EN BANC
FRANCISCO I. CHAVEZ,
Petitioner,
G.
R.
No. 133250
May 6, 2003
-versus-
PUBLIC ESTATES
AUTHORITY
AND AMARI
COASTAL
BAY DEVELOPMENT CORPORATION,
Respondents.
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DISSENTING OPINION
YNARES-SANTIAGO,
J.:chanroblesvirtuallawlibrary
.
The moving force behind
the main decision is sound. It proceeds from policies embodied in
our Constitution that 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.cralaw:red
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.[1]
I submit that there was no need to resort to such a drastic measure.
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First of all, a historical
analysis of the laws affecting reclaimed lands indicates that the same
have been treated by law as alienable.cralaw:red
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."
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.
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Republic Act No. 1899,
and 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."
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Again on the basis of
the
above provision, the 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.[2]
However, before the reclamation was completed, 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.
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"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.
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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.,[3]
held that public lands which 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]
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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.
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Secondly, the reason
behind the total nullification 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)
Consent of the contracting parties;
(2)
Object certain which is the subject matter of the contract;
(3)
Cause of the obligation which is established.[5]
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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.[6]
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 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:
“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 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:
chan robles virtual law library
"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.[7]
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.[8]
Since it has been ruled that the transfer of any of the reclaimed lands
to Amari would be unconstitutional,[9]
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."
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 obligation to perform the only feasible
or practicable prestation.[10]
Even if PEA 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 alternative 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:
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"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 applied 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.[12]
The contract itself provides for severability in case any of its
provisions
are deemed invalid.[13]
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 lead one to conclude that the transfer of
reclaimed
land is the only form of payment contemplated by the parties.[14]
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.
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,[16]
it was the finding of this Court 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:
chan robles virtual law library
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,[18]
I believe that Amari and its successors in 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 so
novel
that even the esteemed ponente concedes that this case is one of first
impression.cralaw:red
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]
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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.[20]
Curiously, this legal principle was held to be inapplicable to
government
entities,[21]
despite several analogous cases 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,”[23]
is not based on any previous jurisprudence, nor is it spelled out in
any
law. It is the result of a process of induction and
interpretation
of several laws which have not been set side by side in such a manner
before.[24]
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.cralaw:red
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:
chan robles virtual law library
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,[25]
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.
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.cralaw:red
Therefore, I vote to
GRANT the Motion for Reconsideration and to DENY the petition for lack
of merit.
____________________________
Endnotes:
[1]
IV TOLENTINO 632, (1990 ed.), citing Perez Gonzalez & Alguer; I-II
Enneccerus, Kipp & Wolff 364-366; 3 Von Tuhr 311; 3 Fabres 231.
[2]
See Republic v. Court of Appeals, 359 Phil. 530 (1998).
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[3]
G.R. No. 73002, 29 December 1986, 146 SCRA 509.
[4]
Id., at pp. 526-527.
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[5]
Emphasis supplied.
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[6]
IV Tolentino, Commentaries and Jurisprudence on the Civil Code of the
Philippines
(Quezon City, 1991), p. 520.
[7]
Id., p. 203.
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[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.
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[10]
Supra note 2, at 209.
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[11]
Legarda v. Miailhe, 88 Phil. 637 (1951).
[12]
Supra note 2, at 642, citing 4 Llerna 93.
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[13]
Amended Joint Venture Agreement, Section 7.4, Private Respondent’s
Annex
B.
[14]
Chavez v. Public Estates Authority, supra.
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The
decision states:chanroblesvirtuallawlibrary
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xxx
xxx xxx
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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.
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xxx
xxx xxx
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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)
[15]
Emphasis supplied.
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[16]
359 Phil. 530 (1998).
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[17]
Republic v. Court of Appeals, 359 Phil. 530 (1998), (concurring opinion
of Puno, J.), citing Civil Code, art. 19.
[18]
Republic v. Court of Appeals, supra.
[19]
Chavez v. Public Estates Authority, supra.
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[20]
Sumail v. Judge of the Court of First Insatnce of Cotabato, 96 Phil.
946
(1955).
[21]
Chavez v. Public Estates Authority, supra.
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[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.
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[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.
[25]
People v. Jabinal, 154 Phil. 565 (1974); Benzonan v. Court of Appeals,
G.R. No. 97973, 27 January 1992, 205 SCRA 515. |