in
accordance with the provisions of Presidential Decree No. 1084.
Can we really blame respondents for concluding that any kind of land
reclaimed by PEA becomes the latter’s patrimonial property? It is spelled
out as such. It was only the filing of the present petition which brought to
light the possibility that this provision may have already been modified,
even partially repealed by Section 4, Subsections 4, 14 and 15 of the
Revised Administrative Code of 1987. 19

Another doctrine which was set aside by the Court’s Decision is the
general rule that alienable land of the public domain automatically
becomes private land upon the grant of a patent or the issuance of a
certificate of title. Curiously, this legal principle was held to be
20
inapplicable to government entities, despite several analogous cases
21

which may have reasonably led the respondents to a different conclusion. 22

Most significantly, the ruling laid down by the Decision that: “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 land,” is not based on any previous jurisprudence, nor
23

is it spelled out in any law. It is the result of process of induction and

interpretation of several laws which have not been set side by side in such
a manner before. This pronouncement has never been made before, and
24

yet now it is law. So

_______________

19 Chavez v. Public Estates Authority, supra

20 Sumail v. Judge of the Court of First Instance of Cotabato, 96 Phil. 946 (1955).
21 Chavez v. Public Estates Authority, supra.
22 Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas, G.R. No. 77541, 29 November
1988, 168 SCRA 198; Manalo v. Intermediate Appellate Court,G.R. No. 64753, 26 April
1989, 172 SCRA 795.
23 Chavez v. Public Estates Authority, supra.
24 These laws are C.A. 141, P.D. 1084, P.D. 1085, P.D. 3-A, E.O. 525, the 1973 Constitution
and the 1987 Constitution, among others.
83
VOL. 403, MAY 6, 2003 83
Chavez vs. Public Estates Authority
when the Decision claimed that it, “does not change the law,” and that it,
“merely reiterates the law that prevailed since the effectivity of the 1973
Constitution,” we believe such a statement to be inaccurate, to say the
least.
Since new doctrines, which constitute new law, are espoused in the
Decision, these should be subject to the general rule under the Civil Code
regarding prospective application:
Art. 4. Laws shall have no retroactive effect, unless the contrary is provided.
Moreover, lex prospicit, non respicit—the law looks forward not backward.
If decisions that repeal the rulings in older ones are given only prospective
application, why should not doctrines that resolve questions of first
25

impression be treated in like manner? Therefore, it is my considered view

that, if the amended JVA should be nullified, the ruling must be given
prospective effect and all vested rights under contracts executed during
the validity thereof must be respected.
The foregoing are basic principles in civil law which have been brushed
aside in the wake of this Court’s haste to stamp out what it deems unjust.
Zeal in the pursuit of justice is admirable, to say the least, especially amid
the cynicism and pessimism that has prevailed among our people in recent
times. However, in our pursuit of righteousness, we must not lose sight of
our duty to dispense justice with an even hand, always mindful that where
we tread, the rights of others may be trampled upon underfoot.
 Therefore, I vote to GRANT the Motion for Reconsideration and to
DENY the petition for lack of merit.
DISSENTING OPINION

SANDOVAL-GUTIERREZ, J.:

It is after deep introspection that I am constrained to dissent from the

denial by the majority of the motions for reconsideration filed by
respondents PEA and AMARI.
_______________

25 People v. Jabinal, 154 Phil. 565; 55 SCRA 607 (1974); Benzonan Court of Appeals, G.R.
No. 97973, 27 January 1992, 205 SCRA 515.
84
84 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
Chief Justice Charles Evans Hughes of the United States Supreme Court
stated that a dissent is of value because it is “an appeal to the brooding
spirit of the law, to the intelligence of a future day, when a later decision
may possibly correct the error into which the dissenting judge believes the
court to have been betrayed.” 1

While I joined in the initial grant of the petition, I realized, however,

that the tenor of our interpretation of the Constitutional prohibition on
the acquisition of reclaimed lands by private corporations is so absolute
and circumscribed as to defeat the basic objectives of its provisions on
“The National Economy and Patrimony.” 2

The Constitution is a flexible and dynamic document. It must be

interpreted to meet its objectives under the complex necessities of the
changing times. Provisions intended to promote social and economic goals
are capable of varying interpretations. My view happens to differ from
that of the majority. I am confident however, that the demands of the
nation’s economy and the needs of the majority of our people will bring the
majority Decision and this Dissenting Opinion to a common
understanding. Always, the goals of the Constitution must be upheld, not
defeated nor diminished.
Infrastructure building is a function of the government and ideally
should be financed exclusively by public funds. However, present
circumstances show that this cannot be done. Thus, private corporations
are encouraged to invest in income generating national construction
ventures.
Investments on the scale of reclamation projects entail huge amounts of
money. It is a reality that only private corporations can raise such
amounts. In the process, they assist this country in its economic
development. Consequently, our government should not take arbitrary
action against these corporate developers. Obviously, the courts play a key
role in all disputes arising in this area of national development.
 This is the background behind my second hard look at the issues and
my resulting determination to dissent.
_______________

1 Hughes, The Supreme Court of the United States, p. 6; cited in Sinco,Philippine Political
Law, Eleventh Edition, 326.
2 Sections 1, 3 and 6, Article XII, Section 9, Article II, Constitution.
85
VOL. 403, MAY 6, 2003 85
Chavez vs. Public Estates Authority
The basic issue before us is whether a private corporation, such as
respondent AMARI, can acquire reclaimed lands.
The Decision being challenged invokes the Regalian doctrine that the
State owns all lands and waters of the public domain. The doctrine is the
foundation of the principle of land ownership that all lands that have not
been acquired by purchase or grant from the Government belong to the
public domain. Property of public dominion is that devoted to public use
3

such as roads, canals, rivers, torrents, ports and bridges constructed by

the State, riverbanks, shores, roadsteads and that of a similar
character. Those which belong to the State, not devoted to public use, and
4

are intended for some public service or for the development of the national
wealth, are also classified as property of public dominion. All other 5

property of the State which is not of public dominion is patrimonial. Also, 6

property of public dominion, when no longer intended for public use or

public service, shall form part of the patrimonial property of the State. 7

In our Decision sought to be reconsidered, we held that the following

8

laws, among others, are applicable to the particular reclamation project

involved in this case: the Spanish Law of Waters of 1866, the Civil Code of
1889, Act No. 1654 enacted by the Philippine Commission in 1907, Act No.
2874 (the Public Land Act of 1919), and Commonwealth Act No. 141 of the
Philippine National Assembly, also known as the Public Land Act of 1936.
Certain dictums are emphasized. Reclaimed lands of the government may
be leased but not sold to private corporations and private individuals. The
government retains title to lands it reclaims. Only lands which have been
officially delimited or classified as alienable shall be declared open to
disposition or concession.
Applying these laws and the Constitution, we then concluded that the
submerged areas of Manila Bay are inalienable natural resources of the
public domain, outside the commerce of man. They have to be classified by
law as alienable or disposable agricultural
_______________

3 Cariño vs. Insular Government, 41 Phil. 935 (1909).

4 Article 420, Civil Code.
5 Id.
6 Article 421, id.
 7 Article 422, id.
8 pp. 27-28.
86
86 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
lands of the public domain and have to be declared open to disposition.
However, there can be no classification and declaration of their alienable
or disposable nature until after PEA has reclaimed these submerged
areas. Even after the submerged areas have been reclaimed from the sea
and classified as alienable or disposable, private corporations such as
respondent AMARI, are disqualified from acquiring the reclaimed land in
view of Section 3, Article XII of the Constitution, quoted as follows:
“Lands of the Public domain are classified into agricultural, forest or timbre,
minerals lands, and national parks. Agricultural lands of the public domain may
be further classified by law according to the uses to which they may be devoted.
Alienable lands of the public domain shall be limited to agricultural
lands. Private corporations or associations may not hold such alienable lands of
the public domain except by lease, for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and not to exceed one thousand
hectares in area. Citizens of the Philippines may lease not more than five
hundred hectares, or acquire not more than twelve hectares thereof by purchase,
homestead, or grant.
“Taking into account the requirements of conservation, ecology, and
development, and subject to the requirements of agrarian reform, the Congress
shall determine, by law, the size of lands of the public domain which may be
acquired, developed, held, or leased and the conditions therefor.”
I dissent from the foregoing conclusions which are based on general laws
mainly of ancient vintage. Reclaimed lands, especially those under the
Manila-Cavite Coastal Road and Reclamation Project (MCCRRP), are
governed by PD 1084 and PD 1085 enacted in 1976 and 1977,
9 10

respectively, or more than half a century after the enactment of the Public
Lands Acts of 1919 and 1936.
PD 1084 and PD 1085 provide:
_______________

9 Creating the Public Estate Authority, defining its powers and functions, providing funds
therefor and for other purposes.
10 Conveying the land reclaimed in the foreshore and offshore of the Manila Bay (The
Manila-Cavite Coastal Road Project, as property of the Public States Authority as well as
rights and interest with assumption of obligations in the reclamation contract covering areas
of the Manila Bay between the Republic of the Philippines and the Construction and
Development Corporation of the Philippines.
87
VOL. 403, MAY 6, 2003 87
Chavez vs. Public Estates Authority
PD 1084—
 “Section 4. Purposes.—The Authority is hereby created for the following
purposes:

1. a.To reclaim land, including foreshore and submerged areas,by dredging,

filling or other means, or to acquire reclaimed land;
2. b.To develop, improve, acquire, administer, deal in, subdivide, dispose,
lease and sell any and all kinds of lands, building, estates and other
forms of real property, owned, managed, controlled and/or operated by
the government;
3. c.To provide for, operate or administer such services as may be necessary
for the efficient, economical and beneficial utilization of the above
properties. (Emphasis ours)

PD 1085—
“The land reclaimed in the foreshore and offshore area of Manila Bay
pursuant to the contract for the reclamation and construction of the Manila-
Cavite Coastal Road Project between the Republic of the Philippines and the
Conduction and Development Corporation of the Philippines dated November 20,
1973 and/or any other contract or reclamation covering the same area is
hereby transferred, conveyed and assigned to the ownership and administration
of the Public Estates Authorityestablished pursuant to P.D. No. 1084; Provided,
however, that the rights and interest of the Construction and Development
Corporation of the Philippines pursuant to the aforesaid contract shall be
recognized respected.
xxx xxx xxx
“Special land patent/patents shall be issued by the Secretary of Natural
Resources in favor of the Public Estates Authority without prejudice to
the subsequent transfer to the contractor or his assignees of such portion or
portions of the land reclaimed or to be reclaimed as provided for in the above-
mentioned contract. On the basis of such patents, the Land Registration
Commission shall issue the corresponding certificates of title.” (Emphasis Ours)
Pursuant to the above provisions, PEA is mandated inter alia to reclaim
land, including foreshore and submerged areas, or to acquire reclaimed
land. Likewise, PEA has the power to sell any and all kinds of lands and
other forms of real property owned and managed by the government.
Significantly, PEA is authorized to transfer to the contractor or its
assignees portion or portions of the land reclaimed or to be reclaimed.
It is a fundamental rule that if two or more laws govern the same
subject, every effort to reconcile and harmonize them must be
88
88 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
taken. Interpretare et concordare legibus est optimus
interpretandi. Statutes must be so construed and harmonized with other
statutes as to form a uniform system of jurisprudence. However, if 11

several laws cannot be harmonized, the earlier statute must yield to the
later enactment. The later law is the latest expression of the legislative
will. Therefore, it is PD 1084 and PD 1085 which apply to the issues in
12

this case.
Moreover, the laws cited in our Decision are general laws which apply
equally to all the individuals or entities embraced by their provisions. The 13

provisions refer to public lands in general.

Upon the other hand, PD 1084 and PD 1085 are special laws which
relate to particular economic activities, specific kinds of land and a
particular group of persons. Their coverage is specific and limited. More
14

specifically, these special laws apply to land reclaimed from Manila Bay by
private corporations. If harmonization and giving effect to the provisions of
both sets of laws is not possible, the special law should be made to prevail
over the general law, as it evinces the legislative intent more clearly. The
special law is a specific enactment of the legislature which constitutes an
exception to the general statute. 15

Our Decision cites the constitutional provision banning private

corporations from acquiring any kind of alienable land of the public
domain. 16

Under the Constitution, lands of the public domain are classified into
agricultural, forest or timber, mineral lands, and natural parks. Land 17

reclaimed from the sea cannot fall under any of the last three categories
because it is neither forest nor timber, mineral, nor park land. It is,
therefore, agricultural land. Agricultural land
18

_______________

11 Valera vs. Tuazon, 80 Phil. 823 (1948).

12 Eraña vs. Vergel de Dios, 85 Phil. 17 (1947); City of Naga vs. Agna,71 SCRA 176 (1976).
13 U.S. vs. Serapio, 23 Phil. 584 (1912); Villegas vs. Subido, 41 SCRA 190 (1971); Bagatsing
vs. Ramirez, 74 SCRA 306 (1976).
14 U.S. vs. Serapio, supra; Valera vs. Tuazon, supra.
15 Licauco & Co. vs. Apostol, 44 Phil. 138 (1922); De Jesus vs. People,120 SCRA 760 (1983)
16 Section 3, Article XII, Constitution.
17 Id.
18 Krivenko vs. Register of Deeds, 79 Phil. 461 (1947).
89
VOL. 403, MAY 6, 2003 89
Chavez vs. Public Estates Authority
of the public domain may be alienated. However, the Constitution states
19

that private corporations may not hold such alienable land except by
lease. It follows that AMARI, being a private corporation, cannot hold any
reclaimed area. But let it be made clear that PD 1084 transfers the public
agricultural land formed by reclamation to the “ownership and
administration” of PEA, a government owned corporation. The transfer is
not to AMARI, a private corporation, hence, the constitutional prohibition
does not apply. Corollarily, under PD 1085, PEA is empowered to
subsequently transfer to the contractor portion or portions of the land
reclaimed to be reclaimed.
Does the Constitution restrain PEA from effecting such transfer to a
private corporation? Under Article 421 of the Civil Code, all property of
the State which is not of public dominion is patrimonial. PEA does not
exercise sovereign functions of government. It handles business activities
for the government. Thus, the property in its hands, not being of public
dominion, is held in a patrimonial capacity. PEA, therefore, may sell this
property to private corporations without violating the Constitution. It is
relevant to state that there is no constitutional obstacle to the sale of real
estate held by government owned corporations, like the National
Development Corporation, the Philippine National Railways, the National
Power Corporation, etc. to private corporations. Similarly, why should
PEA, being a government owned corporation, be prohibited to sell its
reclaimed lands to private corporations?
I take exception to the view of the majority that after the enactment of
the 1935 Constitution, Section 58 of Act 2874 continues to be applicable up
to the present and that the long established state policy is to retain for the
government title and ownership of government reclaimed land. This
simply is an inaccurate statement of current government policy. When a
government decides to reclaim the land, such as the area comprising and
surrounding the Cultural Center Complex and other parts of Manila Bay,
it reserves title only to the roads, bridges, and spaces allotted for
government buildings. The rest is designed, as early as the drawing board
stage, for sale and use as commercial, industrial, entertainment or
services-oriented ventures. The idea of selling lots and earning
_______________

19 Section 3, Article XII, Constitution.

90
90 SUPREME COURT REPORTS ANNOTATED
Chavez vs. Public Estates Authority
money for the government is the motive why the reclamation was planned
and implemented in the first place.
May I point out that there are other planned or on-going reclamation
projects in the Philippines. The majority opinion does not only strike down
the Joint Venture Agreement (JVA) between AMARI and PEA but will
also adversely affect or nullify all other reclamation agreements in the
country. I doubt if government financial institutions, like the Development
Bank of the Philippines, the Government Service Insurance System, the
Social Security System or other agencies, would risk a major portion of
their funds in a problem-filled and highly speculative venture, like
reclamation of land still submerged under the sea. Likewise, there
certainly are no private individuals, like business tycoons and similar
entrepreneurs, who would undertake a major reclamation project without
using the corporate device to raise and disburse funds and to recover the
amounts expended with a certain margin of profits. And why should
corporations part with their money if there is no assurance of payment,
such as a share in the land reclaimed or to be reclaimed? It would be most
unfair and a violation of procedural and substantive rights to encourage 20

investors, both Filipino and foreign, to form corporations, build

infrastructures, spend money and efforts only to be told that the invitation
to invest is unconstitutional or illegal with absolutely no indication of how
they could be compensated for their work.
It has to be stressed that the petition does not actually assail the
validity of the JVA between PEA and AMARI. The petition mainly seeks
to compel PEA to disclose all facts on the then on-going negotiations with
respondent AMARI with respect to the reclamation of portions of Manila
Bay. Petitioner relies on the Constitutional provision that the right of the
people to information on matters of public concern shall be recognized and
that access to papers pertaining to official transactions shall be afforded
the citizen. I believe that PEA does not have to reveal what was going on
21

from the very start and during the negotiations with a private party. As
long as the parties have the legal capacity to enter into a valid contract
over an appropriate subject matter, they do not have to
_______________

20 Section 1, Article III, id. on deprivation of property without due process of law, Section 9
on eminent domain is also infringed.
21 Section 7, Article III, id.
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VOL. 403, MAY 6, 2003 91
Chavez vs. Public Estates Authority
make public, especially to competitors, the initial bargaining, the give-and-
take arguments, the mutual concessions, the moving from one position to
another, and other preliminary steps leading to the drafting and execution
of the contract. As in negotiations leading to a treaty or international
agreement, whether sovereign or commercial in nature, a certain amount
of secrecy is not only permissible but compelling.
At any rate, recent developments appear to have mooted this issue, and
anything in the Decision which apparently approves publicity during on-
going negotiations without pinpointing the stage where the right to
information appears is obiter. The motions for reconsideration all treatthe
JVA as a done thing, something already concrete, if not finalized.
Indeed, it is hypothetical to identify exactly when the right to
information begins and what matters may be disclosed during
negotiations for the reclamation of land from the sea.
Unfortunately for private respondent, its name, “AMARI” happens to
retain lingering unpleasant connotations. The phrase “grandmother of all
scams,”arising from the Senate investigation of the original contract, has
not been completely erased from the public mind. However, any suspicion
of anything corrupt or improper during the initial negotiations which led
to the award of the reclamation to AMARI are completely irrelevant to
this petition. It bears stressing that the Decision and this Dissenting
Opinion center exclusively on questions of constitutionality and legality
earlier discussed.
To recapitulate, it is my opinion that there is nothing in the
Constitution or applicable statutes which impedes the exercise by PEA of
its right to sell or otherwise dispose of its reclaimed land to private
corporations, especially where, as here, the purpose is to compensate
respondent AMARI, the corporate developer, for its expenses incurred in
reclaiming the subject areas. Pursuant to PD 1084 and PD 1085, PEA can
transfer to the contractor, such as AMARI, such portion or portions of the
land reclaimed or to be reclaimed.
WHEREFORE, I vote to GRANT the motions for reconsideration and to
DISMISS the petition for lack of merit.
Motions for reconsideration denied with finality.
92
92 SUPREME COURT REPORTS ANNOTATED
People vs. Annibong
Notes.—The reclamation of foreshore and submerged lands for the
purpose of developing the reclaimed area into an industrial and trading
center with a modern harbor and port facilities for both domestic and
international commerce is an infrastructure project as contemplated
under PD 1818. (Garcia vs. Burgos, 291 SCRA 546 [1998])
No one, not even the government, shall unjustly enrich one-self/itself at
the expense of another. (Republic vs. Court of Appeals, 299 SCRA
199 [1998])

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