FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC ESTATES AUTHORITY
and AMARI COASTAL BAY DEVELOPMENT CORPORATION, respondents. [G.R. No. 133250. November 11, 2003 ] – denial of motions for
reconsideration filed by PEA and AMARI.
“x x x.
However,
the Supplement to Separate Opinion, Concurring and Dissenting of Justice Josue
N. Bellosillo brings to the Courts attention the Resolutions of this Court on 3
February 1965 and 24 June 1966 in L- 21870 entitled Manuel O. Ponce, et al. v. Hon. Amador Gomez, et al. and No.
L-22669 entitled Manuel O. Ponce, et al.
v. The City of Cebu Ponce Manila
Bay
We find
the cited Ponce Cases inapplicable to the instant case.
First,
as Justice Bellosillo himself states in his supplement to his dissent, the
Ponce Cases admit that submerged lands still belong to the
National Government.[1] The correct formulation,
however, is that submerged lands are owned by the State and are inalienable.
Section 2, Article XII of the 1987
Constitution 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. x x x. (Emphasis
supplied)
Submerged
lands, like the waters (sea or bay) above them, are part of the States
inalienable natural resources. Submerged lands are property of public dominion,
absolutely inalienable and outside the commerce of man.[2] This is also true with
respect to foreshore lands. Any sale of submerged or foreshore lands is void
being contrary to the Constitution.[3]
This is
why the Cebu City
In the
instant case, the bulk of the lands subject of the Amended JVA are still submerged
lands even to this very day, and therefore inalienable and outside the commerce of man. Of the 750
hectares subject of the Amended JVA, 592.15 hectares or 78% of the total area are
still submerged, permanently under the waters of Manila Bay
The
Amended JVA states that the 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.[4] The Amended JVA further
states that the sharing of the Joint Venture Proceeds shall be based on the
ratio of thirty percent (30%) for PEA and seventy percent (70%) for AMARI.[5] The Amended JVA also
provides that the PEA hereby designates AMARI to perform PEAs rights and
privileges to reclaim, own and develop the Reclamation Area.[6] In short, under the Amended JVA
the PEA contributed its rights, privileges and ownership over the Reclamation
Area to the Joint Venture which is 70% owned by Amari. Moreover, the PEA
delegated to Amari the right and privilege to reclaim the submerged lands.
The
Amended JVA mandates that the PEA had the duty to execute without delay the
necessary deed of transfer or conveyance of the title pertaining to AMARIs Land
share based on the Land Allocation Plan.[7] The Amended JVA also
provides that PEA, when requested in writing by AMARI, shall then cause the
issuance and delivery of the proper certificates of title covering AMARIs Land
Share in the name of AMARI, x x x.[8]
In the
Ponce Cases, the City of Cebu
retained ownership of the reclaimed foreshore lands and Essel, Inc. only had an
irrevocable option to purchase portions of the foreshore lands once actually
reclaimed. In sharp contrast, in the instant case ownership of the reclamation area, including the submerged lands, was
immediately transferred to the joint venture. Amari immediately acquired the absolute right to own 70% percent of the
reclamation area, with the deeds of transfer to be documented and the certificates
of title to be issued upon actual reclamation. Amaris right to own the
submerged lands is immediately effective
upon the approval of the Amended JVA
and not merely an option to be exercised in the future if and when the
reclamation is actually realized. The submerged lands, being inalienable and
outside the commerce of man, could not be the subject of the commercial
transactions specified in the Amended JVA.
Second,
in the Ponce Cases the Cebu
City Cebu City Cebu
City 11 June
1978 , any sale of
government land must be made only through public bidding. Thus, such an irrevocable option to
purchase government land would now be void being contrary to the requirement of
public bidding expressly required in Section 79[9] of PD No. 1445. This requirement of public
bidding is reiterated in Section 379[10] of the 1991 Local Government Code.[11] Obviously, the ingenious
reclamation scheme adopted in the Cebu
City
Third, Republic Act No. 1899 authorized
municipalities and chartered cities to reclaim foreshore lands. The two
Resolutions in the Ponce Cases upheld the Cebu City 27 June 1965 Resolution made the injunction of
the trial court against the City of Cebu
As we
held in the 1998 case of Republic Real Estate Corporation v. Court of
Appeals,[12] citing the Ponce
Fourth,
the Ponce Cases involve the authority of the City of Cebu Cebu 9
July 2002 Decision and the 6 May 2003 Resolution of this Court in the instant case
expressly recognize this.
However,
in the instant case the PEA is not an
end user agency with respect to the reclaimed lands under the Amended
JVA. As we explained in the 6 May 2003 Resolution:
PEA is the
central
implementing agency tasked to undertake reclamation projects nationwide. PEA took the place of the 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 (or submerged lands) lands are public lands in
the same manner that these same lands would have been public lands in the hands
of DENR. (Emphasis supplied)
Our 9
July 2002 Decision explained the rationale for treating the PEA in the same
manner as the DENR with respect to reclaimed foreshore or submerged lands in
this wise:
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. (Emphasis supplied)
Finally,
the Ponce Cases were decided under the 1935
Constitution which allowed private corporations to acquire alienable lands of
the public domain. However, the 1973
Constitution prohibited private corporations from acquiring alienable lands of
the public domain, and the 1987 Constitution reiterated this prohibition.
Obviously, the Ponce Cases cannot serve as authority for a private corporation
to acquire alienable public lands, much less submerged lands, since under the present Constitution a private
corporation like Amari is barred from acquiring alienable lands of the public
domain.
Clearly,
the facts in the Ponce Cases are different from the facts in the instant case.
Moreover, the governing constitutional and statutory provisions have changed
since the Ponce Cases were disposed of in 1965 and 1966 through minute
Resolutions of a divided (6 to 5) Court.
This
Resolution does not prejudice any innocent third party purchaser of the
reclaimed lands covered by the Amended JVA. Neither the PEA nor Amari has sold
any portion of the reclaimed lands to third parties. Title to the reclaimed
lands remains with the PEA. As we stated in our 9 July 2002 Decision:
In the
instant case, the only patent and certificates of title issued are those in the
name of PEA, a wholly government owned corporation performing public as well as
proprietary functions. No patent or certificate of title has been issued to any
private party. No one is asking the Director of Lands to cancel PEAs patent or
certificates of title. In fact, the thrust of the instant petition is that PEAs
certificates of title should remain with PEA, and the land covered by these
certificates, being alienable lands of the public domain, should not be sold to
a private corporation.
X x x.
[1]
Decision dated 17 January
1964 of Judge Amador E. Gomez. Also quoted in Justice Josue N.
Bellosillos Supplement to Separate Opinion, Concurring and Dissenting.
[2]
Sections 2 and 3, Article XII of the 1987 Constitution.
[4]
Section 3.2 (a), Amended JVA.
[5]
Section 3.3 (a), Amended JVA.
[6]
Section 2.2, Amended JVA.
[7]
Section 5.2 (c), Amended JVA.
[8]
Ibid.
[9]
SECTION 79. Destruction or sale of
unserviceable property. When government property has become unserviceable
for any cause, or is no longer needed, it shall, upon application of the
officer accountable therefor, be inspected by the head of the agency or his
duly authorized representative in the presence of the auditor concerned and, if
found to be valueless or unsalable, it may be destroyed in their presence. If
found to be valuable, it may be sold at public auction to the highest bidder
under the supervision of the proper committee on awards or similar body in the
presence of the auditor concerned or other duly authorized representative of
the Commission, after advertising by printed notice in the Official Gazette, or
for not less than three consecutive days in any newspaper of general
circulation, or where the value of the property does not warrant the expense of
publication, by notices posted for a like period in at least three public
places in the locality where the property is to be sold. In the event that the
public auction fails, the property may be sold at a private sale at such price
as may be fixed by the same committee or body concerned and approved by the
Commission.
[10]
SECTION 379. Property Disposal. When
property of any local government unit has become unserviceable for any cause or
is no longer needed, it shall upon application of the officer accountable
therefor, be inspected and appraised by the provincial, city or municipal
auditor, as the case may be, or his duly authorized representative or that of
the Commission on Audit and, if found valueless or unusable, shall be destroyed
in the presence of the inspecting officer.
If found valuable, the same shall be sold at public auction
to the highest bidder under the supervision of the committee on awards and in
the presence of the provincial, city or municipal auditor or his duly
authorized representative. Notice of the public auction shall be posted in at
least three (3) publicly accessible and conspicuous places, and if the
acquisition cost exceeds One hundred thousand pesos (P100,000.00) in the
case of provinces and cities, and Fifty thousand pesos (P50,000.00) in
the case of municipalities, notice of auction shall be published at least two
(2) times within a reasonable period in a newspaper of general circulation in
the locality.
[11]
Under Section 380 of the 1991 Local Government Code, local governments can sell
real property through negotiated sale only with the approval of the Commission
on Audit. Under paragraph 2 (a) of COA Circular No. 89-296, on Sale Thru
Negotiation, a negotiated sale may be resorted to only if [T]here was a failure
of public auction. The Commission on Audit enforces the express requirement in
Section 79 of the Government Auditing Code that a negotiated sale is possible
only after there is a failure of public auction.
[12]
359 Phil. 530 (1998).
[13]
Laurel v. Garcia, G.R. No.
92013, 25 July 1990 ,
187 SCRA 797.
