Chavez vs PEA and Amari Coastal Bay Development Corporation

G.R. No. 133250. July 9, 2002

Facts:
Public Estates Authority (PEA) is a wholly government-owned and –controlled corporation
which is the primary implementing agency of the National Government to reclaim
foreshore and submerged lands of the public domain. By virtue of a Special Patent issued
by President Corazon Aquino, the Register of Deeds of the Paranaque, in April 1988,
issued certificates of title, in the name of PEA, covering three reclaimed islands known as
the Freedom Islands located at the southern portion of the Manila-Cavite Coastal Road,
Paranaque City. The Freedom Islands have a total land area of 157.841 hectares.

In April 1995, PEA entered into a Joint Venture Agreement (JVA) with AMARI, a private
corporation, to 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-
Manila Cavite Coastal Road Reclamation Project. The JVA was later amended giving
AMARI an option to reclaim an additional 350 hectares of submerged area. Part of the
consideration for AMARI’s work is the conveyance of 70% of the total net usable
reclaimed area – equivalent to 367.5 hectares, title of which will be in AMARI’s name.

Issue:
Whether or not AMARI, a private corporation, can acquire and own under the Amended
JVA 367.5 hectares of reclaimed foreshore and submerged areas in Manila Bay

Held: No. AMARI as a private corporation cannot acquire the reclaimed Freedom Islands,
though alienable lands of the public domain, except by lease, as provided under Section
3, Article XII of the Constitution. The still submerged areas (i.e., the more or less additional
250 and 350 hectares of submerged areas) in Manila Bay are inalienable lands of the
public domain; as such, they are beyond the commerce of man, as provided under
Section 2, Article XII of the Constitution.

The reclaimed Freedom Islands: The assignment to PEA of the ownership and
administration of the reclaimed areas in Manila Bay, coupled with President
Aquino’s actual issuance of a special patent covering the Freedom Islands, is equivalent
to an official proclamation classifying the Freedom Islands as alienable or disposable
lands of the public domain. They also constitute a declaration that the Freedom Islands
are no longer needed for public service. The Freedom Islands are thus alienable or
disposable lands of the public domain, open to disposition or concession to qualified
parties.

The submerged areas: The mere reclamation of foreshore and submerged areas by PEA
does not convert these inalienable natural resources of the State into alienable or
disposable lands of the public domain. There must be a law or presidential proclamation
officially classifying these reclaimed lands as alienable or disposable and open to
disposition or concession. Moreover, these reclaimed lands cannot be classified as
alienable or disposable if the law has reserved them for some public or quasi-public use.

PEA’s authority to sell: In order for PEA to sell its reclaimed foreshore and submerged
alienable lands of the public domain, there must be legislative authority empowering PEA
to sell these lands, in view of the requirement under CA No. 141. Without such legislative
authority, PEA could not sell but only lease its reclaimed foreshore and submerged
alienable lands of the public domain. PEA’s Charter grants it such express legislative
authority to sell its lands, whether patrimonial or alienable lands of the public domain.
Nevertheless, any legislative authority granted to PEA to sell its reclaimed alienable lands
of the public domain would be subject to the constitutional ban on private corporations
from acquiring alienable lands of the public domain. Hence, such legislative authority
could only benefit private individuals.

Registration of alienable lands of the public domain: Registration of land under Act No.
496 or PD No. 1529 does not vest in the registrant private or public ownership of the
land. Registration is not a mode of acquiring ownership but is merely evidence of
ownership previously conferred by any of the recognized modes of acquiring
ownership. Registration does not give the registrant a better right than what the registrant
had prior to the registration. The registration of lands of the public domain under the
Torrens system, by itself, cannot convert public lands into private lands. Jurisprudence
holding that upon the grant of the patent or issuance of the certificate of title the alienable
land of the public domain automatically becomes private land cannot apply to government
units and entities like PEA.

Lands registered under Act No. 496 or PD No. 1529 are not exclusively private or
patrimonial lands. Lands of the public domain may also be registered pursuant to existing
laws. Several laws authorize lands of the public domain to be registered under the
Torrens System or Act No. 496, now PD No. 1529, without losing their character as public
lands. For instance,

- Under the Revised Administrative Code of 1987, private property purchased by

the National Government for expansion of an airport may be titled in the name
of the government agency tasked to administer the airport. Private property
donated to a municipality for use as a town plaza or public school site may
likewise be titled in the name of the municipality. All these properties become
properties of the public domain, and if already registered under Act No. 496 or
PD No. 1529, remain registered land. There is no requirement or provision in
any existing law for the de-registration of land from the Torrens System.

- Private lands taken by the Government for public use under its power
of eminent domain become unquestionably part of the public
domain. Nevertheless, Section 85 of PD No. 1529 authorizes the Register of
Deeds to issue in the name of the National Government new certificates of title
covering such expropriated lands.