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G.R. No. 133250. November 11, 2003.* FRANCISCO I. CHAVEZ, petitioner, vs.

PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT CORPORATION, respondents.

SAME SAME Natural Resources; Reclamation Projects; Public Officers; Graft and Corruption; By any legal or moral yardstick, the P1.754 billion in commissions paid to various individuals for professional efforts and services in successfully negotiating and securing the reclamation contract obviously constitutes bribe money.The private entity that purchased the reclaimed lands for P1.894 billion expressly admitted before the Senate Committees that it spent P1.754 billion in commissions to pay various individuals for professional efforts and services in successfully negotiating and securing the contract. By any legal or moral yardstick, the P1.754 billion in commissions obviously constitutes bribe money. Nonetheless, there are those who insist that the billions in investments of the private entity deserve protection by this Court. Should this Court establish a new doctrine by elevating grease money to the status of legitimate investments deserving of protection by the law? Should this Court reward the patently illegal and grossly unethical business practice of the private entity in securing the contract? Should we allow those with hands dripping with dirty money equitable relief from this Court? Same; Same; Submerged lands are owned by the State and are inalienable; Submerged lands, like the waters (sea or bay) above them, are part of the States inalienable natural resources.As Justice Bellosillo himself states in his supplement to his dissent, the Ponce Cases admit that submerged lands still belong to the National Government. 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. This is also true with respect to foreshore lands. Any sale of submerged or foreshore lands is void being contrary to the Constitution. Same; Same; Reclaimed lands are no longer foreshore or submerged lands, and thus may qualify as alienable agricultural lands of the public domain provided the requirements of public land laws are met. This is why the Cebu City ordinance merely granted Essel, Inc. an irrevocable option to purchase the foreshore lands after the reclamation and did not actually sell to Essel, Inc. the still to be reclaimed foreshore lands. Clearly, in the Ponce Cases the option to purchase referred to reclaimed lands, and not to foreshore lands which are inalienable. Reclaimed lands are no longer foreshore or submerged lands, and thus may qualify as alienable agricultural lands of the public domain provided the requirements of public land laws are met. Same; Same; In the Ponce Cases Nos. L-21870 and L-22669, the City of Cebu retained ownership of the reclaimed foreshore lands and the private corporation only had an irrevocable option to purchase portions of the foreshore lands once actually reclaimed, while in the instant case, ownership of the reclamation area, including the submerged lands, was immediately transferred to the joint ventureAmaris 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.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 an d 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.

Same; Same; Bids and Bidding; Government Auditing Code (P.D. No. 1445); With the enactment of the Government Auditing Code on 11 June 1978, any sale of government land must be made only through public bidding, thus, an irrevocable option to purchase government land would now be void being contrary to the requirement of public bidding; In the instant case, the Amended JVA is a negotiated contract which clearly contravenes Section 79 of P.D. No. 1445. In the Ponce Cases the Cebu City ordinance granted Essel, Inc. an irrevocable option to purchase from Cebu City not more than 70% of the reclaimed lands. The ownership of the reclaimed lands remained with Cebu City until Essel, Inc. exercised its option to purchase. With the subsequent enactment of the Government Auditing Code (Presidential Decree No. 1445) on 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 of P.D. No. 1445. This requirement of public bidding is reiterated in Section 379 of the 1991 Local Government Code. Obviously, the ingenious reclamation scheme adopted in the Cebu City ordinance can no longer be followed in view of the requirement of public bidding in the sale of government lands. In the instant case, the Amended JVA is a negotiated contract which clearly contravenes Section 79 of P.D. No. 1445. Same; Same; Statutes; R.A. No. 1899 applies only to foreshore lands, not to submerged lands.As we held in the 1998 case of Republic Real Estate Corporation v. Court of Appeals, citing the Ponce Cases, R.A. No. 1899 applies only to foreshore lands, not to submerged lands. In his concurring opinion in Republic Real Estate Corporation, Justice Reynato S. Puno stated that under Commonwealth Act No. 141, foreshore and lands under water were not to be alienated and sold to private parties, and that such lands remained property of the State. Justice P uno emphasized that Commonwealth Act No. 141 has remained in effect at present. The instant case involves principally submerged lands within Manila Bay. On this score, the Ponce Cases, which were decided based on R.A. No. 1899, are not applicable to the instant case. Same; Same; There is no dispute that a public corporation is not covered by the constitutional ban on acquisition of alienable public lands.The Ponce Cases involve the authority of the City of Cebu to reclaim foreshore areas pursuant to a general law, R.A. No. 1899. The City of Cebu is a public corporation and is qualified, under the 1935, 1973, and 1987 Constitutions, to hold alienable or even inalienable lands of the public domain. There is no dispute that a public corporation is not covered by the constitutional ban on acquisition of alienable public lands. Both the 9 July 2002 Decision and the 6 May 2003 Resolution of this Court in the instant case expressly recognize this. VITUG, J., Separate Opinion: Natural Resources; Buyers and Builders in Good Faith; The contracts of individuals who, not being personally disqualified to hold alienable lands of the public domain, may have been able to acquire in good faith, reclaimed portions of the subject property from AMARI Coastal Bay Development Corporation should be duly respected and upheld; In instances where the successor-in-interest is itself a corporate entity, the constitutional proscription would stand, but if the corporation has introduced structures or permanent improvements thereon, such structures or improvements, when so viewed as having been made in good faith, could very well be governed by the Civil Code. Just the same, I should like to make a statement on what could be a grave concern on the part of individuals, who, not being personally disqualified to hold alienable lands of the public domain, may have been able to acquire in good faith, reclaimed portions of the subject property from respondent AMARI Coastal Bay Development Corporation. I believe that such contracts must be duly respected and upheld in line with analogous and applicable jurisprudence, as well as equitable considerations, in cases involving the conveyance to disqualified aliens of real property that, subsequently, are acquired by nationals qualified to own such property. In instances, where the successor-in-interest is itself a corporate entity, the constitutional proscription would stand, but if the corporation has introduced structures or permanent improvements thereon, such structures or improvements, when so viewed as having been made in good faith, could well be governed by the Civil Code effectively entitling the builder to pay to the State a reasonable rent for the use of the land or to be reimbursed the value of the structures or improvements. QUISUMBING, J., Separate Opinion: Natural Resources; Reclamation Projects; This much at this time I would concede: state ownership of submerged lands, but after reclamation, I could not concede total nullity of private efforts and resources spent pursuant to prior law and executive policy.I find the cited cases in Justice Bellosillos separate opinion, L -21870 Ponce v. Hon. A. Gomez (Res. of Feb. 3, 1965) and L-22669 (Res. of June 24, 1966) acceptable and instructive for the resolution of the instant controversy before us. That the submerged lands, under the sea or below baywater, should belong to the National Government need

not be debatable. Nor would the proposition that their ownership should pass to the municipal corporation when the city had successfully conducted the reclamation project, through private initiative and financial assistance, be a conceptual barrier to uphold probable rights of the initiator and the financier that made the projects not only feasible but indeed successful. This much at this time I would concede: state ownership of submerged land. But after reclamation, I could not concede total nullity of private efforts and resources spent pursuant to prior law and executive policy. Nor would I neglect to appreciate Justice Vitugs reference to De Castro v. Tan, 129 SCRA 85, for an equitable approach to what appears now a constitutional conundrum. Same; Same; The reclamation projects like those contemplated in the PEA-AMARI joint venture call for a greater public appreciation of equitable investment regimes by policy-makers and private entrepreneurs alike as they impact hugely on the economic development concerns of the nation. Subject to further reflection, it does not appear to me pertinent to apply Sec. 79 on disposal or sale of unserviceable property, contained in P.D. No. 1445, the General Auditing Code, or Sec. 379 of the Local Government Code. The requirement of bidding in regard to corporate projects of PEA is obviously distinguishable, if not outright distinct, from disposal of surplus/junk property. The reclamation projects like those contemplated in the PEA-AMARI joint venture call for a greater public appreciation of equitable investment regimes by policy-makers and private entrepreneurs alike as they impact hugely on the economic development concerns of the nation. Thus, we are of the view that of more pertinence in this regard are the BOT (Build, Operate, and Transfer) Law, R.A. 6957 as amended and the Charter of PEA (P.D. No. 1084) and P.D. No. 1085 concerning reclaimed lands along Manila Bay. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 133250 November 11, 2003

FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT CORPORATION, respondents. RESOLUTION CARPIO, J.: This Court is asked to legitimize a government contract that conveyed to a private entity 157.84 hectares of reclaimed public lands along Roxas Boulevard in Metro Manila at the negotiated price of P1,200 per square meter. However, 1 published reports place the market price of land near that area at that time at a high of P90,000 per square meter. The difference in price is a staggering P140.16 billion, equivalent to the budget of the entire Judiciary for seventeen years and more than three times the Marcos Swiss deposits that this Court forfeited in favor of the government. Many worry to death that the private investors will lose their investments, at most not more than one-half billion pesos in 2 legitimate expenses, if this Court voids the contract. No one seems to worry about the more than tens of billion pesos that the hapless Filipino people will lose if the contract is allowed to stand. There are those who question these figures, but the questions arise only because the private entity somehow managed to inveigle the government to sell the reclaimed lands without public bidding in patent violation of the Government Auditing Code. Fortunately for the Filipino people, two Senate Committees, the Senate Blue Ribbon Committee and the Committee on Accountability of Public Officers, conducted extensive public hearings to determine the actual market value of the public lands sold to the private entity. The Senate Committees established the clear, indisputable and unalterable fact that the sale of the public lands is grossly and unconscionably undervalued based on official documents submitted by the proper government agencies during the Senate investigation. We quote the joint report of these two Senate Committees, Senate Committee Report No. 560, as approved by the Senate in plenary session on 27 September 3 1997: The Consideration for the Property

PEA, under the JVA, obligated itself to convey title and possession over the Property, consisting of approximately One Million Five Hundred Seventy Eight Thousand Four Hundred Forty One (1,578,441) Square Meters for a total consideration of One Billion Eight Hundred Ninety Four Million One Hundred Twenty Nine Thousand Two Hundred (P1,894,129,200.00) Pesos, or a price of One Thousand Two Hundred (P1,200.00) Pesos per square meter. According to the zonal valuation of the Bureau of Internal Revenue, the value of the Property is Seven Thousand Eight Hundred Pesos (P7,800.00) per square meter. The Municipal Assessor of Paraaque, Metro Manila, where the Property is located, pegs the market value of the Property at Six Thousand Pesos (P6,000.00) per square meter. Based on these alone, the price at which PEA agreed to convey the property is a pittance. And PEA cannot claim ignorance of these valuations, at least not those of the Muni cipal Assessors office, since it has been trying to convince the Office of the Municipal Assessor of Paraaque to reduce the valuation of various reclaimed properties thereat in order for PEA to save on accrued real property taxes. PEAs justification for the purchase price are various appraisal reports, particularly the following: (1) An appraisal by Vic T. Salinas Realty and Consultancy Services concluding that the Property is worth P500.00 per square meter for the smallest island and P750.00 per square meter for the two other islands, or a total of P1,170,000.00 as of 22 February 1995; (2) An appraisal by Valencia Appraisal Corporation concluding that the Property is worth P850 per square meter for Island I, P800 per square meter for Island II and P600 per square meter for the smallest island, or a total of P1,289,732,000, also as of 22 February 1995; and (3) An Appraisal by Asian Appraisal Company, Inc. (AACI), stating that the Property is worth approximately P1,000 per square meter for Island I, P950 per square meter for Island II and P600 per square meter for Island III, or a total of P1,518,805,000 as of 27 February 1995. The credibility of the foregoing appraisals, however, are [sic] greatly impaired by a subsequent appraisal report of AACI stating that the property is worth P4,500.00 per square meter as of 26 March 1996. Such discrepancies in the appraised value as appearing in two different reports by the same appraisal company submitted within a span of one year render all such appraisal reports unworthy of even the slightest consideration. Furthermore, the appraisal report submitted by the Commission on Audit estimates the value of the Property to be approximately P33,673,000,000.00, or P21,333.07 per square meter. There were also other offers made for the property from other parties which indicate that the Property has been undervalued by PEA. For instance, on 06 March 1995, Mr. Young D. See, President of Saeil Heavy Industries Co., Ltd., (South Korea), offered to buy the property at P1,400.00 and expressed its willingness to issue a standby letter of credit worth $10 million. PEA did not consider this offer and instead finalized the JVA with AMARI. Other offers were made on various dates by Aspac Management and Development Group Inc. (for P1,600 per square meter), Universal Dragon Corporation (for P1,600 per square meter), Cleene Far East Manila Incorporated and Hyosan Prime Construction Co. Ltd. which had prepared an Irrevocable Clean Letter of Credit for P100,000,000. In addition, AMARI agreed to pay huge commissions and bonuses to various persons, amounting to P1,596,863,050.00 (P1,754,707,150.00 if the bonus is included), as will be discussed fully below, which indicate that AMARI itself believed the market value to be much higher than the agreed purchase price. If such commissions are added to the purchase price, AMARIs acquisition cost for the Property will add -up to P3,490,992,250.00 (excluding the bonus). If AMARI was willing to pay such amount for the Property, why was PEA willing to sell for only P1,894,129,200.00, making the Government stand to lose approximately P1,596,863,050.00? x x x

Even if we simply assume that the market value of the Property is half of the market value fixed by the Municipal Assessors Office of Paraaque for lands along Roxas Boulevard, or P3,000.00 per square meter, the Government now stands to lose approximately P2,841,193,800.00. But an even better assumption would be that the value of the Property is P4,500.00 per square meter, as per the AACI appraisal report dated 26 March 1996, since this is the valuation used to justify the issuance of P4 billion worth of shares of stock of Centennial City Inc.

(CCI) in exchange for 4,800,000 AMARI shares with a total par value of only P480,000,000.00. With such valuation, the Governments loss will amount to P5,208,855,300.00. Clearly, the purchase price agreed to by PEA is way below the actual value of the Property, thereby subjecting the Government to grave injury and enabling AMARI to enjoy tremendous benefit and advantage. (Emphasis supplied) The Senate Committee Report No. 560 attached the following official documents from the Bureau of Internal Revenue, the Municipal Assessor of Paraaque, Metro Manila, and the Commission on Audit: 1. Annex "M," Certified True Copy of BIR Zonal Valuations as certified by Antonio F. Montemayor, Revenue District Officer. This official document fixed the market value of the 157.84 hectares at P7,800 per square meter. 2. Annex "N," Certification of Soledad S. Medina-Cue, Municipal Assessor, Paraaque, dated 10 December 1996. This official document fixed the market value at P6,000 per square meter. 3. Exhibit "1-Engr. Santiago," the Appraisal Report of the Commission on Audit. This official document fixed the market value at P21,333.07 per square meter. Whether based on the official appraisal of the BIR, the Municipal Assessor or the Commission on Audit, the P1,200 per square meter purchase price, or a total of P1.894 billion for the 157.84 hectares of government lands, is grossly and unconscionably undervalued. The authoritative appraisal, of course, is that of the Commission on Audit which valued the 157.84 hectares at P21,333.07 per square meter or a total of P33.673 billion. Thus, based on the official appraisal of the Commission on Audit, the independent constitutional body that safeguards government assets, the actual loss to the Filipino people is a shocking P31.779 billion. This gargantuan monetary anomaly, aptly earning the epithet "Grandmother of All Scams," is not the major defect of this government contract. The major flaw is not even the P1.754 billion in commissions the Senate Committees discovered 5 the private entity paid to various persons to secure the contract, described in Senate Report No. 560 as follows: A Letter-Agreement dated 09 June 1995 signed by Messrs. Premchai Karnasuta and Emmanuel Sy for and in behalf of AMARI, on the one hand, and stockholders of AMARI namely, Mr. Chin San Cordova (a.k.a. Benito Co) and Mr. Chua Hun Siong (a.k.a. Frank Chua), on the other, sets forth various payments AMARI paid or agreed to pay the aforesaid stockholders by way of fees for "professional efforts and services in successfully negotiating and securing for AMARI the Joint Venture Agreement", as follows: Form of Payment Managers Checks Managers Checks 10 Post Dated Checks (PDCs) 24 PDCs 48 PDCs Cash bonus Developed land from Project Paid/Payable On 28 April 1995 Upon signing of letter 60 days from date of letter 31 Aug. 95 to 31 Jan. 98 Monthly, over a 12-month pd. from date of letter When sale of land begins Upon completion of each phase TOTAL Amount P 400,000,000.00 262,500,000.00 127,000,000.00 150,000,000.00 357,363,050.00 not exceeding 157,844,100.00 Costing 300,000,000.00 P1,754,707,150.00 ============== Mr. Luis Benitez of SGV, the external auditors of AMARI, testified that said Letter-Agreement was 6 approved by the AMARI Board. (Emphasis supplied)
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The private entity that purchased the reclaimed lands for P1.894 billion expressly admitted before the Senate Committees that it spent P1.754 billion in commissions to pay various individuals for " professional efforts and services in successfully negotiating and securing" the contract. By any legal or moral yardstick, the P1.754 billion in commissions obviously constitutes bribe money. Nonetheless, there are those who insist that the billions in investments of the private entity deserve protection by this Court. Should this Court establish a new doctrine by elevating grease money to the status of legitimate investments deserving of protection by the law? Should this Court reward the patently illegal and grossly unethical business practice of the private entity in securing the contract? Should we allow those with hands dripping with dirty money equitable relief from this Court? Despite these revolting anomalies unearthed by the Senate Committees, the fatal flaw of this contract is that it glaringly violates provisions of the Constitution expressly prohibiting the alienation of lands of the public domain. Thus, we now come to the resolution of the second Motions for Reconsideration filed by public respondent Public Estates Authority ("PEA") and private respondent Amari Coastal Bay Development Corporation ("Amari"). As correctly pointed out 8 by petitioner Francisco I. Chavez in his Consolidated Comment, the second Motions for Reconsideration raise no new issues. 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, et al." ("Ponce Cases"). In effect, the Supplement to the Dissenting Opinion claims that these two Resolutions serve as authority that a single private corporation like Amari may acquire hundreds of hectares of submerged lands, as well as reclaimed submerged lands, within Manila Bay under the Amended Joint Venture Agreement ("Amended JVA"). 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 9 still belong to the National Government." 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. 10 Submerged lands are property of public dominion, absolutely inalienable and outside the commerce of man. This is also 11 true with respect to foreshore lands. Any sale of submerged or foreshore lands is void being contrary to the Constitution. This is why the Cebu City ordinance merely granted Essel, Inc. an "irrevocable option" to purchase the foreshore lands after the reclamation and did not actually sell to Essel, Inc. the still to be reclaimed foreshore lands. Clearly, in the Ponce Cases the option to purchase referred to reclaimed lands, and not to foreshore lands which are inalienable. Reclaimed lands are no longer foreshore or submerged lands, and thus may qualify as alienable agricultural lands of the public domain provided the requirements of public land laws are met. 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 . Under the Amended JVA, the PEA conveyed to Amari the submerged lands even before their actual reclamation, although the documentation of the deed of transfer and issuance of the certificates of title would be made only after actual reclamation. The Amended JVA states that the PEA "hereby contributes to the Joint Venture its rights and privileges to perform 12 Rawland Reclamation and Horizontal Development as well as own the Reclamation Area." 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 13 seventy percent (70%) for AMARI." The Amended JVA also provides that the PEA "hereby designates AMARI to 14 perform PEAs rights and privileges to reclaim, own and develop the Reclamation Are a." 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.
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The Amended JVA mandates that the PEA had "the duty to execute without delay the necessary deed of transfer or 15 conveyance of the title pertaining to AMARIs Land share based on the Land Allocation Plan." The Amended JVA also provides that "PEA, when requested in writing by AMARI, shall then cause the issuance and delivery of the proper 16 certificates of title covering AMARIs Land Share in the name of AMARI, x x x." 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 subme rged 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 ordinance granted Essel, Inc. an "irrevocable option" to purchase from Cebu City not more than 70% of the reclaimed lands. The ownership of the reclaimed lands remained with Cebu City until Essel, Inc. exercised its option to purchase. With the subsequent enactment of the Government Auditing Code (Presidential Decree No. 1445) on 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 17 bidding expressly required in Section 79 of PD No. 1445. This requirement of public bidding is reiterated in Section 18 19 379 of the 1991 Local Government Code. Obviously, the ingenious reclamation scheme adopted in the Cebu City ordinance can no longer be followed in view of the requirement of public bidding in the sale of government lands. In the instant case, the Amended JVA is a negotiated contract which clearly contravenes Section 79 of PD No. 1445. 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 ordinance only with respect to foreshore areas, and nullified the same with respect to submerged areas. Thus, the 27 June 1965 Resolution made the injunction of the trial court against the City of Cebu "permanent insofar x x x as the area outside or beyond the foreshore land proper is concerned." As we held in the 1998 case of Republic Real Estate Corporation v. Court of Appeals, citing the Ponce Cases, RA No. 1899 applies only to foreshore lands, not to submerged lands. In his concurring opinion inRepublic Real Estate Corporation, Justice Reynato S. Puno stated that under Commonwealth Act No. 141, "foreshore and lands under water were not to be alienated and sold to private parties," and that such lands "remained property of the State." Justice Puno emphasized that "Commonwealth Act No. 141 has remained in effect at present." The instant case involves principally submerged lands within Manila Bay. On this score, the Ponce Cases, which were decided based on RA No. 1899, are not applicable to the instant case. Fourth, the Ponce Cases involve the authority of the City of Cebu to reclaim foreshore areas pursuant to a general law, RA No. 1899. The City of Cebu is a public corporation and is qualified, under the 1935, 1973, and 1987 Constitutions, to hold alienable or even inalienable lands of the public domain. There is no dispute that a public corporation is not covered by the constitutional ban on acquisition of alienable public lands. Both the 9 July 2002 Decision and the 6 May 2003 Resolution of this Court in the instant case expressly recognize this. Cebu City is an end user government agency, just like the Bases Conversion and Development Authority or the 21 Department of Foreign Affairs. Thus, Congress may by law transfer public lands to the City of Cebu to be used for municipal purposes, which may be public or patrimonial. Lands thus acquired by the City of Cebu for a public purpose may not be sold to private parties. However, lands so acquired by the City of Cebu for a patrimonial purpose may be sold to private parties, including private corporations. 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)
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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. As we held in our 9 July 2002 Decision, the Amended JVA "violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution." In our 6 May 2003 Resolution, we DENIED with FINALITY respondents Motions for Reconsideration. Litigations must end some time. It is now time to write finis to this "Grandmother of All Scams." WHEREFORE, the second Motions for Reconsideration filed by Public Estates Authority and Amari Coastal Bay Development Corporation are DENIED for being prohibited pleadings. In any event, these Motions for Reconsideration have no merit. No further pleadings shall be allowed from any of the parties. SO ORDERED.