ChanRobles Virtual law Library

GO TO FULL LIST OF DECISIONS and RESOLUTIONS

FRANCISCO I. CHAVEZ,
                 Petitioner,

G. R. No.  133250
May 6, 2003

-versus-

PUBLIC   ESTATES   AUTHORITY   AND  AMARI
COASTAL BAY DEVELOPMENT CORPORATION,
                        Respondents.
 
 chanroblesvirtualawlibrary

SANDOVAL-GUTIERREZ, J.:chanroblesvirtuallawlibrary

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.

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.chanrobles virtual law library

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.cralaw:red

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.cralaw:red

This is the background behind my second hard look at the issues and my resulting determination to dissent.cralaw:red

The basic issue before us is whether a private corporation, such as respondent AMARI, can acquire reclaimed lands.cralaw:red

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.[3] Property of public dominion is that devoted to public use such as roads, canals, rivers, torrents, ports and bridges constructed by the State, riverbanks, shores, roadsteads and that of a similar character.[4] Those which belong to the State, not devoted to public use, and are intended for some public service or for the development of the national wealth, are also classified as property of public dominion.[5] All other property of the State which is not of public dominion is patrimonial.[6] Also, 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]chanrobles virtual law library

In our decision sought to be reconsidered,[8] we held that the following 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.cralaw:red

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 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, 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.cralaw:red

“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.”chanrobles virtual law library

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 P.D. 1084[9] and P.D. 1085[10] enacted in 1976 and 1977, respectively, or more than half a century after the enactment of the Public Lands Acts of 1919 and 1936.cralaw:red

P.D. 1084 and P.D. 1085 provide:

P.D. 1084:

“Section 4. Purposes. - The Authority is hereby created for the following purposes:

a. To reclaim land, including foreshore and submerged areas, by dredging, filling or other means, or to acquire reclaimed land;

b. 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;chanrobles virtual law library

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.)

P.D. 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 Construction 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 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.

x x x                              x x x                           x x x

“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.chanrobles virtual law library

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.[11] 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.[12] Therefore, it is P.D. 1084 and P.D. 1085 which apply to the issues in this case.cralaw:red

Moreover, the laws cited in our Decision are general laws which apply equally to all the individuals or entities embraced by their provisions.[13] The provisions refer to public lands in general.cralaw:red

Upon the other hand, P.D. 1084 and P.D. 1085 are special laws which relate to particular economic activities, specific kinds of land and a particular group of persons.14 Their coverage is specific and limited. More specifically, these special laws apply to land reclaimed from Manila Bay by private corporations.cralaw:red

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.[17] 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.[18] Agricultural land of the public domain may be alienated.[19] 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 P.D. 1085, PEA is empowered to subsequently transfer to the contractor portion or portions of the land reclaimed or to be reclaimed.chanrobles virtual law library

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 money for the government is the motive why the reclamation was planned and implemented in the first place.chanrobles virtual law library

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[20] 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.chanrobles virtual law library

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.[21] 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.cralaw:red

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 treat the JVA as a done thing, something already concrete, if not finalized.cralaw:red

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.chanrobles virtual law library

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.cralaw:red

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.cralaw:red

WHEREFORE, I vote to GRANT the motions for reconsideration and to DISMISS the petition for lack of merit.
 
 
 

____________________________

Endnotes: