Case No. 8 Republic of The Philippines V Court of Appeals

8/4/2016 SUPREME COURT REPORTS ANNOTATED VOLUME 299
VOL. 299, NOVEMBER 25, 1998 199

Republic vs. Court of Appeals
*
G.R. No. 103882. November 25, 1998.
REPUBLIC OF THE PHILIPPINES, petitioner, vs. THE

HONORABLE COURT OF APPEALS and REPUBLIC
REAL ESTATE CORPORATION, respondents.
CULTURAL CENTER OF THE PHILIPPINES, intervenor.
*
G.R. No. 105276. November 25, 1998.
PASAY CITY and REPUBLIC REAL ESTATE

CORPORATION, petitioners, vs. COURT OF APPEALS
and REPUBLIC OF THE PHILIPPINES, respondents.
Reclamations; Republic Act 1899; Foreshore Lands; Statutory

Construction; Words and Phrases; The Court of Appeals unduly
stretched and broadened the meaning of “foreshore lands,” beyond
the intendment of the law, and against the recognized legal
connotation of “foreshore lands.”—To begin with, erroneous and
unsustainable is the opinion of respondent court that under RA
1899, the term “foreshore lands” includes submerged areas. As
can be gleaned from its disquisition and rationalization
aforequoted, the respondent court unduly stretched and
broadened the meaning of “foreshore lands,” beyond the
intendment of the law, and against the recognized legal
connotation of “foreshore lands.”
Same; Same; Same; Same; Administrative Law; When the law

speaks in clear and categorical language, there is no reason for
interpretation or construction, but only for application; Opinions of
the Secretary of Justice are unavailing to supplant or rectify any
mistake or omission in the law.—Well entrenched, to the point of
being elementary, is the rule that when the law speaks in clear
and categorical language, there is no reason for interpretation or
construction, but only for application. So also, resort to extrinsic
aids, like the records of the constitutional convention, is
unwarranted, the language of the law being plain and
unambiguous. Then, too, opinions of the Secretary of Justice are
http://central.com.ph/sfsreader/session/00000156556fcc8e59e3b404003600fb002c009e/t/?o=False 1/146
unavailing to supplant or rectify any mistake or omission in the

law.
_________________
* EN BANC.
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200 SUPREME COURT REPORTS ANNOTATED
Same; Same; Same; Words and Phrases; “Foreshore Lands,”

Explained.—To repeat, the term “foreshore lands” refers to: “The
strip of land that lies between the high and low water marks and
that is alternately wet and dry according to the flow of the tide.”
(Words and Phrases, “Foreshore”) “A strip of land margining a
body of water (as a lake or stream); the part of a seashore between
the lowwater line usually at the seaward margin of a lowtide
terrace and the upper limit of wave wash at high tide usually
marked by a beach scarp or berm.” (Webster’s Third New
International Dictionary)
Same; Same; Same; Same; Statutory Construction; That

Congress did not include submerged areas could only signify the
exclusion of submerged areas from the term “foreshore lands.”—
The duty of the court is to interpret the enabling Act, RA 1899. In
so doing, we cannot broaden its meaning, much less widen the
coverage thereof. If the intention of Congress were to include
submerged areas, it should have provided expressly. That
Congress did not so provide could only signify the exclusion of
submerged areas from the term “foreshore lands.”
Same; Same; Same; Same; The term “foreshore” refers to “that

part of the land adjacent to the sea which is alternately covered
and left dry by the ordinary flow of the tides.”—All things viewed
in proper perspective, we reiterate what was said in Ponce v.
Gomez (L21870) and Ponce v. City of Cebu (L22669) that the
term “foreshore” refers to “that part of the land adjacent to the
sea which is alternately covered and left dry by the ordinary flow
of the tides.” As opined by this Court in said cases: “WHEREAS,
six (6) members of the Court (Justices Bautista Angelo,
Concepcion, Reyes, Barrera, Dizon and Jose P. Bengzon) opine
that said city ordinance and contracts are ultra vires and hence,
null and void, insofar as the remaining 60% of the area
aforementioned, because the term ‘foreshore lands’ as used in
Republic Act No. 1899 should be understood in the sense attached

thereto by common parlance.” (italics ours)
Same; Same; Same; Same; Municipal Corporations; Local

Government Units; Pasay City Ordinance No. 121, as amended by
Ordinance No. 158, and the Agreement executed pursuant thereto,
are outside the intendment and scope of Republic Act 1899, and
therefore ultra vires and null and void.—It bears stressing that
the subject matter of Pasay City Ordinance No. 121, as amended
by Ordinance
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No. 158, and the Agreement under attack, have been found to be
outside the intendment and scope of RA 1899, and therefore ultra
vires and null and void.
Land Titles; Actions; Lis Pendens; A notice of lis pendens is

necessary when the action is for recovery of possession or
ownership of a parcel of land.—Under the aforecited provision of
law in point, a notice of lis pendens is necessary when the action
is for recovery of possession or ownership of a parcel of land. In
the present litigation, RREC and Pasay City, as defendants in the
main case, did not counterclaim for the turnover to Pasay City of
the titled lots aforementioned.
Same; Same; Torrens Titles; A torrens title cannot be

collaterally attacked—the issue of validity of a torrens title,
whether fraudulently issued or not, may be posed only in an action
brought to impugn or annul it.—What is more, a torrens title
cannot be collaterally attacked. The issue of validity of a torrens
title, whether fraudulently issued or not, may be posed only in an
action brought to impugn or annul it. (Halili vs. National Labor
Relations Commission, 257 SCRA 174; Cimafranca vs.
Intermediate Appellate Court, 147 SCRA 611.) Unmistakable, and
cannot be ignored, is the germane provision of Section 48 of P.D.
1529, that a certificate of title can never be the subject of a
collateral attack. It cannot be altered, modified, or cancelled
except in a direct proceeding instituted in accordance with law.
Equity; Reclamations; No one, not even the government, shall

unjustly enrich oneself/itself at the expense of another; It
appearing that something compensable was accomplished by them,

Pasay City and Republic Real Estate Corporation should be paid
for the said actual work done and dredgefill poured in.
—Although Pasay City and RREC did not succeed in their
undertaking to reclaim any area within subject reclamation
project, it appearing that something compensable was
accomplished by them, following the applicable provision of law
and hearkening to the dictates of equity, that no one, not even the
government, shall unjustly enrich oneself/itself at the expense of
another, we believe; and so hold, that Pasay City and RREC
should be paid for the said actual work done and dredgefill
poured in, worth P10,926,071.29, as verified by the former
Ministry of Public Highways, and as claimed by RREC itself in its
aforequoted letter dated June 25, 1981.
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Supreme Court; National Patrimony; Cultural Heritage; It is

fervently hoped that long after the end of our sojourn in this valley
of tears, the court, for its herein historic disposition, will be exalted
by the future generations of Filipinos, for the preservation of the
national patrimony and promotion of our cultural heritage.—It is
fervently hoped that long after the end of our sojourn in this
valley of tears, the court, for its herein historic disposition, will be
exalted by the future generations of Filipinos, for the preservation
of the national patrimony and promotion of our cultural heritage.
As writer Channing rightly puts it: “Whatever expands the
affections, or enlarges the sphere of our sympathies—Whatever
makes us feel our relation to the universe and all that it inherits in
time and in eternity, and to the great and beneficent cause of all,
must unquestionably refine our nature, and elevate us in the scale
of being.”
ROMERO, J., Separate Opinion:
Reclamations; Foreshore Lands; Municipal Corporations;

Local Government Units; Statutory Construction; Under the
principles of legal construction, since Republic Act No. 1899
partakes of the nature of a legislative grant of a sovereign right to
municipalities and chartered cities, that is, the right “to reclaim,”
it must be strictly construed against the latter.—Initially,
legislative intent and later jurisprudential usage clearly delimited
the term “foreshore lands” to that part of the land where the tides
literally converge, thus excluding submerged lands. This

restricted explication was unquestionably acknowledged by the
other branches of government when, in passing subsequent
related statutes, they added the terms “submerged areas” or
“areas under water” to “foreshore lands.” Under the principles of
legal construction, since R.A. No. 1899 partakes of the nature of a
legislative grant of a sovereign right to municipalities and
chartered cities, that is, the right “to reclaim,” it must be strictly
construed against the latter.
Same; Same; Same; Same; Same; Police Power; Republic Act

No. 1899 was a mere public grant, a privilege which may be
withdrawn by the granting authority, the sovereign, in the exercise
of police power.—Applying the regalian doctrine, the State owns
all waters and lands of the public domain, including those
physically reclaimed. As a general rule, therefore, only the
National Government can reclaim foreshore lands and other
submerged areas. At times, though, the State, to effectuate an
expressed public policy,
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delegates some of its sovereign powers either to the legislature or

to some of its alter egos. One such instance was R.A. No. 1899
which was intended to increase the autonomy of local
governments, an innovation introduced by the Marcos
administration. There is no doubt, however, that R.A. No. 1899
was a mere public grant, a privilege which may be withdrawn by
the granting authority, the sovereign, in the exercise of police
power. This is precisely what President Marcos did when he
issued P.D. No. 3A, a valid and effective means of regaining the
State’s right to reclaim. It must be noted that this decree was not
revoked by President Aquino when she assumed the presidency.
PUNO, J., Concurring Opinion:
Reclamations; Statutory Construction; Verba Legis Rule; If a

statute is clear, plain and free from ambiguity, it must be given its
literal meaning and applied without attempted interpretation; The
verba legis or the plain meaning rule rests on the valid
presumption that the words employed by the legislature in a
statute correctly express its intent or will and preclude the court
from construing it differently.—It is our duty in construing a law
to determine legislative intention from its language. The history

of events transpiring during the process of enacting a law, from
its introduction in the legislature to its final validation has
generally been the first extrinsic aid to which courts turn to
construe an ambiguous act. We bear in mind, however, that
extrinsic aids are resorted to only if the words of the statute are
ambiguous. The clear, unambiguous and unequivocal language of
a statute precludes any court from further construing it and gives
it no discretion but to apply the law. When a statute is clear, it
must be taken to mean exactly what it says. Under settled
principles of statutory construction, if a statute is clear, plain and
free from ambiguity, it must be given its literal meaning and
applied without attempted interpretation. The verba legis or the
plain meaning rule rests on the valid presumption that the words
employed by the legislature in a statute correctly express its
intent or will and preclude the court from construing it
differently. The legislature is presumed to know the meaning of
the words, to have used words advisedly, and to have expressed
its intent by the use of such words as are found in the statute.
Same; Same; Foreshore Lands; Words and Phrases;

“Foreshore Lands,” Explained; The authority to reclaim granted to
chartered
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cities and municipalities under Republic Act 1899 is limited to

foreshore lands only which is “that part of the land adjacent to the
sea which is alternately covered and left dry by the ordinary flow
of the tides.”—“Foreshore lands” has a settled meaning. It was the
dictionary meaning of the term that the Court of Appeals adopted
in Hacut. This Court upheld this dictionary meaning in 1965 in
the cases of Ponce v. Gomez and Ponce v. City of Cebu. In these
cases, the City of Cebu entered into a reclamation contract with
the Cebu Development Corporation to reclaim foreshore land
along the coast of Cebu City pursuant to R.A. 1899. This Court
declared that the authority to reclaim granted to chartered cities
and municipalities under R.A. 1899 is limited to foreshore lands
only which, quoting Corpus Juris, is “that part of the land
adjacent to the sea which is alternately covered and left dry by
the ordinary flow of the tides.” According to this Court, this is how
the term “foreshore” is “generally understood.” As a consequence,
this Court declared the reclamation contract ultra vires insofar as
sixty percent (60%) of the area sought to be reclaimed was beyond

the foreshore, and sustained as valid only to forty per cent (40%)
of the area covered by the ordinance and contract within the
foreshore.
Same; Same; Same; Same; When decisions of the Supreme

Court interpret certain statutes they should be taken into
consideration in construing subsequent statutes of similar nature
—it is fair to assume that the legislature, at the time of the
enactment of a statute, was advised of the prior holdings of the
courts, and that it would have specifically altered the courts’
interpretation if it so desired.—Clearly, the judiciary had adopted
the dictionary meaning of “foreshore lands” years before and after
the enactment of R.A. No. 1899. Our courts applied this meaning
consistently without extending it to include submerged areas or
areas under water. We are seldom at liberty to set aside a rule of
long standing. Our decisions form part of the law of the land. And
when they interpret certain statutes they should be taken into
consideration in construing subsequent statutes of similar nature.
It is fair to assume that the legislature, at the time of the
enactment of a statute was advised of the prior holdings of the
courts, and that it would have specifically altered the courts’
interpretation if it so desired. The presumption is that the
legislature was acquainted with, and had in mind, the judicial
construction of the words in the prior enactment.
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Same; Same; Same; Same; The term “foreshore lands” clearly

does not include submerged lands, otherwise there would have
been no need for the legislative and executive branches of
government to include “submerged areas” or “areas under water”
in subsequent laws.—The term “foreshore lands” clearly does not
include submerged lands. If it were otherwise, there would have
government to include “submerged areas” or “areas under water”
in subsequent laws. R.A. 5187 and P.D. 3A were passed after this
Court defined “foreshore lands” in the Ponce cases. The adoption
of an amendment throws light on the meaning of the act before it
was amended. Indeed, where the terms of a statute have acquired
a settled meaning through judicial interpretation, and the statute
is changed by amendment or reenactment, and the terms to which
judicial interpretation have been given remain in the law
thereafter, they are to be understood and interpreted in the same

sense theretofore attributed to them by the court, unless by
qualifying or explanatory addition a contrary intention of the
legislature is made clear. The judicial construction becomes a part
of the law, as it is presumed that the legislature in passing the
later law knew the judicial construction which had been given to
the words of the prior enactment.
Same; Same; Same; Same; Legislative grants are to be

construed most favorably to the sovereign and most strongly as
against the grantee.—It must also be noted that R.A. No. 1899 is a
legislative grant of the right to reclaim, the right to develop the
land reclaimed and the right to own the reclaimed land.
Assuming that the term “foreshore land” is ambiguous and does
not have a settled meaning but requires construction, legislative
grants are to be construed most favorably to the sovereign and
most strongly as against the grantee. Statutory grants by the
legislature, when they delegate sovereign authority, or confer
special benefits or exemptions are to be construed strictly against
the grantee. Statutes in derogation of common or general rights
are strictly construed and rigidly confined to cases clearly within
their scope and purpose. Grants of public land derogate from
sovereign authority and are to be construed strictly against the
grantee.
Same; Same; Same; Same; The plain meaning of a provision

not contradicted by any other provision in the same statute cannot
be regarded as absurd—an absurdity means anything which is
irrational, unnatural or inconvenient that it cannot be supposed to
have
206
been within the intention of men of ordinary intelligence and

discretion.—The plain meaning of a provision not contradicted by
any other provision in the same statute, cannot be regarded as
absurd. An absurdity means anything which is irrational,
unnatural or inconvenient that it cannot be supposed to have
been within the intention of men of ordinary intelligence and
discretion. The plain meaning of the word must be one in which
the absurdity and injustice of applying the provision to the case
would be so monstrous that all mankind would, without
hesitation, unite in rejecting the application. This situation does
not obtain in R.A. No. 1899 limiting reclamation to foreshore

lands. And even assuming that R.A. No. 1899 is defective because
it only authorized the reclamation of foreshore land, still the
remedy is to amend the law and not to torture its contextual
meaning by judicial interpretation.
Same; Same; Same; Same; Estoppel; Government cannot be

estopped by the mistakes, errors or omissions of its agents.—RREC
and Pasay City also contend that R.A. No. 161, on which R.A. No.
1899 was patterned, granted the City of Bacolod the authority to
reclaim foreshore lands bordering the city. It is claimed that
Bacolod City actually reclaimed areas beyond the foreshore under
R.A. No. 161. Assuming the truth of the allegation, the act of
Bacolod City does not authorize other chartered cities and
municipalities under R.A. No. 1899 to likewise reclaim beyond the
foreshore. Government cannot be estopped by the mistakes, errors
or omissions of its agents. The government’s alleged acquiescence
in the Bacolod City reclamation project does not estop it from
questioning future acts of cities and municipalities especially
after the Court of Appeals defined “foreshore lands” years after
R.A. No. 161 was enacted and before R.A. No. 1899 became law.
Same; Same; Same; Same; Judgments; Doctrine of Stare

Decisis; We should not thoughtlessly overturn the Court en banc’s
ruling in the Ponce cases, lest our decisions become as
unpredictable as lotto results.—The Ponce cases squarely dealt
with the application of R.A. No. 1899. To disregard these cases is
to ignore the doctrine of stare decisis. The Ponce cases were
decided by this Court en banc and we should not thoughtlessly
overturn its ruling, lest our decisions become as unpredictable as
lotto results.
Same; Same; Same; Same; Administrative Law; Municipal

Corporations; “Administration” is synonymous with management,
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and the required “administration” by the municipal corporation

excludes the idea of an agency for the purpose of performing the
reclamation work.—RREC and Pasay City claim that RREC was
the attorneyinfact or agent of Pasay City, therefore, in effect,
Pasay City itself administered the reclamation. This arrangement
does not conform with R.A. No. 1899. The law expressly provides
that reclamation shall be done by the local government unit by

administration. “Administration” is synonymous with
management. The required “administration” by the municipal
corporation excludes the idea of an agency for the purpose of
performing the reclamation work. In other words, the chartered
city or municipality should itself administer or manage the
reclamation project. Where a statute directs the performance of
certain things in a particular manner or by a particular person, it
implies that it shall not be done otherwise or by a different
person.
Same; Natural Resources; Regalian Doctrine; The right to

reclaim is a function of the sovereign who owns title to all the
lands and waters of the public domain, and unless the State,
through Congress, grants this right, it is only the National
Government that can undertake reclamation work and assert title
to reclaimed land.—Reclamation refers to the filling of submerged
land by deliberate act and reclaiming title thereto. The right to
reclaim is a function of the sovereign who owns title to all the
lands and waters of the public domain. The authority to reclaim is
not a right or privilege accorded any person and the land
reclaimed does not belong to whosoever undertakes its
reclamation. Even private owners of lands adjoining bodies of
water, especially the sea and navigable waters, cannot motu
proprio undertake reclamation of shores and submerged lands
and claim title thereto. Unless the State, through Congress,
grants this right, it is only the National Government that can
undertake reclamation work and assert title to reclaimed land.
Same; Same; Same; Municipal Corporations; Being a public

grant, the right to reclaim and own public land granted by the
sovereign to municipal corporations may be revoked by the
sovereign itself.—It is beyond debate that the grant of the right to
reclaim and assert title to the land reclaimed is a public grant and
must be subject to strict scrutiny. We have announced this
principle in Manila Lodge No. 761 v. Court of Appeals where in
1905, the Philippine Commission enacted Act No. 1360
authorizing the City of Manila to reclaim a portion of the Luneta
to form part of the Luneta Extension. The
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Act provided that the reclaimed area “shall be the property of the
City of Manila.” This Court held that the grant made by Act No.
1360 was a grant of a public nature, the same having been made
to a local political subdivision. It was a gratuitous donation of
public resources which resulted in unfair advantage to the grantee.
The exercise of the right by the grantee must therefore be in
accordance with, and is limited by, the conditions expressly and
impliedly imposed by the State, the grantor. It ought to be self
evident that being a public grant, the right to reclaim and own
public land granted by the sovereign to municipal corporations
may be revoked by the sovereign itself.
Same; Same; Same; Same; The State, through Presidential

Decree No. 3A, validly revested in the National Government the
right to reclaim—in effect, Presidential Decree No. 3A repealed
Republic Act No. 1899.—P.D. No. 3A revoked the power
delegated to municipalities and chartered cities to reclaim
foreshore lands in their territories. It returned to the National
Government the power to reclaim “areas under water, whether
foreshore or inland.” In effect, it repealed R.A. No. 1899.
Same; Evidence; Photographs; The Armed Forces of the

Philippines Mapping Center is the custodian of aerial films,
negatives, photographs and documents kept by the government for
the making of military maps and other purposes.—The aerial
photographs of the Manila Bay area taken by the Armed Forces of
the Philippines (AFP) in 1966 and 1968 and filed with the AFP
Mapping Center. The AFP Mapping Center is the custodian of
aerial films, negatives, photographs and documents kept by the
government for the making of military maps and other purposes.
Captain Bailey Nograles, Chief of the AFP Mapping and
Surveying Division of the Center, testified that the negatives of
the photographs have been in the possession of his office since the
time they were taken and have never been altered. The
photographs were reproduced by his staff from the office archives
upon request by the CCP in 1997. They were released upon
approval by the commanding officer of the Mapping Center.
Same; Same; Same; Ancient Documents; Aerial photographs

for the making of maps and other purposes taken by the military
in the regular course of duty form part of the official records of the
Armed Forces of the Philippines Mapping Center and are public
documents and therefore need no authentication; Ancient
documents require no
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authentication.—The photographs are presumed to have been

taken by the military in the regular course of duty. They form
part of the official records of the AFP Mapping Center which is a
technical service of the AFP, the military arm of government
under the Department of National Defense. As official documents,
the photographs are public documents and therefore need no
authentication. Moreover, the 1966 photographs are ancient
documents. They are unblemished and were more than thirty (30)
years old when produced from the custody of the AFP Mapping
Center in 1997. Under the Revised Rules on Evidence, ancient
documents require no authentication.
Same; Same; Same; The photographer is not the only witness

who can identify the pictures—the faithful representation of a
photograph may be proved prima facie by the testimony of those
who were present at the time it was taken, or by any other
competent witness who can testify as to its exactness and accuracy;
The value of a photograph lies in its being a correct representation
or reproduction of the original, and its admissibility is determined
by its accuracy in portraying the scene at the time the picture was
taken.—The general rule in this jurisdiction is that photographs,
when presented in evidence, must be identified by the
photographer as to their production and testified as to the
circumstances under which they were produced. The
photographer, however, is not the only witness who can identify
the pictures. The faithful representation of the photograph may
be proved prima facie by the testimony of those who were present
at the time it was taken, or by any other competent witness who
can testify as to its exactness and accuracy. Once proved, the
court may admit it subject to impeachment as to its accuracy. The
exactness and accuracy of the photographs were certified by
Architect Protacio and these have not been impeached. The value
of a photograph lies in its being a correct representation or
reproduction of the original, and its admissibility is determined by
its accuracy in portraying the scene at the time the picture was
taken.
Evidence; Offer of Compromise; The rule of exclusion of

compromise negotiations does not apply when there is no denial,
expressed or implied, of liability and the only question discussed
relates to the amount to be paid.—The rule in civil cases is that an
offer of compromise is not an admission of any liability, and is not
admissible in evidence against the offeror. Where, however, the
amount named in the offer to accept a certain sum in settlement
appears to
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have been arrived at as a fair estimate of value, it is relevant.

Hence, the rule of exclusion of compromise negotiations does not
apply when there is no denial, expressed or implied, of liability
and the only question discussed relates to the amount to be paid.
In the instant case, the compromise negotiations show that the
only question addressed by the parties was the amount of
compensation to be paid by the National Government to RREC
and Pasay City. The aforementioned offer of RREC can therefore
be used as a basis for compensation. The offer is used to
compensate RREC and not to impose any liability.
National Patrimony; Cultural Heritage; More than its peso

and centavo significance, the Decision and Amended Decision of
the Court of Appeals, unless reversed, will deal arts and culture a
debilitating blow.—By affirming the Decision and Amended
Decision of the Court of Appeals, the people will lose billions of
pesos, the conservative approximate of which runs from 20 to 30
billion. But more than its peso and centavo significance, the
Decision and Amended Decision, unless reversed, will deal arts
and culture a debilitating blow. Arts and culture are not empty
words in the Filipino psyche. Our great national hero, Dr. Jose
Rizal, strove zealously to awaken in his countrymen a meaningful
awareness of their indigenous culture and to develop in them a
suitable appreciation. To this end, Rizal did everything he could
to preserve and promote the cultural advancement of his
countrymen. He wrote poetry in the Tagalog dialect, now the
Filipino language. He annotated Morga’s “Sucesos de las Islas
Filipinas” for the purpose of making “our past known so as to
better judge the present and assess our movement in three
centuries.” Rizal saw our rich cultural heritage and believed in
the potentialities of his countrymen in the field of arts and letters.
He took pride in the awards reaped by the paintings of Juan Luna
and Felix Resurreccion Hidalgo. He also proudly acknowledged
the fiery and convincing editorials of Marcelo H. del Pilar which
earned for him the respect of his own antagonists.
Same; Same; Cultural Center of the Philippines; The Cultural

Center of the Philippines Complex is the only area in the
Philippines that is fully devoted to the growth and propagation of
arts and culture.—The CCP has helped us realize the vision of our
national hero. The CCP Complex is the only area in the
Philippines that is fully devoted to the growth and propagation of

arts and culture. It is the only venue in the country where artists,
Filipino and foreign alike,
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may express their art in its various forms, be it in music, dance,

theater, or in the visual arts such as painting, sculpture and
installation art or in literature such as prose, poetry and the
indigenous oral and written literary forms. The theaters and
facilities of the Complex have been utilized for the staging of
cultural presentations and for the conduct of lectures and
demonstrations by renowned visiting artists. The wide open
spaces of the Complex are the only open spaces in Metropolitan
Manila that have been used to accommodate huge crowds in
cultural, artistic and even religious events.
PANGANIBAN, J., Separate Opinion:
Natural Resources; Property; The Manila Bay area is

definitely outside the scope of Republic Act 1899—it remains part
of the public domain and is, as such, outside the commerce of man.
—The Manila Bay area is, therefore, definitely outside the scope
of RA 1899. It remains part of the public domain and is, as such,
outside the commerce of man. It could not be the object of
ordinary contracts or ordinances. The questioned Agreement and
Ordinances, the objects of which involve such public property, are
thus null and void.
Evidence; Offer of Compromise; An unaccepted offer or

counteroffer of compromise cannot be the basis of the sum to be
adjudged in favor of or against a party, more so if such sum is
unsupported by competent evidence.—Basic is the rule on evidence
that in civil cases, an offer of compromise cannot be taken as an
admission of liability; nor can it be admissible as an evidence
against the offeror. The offer to compromise a claim or a cause of
action is not an admission that the claim is valid, but merely
admits that there is a dispute and that an amount is to be paid to
avoid or end the controversy. I submit that an unaccepted offer or
counteroffer of compromise cannot be the basis of the sum to be
adjudged in favor of or against a party, more so if such sum is
unsupported by competent evidence. In such case, the court itself
insofar as it adopts the amount either offered or counteroffered
would be bereft of factual basis for its decision. Where the

proposed compromise is not accepted, the parties to the litigation
would be back to square one: they have to present before the court
sufficient and credible evidence to prove their respective claims.
PETITIONS for review on certiorari of a decision of the

Court of Appeals.
212

The facts are stated in the opinion of the Court.

R.G. Roxas and Associates for Pasay City and
Republic Real Estate Corp.
Bonifacio A. Alentajan for Pasay City.
Office of the Government Corporate Counsel for
Intervenor Cultural Center of the Philippines.
PURISIMA, J.:
At bar are two consolidated petitions for review on

certiorari under Rule 45 of the Revised Rules of Court.
Here, the Court is confronted with a case commenced
before the then Court of First Instance (now Regional Trial
Court) of Rizal in Pasay City, in 1961, more than 3 decades
back, that has spanned six administrations of the Republic
and outlasted the tenure of ten (10) Chief Justices of the
Supreme Court.
In G.R. No. 103882, the Republic of the Philippines, as
petitioner, assails the Decision, dated January 29, 1992
and Amended 1
Decision, dated April 28, 1992, of the Court
of Appeals, which affirmed with modification the Decision
of the former Court of First Instance of Rizal (Branch 7,
Pasay City) in Civil Case No. 2229P, entitled “Republic of
the Philippines versus Pasay City and Republic Real Estate
Corporation.”
The facts that matter are, as follows:
Republic Act No. 1899 (“RA 1899”), which was approved
on June 22, 1957, authorized the reclamation of foreshore
lands by chartered cities and municipalities. Section 1 of
said law, reads:
“SECTION 1. Authority is hereby granted to all municipalities

and chartered cities to undertake and carry out at their own
expense the reclamation by dredging, filling, or other means, of
any
__________________
1 Penned by Associate Justice Quirino D. Abad Santos and concurred by

Associate Justices Arturo B. Buena and Minerva GonzagaReyes.
213
VOL. 299, NOVEMBER 25, 1998 213

foreshore lands bordering them, and to establish, provide,

construct, maintain and repair proper and adequate docking and
harbor facilities as such municipalities and chartered cities may
determine in consultation with the Secretary of Finance and the
Secretary of Public Works and Communications.”
On May 6, 1958, invoking the aforecited provision of RA

1899, the Pasay City Council passed Ordinance No. 121, for
the reclamation of Three Hundred (300) hectares of
foreshore lands in Pasay City, empowering the City Mayor
to award and enter into reclamation contracts, and
prescribing terms and conditions therefor. The said
Ordinance was amended on April 21, 1959 by Ordinance
No. 158, which authorized the Republic Real Estate
Corporation (“RREC”) to reclaim foreshore lands of Pasay
City under certain terms and conditions.
On April2 24, 1959, Pasay City and RREC entered into an
Agreement for the reclamation of the foreshore lands in
Pasay City.
On December 19, 1961, the3 Republic of the Philippines
(“Republic”) filed a Complaint for Recovery of Possession
and Damages with Writ of Preliminary Preventive
Injunction and Mandatory Injunction, docketed as Civil
Case No. 2229P before the former Court of First Instance
of Rizal, (Branch 7, Pasay City).
On March 5, 1962, the4 Republic of the Philippines filed
an Amended Complaint questioning subject Agreement
between Pasay City and RREC (Exhibit “P”) on the grounds
that the subjectmatter of such Agreement is outside the
commerce of man, that its terms and conditions are
violative of RA 1899, and that the said Agreement was
executed without 5
any public bidding.
The Answers of RREC and Pasay City, dated March 10
and March 14, 1962, respectively, averred that the subject
__________________
2 Exhibit “P”; Folder No. I, Record on Appeal, p. 24.

3 Annex “A”; Record on Appeal, pp. 1017.
4 Annex “E”; Record on Appeal, pp. 6473.

5 Annexes “F” and “G”; Record on Appeal, pp. 74105.
214

matter of said Agreement is within the commerce of man,

that the phrase “foreshore lands” within the contemplation
of RA 1899 has a broader meaning than the cited definition
of the term in the Words and Phrases and in the Webster’s
Third New International Dictionary and the plans and
specifications of the reclamation involved were approved by
the authorities concerned.
On April 26, 1962, Judge Angel H. Mojica, (now
deceased) of the former Court of First Instance
6
of Rizal
(Branch 7, Pasay City) issued an Order the dispositive
portion of which was to the following effect:
“WHEREFORE, the court hereby orders the defendants, their

agents, and all persons claiming under them, to refrain from
‘further reclaiming or committing acts of dispossession or
despoliation over any area within the Manila Bay or the Manila
Bay Beach Resort,’ until further orders of the court.”
On the following day, the

7
same trial court issued a writ of
preliminary injunction which enjoined the defendants,
RREC and Pasay City, their agents, and all persons
claiming under them “from further reclaiming or
committing acts of dispossession.” 8
Thereafter, a Motion to Intervene, dated June 27, 1962,
was filed by Jose L. Bautista, Emiliano Custodio, Renato
Custodio, Roger de la Rosa, Belen Gonzales, Norma
Martinez, Emilia E. Paez, Ambrosio R. Parreno, Antolin M.
Oreta, Sixto L. Orosa, Pablo S. Sarmiento, Jesus Yujuico,
Zamora Enterprises, Inc., Industrial and Commercial
Factors, Inc., Metropolitan Distributors of the Philippines,
and Bayview Hotel, Inc. stating inter alia that they were
buyers of lots in the Manila Bay area being reclaimed by
RREC, whose rights would be affected by whatever decision
to be rendered in the
________________
6 Annex “H”; Record on Appeal, p. 106.

7 Annex “I”; Record on Appeal, p. 107.
8 Annex “J”; Record on Appeal, pp. 109128.
215
VOL. 299, NOVEMBER 25, 1998 215

case. The Motion was granted by 9 the trial court and the
Answer attached thereto admitted.
The 10defendants and the intervenors then moved to
dismiss the Complaint of the Republic, placing reliance on
Section 3 of Republic Act No. 5187, which reads:
“Sec. 3. Miscellaneous Projects

xxx
m. For the construction of seawall and limited access highway
from the south boundary of the City of Manila to Cavite City, to
the south, and from the north boundary of the City of Manila to
the municipality of Mariveles, province of Bataan, to the north,
including the reclamation of the foreshore and submerged areas:
Provided, That priority in the construction of such seawalls,
highway and attendant reclamation works shall be given to any
corporation and/or corporations that may offer to undertake at its
own expense such projects, in which case the President of the
Philippines may, after competitive bidding, award contracts for
the construction of such projects, with the winning bidder
shouldering all costs thereof, the same to be paid in terms of
percentage fee of the contractor which shall not exceed fifty
percent of the area reclaimed by the contractor and shall
represent full compensation for the purpose, the provisions of the
Public Land Law concerning disposition of reclaimed and
foreshore lands to the contrary notwithstanding: Provided,
finally, that the foregoing provisions and those of other laws,
executive orders, rules and regulations to the contrary
notwithstanding, existing rights, projects and/or contracts of city
or municipal governments for the reclamation of foreshore and
submerged lands shall be respected. x x x.” (italics ours)
Since the aforecited law provides that existing contracts

shall be respected, movants contended that the issues
raised by the pleadings have become “moot, academic and
of no further validity or effect.”
Meanwhile, the Pasay Law11 and Conscience Union, Inc.
(“PLCU”) moved to intervene, alleging as legal interest in
__________________
9 Annex “H”; Record on Appeal, p. 129.

10 Annex “N”; Record on Appeal, pp. 169172.
11 Annex “O”; Record on Appeal, pp. 175176.
216

the matter in litigation the avowed purpose of the

organization for the promotion of good government in
Pasay City. In its Order of June 10, 1969,
12
the lower court of
origin allowed the said intervention.
On March 24, 1972, the trial court of origin came out
with a Decision, disposing, thus:
“WHEREFORE, after carefully considering (1) the original

complaint, (2) the first Amended Complaint, (3) the Answer of
Defendant Republic Real Estate Corporation to the first Amended
Complaint, (4) the Answer of Defendant Pasay City to the first
Amended Complaint, (5) the Second Amended Complaint, (6) the
Answer of Defendant Republic Real Estate Corporation to the
Second Amended Complaint, (7) the Answer of Defendant Pasay
City to the Second Amended Complaint, (8) the Memorandum in
Support of Preliminary Injunction of Plaintiff, (9) the
Memorandum In Support of the Opposition to the Issuance of
Preliminary Injunction of Defendant Pasay City and Defendant
Republic Real Estate Corporation, (10) the Answer in
Intervention of Intervenors Bautista, et al., (11) Plaintiff’s
Opposition to Motion to Intervene, (12) the Reply to Opposition to
Motion to Intervene of Intervenors Bautista, et al., (13) the
Stipulation of Facts by all the parties, (14) the Motion for Leave to
Intervene of Intervenor Pasay Law and Conscience Union, Inc.,
(15) the Opposition to Motion For Leave to Intervene of
Intervenors Bautista, et al., (16) the Reply of Intervenor Pasay
Law and Conscience Union, Inc., (17) the Supplement to
Opposition to Motion to Intervene of Defendant Pasay City and
Republic Real Estate Corporation, (18) the Complaint in
Intervention of Intervenor Pasay Law and Conscience Union, Inc.,
(19) the Answer of Defendant Republic Real Estate Corporation,
(20) the Answer of Intervenor Jose L. Bautista, et al., to
Complaint in Intervention, (21) the Motion to Dismiss of
Defendant Republic Real Estate Corporation, and Intervenors
Bautista, et al., (22) the Opposition of Plaintiff to said Motion to
Dismiss, (23) the Opposition of Intervenor Pasay Law and
Conscience Union, Inc., (24) the Memorandum of the Defendant
Republic Real Estate Corporation, (25) the Memorandum for the
Intervenor Pasay Law and Conscience Union, Inc., (26) the
Manifestation of Plaintiff filed by the Office of the Solicitor
General, and all the documentary evidence by the parties to wit:
(a) Plaintiff’s Ex
__________________
12 Annex “T”; Record on Appeal, p. 193.
217
VOL. 299, NOVEMBER 25, 1998 217

hibits “A” to “YYY4,” (b) Defendant Republic Real Estate

Corporation’s Exhibits “1RREC” to “40a” and (c) Intervenor
Pasay Law and Conscience Union, Inc.’s Exhibits “APLACU” to
“CPLACU,” the Court hereby:
(1) Denies the “Motion to Dismiss” filed on January 10, 1968,

by Defendant Republic Real Estate Corporation and
Intervenors Bautista, et al., as it is the finding of this
Court that Republic Act No. 5187 was not passed by
Congress to cure any defect in the ordinance and
agreement in question and that the passage of said
Republic Act No. 5187 did not make the legal issues raised
in the pleadings “moot, academic and of no further validity
or effect”; and
(2) Renders judgment:
(a) Dismissing the Plaintiff’s Complaint;

(b) Dismissing the Complaint in Intervention of Intervenor
Pasay Law and Conscience Union, Inc.;
(c) Enjoining Defendant Republic Real Estate Corporation
and Defendant Pasay City to have all the plans and
specifications in the reclamation approved by the Director
of Public Works and to have all the contracts and sub
contracts for said reclamation awarded by means of, and
only after, public bidding; and
(d) Lifting the Preliminary Injunction issued by the Court on
April 26, 1962, as soon as Defendant Republic Real Estate
Corporation and Defendant Pasay City shall have
submitted the corresponding plans and specifications to
the Director of Public Works, and shall have obtained
approval thereof, and as soon as the corresponding public
bidding for the award to the contractor and subcontractor
that will undertake the reclamation project shall have
been effected.
No pronouncement as to costs.
SO ORDERED.” (See Court of Appeals’ Decision dated

January 28, 1992; pp. 68)
Dissatisfied with the said judgment, the Republic appealed

therefrom to the Court of Appeals. However, on January
11, 1973, before the appeal could be resolved, Presidential
Decree No. 3A issued, amending Presidential Decree No.
3, thus:
218

“SECTION 1. Section 7 of Presidential Decree No. 3, dated

September 26, 1972, is hereby amended by the addition of the
following paragraphs:
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.
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.”
On November 20, 1973, the Republic and the Construction

Development Corporation
13
of the Philippines (“CDCP”)
signed a Contract for the ManilaCavite Coastal Road
Project (Phases I and II) which contract included the
reclamation and development of areas covered by the
Agreement between Pasay City and RREC. Then, there
was issued Presidential Decree No. 1085 which transferred
to the Public Estate Authority (“PEA”) the rights and
obligations of the Republic of the Philippines under the
contract between the Republic and CDCP.
Attempts to settle amicably the dispute between
representatives of the Republic, on the one hand, and those
of Pasay City and RREC, on the other, did not work out.
The parties involved failed to hammer out a compromise.
On January 1428, 1992, the Court of Appeals came out
with a Decision dismissing the appeal of the Republic and
holding, thus:
“WHEREFORE, the decision appealed from is hereby AFFIRMED

with the following modifications:
__________________
13 Rollo, G.R. No. 103882, pp. 853869.

14 Rollo, G.R. No. 105276, pp. 747.
219
VOL. 299, NOVEMBER 25, 1998 219

1. The requirement by the trial court on public bidding and the

submission of RREC’s plans and specification to the Department
of Public Works and Highways in order that RREC may continue
the implementation of the reclamation work is deleted for being
moot and academic;
2. Ordering the plaintiffappellant to turn over to Pasay City
the ownership and possession over all vacant spaces in the
twentyone hectare area already reclaimed by Pasay City and
RREC at the time it took over the same. Areas thereat over which
permanent structures has (sic) been introduced shall, including
the structures, remain in the possession of the present possessor,
subject to any negotiation between Pasay City and the said
present possessor, as regards the continued possession and
ownership of the latter area.
3. Sustaining RREC’s irrevocable option to purchase sixty
percent (60%) of the TwentyOne (21) hectares of land already
reclaimed by it, to be exercised within one (1) year from the
finality of this decision, at the same terms and condition
embodied in the Pasay City—RREC reclamation contract, and
enjoining appellee Pasay City to respect RREC’s option.
SO ORDERED.”
On February 14, 1992, Pasay City and RREC presented a

Motion for Reconsideration of such Decision of the Court of
Appeals, contending, among others, that RREC had
actually reclaimed Fiftyfive (55) hectares, and not only
Twentyone (21) hectares, and the respondent Court of
Appeals erred in not awarding damages to them, movants.
On April 28, 1992, the Court of Appeals acted favorably
on the said Motion for Reconsideration, by amending the
dispositive portion of its judgment of January 28, 1992, to
read as follows:
“WHEREFORE, the dispositive portion of our Decision dated

January 28, 1992 is hereby AMENDED to read as follows:
1. The requirement by the trial court on public bidding and the
submission of the RREC’s plans and specification to the
Department of Public Works and Highways in order that RREC
may continue the implementation of the reclamation work is
deleted for being moot and academic.
220

2. Ordering plaintiffappellant to turn over to Pasay City the

ownership and possession of the above enumerated lots (1 to 9).
3. Sustaining RREC’s irrevocable option to purchase sixty
(60%) percent of the land referred to in No. 2 of this dispositive
portion, to be exercised within one (1) year from the finality of
this Decision, at the same terms and condition embodied in the
Pasay CityRREC reclamation contract, and enjoining Pasay City
to respect RREC’s irrevocable option.
SO ORDERED.”
From the Decision and Amended Decision of the Court of

Appeals aforementioned, the Republic of the Philippines, as
well as Pasay City and RREC, have come to this Court to
seek relief, albeit with different prayers.
On September 10, 1997, the Court commissioned the
former thirteenth Division of Court of Appeals to hear and
receive evidence on the controversy. The corresponding
Commissioner’s Report, dated November 25, 1997, was
submitted and now forms part of the records.
On October 11, 1997, the Cultural Center of the
Philippines (“CCP”) filed a Petition in Intervention,
theorizing that it has a direct interest in the case being the
owner of subject nine (9) lots titled in its (CCP) name,
which the respondent Court of Appeals ordered to be
turned over to Pasay City. The CCP, as such intervenor,
was allowed to present its evidence, as it did, before the
Court of Appeals, which evidence has been considered in
the formulation of this disposition.
In G.R. No. 103882, the Republic of the Philippines
theorizes, by way of assignment of errors, that:
THE COURT OF APPEALS ERRED IN UPHOLDING THE

VALIDITY OF PASAY CITY ORDINANCE NO. 158 DATED
APRIL 21, 1959 AND THE RECLAMATION CONTRACT
ENTERED INTO BETWEEN PASAY CITY AND RREC;
221
VOL. 299, NOVEMBER 25, 1998 221

II
THE COURT OF APPEALS ERRED IN FINDING THAT RREC

HAD RECLAIMED 55 HECTARES AND IN ORDERING THE
TURNOVER TO PASAY CITY OF THE OWNERSHIP AND
POSSESSION OF NINE (9) LOTS TITLED IN THE NAME OF
CCP.
In G.R. No. 105276, the petitioners, Pasay City and RREC,

contend, that:
THE COURT OF APPEALS ERRED IN NOT DECLARING

PRESIDENTIAL DECREE NO. 3A UNCONSTITUTIONAL;
II
THE COURT OF APPEALS ERRED IN NOT AWARDING

DAMAGES IN FAVOR OF PASAY CITY AND RREC.
Let us first tackle the issues posed in G.R. No. 103882.

On the first question regarding the validity of Pasay
City Ordinance No. 158 dated April 21, 1959 and the
Agreement dated April 24, 1959 between Pasay City and
RREC, we rule in the negative.
Section 1 of RA 1899, reads:

any foreshore lands bordering them, and to establish, provide,
It is the submission of the petitioner, Republic of the

Philippines, that there 15are no foreshore lands along the
seaside of Pasay City; that what Pasay City has are
submerged or
_________________
15 See Amended Complaint; supra, footnote 4.
222

offshore areas outside the commerce of man which could

not be a proper subject matter of the Agreement between
Pasay City and RREC in question as the area affected is
within the National Park, known as Manila Bay Beach
Resort, established under Proclamation No. 41, dated July
5, 1954, pursuant to Act No. 3915, of which area it
(Republic) has been in open, continuous and peaceful
possession since time immemorial.
Petitioner faults the respondent court for unduly
expanding what may be considered “foreshore land”
through the following disquisition:
“The former Secretary of Justice Alejo Mabanag, in response to a

request for an opinion from the then Secretary of Public Works
and Communications as to whether the term ‘foreshore areas’ as
used in Section 1 of the immediately aforequoted law is that
defined in Webster’s Dictionary and the Law of Waters so as to
make any dredging or filling beyond its prescribed limit illegal,
opined:
‘According to the basic letter of the Director of Public Works, the law of
Waters speaks of ‘shore’ and defines it thus: ‘that space movement of the
tide. Its interior or terrestrial limit in the line reached by highest
equinoctial tides.’
Webster’s definition of foreshore reads as follows:
That part of the shore between high water and low water marks usually
fixed at the line to which the ordinary means tide flows: also, by
extension, the beach, the shore near the water’s edge.’
If we were to be strictly literal the term foreshore or foreshore lands
should be confined to but a portion of the shore, in itself a very limited
area.’ (p. 6, Intervenorsappellees’ brief).
Bearing in mind the (Webster’s and Law of Waters) definitions of
‘shore’ and of foreshore lands, one is struck with the apparent
inconsistency between the areas thus described and the purpose to which
that area, when reclaimed under the provision of Republic Act No. 1899,
shall be devoted. Section I (of said Law) authorizes the construction
thereat of ‘adequate docking and harbor facilities.’ This purpose is
repeated in Sections 3 and 4 of the Act.
223
VOL. 299, NOVEMBER 25, 1998 223

And yet, it is well known fact that foreshore lands normally extend only
from 10 to 20 meters along the coast. Not very much more if at all. In
fact, certain parts in Manila bordering on Manila Bay, has no foreshore
to speak of since the sea washes the sea wall.

It does not seem logical, then, that Congress had in mind. Webster’s
limited concept of foreshore when it enacted Republic Act No. 1899,
unless it intends that the wharves, piers, docks, etc. should be
constructed parallel to the shore, which is impractical.
Since it is to be presumed that Congress could not have intended to
enact an ineffectual measure not one that would lead to absurd
consequences, it would seem that it used ‘foreshore’ in a sense wider in
scope that that defined by Webster. x x x’
To said opinion on the interpretation of the R.A. 1899, plaintiff

appellant could not offer any refutation or contrary opinion.
Neither can we. In fact, the above construction is consistent with
the ‘rule on context’ in statutory construction which provides that
in construing a statute, the same must be construed as a whole.
The particular words, clauses and phrases should not be studied
as detached and isolated expressions, but the whole and every
part of the statute must be considered in fixing the meaning of
any of its parts in order to produce a harmonious whole (see
Araneta vs. Concepcion, 99 Phil. 709). There are two reasons for
this. Firstly, the force and significance of particular expressions
will largely depend upon the connection in which they are found
and their relation to the general subjectmatter of the law. The
legislature must be understood to have expressed its whole mind
on the special object to which the legislative act is directed but the
vehicle for the expressions of that meaning is the statute,
considered as one entire and continuous act, and not as an
agglomeration of unrelated clauses. Each clause or provision will
be illuminated by those which are cognate to it and by the general
tenor of the whole statute and thus obscurities and ambiguities
may often be cleared up by the most direct and natural means.
Secondly, effect must be given, if it is possible, to every word and
clause of the statute, so that nothing shall be left devoid of
meaning or destitute of force. To this end, each provision of the
statute should be read in the light of the whole. For the general
meaning of the legislature, as gathered from the entire act, may
often prevail over the construction which would appear to
224

be the most natural and obvious on the face of a particular clause.

It is by this means that contradiction and repugnance between
the different parts of the statute may be avoided.’ (See Black,
Interpretation of Laws, 2nd Ed., pp. 317319).
Resorting to extrinsic aids, the ‘Explanatory Note’ to House Bill
No. 3630, which was subsequently enacted as Republic Act No.

1899, reads:
‘In order to develop and expand the Maritime Commerce of the

Philippines, it is necessary that harbor facilities be correspondingly
improved, and, where necessary, expanded and developed. The national
government is not in a financial position to handle all this work. On the
other hand, with a greater autonomy, many chartered cities and
provinces are financially able to have credit position which will allow
them to undertake these projects. Some cities, such as the City of Bacolod
under R.A. 161, has been authorized to reclaim foreshore lands bordering
it.
Other cities and provinces have continuously been requesting for
authority to reclaim foreshore lands on the basis of the Bacolod City
pattern, and to undertake work to establish, construct on the reclaimed
area and maintain such port facilities as may be necessary. In order not
to unduly delay the undertaking of these projects, and inorder to obviate
the passage of individual pieces of legislation for every chartered city and
province, it is hereby recommended that the accompanying bill be
approved. It covers Authority for All chartered cities and provinces to
undertake this work. x x x (italics supplied)
Utilizing the above explanatory note in interpreting and

construing the provisions of R.A. 1899, then Secretary of Justice
Mabanag opined:
It is clear that the ‘Bacolod City pattern’ was the basis of the enactment
of the aforementioned bill of general application. This socalled ‘Bacolod
City pattern’ appears to be composed of 3 parts, namely: Republic Act No.
161, which grants authority to Bacolod City to undertake or carry out . . .
the reclamation . . . of any [sic] carry out the reclamation project
conformably with Republic Act No. 161; and Republic Act No. 1132
authorizing Bacolod City to contract indebtedness or to issue bonds in the
amount not exceeding six million pesos to finance the reclamation of land
in said city.
225
VOL. 299, NOVEMBER 25, 1998 225

Republic Act No. 161 did not in itself specify the precise space
therein referred to as ‘foreshore’ lands, but it provided that
docking and harbor facilities should be erected on the reclaimed
portions thereof, while not conclusive would indicate that
Congress used the word ‘foreshore’ in its broadest sense.
Significantly, the plan of reclamation of foreshore drawn up by
the Bureau of Public Works maps out an area of approximately
1,600,000 square meters, the boundaries of which clearly extend
way beyond Webster’s limited concept of the term ‘foreshore.’ As a

contemporaneous construction by that branch of the Government
empowered to oversee at least, the conduct of the work, such an
interpretation deserves great weight. Finally, Congress in
enacting Republic Act No. 1132 (supplement to RA 161), ‘tacitly
confirmed and approved the Bureau’s interpretation of the term
‘foreshore’ when instead of taking the occasion to correct the
Bureau of over extending its plan, it authorized the city of
Bacolod to raise the full estimated cost of reclaiming the total
area covered by the plan. The explanatory note to House Bill No.
1249 which became Republic Act No. 1132 states among the
things:
‘The Bureau of Public Works already prepared a plan for the reclamation
of about 1,600,000 square meters of land at an estimated costs of about
P6,000,000.00. The project is selfsupporting because the proceeds from
the sales or leases of lands so reclaimed will be more than sufficient to
cover the cost of the project.’
Consequently, when Congress passed Republic Act No. 1899 in order
to facilitate the reclamation by local governments of foreshore lands on
the basis of the Bacolod City pattern and in order to obviate the passage
of individual pieces of legislation for every chartered city and provinces
requesting authority to undertake such projects, the lawmaking body
could not have had in mind the limited area described by Webster as
‘foreshore’ lands. x x x.’
If it was really the intention of Congress to limit the area to the

strict literal meaning of “foreshore” lands which may be reclaimed
by chartered cities and municipalities, Congress would have
excluded the cities of Manila, Iloilo, Cebu, Zamboanga and Davao
from the operation of RA 1899 as suggested by Senator Cuenco
during the deliberation of the bill considering that these cities do
not have ‘foreshore’ lands in the strict meaning of the term. Yet,
Con
226

gress did not approve the proposed amendment of Senator

Cuenco, implying therefore, that Congress intended not to limit
the area that may be reclaimed to the strict definition of
‘foreshore’ lands.
The opinion of the then Secretary of Justice Mabanag, who was
at that time the chief law officer and legal adviser of the
government and whose office is required by law to issue opinions
for the guidance of the various departments of the government,
there being then no judicial interpretation to the contrary, is

entitled to respect (see Bengzon vs. Secretary of Justice and
Insular Auditor, 68 Phil. 912).
We are not unmindful of the Supreme Court Resolution dated
February 3, 1965 in Ponce vs. Gomez (L21870) and Ponce vs. City
of Cebu (L2266), by a unanimous vote of six (6) justices (the other
five [5] members deemed it unnecessary to express their view
because in their opinion the questions raised were not properly
brought before the court), which in essence applied the strict
dictionary meaning of “foreshore lands” as used in RA 1899 in the
case of the city of Cebu. But this was promulgated long after the
then Secretary of Justice Mabanag rendered the above opinion on
November 16, 1959 and long after RREC has started the subject
reclamation project.
Furthermore, as held by the lower court, Congress, after the
Supreme Court issued the aforementioned Resolution, enacted RA
5187. In Sec. 3(m) of said law, Congress appropriated money ‘for
the construction of the seawall and limited access highway from
the South boundary of the city of Manila to Cavite City, to the
South, and from the North boundary of the city of Manila to the
municipality of Mariveles, province of Bataan, to the North
including the reclamation of foreshore and submerged areas . . .
provided . . . that . . . existing projects and/or contracts of city or
municipal governments for the reclamation of foreshore and
submerged lands shall be respected . . .’ This is a clear
manifestation that Congress in enacting RA 1899, did not intend
to limit the interpretation of the term “foreshore land” to its
dictionary meaning.
It is presumed that the legislature was acquainted with and
had in mind the judicial construction given to a former statute on
the subject, and that the statute on the subject, and that the
statute was enacted having in mind the judicial construction that
the prior enactment had received, or in the light of such existing
judicial decisions as have direct bearing upon it (see 50 Am. Jur.,
Sec. 321, pp. 312313). But notwithstanding said interpretation by
the Supreme Court of RA 1899 in the Ponce cases, Congress
enacted a law
227
VOL. 299, NOVEMBER 25, 1998 227

covering the same areas previously embraced in RA 1899 (as

mentioned earlier, cities without foreshore lands which were
sought to be excluded from the operation of RA 1899 were not
excluded), providing that respect be given the reclamation of not
only foreshore lands but also of submerged lands signifying its
nonconformity to the judicial construction given to RA 1899. If

Congress was in accord with the interpretation and construction
made by the Supreme Court on RA 1899, it would have mentioned
reclamation of “foreshore lands” only in RA 5187, but Congress
included “submerged lands” in order to clarify the intention on the
grant of authority to cities and municipalities in the reclamation
of lands bordering them as provided in RA 1899. It is, therefore,
our opinion that it is actually the intention of Congress in RA
1899 not to limit the authority granted to cities and
municipalities to reclaim foreshore lands in its strict dictionary
meaning but rather in its wider scope as to include submerged
lands.”
The Petition is impressed with merit.

To begin with, erroneous and unsustainable is the
opinion of respondent court that under RA 1899, the term
“foreshore lands” includes submerged areas. As can be
gleaned from its disquisition and rationalization
aforequoted, the respondent court unduly stretched and
broadened the meaning of “foreshore lands,” beyond the
intendment of the law, and against the recognized legal
connotation of “foreshore lands.” Well entrenched, to the
point of being elementary, is the rule that when the law
speaks in clear and categorical language, there is no reason 16
for interpretation or construction, but only for application.
So also, resort to extrinsic aids, like the records of the
constitutional convention, is unwarranted,
17
the language of
the law being plain and unambiguous. Then, too, opinions
of the Secretary of Justice are unavailing18 to supplant or
rectify any mistake or omission in the law. To repeat, the
term “foreshore lands” refers to:
__________________
16 Land Bank of the Philippines v. Court of Appeals, 258 SCRA 405.

17 People v. Amigo, 252 SCRA 43.
18 Largado v. Masaganda, 5 SCRA 552.
228

“The strip of land that lies between the high and low water marks
and that is alternately wet and dry according to the flow of the
tide.” (Words and Phrases, “Foreshore”)
“A strip of land margining a body of water (as a lake or
stream); the part of a seashore between the lowwater line usually
at the seaward margin of a lowtide terrace and the upper limit of

wave wash at high tide usually marked by a beach scarp or berm.”
(Webster’s Third New International Dictionary)
The duty of the court is to interpret the enabling Act, RA

1899. In so doing, we cannot broaden its meaning, much
less widen the coverage thereof. If the intention of
Congress were to include submerged areas, it should have
provided expressly. That Congress did not so provide could
only signify the exclusion of submerged areas from the
term “foreshore lands.”
Neither is there any valid ground to disregard the
Resolution of this Court dated February 3, 1965 in Ponce v.
Gomez (L21870) and Ponce v. City of Cebu (L22669)
despite the enactment of Republic Act No. 5187 (“RA
5187”), the relevant portion of which, reads:
“Sec. 3. Miscellaneous Projects

xxx
m. For the construction of seawall and limited access highway
from the south boundary of the City of Manila to Cavite City, to
the south, and from the north boundary of the City of Manila to
the municipality of Mariveles, province of Bataan, to the north,
including the reclamation of the foreshore and submerged areas:
Provided, That priority in the construction of such seawalls,
foreshore lands to the contrary notwithstanding: Pro
229
VOL. 299, NOVEMBER 25, 1998 229

vided, finally, that the foregoing provisions and those of other

laws, executive orders, rules and regulations to the contrary
submerged lands shall be respected. x x x.”
There is nothing in the foregoing provision of RA 5187

which can be interpreted to broaden the scope of “foreshore

lands.” The said law is not amendatory to RA 1899. It is an
Appropriations Act, entitled—“AN ACT APPROPRIATING
FUNDS FOR PUBLIC WORKS, SYNCHRONIZING THE
SAME WITH PREVIOUS PUBLIC WORKS
APPROPRIATIONS.”
All things viewed in proper perspective, we reiterate
what was said in Ponce v. Gomez (L21870) and Ponce v.
City of Cebu (L22669) that the term “foreshore” refers to
“that part of the land adjacent to the sea which is
alternately covered and left dry by the ordinary flow of the
tides.” As opined by this Court in said cases:
“WHEREAS, six (6) members of the Court (Justices Bautista

Angelo, Concepcion, Reyes, Barrera, Dizon and Jose P. Bengzon)
opine that said city ordinance and contracts are ultra vires and
hence, null and void, insofar as the remaining 60% of the area
aforementioned, because the term ‘foreshore lands’ as used in
Republic Act No. 1899 should be understood in the sense attached
thereto by common parlance.” (italics ours)
The aforesaid ruling was applied by then Secretary of

Justice Claudio Teehankee, in his opinion dated December
22, 1966, in a case with analogous facts as the present one,
to wit:
“December 22, 1966
The Secretary of Agriculture

and Natural Resources
Diliman, Quezon City
Sir:
x x x
I. Facts—
230

1. On January 19, 1961, pursuant to the provisions of Republic

Act No. 1899, the Municipality of Navotas enacted Ordinance No.
1 authorizing the Municipal Mayor to enter into a reclamation
contract with Mr. Chuanico.
2. On March 15, 1961, a reclamation contract was concluded
between the Municipality of Navotas, represented by the
Municipal Mayor, and Mr. Chuanico in accordance with the above
ordinance. Thereunder, Mr. Chuanico shall be the attorneyinfact

of the Municipality in prosecuting the reclamation project and
shall advance the money needed therefor; that the actual
expenses incurred shall be deemed a loan to the Municipality;
that Mr. Chuanico shall have the irrevocable option to buy 70% of
the reclaimed area at P7.00 per square meter; that he shall have
the full and irrevocable powers to do any and all things necessary
and proper in and about the premises,” including the power to
hire necessary personnel for the prosecution of the work, purchase
materials and supplies, and purchase or lease construction
machineries and equipment, but any and all contracts to be
concluded by him in behalf of the Municipality shall be submitted
to public bidding.
xxx
3. On March 16, 1961, the Municipal Council of Navotas passed
Resolution No. 22 approving and ratifying the contract.
xxx
III. Comments—
1. The above reclamation contract was concluded on the basis

of Navotas Ordinance No. 1 which, in turn, had been enacted
avowedly pursuant to Republic Act No. 1899. This being so, the
contract, in order to be valid, must conform to the provisions of
the said law.
By authorizing local governments “to execute by
administration any reclamation work,” (Republic Act No. 1899
impliedly forbids the execution of said project by contract. Thus,
in the case of Ponce et al. vs. Gomez (February 3, 1966), five
justices of the Supreme Court voted to annul the contract between
Cebu Development Corporation and Cebu City for the reclamation
of foreshore lands because “the provisions of said . . . contract are
not . . . in accordance with the provisions of Republic Act No.
1899,” as against one Justice who opined that the contract
substantially complied with the provisions of the said law. (Five
Justices expressed no opinion on this point.)
231
VOL. 299, NOVEMBER 25, 1998 231

Inasmuch as the Navotas reclamation contract is substantially

similar to the Cebu reclamation contract, it is believed that the
former is likewise fatally defective.
2. The Navotas reclamation project envisages the construction
of a channel along the Manila Bay periphery of that town and the
reclamation of approximately 650 hectares of land from said
channel to a seaward distance of one kilometer. In the basic letter

it is stated that “practically, all the 650 hectares of lands proposed
to be reclaimed under the agreement” do not constitute foreshore
lands and that “the greater portion of the area . . . is in fact
navigable and presently being used as a fishing harbor by deep
sea fishing operators as well as a fishing ground of sustenance
fisherman. Assuming the correctness of these averments, the
Navotas reclamation contract evidently transcends the authority
granted under Republic Act No. 1899, which empowers the local
governments to reclaim nothing more than “foreshore lands,” i.e.,
“that part of the land adjacent to the sea which is alternately
covered and left dry by the ordinary flow of the tides.” (26 C.J.
890.) It was for this reason that in the cited case Ponce case, the
Supreme Court, by a vote of 60 with five Justices abstaining,
declared ultra vires and void the contractual stipulation for the
reclamation of submerged lands off Cebu City, and permanently
enjoined its execution under Republic Act No. 1899.
xxx
In accordance with the foregoing, I have the honor to submit
the view that the Navotas reclamation contract is not binding and
should be disregarded for noncompliance with law.
Very truly yours,
(SGD) CLAUDIO TEEHANKEE
Secretary of Justice”
The said opinion of Justice Secretary Teehankee who

became Associate Justice, and later Chief Justice, of this
Court, did, in our considered view, supersede the earlier
opinion of former Justice Secretary Alejo Mabanag,
aforestated, as the cases, in connection with which subject
opinions were sought, were with similar facts. The said
Teehankee opinion accords with RA 1899.
232

It bears stressing that the subject matter of Pasay City

Ordinance No. 121, as amended by Ordinance No. 158, and
the Agreement under attack, have been found to be outside
the intendment and scope of RA 1899, and therefore ultra
vires and null and void.
What is worse, the same Agreement was vitiated by the
glaring absence of a public bidding.
Obviously, there is a complete dearth of evidence to
prove that RREC had really reclaimed 55 hectares. The
letter of Minister Baltazar Aquino relied upon by RREC is
no proof at all that RREC had reclaimed 55 hectares. Said

letter was just referring to a tentative schedule of work to
be done by RREC, even as it required RREC to submit the
pertinent papers to show its supposed accomplishment, to
secure approval by the Ministry of Public Works and
Highways to the reclamation plan, and to submit to a
public bidding all contracts and subcontracts for subject
reclamation project but RREC never complied with such
requirements and conditions sine qua non.
No contracts or subcontracts or agreements, plans,
designs, and/or specifications of the reclamation project
were presented to reflect any accomplishment. Not even
any statement or itemization of works accomplished by
contractors or subcontractors or vouchers and other
relevant papers were introduced to describe the extent of
RREC’s accomplishment. Neither was the requisite
certification from the City Engineer concerned that
“portions of the reclamation project not less than 50
hectares in area shall have been accomplished or
completed” obtained and presented by RREC.
As a matter of fact, no witness ever testified on any
reclamation work done by RREC, and extent thereof, as of
April 26, 1962. Not a single contractor, subcontractor,
engineer, surveyor, or any other witness involved in the
alleged reclamation work of RREC testified on the 55
hectares supposedly reclaimed by RREC. What work was
done, who did the work, where was it commenced, and
when was it completed, was never brought to light by any
witness before the court. Certainly, onus probandi was on
RREC and Pasay City to show and point out the as yet
unidentified 55 hectares they alleg
233
VOL. 299, NOVEMBER 25, 1998 233

edly reclaimed. But this burden of proof RREC and Pasay

City miserably failed to discharge.
So also, in the decision of the Pasay Court of First
Instance dismissing the complaint of plaintiffappellant,
now petitioner Republic of the Philippines, the lifting of the
writ of Preliminary Injunction issued on April 26, 1962
would become effective only “as soon as Defendant Republic
Real Estate Corporation and Defendant Pasay City shall
have submitted the corresponding plans and specifications
to the Director of Public Works, and shall have obtained
approval thereof, and as soon as corresponding public

that will undertake the reclamation project shall have been
effected.” (Rollo, pp. 127129, G.R. No. 103882)
From the records on hand, it is abundantly clear that
RREC and Pasay City never complied with such
prerequisites for the lifting of the writ of Preliminary
Injunction. Consequently, RREC had no authority to
resume its reclamation work which was stopped by said
writ of preliminary injunction issued on April 26, 1962.
From the Contract for Dredging Work, dated November
26, 1960, marked Exhibit “21A” for RREC before the lower
court, and Exhibit “EE” for CCP before the Court of
Appeals, it can be deduced that only on November 26, 1960
did RREC contract out the dredging work to C and A
Construction Company, Inc., for the reclamation of the 55
hectares initially programmed to be reclaimed by it. But, as
stated by RREC itself in the position paper filed with this
Court on July 15, 1997, with reference to CDCP’s
reclamation work, mobilization of the reclamation team
would take one year before a reclamation work could
actually begin. Therefore, the reclamation work
undertaken by RREC could not have started before
November 26, 1961.
Considering that on April 26, 1962 RREC was enjoined
from proceeding any further with its reclamation work, it
had barely five (5) months, from November, 1961 to April,
1962, to work on subject reclamation project. It was thus
physically impossible for RREC to reclaim 55 hectares,
with the stipu
234

lated specifications and elevation, in such a brief span of

time. In the report of RREC (Exhibit “DD” for CCP), it was
conceded that due to the writ of preliminary injunction
issued on April 26, 1962, C and A Construction Co., Inc.
had suspended its dredging operation since May, 1962.
The “graphical report” on the Pasay Reclamation project,
as of April 30, 1962, attached to the Progress Report
marked Exhibit “DD,” is a schematic representation of the
work accomplishment referred to in such Progress Report,
indicating the various elevations of the land surface it
embraced, ranging from 0.00 meters to the highest
elevation of 2.5 meters above MLLW. Such portrayal of
work accomplished is crucial in our determination of
whether or not RREC had actually “reclaimed” any land as

under its Contract for Dredging Work with C and A
Construction Company (Exhibit “EE”), the required final
elevation for a completely reclaimed land was 3.5 meters
above MLLW, as explicitly provided in said Contract for
Dredging Work. So, the irresistible conclusion is—when the
work on subject RRECPasay City reclamation project
stopped in April, 1962 in compliance with the writ of
preliminary injunction issued by the trial court of origin, no
portion of the reclamation project worked on by RREC had
reached the stipulated elevation of 3.5 meters above
MLLW. The entire area it worked on was only at sea level
or 0.00 meter above MLLW. In short, RREC had not yet
reclaimed any area when the writ of preliminary injunction
issued in April 1962.
On this point, the testimonies of Architect Ruben M.
Protacio, Architect and Managing partner of Leandro V.
Locsin and partners, Architect and City Planner Manuel T.
Mañoza, Jr. of Planning Resources and Operation System,
Inc., Rose D. Cruz, Executive Assistant, Office of the
President, from 1966 to 1970, and Dr. Lucrecia Kasilag,
National Artist and member of CCP Advisory Committee,
come to the fore. These credible, impartial and
knowledgeable witnesses recounted on the witness stand
that when the construction of the Main Building of the
Cultural Center of the Philippines (CCP) began in 1966,
the only surface land available was the site for the said
building (TSN, Sept. 29, 1997, pages 8, 14 and 50),
235
VOL. 299, NOVEMBER 25, 1998 235

what could be seen in front of and behind it was all water

(TSN, Sept. 29, 1997, pages 127128). When the CCP Main
Building was being constructed, from 1966 to 1969, the
land above sea level thereat was only where the CCP Main
Building was erected and the rest of the surroundings were
all under water, particularly the back portion fronting the
bay. (TSN, Sept. 13, 1997, pp. 181, 182, 185, 186, 188). Dr.
Lucrecia R. Kasilag stressed that on April 16, 1966, during
the ground breaking for the CCP Main Building, it was
water all around (TSN, Sept. 30, 1997, pp. 320, 324, 325).
There was indeed no legal and factual basis for the
Court of Appeals to order and declare that “the
requirement by the trial court on public bidding and the
submission of RREC’s plans and specification to the
Department of Public Works and Highways in order that

RREC may continue the implementation of the reclamation
work is deleted for being moot and academic.” Said
requirement has never become moot and academic. It has
remained indispensable, as ever, and noncompliance
therewith restrained RREC from lawfully resuming the
reclamation work under controversy, notwithstanding the
rendition below of the decision in its favor.
Verily, contrary to what the Court of Appeals found,
RREC had not reclaimed any area with the prescribed
elevation of 3.5 meters above MLLW, so much so that in
1978, it (RREC) opted to file with the former Ministry of
Public Highways, a claim for compensation of
P30,396,878.20, for reclamation work allegedly done before
the CDCP started working on the reclamation of the CCP
grounds. On September 7, 1979, RREC asked the Solicitor
General to settle its subject claim for compensation at the
same amount of P30,396,878.20. But on June 10, 1981,
guided by the cost data, work volume accomplished and
other relevant information gathered by the former Ministry
of Public Highways, the Solicitor General informed RREC
that the value of what it had accomplished, based on 1962
price levels, was only P8,344,741.29, and the expenses for
mobilization of equipment amounted to P2,581,330.00. The
aforesaid evaluation made by the government, through the
then Minister of Public Highways, is fac
236

tual and realistic, so much so that on June 25, 1981, RREC,

in its reply letter to the Solicitor General, stated:
“We regret that we are not agreeable to the amount of

P10,926,071.29, based on 1962 cost data, etc., as compensation
based on quantum meruit. The least we would consider is the
amount of P10,926,071.29 plus interest at the rate of 6% per
annum from 1962 to the time of payment. We feel that 6% is very
much less than the accepted rate of inflation that has supervened
since 1962 to the present,
19
and even less than the present legal
rate of 12% per annum.”
Undoubtedly, what RREC claimed for was compensation

for what it had done, and for the dredge fill of 1,558,395
cubic meters it used, on subject reclamation project.
Respondent Court likewise erred in ordering the turn
over to Pasay City of the following titled lots, to wit:
LOT BUILDING AREA OCT/TCT

NO.
42 Gloria Maris 9,516 sq.m. OCT 159 in the
Restaurant name of GSIS
3 Asean Garden 76,299 sq.m. OCT 1025 in
the
name of CCP
12 Folk Arts 1.7503 hec. TCT 18627 in
Theater
and PICC the name of
parking CCP
space
22 landscaped with 132,924 TCT 75676 in
sq.m.
sculpture of the name of
Asean CCP
Artistssite of
Boom na Boom
23 open space, back 34,346 sq.m. TCT 75677 in
of Philcite the name of
CCP
24 Parking space for 10,352 sq.m. TCT 75678 in
Star City, CCP, the name of
CCP
Philcite
_________________
19 CA Rollo, p. 760.
237
VOL. 299, NOVEMBER 25, 1998 237

25 open space occupied 11,323 sq.m. TCT 75679 in

by Star City the name of CCP
28 open space, 27,689 sq.m. TCT 75684 in
beside PICC the name of CCP
29 open space, leased 106,067 sq.m. TCT 75681 in

by El Shaddai the name of CCP
We discern no factual basis nor any legal justification

therefor. In the first place, in their answer to the
Complaint and Amended Complaint below, RREC and
Pasay City never prayed for the transfer to Pasay City of
subject lots, title to which had long become indefeasible in
favor of the rightful title holders, CCP and GSIS,
respectively.
The annotation of a notice of lis pendens on the
certificates of title covering the said lots is of no moment. It
did not vest in Pasay City and RREC any real right
superior to the absolute ownership thereover of CCP and
GSIS. Besides, the nature of the action did not really
warrant the issuance of a notice of lis pendens.
Section 14 of Rule 13, Revised Rules of Civil Procedure,
reads:
“Sec. 14. Notice of lis pendens.—In an action affecting the title or

the right of possession of real property, the plaintiff and the
defendant, when affirmative relief is claimed in his answer, may
record in the office of the registry of deeds of the province in
which the property is situated a notice of the pendency of the
action. Said notice shall contain the names of the parties and the
object of the action or defense, and a description of the property in
that province affected thereby. Only from the time of filing such
notice for record shall a purchaser, or encumbrancer of the
property affected thereby, be deemed to have constructive notice
of the pendency of the action, and only of its pendency against the
parties designated by their real names.
The notice of lis pendens herein above mentioned may be
cancelled only upon order of the court, after proper showing that
the notice is for the purpose of molesting the adverse party, or
that it is not necessary to protect the rights of the party who
caused it to be recorded.”
238

Under the aforecited provision of law in point, a notice of

lis pendens is necessary when the action is for recovery of
possession or ownership of a parcel of land. In the present
litigation, RREC and Pasay City, as defendants in the main
case, did not counterclaim for the turnover to Pasay City of
the titled lots aforementioned.

What is more, a torrens title cannot be collaterally
attacked. The issue of validity of a torrens title, whether
fraudulently issued or not, may be posed only in an action
brought to impugn or annul it. (Halili vs. National Labor
Relations Commission, 257 SCRA 174; Cimafranca vs.
Intermediate Appellate Court, 147 SCRA 611.)
Unmistakable, and cannot be ignored, is the germane
provision of Section 48 of P.D. 1529, that a certificate of
title can never be the subject of a collateral attack. It
cannot be altered, modified, or cancelled except in a direct
proceeding instituted in accordance with law.
Although Pasay City and RREC did not succeed in their
undertaking to reclaim any area within subject reclamation
project, it appearing that something compensable was
accomplished by them, following the applicable provision of
law and hearkening to the dictates of equity, that no one,
not even the government, shall20 unjustly enrich
oneself/itself at the expense of another, we believe; and so
hold, that Pasay City and RREC should be paid for the said
actual work done and dredgefill poured in, worth
P10,926,071.29, as verified by the former Ministry of Public
Highways, and as claimed by RREC itself in its aforequoted
letter dated June 25, 1981.
It is fervently hoped that long after the end of our
sojourn in this valley of tears, the court, for its herein
historic disposition, will be exalted by the future
generations of Filipinos, for the preservation of the
national patrimony and promotion of
_________________
20 Article 2142, Civil Code:

“Certain lawful, voluntary and unilateral acts give rise to the juridical
relation of quasicontract to the end that no one shall be unjustly enriched
or benefited at the expense of another.”
239
VOL. 299, NOVEMBER 25, 1998 239

our cultural heritage. As writer Channing rightly puts it:

“Whatever expands the affections, or enlarges the sphere of
our sympathies—Whatever makes us feel our relation to
the universe and all that it inherits in time and in eternity,
and to the great and beneficent cause of all, must
unquestionably refine our nature, and elevate us in the
scale of being.”
WHEREFORE:
In G.R. No. 103882, the Petition is GRANTED; the
Decision, dated January 28, 1992, and Amended Decision,
dated April 28, 1992, of the Court of Appeals, are both SET
ASIDE; and Pasay City Ordinance No. 121, dated May 6,
1958, and Ordinance No. 158, dated April 21, 1959, as well
as the Reclamation Agreements entered into by Pasay City
and Republic Real Estate Corporation (RREC) as
authorized by said city ordinances, are declared NULL and
VOID for being ultra vires, and contrary to Rep. Act 1899.
The writ of preliminary injunction issued on April 26,
1962 by the trial court a quo in Civil Case No. 2229P is
made permanent, and the notice of lis pendens issued by
the Court of Appeals in CA G.R. CV No. 51349 ordered
CANCELLED. The Register of Deeds of Pasay City is
directed to take note of and annotate on the certificates of
title involved, the cancellation of subject notice of lis
pendens.
The petitioner, Republic of the Philippines, is hereby
ordered to pay Pasay City and Republic Real Estate
Corporation the sum of TEN MILLION NINE HUNDRED
TWENTYSIX THOUSAND SEVENTYONE AND
TWENTYNINE CENTAVOS (P10,926,071.29) PESOS,
plus interest thereon of six (6%) percent per annum from
May 1, 1962 until full payment, which amount shall be
divided by Pasay City and RREC, share and share alike.
In G.R. No. 105276, the Petition is hereby DENIED for
lack of merit.
No pronouncement as to costs.
SO ORDERED.
Bellosillo, Melo, Quisumbing and Pardo, JJ.,

concur.
240

Narvasa (C.J.), I dissent. Ponce is not binding

precedent, and P.D. 3A is an utter nullity.
Davide, Jr., J., Also that of the concurring opinion
of Mr. Justice Puno.
Romero, J., Please see Separate Opinion.
Puno, J., Please see Concurring Opinion.
Vitug, J., In the result.
Kapunan, J., No part, having appeared for the
Government when I was in the OSG.

Mendoza, J., I concur in this and in the concurring
opinion of Justice Puno.
Panganiban, J., Please see Separate Opinion.
Martinez, J., I join the Chief Justice in his dissent.
SEPARATE OPINION
ROMERO, J.:
“Culture doesn’t save anything or anyone, it doesn’t justify.

But it’s a product of man: he projects himself into it, he
recognizes himself in it; that critical mirror alone offers
him his image.” So said Jean Paul Sartre, one of the
greatest philosophical thinkers of our time. Matthew
Arnold referred to it as the “pursuit of our total perfection”
or the “study of perfection.” The English mathematician
and philosopher Alfred North Whitehead, placing premium
on human subjectivity, declared, “Culture is activity of
thought, and receptiveness to beauty and humane feeling.”
Image, perfection, beauty, and feeling. These are
elements which are also associated with art and creation.
Yet, art in itself is a multifaceted concept. The revered
and, at times, controversial President John Fitzgerald
Kennedy, in one of his numerous speeches, elevated art to
the level of a psychosocial necessity of man when he said, “.
. . (A)rt establishes the basic human truths which must
serve as the touchstone of
241
VOL. 299, NOVEMBER 25, 1998 241

our judgment.” Indeed, there is no question that art

satisfies one of the deepest spiritual needs of man.
Of course, when one speaks of art and culture, he in fact
speaks of it in two ways: the abstract and the concrete.
What is abstract is conditioned by time; that which is
concrete is ravaged by it. While the concept of “culture and
art” endures man’s follies, amassing innumerable, priceless
enhancements as it effortlessly slides through generations
of human progress, its tangible counterpart, that which is
preserved for our children’s appreciation, is unfortunately
fragile. Art works, music, architecture, literature, and
other cultural embellishments which exhibit extraordinary
longevity are proclaimed as national treasures, and rightly

so, for they are lasting testimonials of man’s boundless
imagination and creativity, that single trait that places the
human species above all other creatures of the Almighty.
Most evidence of a culture’s richness are lost, not in the
tide of nature’s frivolity, but through man’s foolishness and
capriciousness. Wars used to be the main culprit in the
virtual obliteration of the works of ancient scholars. We are
now, and for the past century or so, faced with a greater
foe: progress. Progress and development are the hallmarks
of successful governance. Our leaders, and there are so
many of them now, decide “what is best” for the public.
Inopportunely, what is perceived to be in the “best interest”
of the majority in the name of “progress” may sometimes,
and in the long run, be calamitous to the entire people in
terms of cultural atrophy. This is the quandary in which
this Court finds itself as it attempts to weigh once more
private rights against sovereignty and the general welfare.
Background Facts
In a nutshell, the undisputed facts in these consolidated
petitions follow.
Pursuant to Republic Act No. 1899, which authorized
chartered cities and municipalities to reclaim adjoining
foreshore lands, the City Council of Pasay resolved to
reclaim a portion
242

of the Manila Bay covering the ManilaPasayParañaque

boundaries and, for this purpose, enacted Ordinance No.
121 on May 6, 1958. Two days later, on the strength of said
ordinance, Pasay City Mayor Pablo Cuneta contracted with
Republic Real Estate Corporation (RREC) for the
reclamation of portions of the Manila Bay. On April 21,
1959, the City Council of Pasay amended Ordinance No.
121 by enacting Ordinance No. 158. A new agreement
between the parties (the Reclamation Agreement) was
executed three days thereafter, which, among other things,
granted the reclamation project to RREC and gave it an
irrevocable option to purchase a maximum of 60% of the
area reclaimed at P10.00 per square meter, the amount of
which could be set off against any outstanding obligation of
the City to RREC. Such an option could only be effected
within a year from the time the City Engineer certified that
50 hectares had been reclaimed. The reclamation itself was

made by the RREC through third parties who were
awarded contracts on the various phases of the project
through public bidding. To raise more funds, RREC entered
into contracts to sell the reclaimed areas which it could
purchase from Pasay City by exercising its option under
the Reclamation Agreement.
Proceedings before the trial court

On December 19, 1961, the Republic of the Philippines filed
a complaint (amended on March 5, 1962) against Pasay
City and RREC for “Recovery of Possession and Damages
with Writ of Preliminary Preventive Injunction and
Mandatory Injunction” before Branch 7 of the then Court of
First Instance of Rizal, Pasay City, praying for the
declaration of nullity of Ordinance Nos. 121 and 158, the
Reclamation Agreement, and the Contracts to Sell between
RREC and the buyers of the reclaimed land. Among other
things, the following matters were alleged: (a) the area
reclaimed was already reserved as a national park under
Proclamation No. 41, dated July 5, 1954 and Act No. 3915,
hence, the subject of the Reclamation Agreement was
beyond man’s commerce; (b) Ordinance Nos. 121 and 158
were ultra vires and void ab
243
VOL. 299, NOVEMBER 25, 1998 243

initio for being violative of R.A. No. 1899, because they

involved the reclamation of “submerged areas” and not
“foreshore lands” as allowed by said law; and (c) the
Reclamation Agreement was illegal, contrary to morals and
public policy because it was executed with neither
authority from the National Government nor any public
bidding.
In their separate answers, Pasay City and RREC set
forth the following negative defenses: (a) Pasay City was
empowered by R.A. No. 1899 to reclaim any portion of the
Manila Bay; (b) the area reclaimed was not a portion of the
Manila Bay Beach Resort, which was the area reserved as
a national park under Proclamation No. 41 and Act No.
3915; (c) under R.A. No. 1899, the term “foreshore lands”
meant much more than its technical definition and
extended to submerged areas beyond the water marks of
the shore; and (d) all the actuations of the City and RREC
regarding the reclamation project were in accordance with
R.A. No. 1899 and related laws.

On April 26, 1962, the trial court issued a writ of
preliminary injunction ordering Pasay City and RREC to
refrain from their activities at the Manila Bay. On January
10, 1968, however, RREC filed a “Motion to Dismiss” the
complaint on the ground that the passage of Republic Act
No. 5187 (otherwise known as the Public Works Act) on
September 16, 1967, rendered the issues raised by the
Republic of the Philippines moot and academic.
Specifically, RREC relied on Section 3(m) thereof which
stated that all “contracts of city or municipal governments
for the reclamation of foreshore and submerged lands shall
be respected” during the construction by the national
government of a sea wall and limited access highway
passing through the projected area of the reclamation. In
the meantime, the trial court allowed Jose Bautista and
others who allegedly bought in good faith and for value
from RREC some portions of the reclaimed land, to
intervene in the action and join cause with Pasay City and
RREC. On the other hand, the Pasay Law and Conscience
Union, Inc. (PLCUI), a civic organization, joined with the
Republic of the Philippines and filed a complaint in
intervention.
244

On May 24, 1972, the court a quo rendered a judgment on

the pleadings, upholding the validity of Ordinance Nos. 121
and 158 and of the Reclamation Agreement; dismissing the
complaint as well as PLCUI’s complaint in intervention;
enjoining RREC and Pasay City “to have all the plans and
of Public Works, and to have all the contracts and
subcontracts for said reclamation awarded by means of,
and only after, public bidding”; and lifting the preliminary
injunction, dated April 26, 1962, as soon as said conditions
shall have been met by RREC and Pasay City.
Proceedings before the Court of Appeals

During the pendency of the State’s appeal with the Court of
Appeals, President Marcos issued on January 11, 1973,
Presidential Decree No. 3A, providing, inter alia, that “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,” and that
it shall take over any validly existing reclamation contract

on the basis of quantum meruit. On the strength of P.D.
No. 3A, the Commission of Public Highways and the
Construction Development Corporation of the Philippines
(CDCP) took over the reclamation contract between Pasay
City and RREC for the construction of the ManilaCavite
City Coastal Road. CDCP developed the area already
reclaimed by RREC and continued reclaiming where the
latter left off. These areas, which came to be known as the
Cultural Center Complex and the Financial Center
Complex, were registered in the name of the CCP.
On February 4, 1977, the Public Estates Authority
(PEA) was created by virtue of Presidential Decree No.
1084. It was designated as the agency primarily
responsible for all the reclamation projects of the national
government. The PEA then took over the Manila Bay
reclamation contract between the Republic of the
Philippines and CDCP.
In 1978, RREC filed a claim for P30,396,878.20 with the
then Ministry of Public Highways (MPH) for its actual
recla
245
VOL. 299, NOVEMBER 25, 1998 245

mation in the CCP Complex before CDCP assumed

authority over the project. The MPH, on the other hand,
determined the amount of reclamation by RREC to be only
P10,926,071.29. Later, RREC offered to settle the case with
the Office of the Solicitor General for the original amount
of its claim. The OSG would, however, settle only for the
lesser amount assessed by the MPH. This was acceptable to
RREC only with an additional 6% interest per annum from
1962 up to the time of payment. Within the decade that
followed, RREC’s proposals for settling the case ballooned
from a P35,455,011.31 cash settlement or a property
settlement of 3.5 hectares in the CCP Complex covered by
TCT No. 75676, to a cash settlement of P175 million, then
later, P245 million. The Office of the President, to which
the proposals were referred, rejected the same. In other
words, no amicable settlement was reached.
The first decision

On January 28, 1992, the Court of Appeals rendered a
decision, affirming the trial court’s judgment with the
following modifications: (a) the requirement on public
bidding and submission of plans and specifications to the

DPWH by RREC was deleted; (b) the Republic of the
Philippines was ordered to turn over to Pasay City the
ownership and possession of the 21 hectares already
reclaimed by RREC; and (c) RREC’s irrevocable option to
purchase 60% of the 21 hectares it had already reclaimed
was sustained.
The amended decision

On April 28, 1992, the appellate court rendered an
amended decision. It agreed with the position of Pasay City
and RREC in their motion for reconsideration that the
actual area reclaimed was 55, not 21, hectares.
Considering, however, that the latter were willing to accept
35 hectares of open land in the CCP Complex, the court
ordered the Republic of the Philippines to reconvey to
Pasay City and RREC said parcels of land comprising nine
lots registered in the name of
246

CCP. This is the decision being assailed by both parties in

the instant consolidated petitions.
Issues raised
In G.R. No. 103882
Are Ordinance Nos. 121 and 158, as well as the

Reclamation Agreement between Pasay City and RREC,
valid and binding as against the National Government and
the Cultural Center of the Philippines?
The Republic of the Philippines claims that the Court of
Appeals erred in sustaining the validity of Ordinance Nos.
121 and 158 and the Reclamation Agreement executed
pursuant thereto, and in ordering the reconveyance of the
nine lots titled in the name of CCP to the City of Pasay and
RREC. It stresses that the reclamation project undertaken
by Pasay City and RREC violated R.A. No. 1899, especially
since the subject areas were “submerged lands,” not
“foreshore lands” which are the only lands that may be
reclaimed by local governments under said law.
The CCP, as intervenor in G.R. No. 103882, alleges that
the appellate court’s amended decision was not binding
upon it because it was never made a party to the action and
that it was compelled to intervene in the instant petitions

to protect its proprietary interests. It claims that the Court
of Appeals erred in finding that the actual area reclaimed
by RREC was 55 hectares, and in ordering it to turn over to
RREC and Pasay City the nine lots registered in its name.
In G.R. No. 105276
Is P.D. 3A constitutional?

The City of Pasay and RREC claim it is not and that the
Court of Appeals erred in not ruling upon its
constitutionality, considering that said decree deprived
them of their property and rights of ownership without due
process of law and without payment of just compensation,
and that it violated the
247
VOL. 299, NOVEMBER 25, 1998 247

nonimpairment clause of the Constitution; and in not

awarding them damages for the alleged illegal takeover of
the reclamation contract and the reclaimed area. Thus,
they pray for the modification of the assailed amended
decision by awarding them damages and conveying to
them, not merely 35, but 55 hectares of the land allegedly
reclaimed.
The Commissioners’ Report

On September 10, 1997, the Court’s Second Division issued
a Resolution remanding the case to the Court of Appeals to
receive further evidence and determine the actual area
reclaimed by RREC and the areas of the CCP Complex
which are “open spaces.” In its Commissioner’s Report
dated November 25, 1997, the appellate court concluded
that the CCP and the Solicitor General failed to refute its
earlier finding that RREC and Pasay City were able to
reclaim 55 hectares of the Manila Bay.
Discussion of issues
1) Ordinance Nos. 121 and 158, as well as the Reclamation
Agreement between Pasay City and RREC, are null and
void for violating the clear and unambiguous provisions of
R.A. No. 1899.
In 1984, the term “foreshore lands” was defined by this
Court in the case of Republic v. Court of Appeals.1 Although
the subject of this case was part of the Laguna de Bay, the
Court nevertheless applied Bouvier’s definition of

“foreshore lands,” viz.: “that part of the land immediately in
front of the shore; the part which is between high and low
water marks, and alternately covered with water and left
dry by the flux and reflux of the tides. It is indicated by a
middle line between the highest and lowest tides.”
This judicial interpretation did not escape the attention
of the legislature in the enactment of later related laws. In
R.A.
__________________
1 131 SCRA 532.
248

No. 5187, for example, Congress specified the areas that

may be reclaimed in the construction of the ManilaCavite
City Coastal Road to include both “foreshore and
submerged areas.” The Chief Executive also recognized the
disparity between the two terms when he signed into law
P.D. No. 3A, authorizing the reclamation of “areas under
water, whether foreshore or inland.” Similarly, P.D. No.
1084, creating the Public Estates Authority, granted it
authority to “reclaim land, including foreshore and
submerged areas.”
Initially, legislative intent and later jurisprudential
usage clearly delimited the term “foreshore lands” to that
part of the land where the tides literally converge, thus
excluding submerged lands. This restricted explication was
unquestionably acknowledged by the other branches of
government when, in passing subsequent related statutes,
they added the terms “submerged areas” or “areas under
water” to “foreshore lands.” Under the principles of legal
construction, since R.A. No. 1899 partakes of the nature of
a legislative grant of a sovereign right to municipalities
and chartered cities, that is, the right “to reclaim,” it must
be strictly construed against the latter.
R.A. No. 1899 was, therefore, enacted to apply strictly to
“foreshore lands.” Thus, when RREC was permitted by the
City of Pasay, through Ordinance Nos. 121 and 158 and the
ensuing Reclamation Agreement, to reclaim up to a
onekilometer stretch into the Manila Bay, more than just
“foreshore lands” was obviously contemplated and involved.
Furthermore, R.A. No. 1899 mandates that any
reclamation must be carried2

out by the municipality or
chartered city concerned with the aid of funds which 3
it
may borrow from third persons or lending institutions. The
reclamation of Manila Bay was undertaken, not by Pasay
City, but by RREC itself under a special power of attorney
from Pasay City using funds exclusively borrowed by the
latter from RREC. To compound the anomaly of it all, the
reclamation project itself was
___________________
2 At Section 1, in relation to Section 9.

3 At Section 3.
249
VOL. 299, NOVEMBER 25, 1998 249

awarded by Pasay City to RREC without any public

bidding. Finally, to complete Pasay City’s absolute
abdication of its duty to champion public over private
interest, RREC was granted an irrevocable option to
purchase the land reclaimed in lieu of simply paying for it
using a determinable and liquidated amount “in Philippine
currency or in the currency
4
in which the principal has been
originally received,” as required by R.A. No. 1899. In fact,
RREC began disposing of the land by entering into
contracts to sell with various third persons while the
reclamation project was still in progress and long before it
acquired any right of dominion over the lands yet to be
reclaimed. These are all blatant violations of R.A. No. 1899.
Hence, Ordinance Nos. 121 and 158, no less than the
Reclamation Agreement and the Contracts to Sell it has
spawned, should all be deemed null and void, the
reclamation itself being ultra vires.
2) P.D. No. 3A is constitutional and valid.
Applying the regalian doctrine, the State owns all
waters and lands of the public domain, including those
physically reclaimed. As a general rule, therefore, only the
National Government can reclaim foreshore lands and
other submerged areas. At times, though, the State, to
effectuate an expressed public policy, delegates some of its
sovereign powers either to the legislature or to some of its
alter egos. One such instance was R.A. No. 1899 which was
intended to increase the autonomy of local governments, an
innovation introduced by the Marcos administration. There
is no doubt, however, that R.A. No. 1899 was a mere public
grant, a privilege which may be withdrawn by the granting

authority, the sovereign, in the exercise of police power.
This is precisely what President Marcos did when he issued
P.D. No. 3A, a valid and effective means of regaining the
State’s right to reclaim. It must be noted that this decree
was not revoked by President Aquino when she assumed
the presidency.
_________________
4 At Section 6.
250

P.D. No. 3A does not violate the equal protection clause, as
claimed by Pasay City and RREC, because, far from
singling out the latter, its terminology is simple and
extensive enough to cover just about any municipality or
city. The decree was signed by President Marcos under his
emergency powers when martial law was in effect
throughout the country. Thus, it is not an undue delegation
or usurpation of legislative power. Neither does it authorize
the taking of property without just compensation, for it
specifically allows such payment, albeit based on quantum
meruit. Incidentally, while RREC attacks the
constitutionality of P.D. No. 3A, and only at this late stage
in the proceedings, it relied on this “quantum meruit
compensation” clause in the same decree when it filed a
claim before the then Ministry of Public Works way back in
1978 and again in 1983. This is an oddity which this Court
takes notice of in disallowing RREC from taking contrary
positions regarding the validity of a statute in this action.
It cannot take advantage of a provision of law even as it
attacks the same.
Finally, the Court notes that the amended decision of
the Court of Appeals dated April 28, 1992, is based on
inadequate evidence. Its conclusion that RREC was able to
reclaim 35 hectares is totally unsupported by the dubious
proof presented by Pasay City and RREC.
In ruling in favor of Pasay City and RREC, the appellate
court relied mostly on three documents issued by the
government to the RREC, namely, the “Cost of Data for
Items of Work Covered by the Republic Real Estate
Corporation for Work Performed in the Manila Bay” issued
by the Ministry of Public Highways, and two letters both
addressed to RREC Executive Vice President Vicente

Asuncion, Jr., one dated June 6, 1979, from then Minister
of Public Highways Baltazar Aquino, and another, dated
June 10, 1981, from then Solicitor General Estelito
Mendoza. These documents, however, never proved that
RREC was able to reclaim 35 hectares. In fact, the letter of
Aquino, finding that RREC had reclaimed 55 hectares, was,
in its own words, merely “tentative, pending the submittal
of corroborative documents”; hence, it does not
251
VOL. 299, NOVEMBER 25, 1998 251

amount to the “certification” contemplated in R.A. No.

1899. Mendoza’s letter, on the other hand, far from
supporting RREC’s position, rejected RREC’s proposal in
the latter’s attempt at settlement. It is puzzling why the
appellate court even considered this letter in favor of RREC
and Pasay City.
On the other hand, there is ample proof that RREC was
not able to reclaim the 55 hectares which it claims it did, or
even 35 hectares, as found by the Court of Appeals, as
follows: aerial photographs of the Manila Bay area in 1966
and 1968; photographs of the CCP taken in 1967 and 1968
during construction of the main building; and the
testimonies of the persons familiar with the circumstances
under which said photographs were taken, as well as the
other witnesses who were, one way or another, connected
with the construction of the CCP main building, including
a member of the Board of Directors of RREC.
3) RREC is entitled to some monetary award.
While the extent of reclamation actually done by RREC
is debatable, there is no dispute that it did reclaim some
portion of the Manila Bay. In the preceding discussion, we
declared the nullity of Ordinance Nos. 121 and 158 and the
Reclamation Agreement, which are the wellsprings of
RREC’s right to be compensated. Its reclamation efforts
were also found to be ultra vires. Equity and fairness,
however, dictate that it be compensated for the work
actually performed by it. After all, the State cannot deny
that it did benefit from such reclamation. RREC was
initially willing to settle the case for P30,396,878.20. In
view of the foregoing premises, we believe that RREC
should only be given the amount which the State was
willing to pay, that is, P10,929,071.29, without legal
interest. It is axiomatic that legal interest is given either
for the use of the money (a loan or forbearance of money) or

as a penalty for breach of an obligation (damages). In the5
case of Eastern Shipping Lines, Inc. v. Court of Appeals,
the Court
__________________
5 234 SCRA 78, 9596 (1994).
252

had occasion to set the guidelines by which litigants may

claim or be awarded interest as or by way of actual or
compensatory damages. Thus,
“II. With regard particularly to an award of interest in the concept

of actual and compensatory damages, the rate of interest, as well
as the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the
payment of a sum of money, i.e., a loan or forbearance of money,
the interest due should be that which may have been stipulated in
writing. Furthermore, the interest due shall itself earn legal
interest from the time it is judicially demanded. In the absence of
stipulation, the rate of interest shall be 12% per annum to be
computed from default, i.e., from judicial or extrajudicial demand
under and subject to the provisions of Article 1169 of the Civil
Code.
2. When an obligation not consisting of a loan or forbearance of
money, is breached, an interest on the amount of damages
awarded may be imposed at the discretion of the court at the rate
of 6% per annum. No interest, however, shall be adjudged on
unliquidated claims or damages except when or until the demand
can be established with reasonable certainty. Accordingly, where
the demand is established with reasonable certainty, the interest
shall begin to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code) but when such certainty
cannot be so reasonably established at the time the demand is
made, the interest shall begin to run only from the date the
judgment of the court is made (at which time the quantification
damages may be deemed to have been reasonably ascertained).
The actual base for the computation of legal interest shall, in any
case, be on the amount finally adjudged. x x x.” (Citations
omitted)
These are the only circumstances under which interest in
the concept of actual or compensatory damages, liquidated

or otherwise, may be justified. In the case at bar, no loan or
forbearance of money is involved; neither is there any
breach of obligation. Consequently, the lone commitment of
the State would be the payment for services allegedly
rendered, services for which RREC would have the
National Government cede to it its property, the value of
which has been inflated to unimaginable proportions since
the inception of the reclamation
253
VOL. 299, NOVEMBER 25, 1998 253

project. This is manifestly cupidity at its worst. Neither

should the State be penalized for something for which it is
entirely blameless. The circumstances which led to the
filing of these twin actions have long been overtaken by
supervening events, rendering the issues incipiently raised
moot and academic. Thus, RREC and Pasay City are, as
they should be, only entitled to P10,926,071.29. No more,
no less.
Conclusion
For almost three decades, the Cultural Center of the
Philippines has been the principal, if not the sole, purveyor
of the arts in this country. It has weathered criticism, civil
unrest, and “internecine” politics. It relies on the occasional
beneficence of loyal patrons, the socalled “cultured” class
scorned and spurned by the “masa.” Otherwise, it subsists
on the rental income it receives from private entities
leasing portions of the CCP Complex. With the trial and
appellate courts upholding their claims, Pasay City and
RREC wish to dismember this bastion of cultural heritage
and stunt its growth by claiming ownership over a
substantial portion of its property, that which literally
serves as its bloodline. This must not be countenanced. The
CCP is certainly not about to draw its curtains and take a
final bow. As Matthew Arnold said more than a century
ago, “I am a Liberal, yet I am a Liberal tempered by
experience, reflection, and renouncement, and I am above
all, a believer in culture.”
I vote to grant the State’s petition, with the qualification
adverted to above.
CONCURRING OPINION
PUNO, J.:
Petitioners seek to modify the Decision and Amended1

Decision of the Court of Appeals in CAG.R. CV No. 51349
which
__________________
1 Penned by Justice Quirino AbadSantos and concurred in by Justices

Arturo Buena and Minerva GonzagaReyes.
254

ordered the Republic of the Philippines to award thirtyfive

(35) hectares of the Cultural Center Complex to Pasay City
and the Republic Real Estate Corporation.
The cases at bar span forty (40) years and the
administrations of six (6) Presidents—Garcia, Macapagal,
Marcos, Aquino, Ramos and Estrada. The opening scene
saw the passage on June 22, 1957 of Republic Act (R.A.)
No. 1899 authorizing chartered cities and municipalities to
reclaim foreshore lands along their borders. On May 6,
1958, the Pasay City Government, through its legislative
council, passed City Ordinance No. 121 authorizing “the
reclamation of three hundred (300) hectares, more or less,
of the foreshore lands of Pasay City, “beginning from the
present boundary of Pasay City and Parañaque, and from
the present seawall of Pasay City to a distance of one
kilometer towards Manila Bay.” The Ordinance empowered
the City Mayor, in behalf of Pasay City to “issue bonds in
the amounts fixed by the Secretary of Finance; or contract
and award the reclamation work to any person or persons,
associations, corporations, or institutions.” It also provided
that the cost of such reclamation works shall not be paid or
reimbursed by the city government but the award shall be
subject to terms and conditions enumerated therein.
On May 8, 1958, the Mayor of Pasay City, Pablo Cuneta,
entered into an Agreement with the Republic Real Estate
Corporation (RREC) to undertake the 2
reclamation project
contemplated in Ordinance No. 121.
Almost a year later, on April 21, 1959, the Pasay City
Government amended Ordinance No. 121 by passing
Ordinance No. 158 “to make the terms and conditions of
the reclamation work more beneficial to Pasay City.” On
April 24, 1959, the Mayor of Pasay City, for and in behalf of
Pasay City, entered into another Agreement with the
Republic Real Estate Corporation (RREC) for the
reclamation project authorized in Ordi
_________________
2 Agreement dated May 8, 1958, Exhibit “P1,” Folder No. 1 of

Plaintiff’s Exhibits, pp. 4044.
255
VOL. 299, NOVEMBER 25, 1998 255

3
nance Nos. 121 and 158. This became the Agreement that
was to govern the reclamation project itself.
Under the terms of the Reclamation Agreement, Pasay
City was to borrow from RREC and nobody else, at the rate
of six percent (6%) per annum, such sums of money that
may be needed for the reclamation project; that Pasay City
shall pay RREC this debt upon written demand and after
at least fifty (50) hectares shall have been reclaimed; that
in consideration for this loan, RREC shall have the
irrevocable option to purchase sixty percent (60%) of the
area reclaimed at P10.00 per square meter; and that this
option shall be exercised not later than twelve (12) months
from the date the City Engineer certifies that fifty (50)
hectares have been reclaimed in accordance with the plans
and specifications approved by the Director of Public
Works.
Pursuant to this Agreement, RREC immediately
undertook the reclamation of Manila Bay. It conducted
public biddings for and in behalf of Pasay City and
contracted with third persons for particular works on the
project. RREC submitted to Pasay City monthly progress
reports and statements of disbursements incurred in the
course of the project. To generate additional funds, 4RREC
entered into contracts to sell with third persons over
portions of the area reclaimed and those to be reclaimed
which RREC shall have purchased from Pasay City under
its irrevocable option.
On March 5, 1962, the Republic of the Philippines
(National Government) represented by the Solicitor
General filed against Pasay City and RREC Civil Case No.
2229P for “Recovery of Possession and Damages with Writ
of Preliminary Preventive Injunction and Mandatory
Injunction” before the then Court of First Instance of Rizal,
Seventh Judicial
_________________
3 Exhibit “P,” Folder No. 1 of Plaintiff’s Exhibits, pp. 4546. By its

express terms, Ordinance No. 158 “amended” Ordinance No. 121.
However, Ordinance No. 158 is a reenactment of Ordinance No. 121.
4 Jose Bautista, et al.
256

5
District, Branch VII, Pasay City. The National
Government prayed for recovery of possession of the land,
damages, and for the declaration of nullity of City
Ordinance Nos. 121 and 158, the Reclamation Agreement
and other contracts executed between Pasay City and
RREC as well as all Contracts to Sell between RREC and
buyers of the land. The National Government alleged that
the Manila Bay and the area covered by the reclamation
project between Pasay City and RREC is land of the public
domain and belongs to the state; that as early as July 5,
1954, President Magsaysay issued Proclamation No. 41
pursuant to Act 3915 declaring the Manila Bay area a
national park known as the “Manila Bay Beach Resort” and
placing it under the management and administration of the
Commission on Parks and Wildlife of the Department of
Agriculture and Natural Resources; that the reclamation of
areas within its territorial jurisdiction may be made by
Pasay City, a chartered city, pursuant to R.A. No. 1899 but
this authority is limited to foreshore lands only; that
Manila Bay has no foreshore land and the reclamation area
subject of the Ordinances and Reclamation Agreement is
under sea water; that the Pasay City Government and
RREC entered into the Reclamation Agreement without
authority from the National Government, without public
bidding and with full knowledge of its illegality; that the
Reclamation Agreement is illegal, contrary to morals and
public policy, and the subject matter is beyond the
commerce of man; that Ordinance Nos. 121 and 158 are
likewise illegal and ultra vires for being contrary to the
provisions of R.A. 1899; that verbal and written demands
to vacate the reclamation site were made by the National
Government
6
on Pasay City and RREC but these were not
heeded.
In their separate answers, Pasay City and RREC
claimed that the Manila Bay Beach Resort reserved as

national park under Proclamation No. 41 covers a parcel of
“land” in the
_________________
5 See Second Amended Complaint, Annex “E” to the Record on Appeal.

6 Id.
257
VOL. 299, NOVEMBER 25, 1998 257

cities of Manila and Pasay and the municipality of

Parañaque and does not include a portion of “Manila Bay”
as certified by the Acting Chief of the Bureau of Lands;
that assuming that the reclaimed area encroaches the
national park, the Pasay City government is authorized by
R.A. 1899 which empowers chartered cities and
municipalities to reclaim foreshore lands bordering them;
the term “foreshore lands” as used in R.A. 1899 is not
limited to its technical meaning but extends to submerged
areas beyond the high and lowwater marks of the beach;
that the Commission on Parks and Wildlife never managed
nor administered any portion of the Manila Bay; that the
complaint was filed to harass and vilify the Pasay City
Government and RREC who acted in good faith and with
good intentions
7
for the benefit of the city and national
government.
On April 26, 1962, the CFI issued a writ of preliminary
injunction ordering Pasay City and RREC and their agents
from “further reclaiming or committing acts of
dispossession or dispoilation [sic] over any area within the
Manila Bay or the Manila
8
Bay Beach Resort until further
orders of the court.” RREC ceased its reclamation work.
On June 28, 1962, Jose L. Bautista and sixteen (16)
others who were buyers of portions of the reclaimed land
moved to intervene and join in the cause of Pasay City and
RREC.
On September 16, 1967, Congress passed Republic Act
(R.A.) No. 5187, the Public Works Act. This Act
appropriated P600,000,000.00 for the construction of
seawall and limited access highway from the south
boundary of the City of Manila to Cavite City, and from the
north boundary of the City of Manila to the Municipality of
Mariveles, Bataan to the north, “including the reclamation
of the foreshore and submerged areas.” The law also
provided that “the provisions and those of other laws to the

contrary notwithstanding, existing rights,
__________________
7 Answer of RREC to the Amended Complaint, Annex “F” to the Record

on Appeal; Answer of Pasay City to the Amended Complaint, Annex “G” to
the Record on Appeal, CA Records.
8 Annex “H” to the Record on Appeal; CA Records.
258

projects and/or contracts of city or municipal governments

for the reclamation of foreshore and submerged lands shall
be respected.” This project was referred to as the “Manila
Cavite Coastal Road Project.”
In view of R.A. No. 5187, RREC and Intervenors Jose
Bautista, et al. moved to dismiss the complaint in Civil
Case No. 2229P. They alleged that R.A. No. 5187 expressly
acknowledged existing reclamation projects and contracts
and rendered the issues raised by the National
Government moot and academic. Meanwhile, the Pasay
Law and Conscience Union, Inc., a civic organization
dedicated to the interest of “good government and public
welfare” and organized to “fight for, defend, uphold and
preserve the rule of law and conscience in Pasay City” filed
a complaint in intervention, joining cause with the
National Government.
On February 8, 1972, intervenors Jose Bautista, et al.
filed a motion for a judgment on the pleadings. There being
no opposition, the CFI granted the motion. On March 24,
1972, after almost eleven (11) years, the trial court
rendered a decision based on the pleadings. The court
upheld the validity of Ordinance Nos. 121 and 158 and the
Reclamation Agreement between Pasay City and RREC.
The trial court, however, ordered RREC and Pasay City to
secure the approval of the Director of Public Works to all
the plans and specifications of the reclamation and for the
City Government to award the contract by public bidding.
The dispositive portion of the decision reads as follows:
“WHEREFORE, after carefully considering (1) the original

complaint, (2) the first Amended Complaint, (3) the Answer of
Defendant Republic Real Estate Corporation to the First
Amended Complaint, (4) the Answer of Defendant Pasay City to
the First Amended Complaint, (5) the Second Amended

Complaint, (6) the Answer of Defendant Republic Real Estate
Corporation to the Second Amended Complaint, (7) the Answer of
Defendant Pasay City to the Second Amended Complaint, (8) the
Memorandum in Support of Preliminary Injunction of Plaintiff,
(9) the Memorandum in Support of the Opposition to the Issuance
of Preliminary Injunction of Defendant Pasay City and Defendant
Republic Real Estate Corpora
259
VOL. 299, NOVEMBER 25, 1998 259

tion, (10) the Answer in Intervention of Intervenors Bautista, et

al., (11) Plaintiff’s Opposition to Motion to Intervene, (12) the
Reply to Opposition to Motion to Intervene of Intervenors
Bautista, et al., (13) the Stipulation of Facts by all the parties,
(14) the Motion for Leave to Intervene of Intervenor Pasay Law
and Conscience Union, Inc., (15) the Opposition to Motion For
Leave to Intervene of Intervenors Bautista, et al., (16) the Reply
of Intervenor Pasay Law and Conscience Union, Inc., (17) the
Supplement to Opposition to Motion to Intervene of Defendant
Pasay City and Republic Real Estate Corporation, (18) the
Complaint in Intervention of Intervenor Pasay Law and
Conscience Union, Inc., (19) the Answer of Defendant Republic
Real Estate Corporation, (20) the Answer of Intervenor Jose L.
Bautista, et al., to Complaint in Intervention, (21) the Motion to
Dismiss of Defendant Republic Real Estate Corporation, and
Intervenors Bautista, et al., (22) the Opposition of Plaintiff to said
Motion to Dismiss, (23) the Opposition of Intervenor Pasay Law
and Conscience Union, Inc., (24) the Memorandum of the
Defendant Republic Real Estate Corporation, (25) the
Memorandum for the Intervenor Pasay Law and Conscience
Union, Inc., (26) the Manifestation of Plaintiff filed by the Office
of the Solicitor General, and all the documentary evidence by the
parties to wit: (a) Plaintiff’s Exhibits “A” to “YYY4,” (b)
Defendant Republic Real Estate Corporation’s Exhibits “1RREC”
to “40a” and (c) Intervenor Pasay Law and Conscience Union,
Inc., Exhibits “APLACU” to “CPLACU,” the Court hereby;
(1) Denies the ‘Motion to Dismiss’ filed on January 10, 1968,

by Defendant Republic Real Estate Corporation and
Intervenors Bautista, et al., as it is the finding of this
Court that Republic Act No. 5187 was not passed by
Congress to cure any defect in the Ordinance and
agreement in question and that the passage of said
Republic Act No. 5187 did not make the legal issues raised
in the pleadings ‘moot, academic and of no further validity

or effect’; and
(2) Renders judgment;
(a) Dismissing Plaintiff’s Complaint;

(b) Dismissing the Complaint In Intervention of Intervenor
Pasay Law and Conscience Union, Inc.;
(c) Enjoining Defendant Republic Real Estate Corporation
and Defendant Pasay City to have all the plans and
of Public Works, and to have all the contracts and
subcontracts for said
260

reclamation awarded by means of, and only after, public

bidding; and
(d) Lifting the preliminary injunction issued by this Court on
April 26, 1962, as soon as defendant Republic Real Estate
Corporation and Defendant Pasay City shall have
submitted the corresponding plans and specifications to
the Director of Public Works, and shall have obtained
approval thereof, and as soon as the corresponding public
that will undertake the reclamation project shall have
been effected.”
The National Government appealed to the Court of

Appeals.
Earlier, while the case was pending before the CFI, then
President Marcos issued Proclamation No. 100 on
September 10, 1966 reserving a parcel of land in the
District of Malate, City of Manila consisting of 245,690
square meters under Swo40880 for Philippine Cultural
Center site purposes. On December 15, 1967 President
Marcos issued Proclamation No. 316 revoking
Proclamation No. 100 and reserving another parcel of land
in the 9 Manila Bay area consisting of 257,898 square
meters under Swo40880, as site for a Philippine Cultural
Center. On October 5, 1972, when the case was before the
Court of Appeals, President Marcos issued Presidential
Decree (P.D.) No. 15 creating the Cultural Center of the
Philippines (CCP). In the same decree, the President

assigned and conveyed to the CCP 10
the parcel of land
reserved in Proclamation No. 316.
On January 11, 1973, President Marcos issued P.D. No.
3A amending the Public Works Act, R.A. No. 5187. P.D.
No. 3A provided that “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,” and that existing reclamation contracts
“whose validity has been accepted by the National
Government shall be taken over by the National
Government on the basis of quantum
__________________
9 Approximately 25.78 hectares.

10 Section 12, P.D. No. 15.
261
VOL. 299, NOVEMBER 25, 1998 261

meruit.” Pursuant to P.D. 3A, on November 20, 1973, the

National Government, represented by the Commissioner of
Public Highways, contracted the services of the
Construction and Development Corporation of the
Philippines (CDCP) 11to undertake the “ManilaCavite
Coastal Road Project.” CDCP immediately entered into its
obligation and continued the reclamation of the Manila Bay
area. CDCP developed the area reclaimed by RREC and
reclaimed more areas towards the south of Manila. This
gave birth to what is now known as the Cultural
12
Center
Complex and the Financial Center Complex.
On August 22, 1975, President Marcos issued P.D. No.
774 assigning and conveying additional two (2) parcels of
reclaimed land consisting of 104,717 square meters under
Swo04000078 and 400,000 square meters 13
under Swo04
00141 totalling 504,717 square meters to the Cultural
Center of the Philippines.
On February 4, 1977, President Marcos issued P.D. No.
1084 creating the Public Estates Authority (PEA). The PEA
was established for the purpose of reclaiming land,
including foreshore and submerged areas, and developing,
improving and disposing all kinds of14
real property owned
and operated by the government. On the same day,
President Marcos issued P.D. No. 1085 decreeing that the
reclaimed “foreshore and offshore areas of the Manila Bay
from the CCP, passing through Pasay City, Parañaque, Las

Pinas, Zapote, Bacoor up to Cavite City” of the Manila
Cavite Coastal Road Project and all other reclamation
contracts covering the same area be conveyed to the PEA.
The PEA was to assume the obligations of the National
Government in the reclamation project.
In 1978, RREC filed a claim with the then Ministry of
Public Highways pursuant to P.D. No. 3A. RREC proposed
to settle the case amicably by seeking from the government
pay
__________________
11 Memorandum for the DefendantAppellee Republic Real Estate

Corporation, p. 3, Court of Appeals, Rollo, p. 501.
12 Court of Appeals’ Decision, p. 11.
13 Approximately 50.47 hectares.
14 Section 4, P.D. 1084.
262

ment of P30,396,878.20 representing the 15value of the

reclamation work based on 1974 price levels. The Solicitor
General, with the assistance of the Ministry of Public
Highways, counterproposed the payment of the amount of
P10,926,071.29 based on price levels obtaining in 1962
when the reclamation work was restrained by the court.
RREC rejected the counterproposal unless an additional six
per cent (6%)
16
interest from 1962 up to the time of payment
be made. In 1983, RREC again offered to settle the case
amicably if it were to be paid in land. Nothing positive
came out of it.
On October 20, 1986, RREC filed before the Court of
Appeals a “Motion to Admit Additional Evidence” in view of
the events that transpired following the promulgation of
P.D. No. 3A. Without objection from the Solicitor General,
RREC and 17
Pasay City presented their additional
evidence.
On January 14, 1987, RREC again proposed to settle on
the basis of (1) a cash settlement of P35,455,101.31, or (2)
property settlement of three point five (3.5) hectares within
18
the CCP Complex covered by TCT No. 75676 of the CCP.
The amount of P35,455,101.31 was based on the principal
sum of P10,926,071.29 representing actual reclamation cost
at 1962 price levels plus interest at six percent (6%) and
twelve percent
19
(12%) per annum from 1962 to December
31, 1986. The proposal was 20referred to the Office of the
President for consideration. While the proposal was
pending, RREC increased
____________________
15 Comment of the Republic of the Philippines, p. 10, Rollo, p. 191.

16 Id., p. 11, Rollo, p. 191; see also Annex “1” to the Manifestation of
CCP, Court of Appeals Rollo, p. 479.
17 Manifestation and Motion of Appellant, Court of Appeals Rollo, pp.
528529.
18 This is at the intersection of Puyat Avenue (formerly Buendia) and
Roxas Boulevard.
19 Letter of counsel for RREC, V. Asuncion, to the Solicitor General,
Annex “K” to the Memorandum for Intervenor CCP, Rollo, G.R. No.
103882, pp. 880884.
20 Manifestation of Appellant, Court of Appeals Rollo, pp. 562563.
263
VOL. 299, NOVEMBER 25, 1998 263

its cash demand to P175,000,000.00 and then to

P245,000,000.00. The Office
21
of the President found the
proposals unacceptable.
The proceedings before
22
the Court of Appeals resumed on
November 14, 1990. On January 28, 1992, the Court of
Appeals affirmed with modification the decision of the trial
court. The appellate court upheld the validity of the
Reclamation Agreement between Pasay City and RREC but
dispensed with the required public bidding in the trial
court’s decision. It found that RREC reclaimed twentyone
(21) hectares of Manila Bay23 per admission of RREC’s
counsel in its appellee’s brief, and ordered the National
Government to turn over to Pasay City all spaces with no
permanent improvement on the 21hectare reclaimed area.
The Court of Appeals also sustained RREC’s irrevocable
option to purchase sixty percent (60%) of the 21hectare
land to be exercised within one (1) year from finality of the
decision. The dispositive portion of the decision reads as
follows:
“WHEREFORE, the decision appealed from is hereby AFFIRMED

with the following modifications:
1. The requirement by the trial court on public

bidding and the submission of RREC’s plans and

specifications to the Department of Public Works
and Highways in order that RREC may continue
the implementation of the reclamation work is
deleted for being moot and academic;
2. Ordering the plaintiffappellant to turn over to
Pasay City the ownership and possession over all
vacant spaces in the twentyone hectare area
already reclaimed by Pasay City and RREC at the
time it took over the same. Areas thereat over
which permanent structures have been introduced
shall, including the structures, remain in the
possession of the present possessor, subject to any
negotiation between Pasay City and the said
present possessor, as regards the continued
possession and ownership of the latter area.
___________________
21 Comment of the Republic of the Philippines, p. 12, Rollo, p. 193.

22 Court of Appeals Rollo, pp. 568, 586.
23 Court of Appeals’ Decision, pp. 4041.
264

3. Sustaining RREC’s irrevocable option to purchase

sixty (60) percent of the twentyone (21) hectares of
land already reclaimed by it, to be exercised within
one (1) year from the finality of this decision, at the
same terms and conditions embodied in the Pasay
CityRREC reclamation contract, and enjoining 24
appellee Pasay City to respect RREC’s option.”
RREC and Pasay City moved for reconsideration of the

decision mainly claiming that RREC had reclaimed a total
of fiftyfive (55), not twentyone (21), hectares of Manila
Bay.
In an Amended Decision dated April 28, 1992, the Court
of Appeals held that RREC and Pasay City actually
reclaimed fiftyfive (55) hectares of the Manila Bay before
the project was taken over by the National Government.
The appellate court declared that since RREC and Pasay
City were willing to accept only thirtyfive (35) hectares of
open land, specifically the Trade and Convention Site and
25
several vacant lots in the CCP Complex,
http://central.com.ph/sfsreader/session/00000156556fcc8e59e3b404003600fb002c009e/t/?o=False the National 66/146
25
several vacant lots in the CCP Complex, the National
Government should reconvey to Pasay City and RREC
these “open spaces” totalling nine (9) parcels of land in the
name of the CCP. These parcels of land were as follows:
“1. Lot. No. 12 with an area of 17,503 sq. m. covered by

TCT No. 18627;
2. Lot No. 3 covered by OCT No. 10251;
3. Lot No. 22 with an area of 132,924 sq. m. covered
by TCT No. 75676;
4. Lot No. 24 with an area of 10,352 sq. m. covered by
TCT No. 75678;
TCT No. 75679;
TCT No. 757684;
7. Lot No. 29 with an area of 106,067 sq. m. covered
by TCT No. 75681;
_________________
24 Court of Appeals’ Decision, pp. 4142, Rollo, pp. 162163.

25 CA Amended Decision, p. 12, Rollo, p. 176.
265
VOL. 299, NOVEMBER 25, 1998 265


OCT No. 159;
9. Lot No. 23 (portion only) with26an area of 15,925 sq.
m. covered by TCT No. 75677.
The Court of Appeals held:
“WHEREFORE, the dispositive portion of our Decision dated

January 28, 1992 is hereby AMENDED to read as follows:
1. The requirement by the trial court on public

bidding and the submission of the RREC’s plans
and specifications to the Department of Public
Works and Highways in order that RREC may
continue the implementation of the reclamation
work is deleted for being moot and academic;
2. Ordering the plaintiffappellant to turn over to
Pasay City the ownership and possession of the
aboveenumerated lots (1 to 9);

3. Sustaining RREC’s irrevocable option to purchase
sixty (60) percent of the land referred to in No. 2 of
this dispositive portion, to be exercised within one
(1) year from finality of this Decision, at the same
terms and conditions embodied in the Pasay City
RREC reclamation contract, and enjoining 27
Pasay
City to respect RREC’s irrevocable option.”
Both parties appealed to this Court.

In September 1992, the Cultural Center of the
Philippines, through the Office of the Government
Corporate Counsel, filed a petitioninintervention in G.R.
No. 103882 joining cause with the National Government. It
alleged that the Amended Decision of the Court of Appeals
reconveying to RREC the parcels of land in CCP’s name did
not bind CCP because CCP was never made a party to the
case; and that CCP was compelled to intervene to protect28
its properties which are indispensable to its existence.
_________________

28 Motion for Leave to File Attached PetitioninIntervention, Rollo,
G.R. No. 103882, pp. 322324.
266

Oral arguments were held on June 18, 1997 by the Second

Division of this Court where the parties and the CCP were
heard. CCP argued, among others, that the nine (9) lots
ordered by the Court of Appeals to be reconveyed to RREC
and Pasay City are integral to the Cultural Center
Complex and are important for the use and enjoyment of
the public. One of the lots, i.e., Lot 23 has a permanent
improvement which is the Philcite; the four vacant lots are
the parking lots of the Philcite, the Cultural Center main
building, the Folk Arts Theater (FAT), the Philippine
International Convention Center (PICC); and that three (3)
of the lots have been leased out to third parties, i.e., the El
Shaddai, the Boom na Boom and Star City. CCP claimed
that since 1986, the CCP has not been receiving financial
support from the National Government and to finance its
projects, it has been subsisting on the income derived from
29
the earnings of its real property.
29
the earnings of its real property.
On September 10, 1997, the Second Division of this
Court issued a Resolution remanding the case
30
to the Court
of Appeals, former Thirteenth Division, to receive
evidence and thereafter determine:
“(1) the actual area reclaimed by the RREC; and

(2) the areas of the Cultural Center Complex which are
“open spaces” and/or “areas reserved for certain
purposes,” determining in the process the validity of
such postulates and the 31
respective measurements of
the areas referred to.”
The Court of Appeals received evidence presented by CCP

and the Solicitor General, and the rebuttal evidence of
Pasay City and RREC. In a Commissioners’ Report dated
November 25, 1997, the Court of Appeals found that CCP
and the Solicitor General failed to present sufficient
evidence to disprove the finding in the Amended Decision
that RREC and Pasay
________________
29 TSN of June 18, 1997, pp. 51, 59, 66.

30 Justices Arturo Buena, Chairman; Minerva GonzagaReyes, Senior
Member; and Quirino AbadSantos, ponente.
31 Resolution dated September 10, 1997, p. 2.
267
VOL. 299, NOVEMBER 25, 1998 267

City were able to reclaim fiftyfive (55) hectares of Manila

Bay. The Commissioners, after ocular inspection of the
CCP Complex and consultation with the parties, submitted
a list enumerating the lots in the Complex where
permanent structures were found and those32 without
structures, otherwise referred to as “open spaces.”
In June 1998, the Court en banc decided to accept the
cases at bar in view of the constitutional issues involved.
In G.R. No. 103882, petitioner Republic of the
Philippines (National Government) and petitioner
intervenor Cultural Center of the Philippines (CCP) seek to
annul and set aside the Decision and Amended Decision of
respondent Court of Appeals.
In G.R. No. 105276, petitioners Pasay City and RREC
seek to modify the said Amended decision by ordering
respondents National Government and CCP to pay

damages and convey fiftyfive (55) instead of merely thirty
five (35) hectares of the land the former allegedly reclaimed
from Manila Bay.
The National Government claims that:
“I. THE COURT OF APPEALS ERRED IN

UPHOLDING THE VALIDITY OF PASAY CITY
ORDINANCE NO. 158 DATED APRIL 21, 1959
AND THE RECLAMATION CONTRACT
ENTERED INTO BETWEEN PASAY CITY AND
RREC;
II. THE COURT OF APPEALS ERRED IN
ORDERING THE TURN OVER TO PASAY CITY
OF THE OWNERSHIP AND POSSESSION OF
NINE33 (9) LOTS TITLED IN THE NAME OF
CCP.”
CCP claims that:
“I. THE COURT OF APPEALS ERRED IN FINDING THAT

RREC ACTUALLY RECLAIMED AN AREA OF FIFTYFIVE
HECTARES OF THE MANILA BAY.
________________
32 Id., pp. 5459.

33 G.R. No. 103882, Petition, p. 18, Rollo, p. 32.
268

II. THE HONORABLE COURT OF APPEALS ERRED IN

ORDERING THE TURNOVER TO RREC OF NINE 34
PARCELS
OF LAND REGISTERED IN THE NAME OF CCP.”
RREC and Pasay City contend that:
“I. THE COURT OF APPEALS ERRED IN NOT DECLARING

P.D. No. 3A UNCONSTITUTIONAL.
II. THE COURT OF APPEALS ERRED IN NOT AWARDING
DAMAGES IN FAVOR OF PASAY CITY AND RREC FOR THE
ILLEGAL TAKEOVER BY THE REPUBLIC OF THE
PHILIPPINES OF THE QUESTIONED35 RECLAMATION
CONTRACT AND THE RECLAIMED AREA.”
In sum, the main issues are:
1. (a) Does R.A. No. 1899, the law authorizing

chartered cities and municipalities to reclaim
foreshore lands on their borders, allow the
reclamation of submerged lands?
(b) Are the Reclamation Agreements between Pasay

City and RREC and City Ordinance Nos. 121 and
158 in accord with R.A. No. 1899?
2. (a) Is P.D. No. 3A unconstitutional?
(b) Can the President, by the issuance of P.D. No. 3A,

empower the National Government to take over
reclamation projects undertaken pursuant to R.A.
No. 1899?
3. (a) Did the Court of Appeals, in its Amended

Decision and Commissioners’ Report, correctly
determine the size of the area reclaimed by RREC
before it was enjoined and taken over by the
National Government?
FIRST ISSUE
A. R.A. 1899 authorized municipalities and chartered cities

to undertake reclamation of foreshore lands only.
_________________
34 G.R. No. 103882, PetitioninIntervention, p. 8, Rollo, p. 338.

35 G.R. No. 105276, Petition, pp. 1415, Rollo, pp. 7980.
269
VOL. 299, NOVEMBER 25, 1998 269

Republic Act No. 1899 entitled “An Act to Authorize the

Reclamation of Foreshore Lands by Chartered Cities and
Municipalities” was passed on June 22, 1957. Section 1 of
the law provides:
“Section 1. Authority is hereby granted to all municipalities and

chartered cities to undertake and carry out at their own expense
the reclamation by dredging, filling, or other means, of any

R.A. No. 1899 authorizes municipalities and chartered

cities to undertake and carry out at their own expense the
reclamation by dredging, filling or other means, of any
foreshore lands bordering their respective territories. The
law itself specifies what lands may be reclaimed and these
are foreshore lands. It did not, however, define the term
foreshore lands.
Four years before R.A. No. 1899 was passed, the term
“foreshore lands” was defined by the Court
36
of Appeals in
the case of Hacut v. Director of Lands which involved a
parcel of land along Basilan Island. The appellate court,
quoting from Bouvier’s Law Dictionary, defined foreshore
lands as:
“that part of the land immediately in front of the shore; the part
which is between high and low water marks, and alternately
covered with water and left dry by the flux and reflux of the tides.
It is indicated
37
by a middle line between the highest and lowest
tides.”
RREC and Pasay City contend that this dictionary

definition should not be read into R.A. No. 1899 because it
runs counter to the intent of the law. It is alleged that R.A.
No. 1899 was patterned after R.A. No. 161 passed by
Congress in 1947 authorizing the City of Bacolod to reclaim
foreshore
________________
36 6724R, 49 O.G. No. 5, p. 1863 [1953].

37 Id., at 1865.
270

lands within its territory. Congress authorized Bacolod

City to 38raise funds not exceeding P6 million to finance the
project. Bacolod City, according to RREC and Pasay City,
reclaimed 1,600,000 square meters which was not limited
to the foreshore as defined in Hacut but extended to lands
submerged by the Sea. The city later constructed docking
and harbor facilities on land it reclaimed.
It is our duty in construing a law 39
to determine
legislative intention from its language. The history of
39
legislative intention from its language. The history of
events transpiring during the process of enacting a law,
from its introduction in the legislature to its final
validation has generally been the first extrinsic 40
aid to
which courts turn to construe an ambiguous act. We bear
in mind, however, that extrinsic aids are resorted
41
to only if
the words of the statute are ambiguous. The clear,
unambiguous and unequivocal language of a statute
precludes any court from further construing
42
it and gives it
no discretion but to apply the law. When a statute
43
is clear,
it must be taken to mean exactly what it says.
Under settled principles of statutory construction, if a
statute is clear, plain and free from ambiguity, it must be
given its literal
44
meaning and applied
45
without attempted
interpretation. The verba legis or the plain meaning rule
rests on the
__________________
38 R.A. 1132 amending R.A. 161.

39 Village of Glencoe v. Hurford, 148 N.E. 69, 73 [1925].
40 Sutherland, Statutes and Statutory Construction, Vol. 2A, 4th ed., p.
197 [1973].
41 Id., at 182.
42 Ramos v. Court of Appeals, 108 SCRA 728 [1981]; Republic Flour
Mills, Inc. v. Commissioner of Customs, 39 SCRA 269 [1971].
43 Banawa v. Mirano, 97 SCRA 517 [1980]; Espiritu v. Cipriano, 55
SCRA 533 [1974]; see also Agpalo, Statutory Construction, pp. 9495
[1990].
44 Victoria v. Commission on Elections, 229 SCRA 269, 273 [1994];
GlobeMackay Cable and Radio Corporation v. NLRC, 206 SCRA 701, 711
[1992].
45 This is derived from the maxim index animi sermo est, i.e., speech is
the index of intention GlobeMackay Cable and Radio Corporation v.
NLRC, at 711.
271
VOL. 299, NOVEMBER 25, 1998 271

valid presumption that the words employed by the

legislature in a statute correctly express its intent or
46
will
and preclude the court from construing it differently. The
legislature is presumed to know the meaning of the words,
to have used words advisedly, and to have expressed its
intent by47
the use of such words as are found in the
statute.
“Foreshore lands” has a settled meaning. It was the

dictionary meaning of the term that the Court of Appeals
adopted in Hacut. This Court upheld this dictionary 48
meaning in 1965 in the 49
cases of Ponce v. Gomez and
Ponce v. City of Cebu. In these cases, the City of Cebu
entered into a reclamation contract with the Cebu
Development Corporation to reclaim foreshore land along
the coast of Cebu City pursuant to R.A. 1899. This Court
declared that the authority to reclaim granted to chartered
cities and municipalities under R.A. 1899 is limited to
foreshore lands only which, quoting Corpus Juris, is
“that part of the land adjacent to the sea which is alternately

covered and left dry by the ordinary flow of the tides.”
According to this Court, this is how the term “foreshore” is

“generally understood.” As a consequence, this Court
declared the reclamation contract ultra vires insofar as
sixty percent (60%) of the area sought to be reclaimed was
beyond the foreshore, and sustained as valid only forty per
cent (40%) of the area covered by the ordinance and
contract within the foreshore.
_________________
46 GlobeMackay Cable and Radio Corporation v. NLRC, supra.

47 Id., Aparri v. Court of Appeals, 127 SCRA 231, 241 [1984]; Espino v.
Cleofe, 52 SCRA 92, 98 [1973].
48 L21870, February 3, 1965.
49 L22669, February 3, 1965. Before the Ponce cases, the Supreme
Court, in an obiter dictum in Ignacio v. Director of Lands, 108 Phil. 335,
337338 [1960] declared that foreshore land is covered by the ebb and flow
of the tide, and, pursuant to the Spanish Law of Waters of 1866, formed
part of the public domain.
272

Almost twenty years thereafter, this Court again defined

foreshore50 lands in the 1984 case of Republic v. Court of
Appeals. The case involved the registration of a parcel of
land reclaimed by adjoining owners along the shores of the
Laguna de Bay. The Director of Lands opposed the
application on the ground that the subject land was
foreshore land and part of the lake bed. Although the case
did not involve the sea, this Court, again citing Bouvier’s
Law Dictionary, applied the definition of foreshore land as:
“. . . that part of [the land] which is between high and low water
and left dry by the flux and reflux of the tides x x x”
“The strip of land that lies between the high and low water
marks and 51
that is alternately wet and dry according to the flow of
the tide.”
Based on this definition, this Court found that the

reclaimed property was not part of the foreshore nor of the
lake bed and consequently allowed its registration as
private property.
Clearly, the judiciary had adopted the dictionary
meaning of “foreshore lands” years before and after the
enactment of R.A. No. 1899. Our courts applied this
meaning consistently without extending it to include
submerged areas or areas under water. We are seldom at
liberty to set aside a rule of long standing. Our decisions
form part of the law of the land. And when they interpret
certain statutes they should be taken into consideration in
construing subsequent statutes of similar nature. It is fair
to assume that the legislature, at the time of the enactment
of a statute was advised of the prior holdings of the courts,
and that it would have specifically
52
altered the courts’
interpretation if it so desired. The presumption is
__________________
50 131 SCRA 532, 539 [1984].

51 Id., at 539.
52 State v. Stueve, 150 N.W. 2d 597, 599 (Iowa 1967); see also
Sutherland, supra, at 256261.
273
VOL. 299, NOVEMBER 25, 1998 273

that the legislature was acquainted with, and had in mind,

the judicial
53
construction of the words in the prior
enactment.
It was the dictionary definition the judiciary gave to the
word “foreshore” that the Legislature recognized in
subsequent laws. In 1967, two years after this Court
promulgated the Ponce cases, Congress passed R.A. 5187,
the Public Works Act. Congress approved and appropriated
P600 million for the construction of the ManilaCavite
Coastal Road Project, to wit:
“Sec. 3(m). For the construction of a seawall and limited access

highway from the south boundary of the City of Manila to Cavite
City, to the south, and from the north boundary of the City of
Manila to the Municipality of Mariveles, Province of Bataan, to
the north, including the reclamation of foreshore and submerged
areas: provided That priority in the construction of such seawalls,
foreshore lands to the contrary notwithstanding: Provided,
finally, That the foregoing provisions and those of other laws,
executive orders, rules and regulations to the contrary
submerged lands shall be respected P600,000,000.”
By adding the term “submerged areas” in the reclamation

of Manila Bay for the Coastal Road Project, Congress
tacitly
_________________
53 Village of Glencoe v. Hurford, supra; People v. Illinois Central

Railroad Co., 314 Ill. 373, 145 N.E. 731 [1924]; see also Martin, Statutory
Construction, p. 123, citing Lenawee County Gas v. Adrian, 10 ALR 1328.
274

recognized the limited dictionary meaning of “foreshore

lands.”
This definition of foreshore lands was again recognized
in P.D. No. 3A, a legislative measure issued by the Chief
Executive in 1972. P.D. 3A authorized the reclamation of
“areas under water, whether foreshore or inland.” In 1977,
P.D. 1084 created the PEA and authorized it to “reclaim
land, including foreshore and submerged areas.”
The term “foreshore lands” clearly does not include
submerged lands. If it were otherwise, there would have

government to include “submerged areas” or “areas under
water” in subsequent laws. R.A. 5187 and P.D. 3A were
passed after this Court defined “foreshore lands” in the
Ponce cases. The adoption of an amendment throws 54
light
on the meaning of the act before it was amended. Indeed,
where the terms of a statute have acquired a settled
meaning through judicial interpretation, and the statute is
changed by amendment or reenactment, and the terms to
which judicial interpretation have been given remain in the
law thereafter, they are to be understood and interpreted
in the same sense theretofore attributed to them by the
court, unless by qualifying or explanatory addition a
contrary intention of the legislature is made clear. The
judicial construction becomes a part of the law, as it is
presumed that the legislature in passing the later law
knew the judicial construction55 which had been given to the
words of the prior enactment.
Both the judicial and legislative interpretations lead to
the inescapable conclusion that R.A. No. 1899 is limited to
the
___________________
54 Calvert v. Audio Center, Inc., supra; Federal Trade Commission v.

Raladam Co., 283 U.S. 643, 648, 75 L Ed 1324, 51 S Ct 587 [1931]; U.S. v.
Henning, 344 U.S. 66, 97 L Ed 101, 73 S Ct 114 [1952].
55 People ex rel James v. Illinois Cent. R. Co., 145 N.E. 731, 733 [1924];
Village of Glencoe, supra, at 7576 [1925]; see also Black, Handbook on the
Construction and Interpretation of Laws, p. 596 [1911].
275
VOL. 299, NOVEMBER 25, 1998 275

reclamation of foreshore lands and does not include offshore

and submerged lands.
It must also be noted that R.A. No. 1899 is a legislative
grant of the right to reclaim, the right to develop the land
reclaimed and the right to own the reclaimed land.
Assuming that the term “foreshore land” is ambiguous and
does not have a settled meaning but requires construction,
legislative grants are to be construed most favorably to the
56
sovereign and most strongly as against the grantee.
Statutory grants by the legislature, when they delegate
sovereign authority, or confer special benefits or
exemptions
57
are to be construed strictly against the
grantee. Statutes in derogation of common or general
rights are strictly construed and rigidly58 confined to cases
clearly within their scope and purpose. Grants of public
land derogate from sovereign authority 59
and are to be
construed strictly against the grantee.
RREC and Pasay City claim that reclamation under R.A.
No. 1899 cannot be limited to foreshore lands only because
this would render the law absurd and useless. They cite
Sections 1 and 4 of R.A. 1899 which provide:
“Section 1. Authority is hereby granted to all municipalities and

chartered cities to undertake and carry out at their own expense
the reclamation by dredging, filling, or other means, of any
harbor facilities as such
__________________
56 Manila Lodge No. 761 v. Court of Appeals, 73 SCRA 162, 178 [1976]; River
Dev. Corp. v. Liberty Corp., 144 A. 2d 180, 191, 51 N.J. Super. 447 [1958]; City of
Passaic v. State, 109 A. 2d 294, App. Div. [1954].
57 Black, supra, at 499.
58 Realty Investment, Inc. v. Valderama, 84 Phil. 842 [1951]; Philippine
National Bank v. Jacinto, 88 Phil. 376 [1951]; Herrerias v. Javellana, 84 Phil. 608
[1949]; see also Agpalo, supra, at 212.
59 Manila Lodge No. 761 v. Court of Appeals, supra, at 178—this involved the
reclamation of a portion of Manila Bay by the City of Manila; see also Home for
Aged Women v. Commonwealth, 202 Mass 422, 89 NE 124, 129 [1909].
276

municipalities and chartered cities may determine in consultation

with the Secretary of Finance and the Secretary of Public Works
and Communications.
xxx
“Section 4. All lands reclaimed as herein provided, except such
as may be necessary for wharves, piers and embankments, roads,
parks and other public improvements, may be sold or leased under
such rules and regulations as the municipality or chartered city
may prescribe.”
It is contended that reclamation under R.A. No. 1899 was

granted to local government units for the primary purpose
of establishing, providing, constructing, maintaining and
repairing “proper and adequate docking and harbor

facilities,” as well as the construction of “wharves, piers,
embankments, roads, parks and other public
improvements.” According to RREC and Pasay City, if what
may be reclaimed is limited to the area between the high
and lowwater marks which is some 10 to 20 meters along
the coast, then there will be practically nothing for the
construction of the facilities envisioned in the law. They
cite the Opinion of former Secretary of Justice Alejo
Mabanag to the effect that the technical definition of
foreshore land will limit the construction of wharves, piers,
docks, etc. to the area parallel to the shore which is an
absurd situation. To avoid this perceived absurdity, it is
opined that the term “foreshore” should be construed to
include offshore or submerged lands.
A close examination of the law, however, will reveal that
the purpose of the grant will not be defeated if reclamation
is limited to foreshore land. For one, the purpose of
reclamation under R.A. No. 1899 is not only to be able to
construct piers, docks, etc. Reclaimed foreshore lands can
be devoted to a lot of public and private purposes. Roads,
parks and other public improvements may be made on
reclaimed foreshore land especially if these are extensions
of already existing roads and parks adjacent to the
foreshore. Indeed, RREC sold lots to private individuals
and these lots are presumably part of the foreshore lands.
For another, it is not impossible to reclaim foreshore land,
construct wharves and piers on the reclaimed
277
VOL. 299, NOVEMBER 25, 1998 277

land and extend these structures from the reclaimed land

to the submerged areas out in the deep waters.
Undeniably, wharves and piers may be constructed on
water. Moreover, in some navigable waters of the
archipelago, the sea, river or lake bed do not gradually
descend from the shore into the deep but at some point
from the shore drop into the deep abruptly. In the Ponce
cases, this Court did not nullify the entire reclamation
agreement of the City of Cebu. It nullified only sixty
percent (60%) of the area sought to be reclaimed as beyond
the foreshore but upheld as valid forty percent (40%) of the
area. The plain meaning of a provision not contradicted by
any other provision in the same statute, cannot be regarded
as absurd. An absurdity means anything which is
irrational, unnatural or inconvenient that it cannot be

supposed to have been within the60 intention of men of
ordinary intelligence and discretion. The plain meaning of
the word must be one in which the absurdity and injustice
of applying the provision to the case would be so monstrous
that all mankind would, 61
without hesitation, unite in
rejecting the application. This situation does not obtain in
R.A. No. 1899 limiting reclamation to foreshore lands. And
even assuming that R.A. No. 1899 is defective because it
only authorized the reclamation of foreshore land, still the
remedy is to amend the law and not to torture its
contextual meaning by judicial interpretation.
RREC and Pasay City also contend that R.A. No. 161, on
which R.A. No. 1899 was patterned, granted the City of
Bacolod the authority to reclaim foreshore lands bordering
the city. It is claimed that Bacolod City actually reclaimed
areas beyond the foreshore under R.A. No. 161. Assuming
the truth of the allegation, the act of Bacolod City does not
authorize other chartered cities and municipalities under
R.A. No. 1899 to likewise reclaim beyond the foreshore.
Government cannot be estopped by the mistakes, errors or
omissions of its
_______________
60 Black, supra, at 130.

61 Sturges v. Crowninshield, 4 Wheat (17 US) 122, 200, 4 L. Ed. 529
[1819].
278

62
agents. The government’s alleged acquiescence in the
Bacolod City reclamation project does not estop it from
questioning future acts of cities and municipalities
especially after the Court of Appeals defined “foreshore
lands” years after R.A. No. 161 was enacted and before R.A.
No. 1899 became law.
The view that Hacut and the Ponce cases are
inapplicable to the case at bar is not welltaken. Hacut may
have involved the registration of a parcel of land acquired
by accretion but the issue of whether said land could be
registered depended on whether it was foreshore land. If it
was not, it could be registered; otherwise, it was public
property and could not be registered. In fine, the resolution
of the issue depended on the definition of foreshore land
and the Court of Appeals adopted its dictionary meaning.

The Ponce cases squarely dealt with the application of
R.A. No. 1899. To disregard these cases is to ignore the
doctrine of stare decisis. The Ponce cases were decided by
this Court en banc and we should not thoughtlessly
overturn its ruling, lest our decisions become as
unpredictable as lotto results.
In sum, the reclamation of lands beyond the foreshore of
Manila Bay was ultra vires and therefore null and void.
B. The Reclamation Agreement and Pasay City
Ordinance Nos. 121 and 159 are contrary to R.A. No. 1899
and are null and void.
In the instant cases, the Reclamation Agreement
between RREC and Pasay City as well as Ordinance Nos.
121 and 158 are not in accordance with the provisions of
R.A. No. 1899.
The full text of R.A. No. 1899 reads:
_________________
62 Manila Lodge No. 761 v. Court of Appeals, 73 SCRA 162, 186 [1976];
Development Bank of the Philippines v. Commission on Audit, 231 SCRA
202 [1994]; Government Service Insurance System v. Court of Appeals,
218 SCRA 233 [1993].
279
VOL. 299, NOVEMBER 25, 1998 279


any foreshore lands bordering them, and to establish, provide,
Secretary of Public Works and Communications.
SECTION 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.
SECTION 3. For the purpose of this reclamation, and of the
construction, maintenance and repair of such wharves, piers,
docking and other harbor facilities as may be provided in
accordance with Section One hereof, the municipalities and
chartered cities are hereby authorized to contract indebtedness
with any person, association, corporation, or lending institution.

Upon proper application, a municipality or chartered city may, for
the same purpose, likewise issue bonds in such amounts and
under such terms and conditions as may be fixed by the Secretary
of Finance. Such bonds shall be guaranteed by the Government of
the Philippines and their issue, servicing and liquidation shall be
undertaken by the Central Bank of the Philippines.
SECTION 4. All lands reclaimed as herein provided, except
such as may be necessary for wharves, piers and embankments,
roads, parks and other public improvements, may be sold or leased
under such rules and regulations as the municipality or chartered
city may prescribe. All proceeds derived from such sale or lease,
and all berthing and other fees and such other earnings as the
municipality or chartered city shall derive from the use of the port
facilities and improvements contemplated under this Act, shall be
credited to a special fund which shall accrue in the first instance
to the sinking fund hereafter provided. Any balance thereof in
excess of periodic sinking fund requirements shall be available for
other permanent public improvements of the municipality or
chartered city.
SECTION 5. Upon application by a municipality or chartered
city to issue bonds, the Secretary of Finance shall determine the
borrowing and paying capacity of the applicant, the amount of the
issue that may be authorized, and, in consultation with the
280

Monetary Board of the Central Bank of the Philippines, the form,

rate of interest, and redemption of said bonds. In the redemption
of these bonds the Secretary of Finance may apply the lottery
principle by which bonds, drawn by lot, may be redeemed before
maturity.
SECTION 6. All loans contracted, and bonds issued, under this
Act shall be payable, both as to the principal and interest, in
Philippine currency or in the currency in which the principal has
been originally received, which fact shall be acknowledged on the
face of the note or certificate accomplished therefor, free from any
tax or other public impost arising from currency conversion, any
existing law to the contrary notwithstanding.
SECTION 7. Bonds issued under this Act shall be exempt from
taxation, which fact shall be stated on the face of the certificates
which shall be issued in accordance with this Act.
SECTION 8. Should the receipts accruing under section four be
insufficient to service adequately bonds issued under this Act, the
sinking fund deficiency shall be made good by the general funds of
the municipality or chartered city in such manner that the annual

contribution shall be sufficient to redeem at maturity the bonds
issued under this Act. The sinking fund shall be under the
custody of the Central Bank of the Philippines which shall invest
the same in such manner as the Monetary Board shall approve.
SECTION 9. The provisions of existing law to the contrary
notwithstanding, municipalities and chartered cities are hereby
authorized and empowered to execute by administration any
reclamation work or any construction authorized in section one
hereof: Provided, That all such works shall be prosecuted on the
basis of plans and specifications approved by the Director or City
Engineer concerned who shall certify every statement of
accomplished work that the same is in accordance with the
approved plans and specifications.
SECTION 10. This Act shall take effect upon its approval.”
R.A. No. 1899 grants authority to municipalities and

chartered cities to undertake and carry out the reclamation
of lands along bodies of water in their respective territorial
jurisdiction. The grant of this power is for a public purpose,
i.e., to “establish, provide, construct, maintain and repair
proper and adequate docking and harbor facilities.” The
reclamation project must be undertaken by the
municipality or chartered
281
VOL. 299, NOVEMBER 25, 1998 281

city itself by administration in consultation with the

Secretary of Finance and the Secretary of Public Works
and Communications. To finance the project, the municipal
government is authorized to contract indebtedness with
any third person, or issue bonds under terms and
conditions to be fixed by the Secretary of Finance. All loans
contracted and bonds issued shall be paid in Philippine
currency or in the currency in which the principal loan was
originally received. All lands reclaimed shall become the
property of the municipality or chartered city. Any new
foreshore land along the reclaimed areas shall, however,
continue to be property of the National Government.
Except as may be necessary for public improvements, the
reclaimed land may be sold or leased by the municipality or
chartered city and all proceeds therefrom and such other
fees shall be credited to a special fund. The special fund
must first accrue to a sinking fund to pay off the loan
incurred from the issuance of bonds. Any excess in the
sinking fund shall be used for other permanent public

improvements of the municipality or chartered city.
The Agreement dated April 24, 1959 between Pasay City
and RREC and Ordinance Nos. 121 and 158 were made
under the authority of R.A. No. 1899. The Reclamation
Agreement substantially carries the provisions of
Ordinance Nos. 121 and 158 and reads as follows:
“AGREEMENT”
“This AGREEMENT entered into by and between PASAY CITY,

represented in this act by its duly authorized City Mayor, Pablo
Cuneta, and the REPUBLIC REAL ESTATE CORPORATION, a
corporation duly organized and existing under and by virtue of
the laws of the Philippines with principal office at the 2nd Floor,
Magsaysay Building, 520 San Luis, Ermita, Manila, represented
in this act by its duly authorized officer, Esperanza Zamora.
WITNESSETH:
WHEREAS, Republic Act No. 1899 authorizes municipalities

expense the reclamation by dredging, filling or other means of any
foreshore lands bordering them;
282

WHEREAS, Ordinance No. 121 of Pasay City, approved on May 6,

1958, declared a reclamation area aggregating to 300 hectares
more or less, of lands bordering Pasay City, beginning from the
present boundary of Pasay City and Manila, and extending to the
present boundary of Pasay City and Parañaque, and from the
present seawall of Pasay City to a distance of one kilometer
towards the Manila Bay;
WHEREAS, said Ordinance No. 121 authorized the Republic
Real Estate Corporation for and in behalf of Pasay City to reclaim
foreshore lands bordering Pasay City, for and in behalf of the said
City;
WHEREAS, after consultation with the aforementioned
corporation, it was deemed advisable to amend Ordinance No. 121
so to make the terms and conditions of the reclamation work more
beneficial to Pasay City;
WHEREAS, the Republic Real Estate Corporation has agreed
to the amendment of the aforementioned Ordinance No. 121;
WHEREAS, Amendatory Ordinance No. 158 was approved on
April 21, 1959;
WHEREAS, under said Amendatory Ordinance, the Mayor of

Pasay City is authorized, empowered and directed to sign and
execute any and all papers, documents, contract or contracts
necessary and proper to be signed and executed with the Republic
Real Estate Corporation or with any person or entity in order to
immediately put into effect the provisions of this Ordinance.
NOW THEREFORE, for and in consideration of the foregoing
premises and the hereunder stipulations, the parties have hereby
agreed and covenanted that:
1. Pasay City will borrow from the Republic Real Estate

Corporation and from nobody else, such sum or sums of
money which may be needed from time to time to undertake
the reclamation of foreshore lands bordering the City, in
accordance with plans and specifications submitted to the
Director of Public Works for approval; provided, however,
that the loan or loans shall be made by the Republic Real
Estate Corporation from time to time as disbursements
are made for the purchase of materials and supplies, the
purchase or lease of construction machinery and
equipment, the payment of salaries and wages and the
payment of other contractual obligations in any form
incurred in connection with the reclamation of foreshore
lands above mentioned.
283
VOL. 299, NOVEMBER 25, 1998 283

2. The sum or sums of money to be borrowed by Pasay City

under this Ordinance, shall bear interest at the rate of 6%
per annum computed from the date of the actual
disbursement made by Republic Real Estate Corporation
in behalf of the City.
3. The Republic Real Estate Corporation shall, as soon as
practicable, after the end of each month, submit to Pasay
City a complete and accurate statement of the amount of
disbursements and expenditures during the preceding
month.
4. The sum or sums of money loaned by the Republic Real
Estate Corporation to Pasay City, including the accrued
interests thereon, shall be payable to the said corporation
upon its written demand but not before 50 hectares of
foreshore lands shall have been reclaimed and certified by
the City Engineer and accomplished in accordance with
plans and specifications approved by the Director of Public
Works; provided, however, that further demands for

payment may be made from time to time as reclamation of
every additional 50 hectares of foreshore lands shall have
been accomplished and certified by the District Engineer,
until the entire project envisioned under this ordinance is
finally completed.
5. The Republic Real Estate Corporation, in consideration of
its agreeing to loan to the City the funds necessary for the
reclamation of the foreshore lands abovementioned is
hereby granted the irrevocable option to purchase from
Pasay City all the reclaimed lands which the City, in
accordance with law, has the power to sell but which shall
not exceed 60% of the entire area reclaimed, it being
understood that 40% of the reclaimed area shall be
reserved by the City for use as wharves, piers,
embankments, roads, gutters, sites for schoolrooms,
municipal areas, sites for civic buildings, parks, estuaries,
lagoons, and other public improvements as are indicated
in the plans submitted to the Director of Public Works;
provided, however, that the Republic Real Estate
Corporation shall have the right to select that portion of
the reclaimed land which it shall purchase; provided,
further, that the option to purchase herein granted to the
Republic Real Estate Corporation shall be exercised not
later than 12 months from the date or dates the City
Engineer shall certify that portions of the reclamation
project not less than 50 hectares in area shall have been
accomplished or completed in accordance with the plans
and specifications approved by the Director of Public
Works; and provided, furthermore, that the purchase price
to be paid by the Republic Real Estate Corporation under
its irrevocable option shall be P10.00 per square meter.
284

6. In case Pasay City has outstanding obligations in favor of

the Republic Real Estate Corporation in connection with
the loans made pursuant to this Ordinance at the time
that the Republic Real Estate Corporation exercises its
option to purchase the reclaimed land to be designated by
said corporation within the limits stated in Section 5
hereof, the amount of said obligations may be directed by
said Corporation to be applied against the purchase price
thereof and as soon as the full purchase price of the
reclaimed area or a portion thereof is paid by the Republic

Real Estate Corporation, it shall be the obligation of this
City to deliver to the said Corporation possession of the
land purchased and immediately take such step or steps
as are necessary to obtain for the Republic Real Estate
Corporation title to the property purchased in accordance
with the Land Registration Act or any other law or laws of
the Philippines, provided, however, that, at its option, the
Republic Real Estate Corporation may take such step or
steps as are necessary to obtain such title in its name in
accordance with the laws aforementioned at the expense of
the City.
7. In the event that all the saleable portion of the reclaimed
land is purchased by the Republic Real Estate Corporation
in accordance with this ordinance, and the purchase price
thereof is less than the actual outstanding loans payable
by the City to said Corporation under this ordinance, this
City shall be relieved from paying the difference and the
Republic Real Estate Corporation shall have no recourse,
absolutely and forever, against the City or any of its
properties.
8. The area of the foreshore lands to be reclaimed by Pasay
City shall be 300 hectares; provided, however, that should
it be deemed necessary to reclaim a larger area than 300
hectares, then such reclamation of the additional area
shall be undertaken under the same terms and conditions
of this ordinance, except that with regard to such
additional area the Republic Real Estate Corporation shall
continue to have irrevocable option to purchase these
additional lands at the same price fixed in Section 5 of this
Ordinance; provided, however, in such a case Republic
Real Estate Corporation shall have the option to purchase
only 50% of the additional area so reclaimed, the other
50% being reserved by the City for itself and the said 50%
shall not be held liable to the Republic Real Estate
Corporation for any indebtedness that the City may incur
in favor of the said corporation, but the Republic Real
Estate Corporation shall have the option to make or not to
make further loans to the City.
285
VOL. 299, NOVEMBER 25, 1998 285

9. The Republic Real Estate Corporation, for and in

consideration of the loan that it will extend to Pasay City,
is hereby constituted, appointed, nominated, and made as

the Attorneyinfact of the said City, with full and
irrevocable powers to do any and all things necessary and
proper in and about the premises to carry out the
reclamation of foreshore lands bordering Pasay City, to
the extent indicated in the next preceding Section,
including, but not limited to, the power to hire the services
of contractors or subcontractors, to retain the services of
any person or persons, natural or juridical, as technical
consultants and supervisors; provided, however, that any
and all contracts to be entered into by the said Attorney
infact, for and in behalf of Pasay City, in connection with
the reclamation work to be undertaken, shall be submitted
to public bidding; provided, furthermore, that in the event
that there are no bidders or that the bids submitted by the
contractors or subcontractors are not acceptable because
prejudicial to the interest of the City in the discretion of
the Attorneyinfact, then, the Attorneyinfact may itself
undertake the work to be performed so as not to delay or
hamper the reclamation.
10. The Republic Real Estate Corporation shall, upon the
signing of this agreement, immediately undertake for and
in behalf of Pasay City, all the works on the reclamation of
the whole three hundred (300) hectares, more or less,
mentioned in the second WHEREAS Clause of this
Agreement, and shall start or commence the initial work
thereon like dredging, filling and others, not later than
December 31, 1959.
11. That the Republic Real Estate Corporation shall also be
required to put a fishermen’s wharf where bancaowners
can take their bancas; and this area may be extended
beyond the one kilometer limit from the original shoreline
but not to exceed one and onehalf kilometers.
12. The Republic Real Estate Corporation shall be responsible
for all damages actually sustained by owners of private
property by virtue of the reclamation project and suits by
employees and workers arising from or in connection with
their employment or service in the reclamation project
that will be undertaken by the Republic Real Estate
Corporation, provided, however, that the Republic Real
Estate Corporation can avail itself of all defenses
pertaining to Pasay City.
13. The Republic Real Estate Corporation thereby agrees, in
connection with hiring of laborers for the construction and
reclama
286

tion hereinabove mentioned, to hire 80% of the laborers

who are bonafide residents of Pasay City, thru the City
Mayor, except those which may require highly technical
skills.
14. That to insure the compliance by the Republic Real Estate
Corporation of any and all the conditions hereinabove
mentioned, in favor of the Pasay City Government, the
Republic Real Estate Corporation shall execute a
performance bond in an amount of ONE HUNDRED
THOUSAND (P100,000.00) PESOS.
IN WITNESS WHEREOF, the parties have hereunto set
their hands in the City of Manila this 24th day of April,
1959.
REPUBLIC REAL ESTATE CORPORATION PASAY CITY

By: (Sgd.) Esperanza Zamora By: (Sgd.) Pablo Cuneta
(T.W.) ESPERANZA ZAMORA (T.W.) PABLO CUNETA
Treasurer Mayor
SIGNED IN THE PRESENCE OF:
(Sgd.) Illegible (Sgd.) Lorenzo S. Ramos”
63
x x x.”
The Reclamation Agreement does not conform with R.A.

No. 1899 for the following reasons:
(1) The Agreement does not only cover foreshore lands
but starts from the seawall on Pasay City and extends one
kilometer into the Bay. The onekilometer stretch shall
start from the Pasay CityManila border and end at the
Pasay CityParañaque border for a total of three hundred
hectares (300) with right to reclaim a larger area when
deemed necessary by RREC. It is of judicial notice that
Manila Bay does not have substantial foreshore land. The
waters of the bay wash against the seawall and 64
any
foreshore is confined to a few meters along the coast;
__________________
63 Exhibit “P,” Folder No. 1 of Plaintiff’s Exhibits, pp. 4044.

64 See Photographs of Manila Bay and the area to be reclaimed,
Exhibits “C3” to “C20”; “D” to “G1”; Folder No. 1 of Plaintiff’s Exhibits,
pp. 5 to 17.
287
VOL. 299, NOVEMBER 25, 1998 287

(2) The reclamation under R.A. No. 1899 must be

undertaken by 65the chartered city or municipality by
administration. In the Agreement, reclamation was 66
undertaken and administered by RREC, not Pasay City.
RREC and Pasay City claim that RREC was the
attorneyinfact or agent of Pasay City, therefore, in effect,
Pasay City itself administered the reclamation.
This arrangement does not conform with R.A. No. 1899.
The law expressly provides that reclamation shall be done
by the local government unit by administration.
“Administration” is synonymous with management. The
required “administration” by the municipal corporation
excludes the idea of an agency for the purpose of
performing the reclamation work. In other words, the
chartered city or municipality should itself administer or
manage the reclamation project. Where a statute directs
the performance of certain things in a particular manner or
by a particular person, it implies that
67
it shall not be done
otherwise or by a different person. Expressio unius est
exclusio alterius.
(3) Assuming that R.A. No. 1899 allows reclamation by
contract, the reclamation contract with RREC 68
was not
awarded by Pasay City through public bidding.
RREC and Pasay City argue that RREC’s authority to
reclaim did not attach ipso facto but was subject to the
condition that all reclamation contracts and subcontracts
be submitted first to public bidding. In short, RREC was
also under obligation to bid for the reclamation contract. It
is only when no bidders shall have appeared or qualified, or
when the bids
_________________
65 Sections 1 and 9.
66 Paragraph 9.
67 Martin, Statutory Construction, p. 62 [1967] citing Martin v. Com. of
Internal Revenue, C.C.A. 61 F. 2d, p. 942; Breedlove v. Gen. Baking Co.,
23 2d, pp. 428, 483; Acosta v. Flor, 5 Phil. 18 [1905].
68 Commonwealth Act No. 541 (1940) then mandated all government
branches, offices and subdivisions to undertake a public bidding in the
awarding of contracts for the construction or repair of public works.
288

submitted were “not acceptable because they are

prejudicial to the interest of the city” that RREC could
undertake the reclamation.
Paragraph 9 of the Agreement provides that any and all
contracts entered into by the attorneyinfact in connection
with the reclamation work shall be submitted to public
bidding and if there are no bidders or the bids submitted
are not acceptable because they are prejudicial to the
interest of the City “in the discretion of the attorneyin
fact,” then the attorneyinfact “may itself undertake the
work to be performed.” The Agreement does not state
whether Pasay City conducted a bidding before it awarded
the principal contract to RREC. The required public
bidding in the Agreement refers to the subcontracting of
works in the project which works may likewise be
undertaken by RREC itself.
(4) The reclamation under R.A. No. 1899 is to be
undertaken and carried out by the chartered city or
municipality itself, at its own expense and to be financed by
loans obtained from third persons or lending institutions.
Under the Agreement, Pasay City was to borrow 69
money
from RREC to finance the reclamation project. For and in
consideration of this loan, RREC was to be paid the
following: (1) the principal sum of what Pasay City
borrowed; (2) interest on the sums borrowed at the rate of 6
percent (6%) per annum computed from70the date of its
actual disbursement in behalf of the City; and (3) by the
express grant of an irrevocable
71
option to purchase 60% of
the entire lands reclaimed.
The Agreement does not mention the amount of money
Pasay City was to borrow from RREC. Strangely enough,
the Agreement provides that Pasay City was to borrow
money from RREC, and nobody else. This implies that
Pasay City was not free to contract indebtedness with any
person, association or corporation or lending institution.
Pasay City was to
_________________
69 Second Whereas Clause; Paragraph 1.

70 Section 2.
71 Section 5.
289
VOL. 299, NOVEMBER 25, 1998 289

borrow money only from RREC to finance the reclamation

which RREC itself, and not Pasay City, was to undertake.
Pasay City bound itself to pay this undetermined loan with
interest after RREC shall have reclaimed fifty (50) hectares
of the contract area. Indeed, even before RREC could
reclaim said fifty (50) hectares, it was already selling lots to
the public. In sum, RREC was to lend money to Pasay City
to finance72 the project which RREC was going to
undertake. RREC was, in effect, giving itself its own
money!
(5) Under R.A. No. 1899, the loan contracted by Pasay
City is to be payable in Philippine currency or in the
currency73 in which the principal had been originally
received.
There is nothing in the Agreement that indicates how
much Pasay City proposed to borrow from RREC and in
what currency the loan was to be given. Paragraph 1 of the
Agreement merely declares that Pasay City was to borrow
“such sum or sums of money as may be needed from time to
time x x x.”
Paragraph 2 of the Agreement states that this “debt”
was to bear interest at 6% per annum which shall be paid
to RREC upon written
74
demand after 50 hectares shall have
been reclaimed. There is no clear and categorical
statement as to the amount of the principal “loan” of Pasay
City, or whether this “loan” was delivered to and received by
Pasay City, directly or indirectly.
The Agreement, however, grants RREC, in consideration
of its loan to Pasay City, the irrevocable option to purchase
sixty percent (60%) of the land reclaimed at a fixed price of
P10.00 per square meter. The irrevocable option shall be
exercised not later than twelve (12) months from the time
the City Engineer certifies that fifty (50) hectares of the
project have been reclaimed in accordance with the plans
and specifications
_________________
72 Paragraphs 1 and 2.
73 Section 6.
74 Paragraph 4.
290

75
approved by the Director of Public Works. The Agreement
provides that in case Pasay City is unable to pay its “debt”
to RREC, the debt shall be applied to the purchase price of
the land under RREC’s irrevocable option.
In short, the irrevocable option to purchase granted by
Pasay City to RREC 76
implies that Pasay City’s “debt” shall
be payable in land.
Foreshore lands are lands of public dominion. They
belong to the State. In derogation of the State’s sovereign
power over its property, R.A. No. 1899 gave chartered cities
and municipalities the right to acquire these lands for a
stated public purpose, provided that the conditions of the
law are met. The State is possessed of the plenary power as
the persona in law to determine who shall be the favored
recipients of public lands, as well
77
as under what terms they
may be granted such privilege. It is clear from a reading of
R.A. No. 1899 that at every stage of the procedure—before,
during and after the reclamation—the State retains control
and regulation over the disposition of its own property.
Unless the land is alienated in accordance with law, 78
the
State retains its rights over its property as dominus.
The provisions of the Reclamation Agreement do not
meet the requirements of R.A. No. 1899. City Ordinance
Nos. 121 and 158 which are substantially reproduced in the
said Agreement are illegal. They purport to grant Pasay
City the authority to reclaim lands in Manila Bay for
purposes stated in the law. The Agreement, however, gives
RREC the power to reclaim and own practically almost all
of the land sought to be reclaimed. The complex provisions
of the Agreement reveals an insidious attempt to
circumvent R.A. No. 1899 for the
_________________
75 Once RREC exercises this option, it has the right to choose the
portion of the land it shall purchase and “take steps necessary to obtain
title to the lands in its name at the expense of Pasay City” (Paragraphs 5
and 6).
76 Section 5.
77 Gonzaga v. Court of Appeals, 51 SCRA 381, 388 [1973].
78 Santiago v. de los Santos, 61 SCRA 146, 152 [1974].
291
VOL. 299, NOVEMBER 25, 1998 291

benefit of RREC. The Agreement is in reality a sweetheart

contract; it is grossly disadvantageous and iniquitous to
Pasay City.
Since the Reclamation Agreement and City Ordinance
Nos. 121 and 158 are illegal, it follows that the reclamation
project by RREC and Pasay City is null and void and the
State retains ownership over the land reclaimed.
SECOND ISSUE
Assuming, nevertheless, that the Reclamation Agreement

is valid, the take over of the reclamation project by the
National Government was well within the sovereign power
of the State.
The National Government, by virtue of P.D. 3A, took
over the reclamation project of RREC and Pasay City. P.D.
No. 3A provides that the reclamation of areas under water,
whether foreshore or inland, shall be limited to the
National Government or any person authorized thereby.
All reclamations made by entities other than the National
Government are deemed forfeited to the State without need
of judicial action. All ongoing reclamation projects shall
likewise be taken over by the National Government which
shall, however, compensate the parties to the reclamation
projects quantum meruit.
In the cases at bar, Pasay City and RREC claim that
P.D. No. 3A is unconstitutional because it is a legislative
measure issued by the Chief Executive; that it impaired the
obligation of contracts and amounts to a deprivation of
property without just compensation and due process of law.
These submissions lack merit.
A. Reclamation, which includes ownership of the land

re
claimed is essentially a function of the sovereign.
All lands and waters of the public domain are owned by the
state. This principle is derived from the jura regalia or
Regalian doctrine which is the prerogative or proprietary
right
292

79
belonging to the sovereign.
80
The
81
doctrine was adopted and
82
enshrined in the 1935, 1973 and 1987 Constitutions.
The State is, by the Constitution, the owner of all lands

belonging to the public domain, the waters, minerals,
fisheries, forests and all natural resources therein.
Spain, in its earlier decrees, embodied the universal83
feudal theory that all lands were held from the Crown. In
one of the royal decrees incorporated in the Recopilacion de
Leyes de las Indias, the Spaniards declared that:
“We, having acquired full sovereignty over the Indies, and all
lands, territories, and possessions not heretofore ceded away by
our royal predecessors, or by us, or in our name, still pertaining to
the royal crown and patrimony, it is our will that all lands which
are held without proper and true deeds of grant be restored to us
according as they belong to us, in order that after reserving before
all what to us or to our viceroys, audiencias, and governors may
seem
_________________
79 Pinero v. Director of Lands, 57 SCRA 386, 391 [1974].

80 Lee Hong Hok v. David, 48 SCRA 372, 377 [1972]; Krivenko v. Register of
Deeds, 79 Phil. 461, 468 [1947]. Section 1, Article XIII of the 1935 Constitution
reads:
“Sec. 1. All agricultural, timber, and mineral lands of the public domain,
waters, minerals, coal, petroleum, and other mineral oils, all forces of potential
energy and other natural resources belong to the State x x x.”
81 Section 8, Article XIV of the 1973 Constitution reads:
“Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and
other mineral oils, all forces of potential energy, fisheries, wildlife, and other
natural resources of the Philippines belong to the State. x x x.”
82 Section 2, Article XII of the 1987 Constitution reads:
“Sec. 2. 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. x x
x.”
83 Lee Hong Hok v. David, supra, at 377; Carino v. Insular Government, 212
U.S. 449, 457 [1909]; Valenton v. Murciano, 3 Phil. 537, 543 [1904].
293
VOL. 299, NOVEMBER 25, 1998 293

necessary for public squares, ways, pastures, and commons in

those places which are peopled, taking into consideration not only
their present condition, but also their future and their probable
increase, and after distributing to the natives what may be
necessary for tillage and pasturage, confirming them in what they
now have and giving them more if necessary, all the rest of said
lands may remain

84
free and unencumbered for us to dispose of as
we may wish.”
This decree dictated that all those lands which had not
been granted by Philip, or in his name, or 85
by the kings who
preceded him, belonged to the Crown. The king, as the
representative of the people, assumed, asserted, and had
title to all the lands in the Philippines, except86
as far as he
saw fit to permit private titles to be acquired.
The Regalian doctrine was also recognized in the
common law 87of England and was introduced into the
United States. The English possessions
88
in America were
claimed by right of discovery. Having been discovered by
subjects of the King of England, and taken possession of in
his name, by his authority or with his assent, they were
held by the King as the representative of and in trust for
the nation; and all vacant lands, and 89
the exclusive power
granted them, were vested in him. The Crown, according
to the principles of the British90law, was the proper organ to
dispose of the public domains.
The Crown’s title to the land extended to all lands
covered by navigable waters in which the tide ebbs and
flows. By the common law, both the title and the dominion
of the sea, and of the rivers and arms of the sea, where the
tide ebbs and flows,
_________________
84 Lee Hong Hok v. David, supra, at 378; Valenton v. Murciano, supra,

at 542543.
85 Valenton v. Murciano, supra, at 543.
86 Carino v. Insular Government, supra, at 457.
87 Shively v. Bowlby, 152 U.S. 331, 337 [1893].
88 Martin v. Waddell, 10 L. ed. 997, 1012, 41 U.S. 16 Pet. 367 [1842].
89 Shively v. Bowlby, supra, at 337.
90 Martin v. Waddell, supra, at 1012.
294

and of all lands below highwater mark, within the 91

jurisdiction of the Crown of England, were in the King.
Such waters and the lands they covered, either at all times,
or when the tide was in, were incapable of ordinary and
private occupation, cultivation and improvement; and their
natural and primary uses were public in their nature, for
highways of navigation and commerce, domestic and

foreign, and for the purpose of fishing by all the King’s
subjects. Therefore, the title, jus privatum, in such lands,
as of waste and unoccupied lands, belonged to the King as
the sovereign; and the dominion thereof, jus publicum, was
vested in him as 92the representative of the nation and for
the public benefit.
Similarly in the Philippines, the Spanish Law of Waters
of 1866 provided that the coasts or maritime frontiers of
Spanish territory with their coves, inlets, creeks,
roadsteads, bays and ports were part of the national
dominion and open to public use. They belonged to the
sovereign, 93 now the state, and to no one person in
particular. These bodies of water are within the land
boundaries of the state or are closely linked to its land
domain that they are treated as internal waters in
International Law. Internal waters have94 been considered
as legally equivalent to the national land.
__________________
91 Shively v. Bowlby, supra, at 336; Stein v. Brown Properties, Inc., 104

So. 2d 495, 499 [1958]; Money v. Wood, 118 So. 357, 359, 153 Miss. 17
[1928].
92 Id., Id.
93 Ker & Co. v. Couden, 223 U.S. 268, 56 L. ed. 432, 435 [1912].
94 Coquia and DefensorSantiago, Public International Law, p. 357
[1993]; Salonga and Yap, Public International Law, p. 79 [1992]. Article 2
of the 1982 UN Convention of the Law of the Sea provides:
“1. The sovereignty of a coastal State extends, beyond its land territory
and internal waters and, in the case of an archipelagic State, its
archipelagic waters, to an adjacent belt of the sea, described as the
territorial sea.
2. This sovereignty extends to the air space over the territorial sea as
well as to its bed and subsoil.
x x x.”
295
VOL. 299, NOVEMBER 25, 1998 295

Articles 1 and 18 of the Spanish Law of Waters of 1866

provide:
“Article 1. The following are part of the national domain open to

public use:
The coasts or maritime frontiers of Spanish

1. territory, with their coves, inlets, creeks,
roadsteads, bays and ports.
2. The coast sea, that is, the maritime zone encircling
the coasts, to the full width recognized by
international law. The State provides for and
regulates the police supervision and uses of this
zone, as well as the right of refuge and immunity
therein, in accordance with law and international
treaties.
3. The Shores.—By the shore is understood that space
covered and uncovered by the movement of the tide.
Its interior or terrestrial limit is the line reached by
the highest equinoctial tides. Where the tides are
not appreciable, the shore begins on the land side at
the line reached by the sea during ordinary storms
or tempests.”
xxx
Article 18. In no place on the coasts, shores, ports, or entrances
of rivers, nor on the islands referred to in Art. 3, shall new works
of any kind whatever be constructed, nor any building be erected,
without proper permission, in accordance with the provisions of
this law and with those of the law regarding ports.
x x x.”
95
The coast sea and its shores with its coves, inlets, creeks,
roadsteads, ports, bays, etc. are part of the national
domain and are open to public use. They have remained
property of public ownership devoted to public use under
the Civil Code of 188996 and property of public dominion
under the Civil
_________________
95 The shores include the foreshore. As defined in Hacut, the foreshore

is that part of the land immediately in front of the shore. It is that part
between the highand lowwater marks.
96 Insular Government v. Aldecoa, 19 Phil. 505, 514 [1911]; Manila
Lodge No. 761 v. Court of Appeals, 73 SCRA 162, 181 [1976].
Article 339 of the Civil Code of Spain reads:
“Art. 339. Property of public ownership is
296

97
Code of 1950. Property of the public domain
http://central.com.ph/sfsreader/session/00000156556fcc8e59e3b404003600fb002c009e/t/?o=False is held by the 98/146
97
Code of 1950. Property of the public domain is held by the
State in the exercise of its sovereignty for the public
interest. The State takes care of it, preserves and regulates
it whenever it must be brought into use. 98
It is part of the
patrimony under safeguard of the State.
Since the sea and its shores belong to the national
domain, Article 18 of the Spanish Law of Waters of 1866 as
aforequoted strictly prohibited the construction of any
works or the erection of any building at any place on the
coasts and shores,
99
without proper authorization from the
government. The foreshore lands and those under water
were controlled by the government as agent of100the State and
were held in trust for the benefit of the public.
The State, as sovereign owner of the sea and its shores,
recognized the right to reclaim the land it owns. Article 5 of
the Spanish Law of Waters, provides:
“Article 5. 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.”
____________________
1. 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. x x x.”
97 Article 420 of the Civil Code of the Philippines reads: “Art. 420. The
following are property of public dominion:
1. Those intended for public use, such as roads, canals, rivers, torrents,
ports and bridges constructed by the State, banks, shores, roadsteads, and
others of similar character.
x x x.”
98 Kock Wing, 54 Phil. 439, 444 [1930] citing Manresa’s Commentaries,
Vol. 3, p. 68, 5th ed.
99 Insular Government v. Aldecoa & Co., 19 Phil. 505, 513 [1911].
100 Kock Wing v. Phil. Railway Co., supra, at 444.
297
VOL. 299, NOVEMBER 25, 1998 297

This provision recognized the power of the State and the

provinces, pueblos and private persons, with proper
permission, to reclaim lands from the sea. The grant to
provinces, pueblos or private persons to undertake
reclamation of lands of the sea, however, did not divest the

State of its ownership and control over these lands. The
State remained owner of the lands. Ownership of land
reclaimed from the sea and its shores could be given the
adjoining owner or of101the person reclaiming, pursuant only
to an express grant. There must be a formal declaration
through the executive or legislative branches of
government that land reclaimed from the sea was no longer
needed for coast guard service, for public use or for special
industries in order that such land could be considered as
having ceased to be part of the public domain and102was now
available for private appropriation or ownership. Absent
a valid grant and declaration from the State, any land
reclaimed from the sea, whether foreshore or under water,
remained property of the State.
The public nature of reclaimed land was affirmed in
1907 when the Philippine Commission passed Act 1654, “An
Act to Provide for the Leasing of Reclaimed Land for
Commercial Purposes, for the Leasing of the Foreshore and
Lands Under Water, and to Regulate the Construction of
Bridges over Navigable Waterways.” Act 1654 affirmed the
power of the National Government, as agent of the State, to
reclaim the
__________________
101 Private lands near Manila Bay which disappeared due to natural
erosion because of the ebb and flow of the tide and which were later
reclaimed by the government by filling in belongs to the public domain for
public use (Government of the P.I. v. Cabangis, 53 Phil. 112 [1929]. Land
reclaimed from the sea as a result of the construction by the government
of a breakwater belongs to the government (Lamprea v. Director of Lands,
67 Phil. 388 [1939]). Reclaimed land covered and uncovered by the
movement of the tide is a shore which is property of the public domain
(Francisco v. Government of P.I., 28 Phil. 505, 507 [1914]).
102 Ignacio v. Dir. of Lands, 108 Phil. 335, 339 [1960]; Joven v. Director
of Lands, 93 Phil. 134, 136137 [1953]; See Aquino, The Civil Code of the
Philippines, Vol. 1, p. 449 [1990].
298

foreshore and lands under water. The law, in pertinent

part, reads:
“Section 1. The control and disposition of the foreshore as defined
in existing law, and the title to all Government or public lands

made or reclaimed by the Government by dredging or filling or
otherwise throughout the Philippine Islands, shall be retained by
the Government without prejudice to vested rights and without
prejudice to rights conceded to the City of Manila in the Luneta
Extension.”
Section 2. (a) The Secretary of the Interior shall cause all
Government or public lands made or reclaimed by the
Government by dredging or filling or otherwise to be divided into
lots or blocks, with the necessary streets and alleyways located
thereon, and shall cause plats and plans of such surveys to be
prepared and filed in the Bureau of Lands.
103
(b) Upon the completion of such plats and plans the Governor
General shall give notice to the public that such parts of the lands
so made or reclaimed as are not needed for public purposes will be
leased for commercial and business purposes, and upon receipt of
an application or applications for a lease or leases, the
GovernorGeneral shall designate and specify certain portions of
the land for such use, and shall give notice by public
advertisement that such applications have been made and that
the Government will lease lots or blocks, to be specified in said
advertisement, for commercial and business purposes, such leases
to run for a period of ninetynine years x x x.”
xxx
Section 5. Upon receipt of an application or applications for the
lease of any portion of the foreshore or lands under water in the
Philippine Islands for the purpose of erecting and maintaining
wharves, docks, piers, marine railways, or other appropriate
structures, and upon the recommendation of the Secretary of
Commerce and Police, the GovernorGeneral may designate and
specify such portions of the foreshore lands or lands under water
for such use, and shall give notice by public advertisement that
such applications have been made and that the Government will
lease such portion of the foreshore, to be specified in said
advertisement, for wharves,
__________________
103 “plats”—as stated in the law.
299
VOL. 299, NOVEMBER 25, 1998 299

docks, piers, marine railways, or other appropriate structures for

a term not to exceed ninetynine years, with the right on the part
of the lessee to erect and maintain such wharves, docks, piers,
marine railways, or other appropriate structures, or to make such

other beneficial use of such leased foreshore or lands under water
as may be specified in the lease, subject, however, to all vested
rights or easements of owners of lands adjacent to such foreshore
or lands under
104
water.
x x x.”
In 1919, the Philippine Legislature passed Act 2874, the

Public Land Act. This law declared which lands of the
public domain may be disposed to the public. Lands
reclaimed by the government and the foreshore could only
be disposed of by lease. Title III of the law was devoted to
lands for commercial or industrial purposes and for this
purpose classified disposable lands as follows:
“Sec. 56. The lands disposable under this title shall be classified as
follows:
(a) Lands reclaimed by the Government by dredging, filling, or

other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon
the shores or banks of navigable lakes or rivers;
_________________
104 Act 1654 expressly empowered the National Government to reclaim

foreshore and submerged lands within the Philippine archipelago and
retain ownership of the land reclaimed. The National Government was to
reclaim the land, bear the cost of reclamation and undertake the
construction of streets, alleyways and curbs on the reclaimed land. The
streets, alleyways and curbs were to be maintained, however, by the
municipal government in which the reclaimed land was situated, who was
likewise mandated to shoulder the cost of the sewers and water mains.
The municipal government was encouraged to construct on the reclaimed
land wharves, piers, docks and other structures for shipping in accordance
with plans and specifications given by the National Government (Sections
3 and 8).
300

(d) Lands not included in any of the foregoing classes.
xxx
Sec. 58. The lands comprised in classes (a), (b), and (c) of
section fiftysix shall be disposed of to private parties by lease only

and not otherwise, as soon as the GovernorGeneral, upon
recommendation by the Secretary of Agriculture and Natural
Resources, shall declare that the same are not necessary for the
public service and are open to disposition under this chapter. The
lands included in class (d) may be disposed of by sale or lease
under the provisions of this Act.”
The provisions of Act 2874 as amended, specifically Title

III thereof, were substantially reenacted
105
in Commonwealth
Act 141, the Public Land Act of 1936. Commonwealth Act
No. 141 has remained in effect at present.
Foreshore lands
106
are lands of public dominion intended
for public use. So too are lands reclaimed by the
government by dredging, filling, or other means. Act 1654
mandated that the control and disposition of the foreshore
and lands under water remained in the national
government. Said law allowed only the “leasing” of
reclaimed land. The Public Land Acts of 1919 and 1936
also declared that the foreshore and lands reclaimed by the
government were to be “disposed of to private parties by
lease only and not otherwise.” Before leasing, however, the
Governor General, upon recommendation of the Secretary
of Agriculture and Natural Resources, had first to
determine that the land reclaimed was not necessary for
the public service. This requisite must have been met
before the land could be disposed of. But even then, the
foreshore and lands under water were not to be alienated
and sold to private parties. The disposition of the reclaimed
land was only by lease. The land remained property of the
State.
___________________
C.A. No. 141 was a reenactment of Act No. 2874 with

105
slight modifications to conform with the nationalistic
provisions of the 1935 Constitution (Noblejas, Land Titles
and Deeds, p. 250 [1961]).
106 Article 420, Civil Code.
301
VOL. 299, NOVEMBER 25, 1998 301

Reclamation refers to the filling of submerged

107
land by
deliberate act and reclaiming title thereto. The right to
reclaim is a function of the sovereign who owns title to all
the lands and waters of the public domain. The authority to

reclaim is not a right or privilege accorded any person and
the land reclaimed does not belong to whosoever
undertakes its reclamation. Even private owners of lands
adjoining bodies of water, especially the sea and navigable
waters, cannot motu proprio undertake reclamation of
shores and submerged lands and claim title thereto. Unless
the State, through Congress, grants this right, it is only the
National Government that can undertake 108
reclamation
work and assert title to reclaimed land.
B. The State, in derogation of its sovereign power,

delegated
to municipalities and chartered cities the right to
reclaim
foreshore lands on their borders with the passage of
R.A.
No. 1899.
After the war, the State delegated to specific municipalities

the right to reclaim land. The Philippine Legislature
passed laws granting municipalities the right to reclaim
foreshore 109or marshy lands within their respective
territories. The rule
__________________
107 Peña, Registration of Land Titles and Deeds, p. 19 [1994]; Noblejas,

Registration of Land Titles and Deeds, p. 20 [1986].
108 Peña, supra, at 19; Noblejas, supra, at 20.
“In some states [of the United States], there exists some sort of an
express or implied grant to the effect that the owners of the adjacent
upland may fill the adjacent land under water, subject only to the
paramount power of the government to establish harbor lines, and as soon
as this is completed the reclaimed land becomes an integral part of the
adjoining land so that the owner has full title to one as much as the
other.”
“In the Philippines, there exists no such grant, express or implied, to
private landowners, and it is only the government that can assert title to
reclaimed land.” (Peña, supra)
109 R.A. 161, Bacolod City; R.A. 287, Catbalogan, Samar; R.A. 1099,
Romblon, etc.
302

remained, nonetheless, that no person, public or private,

could undertake reclamation work and own the land they
reclaimed without a specific grant from Congress. It was
only with the passage of R.A. 1899 in 1957 that Congress
granted to chartered cities and municipalities a general
authority to reclaim110 foreshore lands bordering their
respective territories. The law was in keeping with the
trend of giving more autonomy to local governments.
It is beyond debate that the grant of the right to reclaim
and assert title to the land reclaimed is a public grant and
must be subject to strict scrutiny. We have announced this 111
principle in Manila Lodge No. 761 v. Court of Appeals
where in 1905, the Philippine Commission enacted Act No.
1360 authorizing the City of Manila to reclaim a portion of
the Luneta to form part of the Luneta Extension. The Act
provided that the reclaimed area “shall be the property of
the City of Manila.” This Court held that the grant made
by Act No. 1360 was a grant of a public nature, the same
having been made to a local political subdivision. It was a
gratuitous donation of public resources
112
which resulted in
unfair advantage to the grantee. The exercise of the right
by the grantee must therefore be in accordance with, and is
limited by, the conditions expressly and impliedly imposed
by the State, the grantor.
It ought to be selfevident that being a public grant, the
right to reclaim and own public land granted by the
sovereign to municipal corporations may be revoked by the
sovereign itself.
C. The State, through P.D. No. 3A, validly revested in

the
National Government the right to reclaim.
P.D. No. 3A revoked the power delegated to municipalities

and chartered cities to reclaim foreshore lands in their
territories. It returned to the National Government the
power to
________________
110 Explanatory Note to H.B. 3630 (R.A. 1899).

111 73 SCRA 162, 178 [1976].
112 Id., at 178.
303
VOL. 299, NOVEMBER 25, 1998 303

reclaim “areas under water, whether foreshore or inland.”

In effect, it repealed R.A. No. 1899.
Presidential Decree No. 3A was promulgated on
January 11, 1973 and reads as follows:
“AMENDING SECTION 7 OF PRESIDENTIAL DECREE NO. 3,

DATED SEPTEMBER 26, 1972, BY PROVIDING FOR THE
EXCLUSIVE PROSECUTION BY ADMINISTRATION OR BY
CONTRACT OF RECLAMATION PROJECTS.
I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers in me vested by the Constitution as
CommanderinChief of all the Armed Forces of the Philippines,
and pursuant to Proclamation No. 1081, dated September 21,
1972 and General Order No. 1 dated September 22, 1972 as
amended, do hereby order and decree:
SECTION 1. Section 7 of Presidential Decree No. 3 dated
September 26, 1972, is hereby amended by the addition of the
following paragraphs:
“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.
“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.”
SECTION 2. This Decree shall take effect immediately.
x x x.”
P.D. No. 3A revested in the National Government the

power to undertake reclamation projects. P.D. No. 3A was
an amendment to P.D. No. 3 which reads as follows:
304

“PRESIDENTIAL DECREE NO. 3
“APPROPRIATING FUNDS FOR PUBLIC WORKS INVOLVING

REHABILITATION AND CAPITAL DEVELOPMENT,
SYNCHRONIZING THE SAME WITH PREVIOUS PUBLIC
WORKS APPROPRIATIONS”
WHEREAS, the rehabilitation and reconstruction of damaged

infrastructure facilities due to the recent calamities is a
primordial duty of the Government, to bring about normality in
the economic and social activities of the people;
WHEREAS, in addition to rehabilitation and reconstruction,
development efforts must be carried on with even greater effect,
to avoid economic stagnation;
WHEREAS, the implementation of the rehabilitation and
reconstruction and the undertaking of other development projects
would require the availment of financial assistance proffered by
international lending institutions and other governments;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President
of the Philippines, by virtue of the powers vested in me by the
Constitution as CommanderinChief of all the Armed Forces of
the Philippines, and pursuant to Proclamation No. 1081 dated
September 22, 1972, as amended, and for sustained development
of the economy, do hereby issue this decree.
For this purpose, the attached appropriations measure is
hereby adopted and decreed as part of the law of the land.
Done in the City of Manila, this 26th day of September, in the
year of our Lord, nineteen hundred and seventytwo.”
P.D. No. 3 appropriated funds for public works for the

“rehabilitation and reconstruction of damaged
infrastructure facilities due to recent calamities,” and at
the same time, carry “development efforts with greater
effect to avoid economic stagnation.” In other words, P.D.
No. 3 was aimed at reconstructing damaged infrastructure
facilities and developing other public works in line with the
national infrastructure and development plan. P.D. No. 3A
amended P.D. No. 3 by declaring reclamation as a national
infrastructure project.
305
VOL. 299, NOVEMBER 25, 1998 305

D. No right to irrepealable laws—R.A. No. 1899 validly

re
pealed.
P.D. No. 3A is an amendatory law and was impelled by a

public purpose, i.e., the necessity to provide for a
centralized mechanism in the implementation of public
works projects. The National Government obtained loans
from international lending institutions and foreign
governments to finance vital infrastructure projects. To
ensure the priority and completion of these projects, the

National Government saw it fit to integrate all reclamation
projects113and take over the same in sync with the national
agenda.
It is thus clear that the National Government did not
revest to itself the right to reclaim foreshore and
submerged lands for a frivolous purpose. It used the
reclaimed land to construct a cultural and financial center
complex in these areas and dedicated the entire land
reclaimed and to be reclaimed to this noble vision. The
Cultural Center Complex covers an area of eightyseven
point two (87.2) hectares and is composed of lots where
several buildings now stand. The Complex principally has
the main CCP building which houses the main theater,
smaller theaters, an art gallery and library under one
structure. Behind the main building are the Folk Arts
Theater, the Tahanang Pilipino, the Philcite, Philippine
International Convention Center, the Philippine Plaza
Hotel, etc. South of the CCP Complex is the Financial
Center Com
________________
113 The Solicitor General, in its Appellant’s Brief before the Court of
Appeals, apprised the said court that the municipal councils of Las Piñas
and Parañaque, Rizal, and the municipal councils of Bacoor, Kawit and
Noveleta, Cavite issued ordinances authorizing RREC to undertake the
reclamation of Manila Bay along their coastal borders (Brief for Plaintiff
Appellant, Annex “A” to the Petition for Review of the Republic of the
Philippines, pp. 4243, Rollo, G.R. No. 103882, pp. 102103). Mr. Lauro
Marquez, a member of the Board of Directors of RREC, declared before the
CA Commissioners that all the municipalities adjacent to Manila Bay
from Pasay City all the way to Noveleta, Cavite entered into reclamation
contracts with RREC pursuant to R.A. No. 1899 (TSN of Oct. 6, 1997, p.
32).
306

plex. It is composed of lots for the Central Bank of the

Philippines, the Government Service Insurance System,
the Social Security System, the Philippine National
114
Bank
and the Development Bank of the Philippines. 115
The CCP is a “nonmunicipal public corporation”
established for the primary purpose of propagating arts
and culture in the Philippines. It was created to awaken
the consciousness of the Filipino people to their artistic and

cultural heritage, and encourage them to assist in its 116
preservation, promotion, enhancement and development.
The CCP Complex was established as a worthy venue for
Filipino artists to express their art and for the people to
appreciate art and the Filipino culture. In furtherance of
this objective, the CCP, through its Board of Trustees, was
likewise mandated to come up with programs and projects
that cultivate and enhance public interest in, and
appreciation of Philippine art; discover and develop talents
connected with Philippine cultural pursuits; create
opportunities for individual and national selfexpression in
cultural affairs; and encourage the organization of cultural
117
groups and the staging of cultural exhibitions. The
properties of the CCP, both real and personal, are
administered and held in trust by the Board of Trustees
118
of
the CCP for the benefit of the Filipino people. Income
derived from its projects and operations are invested by the
Board of Trustees in a Cultural Development
119
Fund set up
to attain the objectives of the CCP.
The site of the CCP was chosen for historical reasons.
Much of our history and culture flourished along the shores
of Manila Bay. This is where the early Filipinos under
Rajah Lakandula made their settlement. This is also where
the
_________________
114 See Memorandum for DefendantAppellee RREC, pp. 46, CA Rollo,

pp. 502504.
115 P.D. 15, Second Whereas Clause.
116 Id., Sec. 2(b).
117 Id., Section 2(c) to (e).
118 Id., Sections 3 and 6.
119 Id., Section 3.
307
VOL. 299, NOVEMBER 25, 1998 307

Spaniards and their armadas landed to establish

Intramuros. It was also in Manila Bay where the Spanish
American battle was fought, and in nearby Corregidor, 120
the
Filipinos and Americans heroically fought the Japanese.
Unlike other decrees of President Marcos, P.D.121No. 3A
was not revoked by President Corazon C. Aquino. Today,
the reclamation of foreshore and submerged lands within
the national territory continues to be a function of the

National Government, through the PEA. The PEA was
created by P.D. No. 1084 in 1977 and until now, it still
exists under the same charter. It discharges the same
functions in its charter and continues to coordinate and
exercise jurisdiction over all reclamation projects
throughout
122
the country in accordance with the national
agenda.
E. P.D. No. 3A does not violate the equal protection

clause.
P.D. No. 3A does not violate the equal protection clause of
the Constitution. Equal protection simply requires that all
persons or things similarly situated should be treated
alike, both
123
as to rights conferred and responsibilities
imposed. The
_________________
120 See Imelda Marcos, “Sanctuary of the Filipino Soul,” Remarks

delivered at the formal dedication of the Cultural Center of the
Philippines, Sept. 10, 1969.
121 Former President Aquino issued Executive Orders revoking several
P.D.’s of former President Marcos. Examples of the P.D.’s revoked are:
P.D. 33 (E.O. 29); P.D.’s 1404, 1836, 1977 and 1877A (E.O. 59); P.D. 90
and LOI 50 (E.O. 65); P.D.’s 1727A and 1804 (E.O. 99); P.D.’s 1835 and
1975 (E.O. 167), etc.
122 Engr. Manuel Berina, Jr., Deputy General Manager of the PEA,
testified before the CA Commissioners that the PEA exercises jurisdiction
over all reclamation projects in the country. Government agencies whose
charters allow reclamation work, like the Phil. Ports Authority for port
related facilities, may undertake reclamation but must coordinate with
the PEA (TSN of October 3, 1997, p. 30). To date, the PEA has undertaken
reclamation projects in Cebu, Laguna de Bay, Cavite, Smokey Mountain,
etc. (Id., at 249250).
123 Lao Ichong v. Hernandez, 101 Phil. 1155, 1164 [1957].
308

equal protection clause is not infringed by legislation which

applies only to those persons falling within a specified
class, if it applies alike to all persons within such class.
P.D. 3A does not discriminate against Pasay City and
RREC. The law is couched in general terms and applies to
all persons, natural or juridical, under the same class. It

addresses all “contracts for reclamation x x x legally
existing or whose validity has been accepted by the
National Government x x x.” It provides for the takeover of
all reclamation projects and applies to all reclamation
contracts regardless of the parties and the size or location
of the area being reclaimed.
F. P.D. No. 3A is not an undue delegation of

legislative power.
Nor is the law an undue delegation of legislative power.

Neither is it a usurpation of legislative power. P.D. Nos. 3
and 3A were promulgated after then President 124 Marcos
declared martial law on September 21, 1972. The
President invoked his emergency powers under
Proclamation No. 1081 125
and General Order No. 1 in
enacting both P.D.’s. As CommanderinChief of the
Armed Forces, the power of then President Marcos to
promulgate proclamations, orders and decrees essential to
the security of the Republic, and the power to institute
political and economic reforms to meet the impact of
worldwide recession, inflation and economic crisis was
recognized126 by this Court in Aquino, Jr. v. Commission on
Elections. This Court upheld the legislative power of the
President as flowing from his martial law powers and the 127
transitory provisions of the 1973 Constitution.
Noteworthy, the Freedom
___________________
124 P.D.’s Nos. 3 and 3A were published in the Official Gazette. P.D. 3
was published in 68 O.G. No. 40, 7800, Oct. 2, 1972. P.D. 3A was
published in 69 O.G. No. 3, 4121 Supp., Jan. 15, 1973.
125 First Paragraph of P.D. 3.
126 62 SCRA 275, 298300 [1975].
127 Article XVII, Section 3(2) of the 1973 Constitution provides:
309
VOL. 299, NOVEMBER 25, 1998 309

Constitution also granted former President Aquino

legislative power to cope with the emergency posed by the
transition from former President Marcos’ government.
G. P.D. No. 3A does not authorize taking of property
without just compensation.
No property can be taken without just compensation. P.D.

No. 3A recognized the existence of “reclamation contracts
still legally existing or those whose validity has been
accepted by the National Government” and provided
compensation on the basis of quantum meruit.
Quantum meruit means that payment shall be made in
an action for work 128and labor as much as the plaintiff
reasonably deserves. P.D. No. 3A did not declare a fixed
nonnegotiable price for compensation, in disregard of due
process. It set compensation at the common law concept of
quantum meruit, “as much as the person deserves” which is
a fair and equitable consideration. Moreover, compensation
is not limited to reclamation contracts that are valid under
the law. Compensation also extends to those contracts
“whose validity has been accepted by the National
Government.”
H. RREC cannot invoke P.D. No. 3A and later attack

it as unconstitutional.
RREC and Pasay City did not challenge the

constitutionality of P.D. No. 3A before the Court of
Appeals. For this Court
_________________
“Sec. 3 (2). All proclamations, orders, decrees, instructions, and acts

promulgated, issued, or done by the incumbent President shall be part of
the law of the land, and shall remain valid, legal, binding, and effective
even after lifting of martial law or the ratification of this Constitution,
unless modified, revoked, or superseded by subsequent proclamations,
orders, decrees, instructions, or other acts of the incumbent President, or
unless expressly and explicitly modified or repealed by the regular
National Assembly.”
128 Black’s Law Dictionary, 4th ed., p. 1408 [1957].
310

to exercise the power of judicial review, the question of

constitutionality
129
must be raised at the earliest
opportunity. And RREC and Pasay City not only failed to
challenge the constitutionality of the decree, worse, they
used P.D. No. 3A in seeking compensation from the
National Government. P.D. No. 3A was issued in 1973.

Five (5) years later, in 1978, RREC filed a claim for
quantum meruit compensation on the basis of P.D. No. 3A
with the then Ministry of Public Highways and the
Solicitor General. In 1983, RREC offered to accept land and
negotiated with the PEA for such payment. On October 20,
1986, RREC filed with the Court of Appeals, a Motion to
Admit Additional Evidence to prove the area of land it
reclaimed so it can be compensated under P.D. No. 3A on
the basis of quantum meruit. RREC’s flipflopping stance
on P.D. No. 3A cannot be countenanced. It cannot be
allowed to use P.D. No. 3A upon its convenience. Its attack
on P.D. No. 3A is a clear afterthought, a bargaining chip
against the National Government.
THIRD ISSUE
A. The Amended Decision of the Court of Appeals is

based on insufficient and doubtful evidence.
In its Amended Decision, the Court of Appeals found that

RREC reclaimed fiftyfive (55) hectares of Manila Bay from
1959 to 1962. This was allegedly confirmed by RREC’s 130
evidence adduced at the Commissioners’ hearings. The
contrary evidence presented by the CCP was considered
insufficient.
The Court of Appeals’ ruling is based on three documents
issued by the government to RREC during the pendency of
the case. The first is the “Cost Data for Items of Work
Covered
_________________
129 People v. Vera, 65 Phil. 56, 88 [1937]; see also Bernas, The
Constitution of the Republic of the Philippines, Vol. II, pp. 279280 [1988].
130 Commissioners’ Report, p. 54.
311
VOL. 299, NOVEMBER 25, 1998 311

by the Republic Real Estate Corporation for Work

Performed In the Manila131Bay” issued by the Ministry of
Public Highways (MPH). The second is the letter dated
June 6, 1979 of then Minister of Public Highways Baltazar
Aquino addressed to Mr. 132 Vicente Asuncion, Jr., Executive

VicePresident of RREC. The third is the letter dated
June 10, 1981 of then Solicitor
133
General Estelito Mendoza
also to Mr. Asuncion, Jr. The Court of Appeals held:
“One of said evidences (Exh. 17A) shows that the then Ministry
of Public Highways conducted actual and physical investigation,
inspection and measurement of RREC’s accomplishment as far as
reclaimed lands are concerned. Their report on said inspection
and measurement was reduced into a document entitled “Cost
Data Items of Work Covered By the Republic Real Estate
Corporation For Work Performed In the Manila Bay,” prepared by
Supervising Civil Engineer III Ignacio Gallego and noted by staff
Civil Engineer Juan Mendoza and Executive Director for Special
Projects Antonio Goco, all of the Ministry of Public Highways.
This document shows the technical measurement and costs,
among others, of the work accomplished by RREC: “reclamation of
approximately fiftyfive (55) hectares”:
On the basis of this actual inspection, the then Minister of
Public Highways, Minister Baltazar Aquino, wrote the Executive
VicePresident of RREC acknowledging RREC’s accomplishment
at “approximately fiftyfive (55) hectares.” The said letter (Exh.
15) reads in part:
xxx
In the letter subsequently sent by the Solicitor General to the
RREC as regards the settlement of this case (Exh. 18), the
Solicitor General did not dispute but instead made reference to
the facts stated in the above letter of the then Minister of Public
Highways certifying to RREC’s having reclaimed approximately
fiftyfive (55) hectares of Manila Bay.
_________________
131 Exhibit “17A” for RREC, CA Rollo, p. 756; marked as p. 56.

132 Exhibit “15” for RREC, CA Rollo, pp. 750751; marked as pp. 5051.
133 Exhibit “18” for RREC, CA Rollo, pp. 758759; marked as pp. 5859.
312

These documents and their contents were not even disputed by

plaintiffappellant as far as “the extent of the work accomplished
as above certified” (see p. 3, Comment of OSG), only that, it
asserts that the documents are not conclusive proofs of RREC’s
allegation that it was one which reclaimed the entire fiftyfive
hectares.
To our mind, plaintiffappellant’s assertion needs no further

elaboration since thru the naked eye it can easily be seen and
discerned that plaintiffappellant, all along, believed and
admitted that the fiftyfive (55) hectares were undoubtedly
reclaimed by RREC in contract with Pasay City.
The then Minister of Public Works (now deceased), who was
the protector of the government interest as far as public works is
concerned has already certified that RREC has reclaimed
approximately fiftyfive (55) hectares after having weighed and
examined the proper documents and has made the actual
inspection. A person in his position would not have made the
declaration unless he believed it to be true and correct.
Besides, actual, physical inspection reduced to a documentary
evidence executed by high public officials of the government, who
is [sic] always presumed to have regularly performed his [sic]
functions (see Sec. 3[m], Rule 131 of the Rules
134
of Court), is always
accorded high probative value by courts.”
In determining the size of the land reclaimed by RREC and

Pasay City, and rejecting the contrary evidence of CCP and
the National Government, the Court of Appeals
Commissioners concluded that:
“There was no competent evidence presented by CCP and RP from

which the actual area reclaimed by RREC can be conclusively
established. While the thrust of CCP’s evidence is to challenge the
correctness of the assumption in Exh. “15” that the area reclaimed
by RREC from 1959 to 1962 was approximately 55 hectares, the
evidence presented was not based on personal knowledge of the
witnesses as to the actual condition and/or depth of the seabed at
the time of the reclamation. Moreover, even the actual or required
elevation of the reclaimed area at that time was not satisfactorily
established.
___________________
134 Amended Decision, pp. 910.
313
VOL. 299, NOVEMBER 25, 1998 313

The testimonies of RREC’s witnesses tend to confirm the

correctness of the assumption in Exhibit 15 that RREC 135
has
reclaimed approximately fiftyfive (55) hectares as of 1962.”
These findings and conclusions of the Court of Appeals are

grossly erroneous and cannot be affirmed. The “Cost Data
Items of Work Covered by the Republic Real Estate

Corporation For Work Performed in Manila Bay” is a
tabulation of the findings of the MPH on the extent of
RREC’s reclamation work in Manila Bay. Item No. 2 of the
table states “[r]eclamation of approximately 55 has.”
Contrary to the finding of the Court of Appeals, this entry
does not amount to a certification by the MPH. It merely
describes the item of work where dredge fill was allegedly
measured. The “Cost Data Items of Work x x x” was
summarized in the letter of then Minister Baltazar Aquino.
The full text of Minister Aquino’s letter reads as follows:
“Sir:
This has reference to your claim based on “quantum meruit”

pursuant to Presidential Decree No. 3A for the reclamation work
undertaken on the Manila Bay during the period from 1959 to
1962.
Considering that your claim is still the subject of Civil Case
No. 2229R, CFI of Rizal, Branch VIII, Pasay City, now pending
appeal with the Court of Appeals (CAG.R. 51349R), we are
confining our action hereon only on the determination of the
physical measurement of your work accomplished in the
reclamation project.
Based on the documents you have submitted, we have

tentatively made, pending submittal of corroborative
documents, such as the latest partial payment vouchers
(and its supporting papers) and release of retention
vouchers, the findings on your accomplishments shown
below in comparison with your claimed accomplishments:
____________________
135 Commissioners’ Report, pp. 5354.
314

ITEMS OF WORK QUANTITY

RREC CLAIM MPH FINDINGS
1. Improvement of existing submerged breakwater, 353.00 m. long

(Sta. 0+000Sta. 0+353); construction of a seawall/breakwater, 47
M. long (Sta. 0+353Sta. +440) and construction of submerged
seawall/breakwater, 819 M. long (Sta. 0+400+Sta. 1+219
involving the following material:
a) Class I Rocks 28,869.47 M.T 25,675.84 M.T.

b) Class II Rocks 20,623.45 M.T. 19,021.98 M.T.
c) Class III Rocks 32,321.15 M.T. 26,704.25 M.T.
d) Bedding Rocks 31,866.62 M.T. 21,514.90 M.T.
(Protective coverings)
e) Class “B” 488.36 Cu.M. 467.40 Cu.M.
concrete filler
f) Sand Mattress 84,792.65 Cu.M. 61,188.11 Cu.M.
(Sand Fill)
2) Reclamation of approximately 55 Has. involving:

a) Dredge Fill 1,134,837.00 Cu.M. 1,173,993.00 Cu.M.
for Area A (Trade & Convention Site Area)
b) Dredge Fill for 423,558.00 Cu.M. 400,958.00 Cu.M.
Area B (Cultural Center Complex Area)
3) Construction of a drainage Interceptor, 262.49 M. long
including manholes and tappings to existing pipes,
involving:
a) Class “A” Concrete 502.77 Cu.M. 488.87 Cu.M.

b) Reinforcing Steel 28,280.05 Cu.M. 27,329.44 Cu.M.
c) Foundation Fill 325.51 Cu.M. 525.04 Cu.M.
d) Excavation for 2,707.02 Cu.M. 1,806.24 Cu.M.
Structures
e) Manholes and R.C. 4 units 4 units
Pipes
In this connection, please submit all the statements of work

accomplished by your Contractors including the quantities
of pay items and accompanying vouchers.
Your claim for preoperating (planning and detailed
engineering) expenses and the mobilization of L.S.
Dillingham Dredger, as well as clearing and grubbing of
quarry site, preparation of two
315
VOL. 299, NOVEMBER 25, 1998 315
quarry benches, and construction and repair of marginal wharf

may well be taken up when the cost issue is discussed after your
case in court shall have been finally resolved in your favor.
Very truly yours,
(SGD.)
BALTAZAR AQUINO 136
Minister.”
The letter abovequoted was rendered by Baltazar Aquino

in his capacity as the head of the Ministry of Public
Highways (MPH), the department tasked with the public
works program of government. His alleged “certification”
that RREC was able to reclaim 55 hectares of Manila Bay
was merely “tentative, pending the submittal of
corroborative documents.” This is expressly stated in the
letter itself. A tentative finding is provisional; it is not final.
Its finality was conditioned on RREC’s submission of
documents to corroborate the MPH’s tentative findings.
And there is no showing RREC submitted such documents
so as to elevate the tentative status of the MPH findings to a
fullfledged certification.
The “Items of Work” tabulating RREC’s claim and the
Ministry of Public Highways’ findings do not state that the
Ministry found RREC to have reclaimed 55 hectares. No. 2
of the “Items of Work” is merely a description of the area
where dredge fill was found and measured. In fact, the
quantity of dredge fill found by the MPH substantially
differed from the quantity claimed by RREC.
Compromise negotiations continued. On June 10, 1981,
then Solicitor General Estelito Mendoza wrote Mr. Vicente
Asuncion, Jr. This letter reads in full:
“Sir:
This is with reference to your letter dated September 7, 1979

offering a compromise of the abovenoted case by asking payment,
___________________
136 CA Rollo, pp. 750751; also marked as pp. 5051.
316

based on quantum meruit, of the amount of P30,396,878.20 for the

reclamation work on a portion of the Manila Bay area.
We have considered the proposal in the light of cost data, work
volume accomplished and other information given us by the
Ministry of Public Highways, and have found the amount of your
claim to be unjustified. If settlement should be proper, the amount
of P10,926.071.29 based on price levels obtaining in 1962 when
the reclamation work was stopped by the court, and not on
prevailing prices, would seem to be reasonable. The cost
breakdown would be:
a. Work accomplished
based on 1962 price
levels ............................................ P8,344,741.29
b. Mobilization of
equipment .................................... 2,581,330.00
P10,926,071.29
We should like to inform you, in this connection, that we referred

to the Public Estates Authority for consideration your offer for
settlement on the belief that it has jurisdiction over all reclaimed
lands. The PEA replied (see annex) stating that the land in
question is not under its administration.
Pending determination of the proper Government agency
authorized to entertain and consider your proposals and without
prejudice to whatever funding requirements the proposed
agreement may entail, we would like to know, as a start, if
Republic Real Estate Corporation is agreeable to the amount of
P10,926,071.29 as compensation in the event settlement is to be
pursued.
We will appreciate your early reply.
Very truly yours,
(SGD.)
ESTELITO P. MENDOZA 137
Solicitor General.”
Then Solicitor General Mendoza rejected RREC’s proposed

compromise amount on the basis of “cost data, work volume
accomplished and other information given by the Ministry
of
__________________
137 CA Rollo, pp. 758759; also marked as pp. 5859.
317
VOL. 299, NOVEMBER 25, 1998 317

Public Highways.” The Solicitor did not accept RREC’s

proposal on the basis of the Cost Data Report and Minister
Aquino’s letter only. He based it also on “other information
given by the MPH.” The Solicitor General’s rejection of
RREC’s proposal affirms the tentativeness of the MPH
findings.
In Item of Work No. 2 of Minister Aquino’s letter, the
MPH found that RREC was able to deposit 1,574,891 cubic 138
meters of dredge fill for the reclamation of Manila Bay.
RREC now claims before this Court that this amount of
dredge fill covered 55 hectares and the entry “reclamation
of approximately 55 has.” in Minister Aquino’s letter
certified to such finding. The Solicitor General presented
evidence before the Court of Appeals Commissioners that
disproves RREC’s claim. In its reply to an official query by
then Solicitor General Ramon S. Desuasido, the Public
Estates Authority made the following observations:
‘The Public Estates Authority (PEA) as the primary agency of the

national government on reclamation would like to call attention to
a misreading or misappreciation, to the point of certainty, of the
letter of the Ministry of Public Highways (MPH) dated 6 June
1979. This was used as exhibit in the case and served as the basis
of the conclusion that RREC was able to reclaim 55 has. covering
the period 1959 to 1962.
An examination of the aforecited letterexhibit will indicate
that it is simply not possible physically for RREC to have
reclaimed 55 has. based on scientific, technical and engineering
considerations. Please note the following, viz.:
(i) The hydrographic nature of the area or the physical contour
and configuration of the seabed measured at sea level (technically
called MLLW or mean lower low water level representing the
average of the low tide observed over a 20year period) indicates
an average depth of 7 meters. To undertake a reclamation under
such a condition, the requirement is not only 7 cu.m. of dredge fill
but an additional 3 more (technically described as +3 meters
___________________
138 MPH Findings on Dredge Fill for Areas A & B total 1,574,891 cu.m.
318

above MLLW) or a total of 10 cu.m. to make allowance for natural

land settlement over time.
With the above in mind, a 55 has. reclamation would therefore
require a 5.5 Million cubic meters of dredge fill based on this
computation i.e. 10 cu.m. of dredge fill x 10,000 sq.m. or 1 ha. or
100,000 cu.m. per hectare x 55 has. equals a total of 5,500,000
cu.m. The above cited letterexhibit of the MPH validated only a
total accomplishment of 1,574,891 cu.m. of dredge fill. In terms of
hectares, this is equivalent to only 15.74 has. of accomplishment.
(ii) The abovecited letterexhibit of the MPH did not really
certify to a 55 has. accomplishment. What was certified or
validated was the quantity of work accomplished measured
principally in terms of cubic meters of dredge fill through a
tabular comparison of what is claimed by RREC vis a vis the
findings of MPH. Looking at the tabular presentation and noting
the big difference in physical accomplishment between the claims
of RREC and the findings of MPH it is simply untenable to come to
the same conclusion that 55 has. was accomplished based on
differing set of physical data.
(iii) The fact is, the 55 has. was mentioned in the column
“Items of Work” which was simply a description or list of work to
be done and not in the column under “Quantity” where the
physical measure of work accomplished was made by MPH in
comparison with RREC’s claims. It is clear that the 55 has. was
indicated under “Items of Work” simply as a target benchmark of
work to be done x x x.
(iv) Finally, we wish to note that the original claim of RREC
that it has reclaimed 21 has. is closer to the quantity in terms of
cubic meters validated and certified by the MPH in the cited
letterexhibit of some 1,574,891 cu.m. or 15.74 has. (say 16 has.).
To insist that this volume of cubic meters as certified by the MPH
is sufficient to reclaim 55 has. is to come to the ridiculous
conclusion that there was no reclamation undertaken (in the
sense of recovering land submerged under water), that the Manila
Bay offshore area has no depth or that the land is equivalent to
the sea level, and what was done was simply to put it up to +3
meters above sea level (computation “3 cu.m. x 10,000 sq.m. or 1
ha. x 55 has. equals 1,650,000 cu.m. nearly approximating 139 the
1,574,891 cu.m. validated by MPH. This is simply not possible.
____________________
139 Exhibit “BRP,” Exhibit “AACCP”; Italics as copied.
319
VOL. 299, NOVEMBER 25, 1998 319
This opinion was rendered on June 19, 1992 by then Acting

General Manager Manuel R. Berina, Jr. of the PEA.
Engineer Berina affirmed the contents of his opinion before
the Court of Appeals Commissioners. As an expert witness,
Engineer Berina testified that he and his staff exhausted the
scenarios of reclaiming land in Manila Bay with 1,574,891
cubic meters of dredge fill. They found that in no way could
such quantity of dredge fill reclaim fiftyfive (55) hectares.
Assuming that 1,574,891 cubic meters indeed filled 55
hectares, this produced a slice of land 55 hectares in area
but140with a thickness or depth of only 2.8 meters of dredge
fill. The reclamation of Manila Bay requires that the
seabed be filled up to sea level, in addition, this filled up
portion must be raised to a minimum of three (3) 141
meters
from sea level to withstand the changing tide. The 55
hectares of 2.8 meters of reclaimed land means that the
land was never below sea level.
142
If so, there was nothing to
reclaim from the beginning.
B. There is overwhelming evidence that RREC did not

reclaim fiftyfive hectares of Manila Bay.
The general rule in this jurisdiction is that actual findings

of the Court of Appeals are not reviewable but are final and
conclusive on the Supreme Court. This is not a hard and
fast rule, however. The Supreme Court may review such
findings where the judgment of the appellate court is based
on a misapprehension of facts, or the inferences made 143
therein are manifestly mistaken, absurd or impossible.
The allegation that RREC failed to reclaim fiftyfive (55)
hectares of Manila Bay is supported by the following
evidence:
____________________
140 TSN of October 3, 1997, pp. 254258.

141 TSN of October 3, 1997, pp. 254264.
142 TSN of October 3, 1997, pp. 256258.
143 Republic v. Court of Appeals, 258 SCRA 712, 721722 [1996];
Valenzuela v. Court of Appeals, 253 SCRA 303, 313 [1996]; Geronimo v.
Court of Appeals, 224 SCRA 494, 498499 [1993].
320

(1) The aerial photographs of the Manila Bay area taken by

the Armed Forces of the Philippines (AFP) in 1966
144
and 1968
and filed with the AFP Mapping Center. The AFP
Mapping Center is the custodian of aerial films, negatives,
photographs and documents kept by the government 145
for
the making of military maps and other purposes. Captain
Bailey Nograles, Chief of the AFP Mapping and Surveying
Division of the Center, testified that the negatives of the
photographs have been in the possession of his office since 146
the time they were taken and have never been altered.
The photographs were reproduced by his staff from the
office archives upon request by the CCP in 1997. They were
released upon approval
147
by the commanding officer of the
Mapping Center.
The
148
photographs form a series of aerial views of Manila
Bay. On the left margin of each photograph are some
figures—a square, rectangle, circle and clocks and dials.
Capt. Nograles identified these as indicators of the time the
photograph was taken, the date and location of the area
when the photograph was taken, the calibrated focal lens
size of the camera used, the film roll number, the lens
serial number, the camera number, the type of149plane used
in taking the photograph, and the altitude. The first 150
photograph indicates that it was taken on March 8, 1966.
The second, third, fourth and fifth photographs do not
indicate the date clearly although the other entries show
that they were taken by the same camera, same lens and at
the same altitude
151
at approximately fivesecond intervals
from the other. The second series of photo
__________________
144 Exhibits “DCCP,” “D1CCP” to “D12CCP.”

145 Nograles, TSN of Sept. 29, 1997, pp. 7072, 8384.
146 Affidavit of Capt. Nograles, Exhibit “CCCP,” Rollo, G.R. No.
103882, p. 895.
147 Nograles—TSN of Sept. 29, 1997, p. 77.
148 Capt. Nograles verified the geographical location of the photographs
—TSN of Sept. 29, 1997, p. 10.
149 Nograles—TSN of Sept. 29, 1997, pp. 8081.
150 Exhibit “D2CCP,” Folder of CA Exhibits.
151 Exhibits “D3CCP” to “D7CCP,” Folder of CA Exhibits.
321
VOL. 299, NOVEMBER 25, 1998 321

graphs clearly indicate the date they were

152
taken as “4268”
or April 2, 1968, and all other entries.
The entries in the photographs have been summarized
in the flight data presented by Capt. Nograles. Flight data
are usually entered into the film negatives by the company
153
or person who developed the aerial photographs. Capt.
Nograles merely reproduced the data from the film
negative. The flight data for the first six aerial photographs
154
indicate that they were taken on March 8, 1966. The
second flight data showed
155
that the next three photographs
were taken in 1968.
The photographs are presumed to have 156
been taken by
the military in the regular course of duty. They form part
of the official records of the AFP Mapping Center which is
a technical service of the AFP, the military arm of 157
government under the Department of National Defense.
As official documents, the photographs are public 158
documents and therefore need no authentication.
Moreover, the 1966 photographs are ancient documents.
They are unblemished and were more than thirty (30)
years old when produced from the custody of the AFP
_________________
152 Exhibits “D8CCP” to “D10CCP,” supra.

153 Capt. Nograles testified that the flight data are usually entered in
the third frame of the spool of negatives of the aerial photographs—TSN
of Sept. 29, 1997, pp. 101102.
154 Exhibit “D11CCP,” Folder of CA Exhibits; Nograles—TSN of Sept.
29, 1997, pp. 98100.
155 Exhibit “D12CCP,” Folder of CA Exhibits.
156 The aerial photographs were ordered released by the Commanding
Officer of the AFP Mapping Center (Nograles—TSN of Sept. 29, 1997, p.
77).
157 Chapter 6, Subtitle II, Title VIII, Book IV, Administrative Code of
1987.
158 Section 19(a), Rule 132, Revised Rules on Evidence provides:
“Sec. 19. Classes of Documents.—x x x. Public documents are:
(a) The written official acts, or records of the official acts of the
sovereign authority, official bodies and tribunals, and public officers,
whether of the Philippines, or of a foreign country; x x x.”
322

Mapping Center in 1997. Under the Revised Rules on

159
Evidence, ancient documents require no authentication.
159
Evidence, ancient documents require no authentication.
The series of photographs show a strip of mass jutting
out from the mainland towards Manila Bay. The mass is an
irregularlyshaped rectangle with its right side (eastern
side) adjacent to the mainland. The length of the right side
(eastern side) is twice the length of the left side (western
side) with the base (south) sharply curving inwards. Within
the rectangle are light and dark patches. This formation
was examined by Architect Manuel T. Manosa, Jr. who
measured, analyzed and verified his findings with the use
of maps and computer digital analysis. Architect Manosa
found that the mass extended 160
from the mainland to the bay
for about one kilometer. The light patches in the
rectangle showed surface land located primarily in the
center and lower right side (or southeastern side) and some
patches in the southwestern and northeastern portions.
The dark patches showed water. The total area of visible
land measured approximately sixteen point 8 (16.8)
hectares in the 1966 photographs. The 1968 photographs
showed that two point eight (2.8) hectares were added to
the land thereby161
increasing the area to nineteen point six
(19.6) hectares.
Architect Manosa is an architect and environmental
planner and has been President for twentyone years of the
Planning Resources and Operations Systems, Inc., a
corporation
__________________
159Section 21, Rule 132, Revised Rules on Evidence provides:

“Sec. 21. When evidence of authenticity of private document not
necessary.—Where a private document is more than thirty years old, is
produced from a custody in which it would naturally be found if genuine,
and is unblemished by any alterations or circumstances of suspicion, no
other evidence of its authenticity need be given.”
160 Manosa—TSN of Sept. 29, 1997, p. 114.
161 Exhibit “FCCP,” Professional Report of Architect Manosa, Rollo,
G.R. No. 103882, pp. 900903.
323
VOL. 299, NOVEMBER 25, 1998 323

162
specializing in city planning and consulting services.
Testifying as an expert witness, he declared that aerial
photographs are taken by special cameras and, although
expensive, are very accurate. These photographs are
important in city planning and development because they

accurately
163
trace the sequence of changes in an urban
area. Architect Manosa’s testimony was not discredited
on cross and 164
additional crossexaminations by RREC and
Pasay City.
(2) The photographs of the CCP site taken in 1967 and
1968 during the construction of the CCP main building as
identified and presented by Architect Ruben A. Protacio, the
Managing Partner of 165 the architectural firm of Leandro V.
Locsin and Partners. Leandro V. Locsin and Partners
conceptualized the blueprint of the CCP main building. As
a member of the firm, Architect Protacio was personally
involved 166
in the project from design to the completion of the
building. Architect Protacio presented and identified
seven (7) photographs taken during the construction of the
CCP main building. The photographs were part of progress
reports submitted by the building contractor to Leandro
Locsin and Partners which reports were verified by
Architect Protacio and 167
his team members by personal
inspection of the site. These photographs were found in
the archives of Leandro V. Locsin and Partners and were
certified by Architect Protacio as a true and faithful
reproduction of the main building construction site from
1967 to 1968.
The general rule in this jurisdiction is that photographs,
when presented in evidence, must be identified by the
photographer as to their production and testified as to the
circum
__________________
162 Affidavit of Arch. Manuel Manosa, Jr., Exhibit “ECCP,” Rollo, G.R.
No. 103882, pp. 898899.
163 Manosa—TSN of Sept. 29, 1997, pp. 113, 158.
164 Manosa—TSN of Sept. 29, 1997, pp. 134175.
165 Exhibits “B,” “B1” to “B6,” Rollo, G.R. No. 103882, pp. 9081011.
166 Protacio—TSN of Sept. 29, 1997, p. 7.
167 Id., pp. 2729.
324

stances under which they were produced. The

photographer, however, is not the only witness who can
identify the pictures. The faithful representation of the
photograph may be proved prima facie by the testimony of
those who were present at the time it was taken, or by any

other competent168
witness who can testify as to its exactness
and accuracy. Once proved, the court169 may admit it
subject to impeachment as to its accuracy. The exactness
and accuracy of the photographs were certified by Architect
Protacio and these have not been impeached.
The value of a photograph lies in its being a correct
representation or reproduction of the original, and its
admissibility is determined by its accuracy in portraying
170
the scene at the time the picture was taken. The
photographs show that the CCP main building was the
very first improvement constructed on the reclaimed area.
The area where the CCP main building itself was being
constructed was clearly abovewater. Behind the
construction was land but further beyond where the Folk 171
Arts Theater (FAT) now stands had some parts in water.
The CCP main building was constructed facing east,
towards Roxas Boulevard on the 172
mainland. To the
immediate left of the main building was land but further
to its left rear where the Philippine International
Convention Center (PICC), the Philippine Plaza Hotel, the
Film Center and all structures
173
now existing are located,
were the waters of the bay. It was all sea.
Architect Protacio himself testified that when his firm,
Leandro V. Locsin and Partners, constructed the FAT in
1974,
__________________
168 Sison v. People, 250 SCRA 58, 7576 [1995].

169 Id.
170 Id., at 7576.
171 Exhibits “B3CCP,” “B4CCP,” “B6CCP,” Rollo, G.R. No. 103882,
pp. 1008, 1009, 1011.
172 Perspective is from Roxas Boulevard facing the CCP main building.
173 Exhibits “B2,” “B3,” “B4,” “B6,” Rollo, G.R. No. 103882, pp. 1000,
1008, 1009, 1011.
325
VOL. 299, NOVEMBER 25, 1998 325

and the PICC and the Philippine Plaza in 1975,

reclamation of the land was 174done simultaneously with the
construction of the buildings.
(3) The eyewitness testimony of Architect Antonio S.
Dimalanta whose firm, TransAsia Phil., of which he was
President from 1965 to 1983, was the engineering

consultant and project manager for the construction of the
CCP main building, the FAT, the PICC and Philippine
Plaza Hotel. Architect Dimalanta visited the proposed site
for the CCP in 1965. He saw that the CCP site topography
was irregular and that there was no road or any
improvement on the land except for a seawall running
parallel to Roxas Boulevard starting from the breakwater
of the Manila Yacht Club and the Philippine Navy
extending southwards to the area where the Coconut
Palace or Tanghalang Pilipino now stands. He saw that
within the seawall was a large patch of visible land but
that its elevation was lower than Roxas Boulevard. To
prepare the site for CCP, his firm surveyed the area and
coordinated with the Department of Public Works (DPW)
who filled 175
in the land to bring it to the level of Roxas
Boulevard. During the construction of the CCP main
building, his firm surveyed 176
the land periodically as the
DPW continuously reclaimed. The DPW also filled in the
patches of water behind the CCP main building 177
such that
by 1968, the condition of the land improved. Architect
Dimalanta supported his testimony with a photograph of
the reclamation site taken by the company photographer in
1968 which was part of the progress reports his office 178
submitted to the firm of Leandro V. Locsin and Partners.
The photograph shows continuous land, sandy, 179
behind the
CCP main building all the way to the seawall. To the left
rear of the
________________
174 Protacio—TSN of Sept. 29, 1997, pp. 3436.

175 Dimalanta—TSN of Oct. 3, 1997, pp. 2324, 3031.
176 Affidavit of Arch. Dimalanta, Exhibit “N,” Rollo, G.R. No. 103882, p.
904; TSN of Oct. 3, 1997, pp. 2627, 3031.
177 Id., p. 36; Exhibit “O3,” SC Rollo, p. 906.
178 Dimalanta—TSN of Oct. 3, 1997, pp. 3738.
179 Exhibit “O,” Rollo, G.R. No. 103882, p. 906.
326

CCP main building, however, were 180

the waters of the bay
and along its shores were shanties.
According to Architect Dimalanta, reclamation 181
by the
DPW never ceased and was never interrupted. The FAT
was constructed in 1974. Reclamation continued and the

land steadily increased in size. Reclamation extended to
the left rear of the CCP main building where PICC and
Philippine Plaza Hotel were eventually constructed. And
even during the construction of these two buildings,
reclamation never ceased.
(4) The eyewitness accounts of Dr. Lucrecia Kasilag and
Mrs. Rose Duavit Cruz. Dr. Lucrecia Kasilag was the
Artistic Director of the CCP in 1966 and its President from
1976 to 1986. She attended the formal groundbreaking
ceremony of the CCP main building on April 17, 1966 at
the reclamation site. The only visible land was the area
where the building was to be constructed 182
and the
neighboring Philippine Navy Compound. 183 Much of the
surrounding area of the site was under water.
Mrs. Rose Duavit Cruz was with the Office of the
President in 1966 and was assigned to the CCP project as
Project Coordinator and Comptroller. She became
Administrative Director of the CCP from 1970 to 1976. She
testified that in 1966, the immediate area where the CCP
main building was being constructed was the only land
available in Manila Bay. The area behind 184
was under water
during high tide and had to be filled in. In 1970, when the
main Central Bank building was being constructed across
Roxas Boulevard, she allowed Central Bank, per their
request, to dump debris and rocks on the land behind the
CCP main building. She “welcomed all the filling
__________________
180 Exhibits “OCCP,” “O3CCP,” supra.

181 Dimalanta—TSN of Oct. 3, 1997, pp. 74, 89, 9394.
182 Kasilag—TSN of Sept. 30, 1997, p. 324.
183 Affidavit of Dr. Lucrecia R. Kasilag, Exhibit “MCCP,” Rollo, G.R.
No. 103882, p. 1015.
184 Exhibit “LCCP,” Rollo, G.R. No. 103882, p. 1018; Cruz—TSN of
Sept. 30, 1997, pp. 181182.
327
VOL. 299, NOVEMBER 25, 1998 327

185
materials in Manila to be dumped there.” Central Bank
dumped its debris on the lot where the Design Center
Building now stands. Beyond the Design Center Building
was the FAT which was constructed from 1973 to 1974. The
lot of the FAT was then below sea level such that CCP had
to finance the cost of filling it up. It was the Department of

Public Works and the Philippine Navy 186
that filled up the
land and continued the reclamation. Eventually, the land
was filled by187materials delivered by trucks twentyfour (24)
hours a day. Reclamation extended to the area to the left
rear of the 188
CCP main building which was still
underwater. In the early 1970’s, the Construction
Development Corporation of the Philippines (CDCP) took
over and 189
continued the reclamation southwards to
Buendia.
(5) The testimony of RREC’s and Pasay City’s witness, 190
Mr. Lauro Marquez and 191
the “General Development Plan”
and “Contract to Sell” he identified. Mr. Marquez is a
member of the Board of Directors of RREC since 1993 until
the present. When RREC was organized in 1958, he was a
stockholder of the corporation and one of its two (2)
exclusive brokers for the sale of portions of the reclaimed
land.
Mr. Marquez testified that in 1961, RREC, through him
and the other broker, sold to various third persons 165
subdivided lots in the reclaimed land totalling 250,600
square meters in area, or approximately 25 192 hectares. Each
sale was evidenced by a Contract to Sell executed by
RREC and the buyer. The Contract to Sell incorporated
and made reference
____________________
185 Cruz—TSN of Sept. 30, 1997, p. 195.

186 Affidavit of Mrs. Rose D. Cruz, Exhibit “LCCP,” Rollo, G.R. No.
103882, p. 1018.
187 Id., p. 208.
188 Id., pp. 213, 216.
189 Now Gil Puyat Ave; Cruz—TSN of Sept. 30, 1997, pp. 210214.
190 Exhibit “17Pasay City and RREC,” Folder of CA Exhibits.
191 Exhibit “19Pasay City and RREC,” Folder of CA Exhibits.
192 Exhibit “19Pasay City and RREC.”
328

to the Reclamation Agreement between RREC and Pasay

City, specifically the provision where RREC must reclaim
at least fifty (50) hectares before it can be allowed to
subdivide, develop and sell portions thereon. According to
Mr. Marquez, since RREC was able to sell lots, then the
presumption is that RREC had already reclaimed 193
and
developed at least fifty (50) hectares of Manila Bay.
This presumption has been rebutted by Mr. Marquez’s
testimony itself. The lots sold by RREC were subdivided in
accordance with a General Development Plan approved by
the City
194
Engineer and City Mayor of Pasay in November
1960. The General Development Plan was attached to the
Contract to Sell. The Fourth Whereas Clause of the
Contract to Sell states that the “City Mayor and City
Engineer of Pasay have approved the attached General
Development Plan for the first fiftyfive (55) hectares of the
Pasay reclamation project.” Mr. Marquez admitted on the
witness stand that the General Development Plan attached
to the Contract to Sell covered Phase I of the project and
that this covered an aggregate area of 347,752 square 195
meters or thirty four point seven (34.7) hectares only. In
other words, the General Development Plan did not cover
fiftyfive (55) hectares but merely thirtyfour hectares of
reclaimed land. Mr. Marquez said that RREC had another
General Development Plan for other portions of the
reclaimed property. When requested to produce this Plan,
Mr. Marquez declared 196
that he could not produce it before
the Commissioners. The records of the then CFI and the
Court of Appeals do not reveal whether such other Plan has
ever been submitted.
The words of the Contract to Sell provides that RREC
promised to sell the lots after they shall have been
reclaimed. The pertinent portions of the Contract read as
follows:
__________________
193 Affidavit of Lauro Marquez, Exhibit “16Pasay City and RREC”;

Marquez—TSN of Oct. 6, 1997, p. 17.
195 Marquez—TSN of Oct. 6, 1997, pp. 19, 22.
196 Id., p. 23.
329
VOL. 299, NOVEMBER 25, 1998 329

197
“WHEREAS, the PARTY OF THE SECOND PART will require
and use additional funds to proceed with the reclamation project
on the terms and conditions of the abovementioned
198
agreements,
and the PARTY OF THE FIRST PART, being fully aware
thereof and in view therefor, is hereby offering to advance and

remit to the PARTY OF THE SECOND PART the amount
hereinunder stated, provided, that the PARTY OF THE SECOND
PART promises to sell to the PARTY OF THE FIRST PART the
lot indicated in the attached General Development Plan after said
lot is reclaimed and the City of Pasay transfers and delivers
possession of and title to said lot in favor of the PARTY OF THE
SECOND PART hereof in accordance with the abovementioned
agreement attached as Annex “A” hereof, at the price which the
PARTY OF THE FIRST PART considers cheap, and on the terms
and conditions, hereunder fixed;
WHEREAS, in view therefore, and in accordance with the
abovequoted provisions of the Agreement attached as Annex “A”
hereof, the PARTY OF THE SECOND PART is going to exercise
at the proper time its irrevocable option to purchase from Pasay
City the reclaimed land indicated in the attached General
Development Plan;
NOW, THEREFORE, premises considered, the PARTY OF
THE FIRST PART hereby offers and agrees to buy, and the
PARTY OF THE SECOND PART hereby accepts said offer, and
hereby agrees to sell to the PARTY OF THE FIRST PART, the lot
to be reclaimed by the PARTY OF THE SECOND PART as
attorneyinfact of Pasay City, and to be sold, transferred and
delivered by said City in favor of the PARTY OF THE SECOND
PART, in accordance with the abovementioned agreements,
indicated and identified in the attached General Development
Plan, Annex “B” hereof, as follows:
Lot No…, Block No………… with an approximate area of
………… (…………) square meters, under the following terms and
conditions:199
1. x x x
As the area covered by the attached General Development Plan
after reclamation, shall still be surveyed and subdivided and the
_________________
197 RREC.
198 The buyer.
199 The price was to be paid in installments.
330

technical description of each lot therein, subject to review and

approval by the proper governmental authority, the area of the lot
covered by this Contract to Sell is subject to change; if said area is
bigger than the area stated above upon actual survey and
subdivision of the lots of the attached General Development Plan
and per its approved technical description, the PARTY OF THE
FIRST PART shall pay the corresponding proportionate increase
of the total purchase price on the basis of the above terms and
conditions; conversely, if the area is smaller than the area as
stated above, the PARTY OF THE SECOND PART shall make
the corresponding refund to the PARTY OF THE FIRST PART
also taking into account the above terms and conditions and the
amount of each of the above installments shall also be reduced
accordingly;
2. x x x.
3. The PARTY OF THE FIRST PART may take possession of
the abovementioned lot and make improvements thereon, not
contrary to law, ordinance, governmental zoning rules and
regulations, as well as rules and regulations, easements, and
restrictions contained in the Deed of Restrictions hereto attached
and marked as Annex “C” hereof, adopted by the PARTY OF THE
SECOND PART for some areas covered by the attached General
Development Plan, after said lot is reclaimed and possession and
title thereto are delivered and transferred by Pasay City to the
PARTY OF THE SECOND PART.
x x x.
6. Upon full payment of the abovementioned total purchase
price together with the interests thereon, the PARTY OF THE
SECOND PART shall execute the corresponding deed of absolute
sale in favor of the PARTY OF THE FIRST PART of the
abovementioned lot, when reclaimed and after the City of Pasay
delivers and transfers possession and title to said lot to the PARTY
OF THE SECOND PART, free and clear of all liens and
encumbrances, except such rules and regulations, and such
easements, restrictions and zoning regulations referred to in
paragraph 3 hereof; and all expenses for any documentary stamps
and registration fees for the registration of said instrument is for
any reason200
invalidated by the court, nor for any fortuitous
events.”
___________________
331
VOL. 299, NOVEMBER 25, 1998 331

RREC promised to sell the lot indicated in the General

Development Plan “after said lot is reclaimed and the City
of Pasaytransfers and delivers possession of and title to

said lot” infavor of RREC. RREC expressly acknowledged
that it wasgoing to exercise its irrevocable option to
purchase the reclaimed land indicated in the General
Development Plan “atthe proper time”; and that as the
area covered in the Planafter reclamation “shall still be
surveyed and subdivided x x xsubject to the review and
approval by the government, thearea may be subject to
change.”
The contract speaks for itself. At the time RREC sold lots
on the reclaimed land, the lands had not yet been
reclaimed and RREC could not have, in any way, exercised
its irrevocable option to purchase the land. The money paid
by the buyers was used by RREC to finance the
reclamation project. The lots did not yet exist and the
Contract to Sell fully apprised the buyers of this fact. Mr.
Marquez himself admitted that some buyers did not inspect
the reclamation site but merely looked at201the General
Development Plan before they decided to buy.
There is no evidence that the provisions of the Contract
to Sell had been amended and the RREC had been able to
exercise this irrevocable option. Lacking such evidence, the
Contract to Sell stands as the only instrument that
governed the sale of the lots. And this Contract
unmistakably shows that RREC engaged in preselling the
lots. RREC, of and by itself, directly sold to third persons
lots it did not own and did not yet exist, and used the
proceeds from this sale to produce the land it promised to
sell.
RREC’s claim that it had reclaimed and developed fifty
five (55) hectares of Manila Bay before it was taken over by
the National Government is belied by the evidence—over
whelmingly and unmistakably so. What the evidence shows
is that RREC, as attorneyinfact of Pasay City, started
reclaiming land in Manila Bay in 1959 pursuant to the
Recla
_________________
201 Marquez—TSN of Oct. 6, 1997, pp. 13, 36.
332

mation Agreement and Pasay City Ordinances Nos. 161

and 158. As the reclamation proceeded, RREC, citing its
irrevocable option to purchase under the Reclamation

Agreement, directly sold portions of the land being
reclaimed to third persons and used the funds derived from
the sale to finance the reclamation project. The inexistent
lots were subdivided and sold by RREC on the basis of the
General Development Plan, a proposed subdivision plan of
the reclaimed area approved and certified by the City
Mayor and City Engineer of Pasay. Reclamation work
begun by RREC ceased after the CFI issued a writ of
preliminary injunction on April 26, 1962. The land RREC
reclaimed and left unfinished was rectangular in shape,
with a large patch of land in the center and patches of land
and water surrounding it. The visible land on the eastern
portion of the rectangle covered the lots where the CCP
main building now stands. There were patches of water
further behind the main building where now stand the
Design Center Building, the FAT, the FAT Parking Lot,
Tahanang Pilipino, the Administration Building, and the
Flagpole site. The southeast portion of the rectangle was a
small mass of land which is now part of the land leased by
Boom na Boom. Behind it, where the Philcite, the PICC
and the Philippine Plaza were erected and the bulk of the
Boom na Boom are located, were the waters of Manila Bay.
In 1965, the National Government, through the then
Department of Public Works, entered into the area and
continued the reclamation work of RREC by filling in the
patches of water within the rectangle. It was within this
area that the CCP main building was constructed from
1965 to 1967. On September 10, 1966, President Marcos
issued Proclamation No. 100 reserving the parcel of land
where the CCP main building was being constructed as site
for a Philippine Cultural Center. The land reserved was
surveyed as Swo40880 and covered a total of 245,690
square meters or 24.5 hectares. On December 15, 1967,
after the completion of the CCP main building, President
Marcos issued Proclamation No. 315 revoking Proclamation
No. 100 and reserving a larger parcel of land as site for a
Philippine Cultural Center. The land reserved was 257,898
square meters, or approximately 25.79 hectares under Swo
40880. It
333
VOL. 299, NOVEMBER 25, 1998 333

was the same land originally reserved under Proclamation

No. 100 but with almost two hectares added on the western
202
side adjacent to the seawall. The land granted by
202
side adjacent to the seawall. The land granted by
Proclamations Nos. 100 and 316 is composed of the lots of
the CCP main building, the CCP open parking lot, the
Design Center Building, the FAT, the FAT parking lot, and 203
all other lots within the rectangular mass left by RREC.
In other words, Swo40880 encompassed the entire
rectangular mass reclaimed by RREC. On October 5, 1972,
the CCP was created by P.D. No. 15 which conveyed to it
the 25.79 hectares reserved in Proclamation No. 315. In
1973, the reclamation by the Department of Public Works
was taken over by CDCP which continued and extended
reclamation south of the rectangle where the waters of the
bay were. On August 22, 1975, P.D. No. 774 conveyed to
CCP two more parcels totalling 504,717 square meters or
approximately 50 hectares under Swo04000078 and Swo
0400141. These parcels covered the land outside of the
rectangular mass reclaimed by RREC and these are the
lots where the PICC, Philippine Plaza, Philcite, Fiesta
Island204Pavilion, the parking lots and Boom na Boom now
stand.
The Solicitor General, through the PEA, claims that
RREC was able to reclaim fifteen point
205
seventyfour (15.74)
hectares of land from Manila Bay. The CCP claims that
based on the 1966 aerial photographs examined by
Architect Protacio the rectangular land mass reclaimed by
RREC measured
206
approximately sixteen point eight (16.8)
hectares. RREC and Pasay City did not present further
evidence before the Court of Appeals Commissioners to
prove the size of the area they
_________________
202 Annexes “Y” and “F1” to Intervenor CCP’s Memorandum dated July
31, 1997; Exhibit ACCP, Diagram on the Illustration Board.
205 Opinion of PEA Acting Administrator Eng’r. Berina, Exhibit “BRP,”
Folder of CA Exhibits.
206 Exhibit “F,” Professional Report of Arch. Manosa, Jr.
334

actually reclaimed. They relied solely on the contents of

Minister Aquino’s letter and the “Cost Data Items of Work”
allegedly certifying that they reclaimed fiftyfive (55)
hectares of Manila Bay. What is clear, nevertheless, is that

RREC, on behalf of Pasay City, was able to reclaim, albeit
unfinished, that mass of land in Manila Bay on which the
CCP main building was constructed.
Given all the facts, Pasay City and RREC cannot be left
uncompensated. The 207
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. It is not practical at this stage to award Pasay City
and RREC any land by way of compensation. The
controversy as to the location of the lots to be awarded will
certainly result in another cycle of cases as all these lots
are now part of the Cultural Center Complex. The
compensation should therefore be in cash plus legal
interest of six percent (6%) per annum from 1962 until full
payment.
I agree with the majority of the Court that RREC and
Pasay City should be paid the amount of P10,976,071.29
plus legal interest of six percent (6%) per annum from 1962
until full payment. During the pendency of the case before
the Court of Appeals, RREC proposed an amicable
settlement with the National Government upon payment of
a certain sum of money. The Solicitor General
counterproposed the amount of P10,926,071.29 as a fair
valuation of RREC’s and Pasay City’s reclamation project
based on 1962 price levels. In a letter dated June 15, 1981,
RREC and Pasay City accepted the amount of
P10,926,071.29 but with the addition of six percent (6%)
interest per annum from 1962 until full payment of the
obligation.
___________________
207 Unjust enrichment is used here as an equitable principle under

Article 19 of the Civil Code on Human Relations, not the quasicontracts
of unjust enrichment in Articles 21422175 of the same Code.
335
VOL. 299, NOVEMBER 25, 1998 335

The rule in civil cases is that an offer of compromise is not

an admission of any liability,208
and is not admissible in
evidence against the offeror. Where, however, the amount
named in the offer to accept a certain sum in settlement
appears to have been arrived at as a fair estimate of value,
it is relevant. Hence, the rule of exclusion of compromise

negotiations does not apply when there is no denial,
expressed or implied, of liability and the 209
only question
discussed relates to the amount to be paid. In the instant
case, the compromise negotiations show that the only
question addressed by the parties was the amount of
compensation to be paid by the National Government to
RREC and Pasay City. The aforementioned offer of RREC
can therefore be used as a basis for compensation. The offer
is used to compensate RREC and not to impose any
liability.
CONCLUSION
By affirming the Decision and Amended Decision of the

Court of Appeals, the people will lose billions of pesos, the
conservative approximate of which runs from 20 to 30
billion. But more than its peso and centavo significance,
the Decision and Amended Decision, unless reversed, will
deal arts and culture a debilitating blow. Arts and culture
are not empty words in the Filipino psyche. Our great
national hero, Dr. Jose Rizal, strove zealously to awaken in
his countrymen a meaningful awareness of their
indigenous culture
210
and to develop in them a suitable
appreciation. To this end, Rizal did everything he could to
preserve and promote the cultural
_________________
208 Sec. 27, Rule 130, Revised Rules on Evidence.

209 El Varadero de Manila v. Insular Lumber Co., 46 Phil. 176, 178
[1924] also cited in Padilla, Evidence, Vol. 1, pp. 448449 [1988]; Regalado
Remedial Law Compendium, Vol. 2, p. 586 [1995]; see also Soriano v. Cia.
General de Tabacos de Filipinas, 18 SCRA 999, 10191020 [1966]).
210 Former Chief Justice Roberto R. Concepcion, “Rizal and Philippine
Culture,” The Seventh Annual Rizal Lectures, pp. 518 [1975].
336

advancement of his countrymen. He wrote poetry in the

Tagalog dialect, now the Filipino language. He annotated
Morga’s “Sucesos de las Islas Filipinas” for the purpose of
making “our past known so as to better judge211the present
and assess our movement in three centuries.” Rizal saw
our rich cultural heritage and believed in the potentialities

of his countrymen in the field of arts and letters. He took
pride in the awards reaped by the paintings of Juan Luna
and Felix Resurreccion Hidalgo. He also proudly
acknowledged the fiery and convincing editorials of
Marcelo H. del Pilar which earned for him the respect of
his own antagonists.
Rizal, however, was not a blind, bigoted and intolerant
nationalist. He stood not only for the preservation and
development of Philippine culture, cleansed of its
imperfections. He also favored the freest possible
assimilation
212
of the best there is in the culture of other
lands.
The CCP has helped us realize the vision of our national
hero. The CCP Complex is the only area in the Philippines
that is fully devoted to the growth and propagation of arts
and culture. It is the only venue in the country where
artists, Filipino and foreign alike, may express their art in
its various forms, be it in music, dance, theater, or in the
visual arts such as painting, sculpture and installation art
or in literature such as prose, poetry and the indigenous
oral and written literary forms. The theaters and facilities
of the Complex have been utilized for the staging of
cultural presentations and for the conduct of lectures and
demonstrations by renowned visiting artists. The wide
open spaces of the Complex are the only open spaces in
Metropolitan Manila that have been used to accommodate
huge crowds in cultural, artistic and even religious events.
But the fulfillment of CCP’s mandate did not start and
end in Manila Bay. The CCP, through its Board of
Trustees, has reached out to the provinces through
programs, scholarships
___________________
211 Morga, ed. Rizal, cf. Leon Ma. Guerrero, The First Filipino, p. 210
[1969].
212 Concepcion, supra, at 7.
337
VOL. 299, NOVEMBER 25, 1998 337

and national competitions for young artists. It has helped

young artists hone their craft and develop their creativity
and ingenuity. It has also exposed the Filipino artists to
foreign art and advanced instruction, and thereby develop
worldclass artists, earning for the Philippines the respect

and admiration of other countries. The CCP has likewise
exposed the ordinary Filipino to the national culture. It has
enhanced public interest in Philippine art in various forms,
in our history, in our indigenous and modern culture, and
at the same time, enriched us with the culture of other
countries. The CCP has indeed emerged as a dynamic force
in the promotion of the country’s artistic and cultural
heritage and the development of new and modern art
forms. Through the years, it has helped raise the Filipino
consciousness to our nationhood, and in the process,
inculcated love for our country.
Article XV of the 1987 Constitution provides:
“Sec. 14. The State shall foster the preservation, enrichment, and
dynamic evolution of a Filipino national culture based on the
principle of unity in diversity in a climate of free artistic and
intellectual expression.
Sec. 15. Arts and letters shall enjoy the patronage of the State.
The State shall conserve, promote, and popularize the nation’s
historical and cultural heritage and resources, as well as artistic
creations.
x x x.”
The state recognizes the vital role arts and culture play in
national development. Indeed, a nation that would give up
its cultural patrimony in exchange for economic and
material pursuits213
cannot but be doomed as a “people
without a soul.” The Cultural Center of the Philippines
has helped us capture this “soul.”
I vote to annul the Decision dated January 28, 1992 and
the Amended Decision dated April 28, 1992 of the Court of
Appeals in CAG.R. CV No. 51349. The Reclamation Agree
__________________
213 El Filibusterismo, Guerrero translation, p. 49 [1965].
338

ment between Pasay City and RREC as well as Pasay City

Ordinance Nos. 121 and 158 are contrary to the provisions
of R.A. No. 1899 and should also be voided.
I also vote to award Pasay City and Republic Real
Estate Corporation the sum of P10,926,071.29 plus interest
thereon of 6% per annum from May 1, 1962 until full

payment. The amount shall be paid by the National
Government and shall be shared equally by Pasay City and
RREC.
I also vote to dismiss the petition in G.R. No. 105276.
SEPARATE OPINION
PANGANIBAN, J.:
I concur with the persuasive ponencia of Mr. Justice Fidel

P. Purisima, as fortified by the Separate Opinion of Mr.
Justice Reynato S. Puno, insofar as it (1) nullifies (a) the
Reclamation Agreement between Pasay City and the
Republic Real Estate Corporation (RREC) and (b) Pasay
City Ordinance Nos. 121 and 158, and (2) retains
ownership of the reclaimed land in favor of the Cultural
Center of the Philippines. With due respect, I submit,
however, that the majority has no factual basis for its
determination of the compensation awarded to RREC and
Pasay City.
(1) Nullity of Reclamation Agreement

and Ordinance Nos. 121 and 158
Pasay City justifies its execution of the Reclamation

Agreement with RREC and the passage of Ordinance Nos.
121 and 158 on the basis of Republic Act No. 1899 (RA
1899), the law authorizing chartered cities and
municipalities to undertake the reclamation of foreshore
lands. The questioned Agreement and Ordinances,
however, cover submerged areas of the Manila Bay. As
explained in the ponencia, with which I agree, the legal and
common definition of foreshore land does not include areas
that are fully submerged by the sea.
339
VOL. 299, NOVEMBER 25, 1998 339

The Manila Bay area is, therefore, definitely outside the

scope of RA 1899. It remains part of the public domain and
is, as such, outside the commerce of man. It could not be
the object of ordinary contracts or ordinances. The
questioned Agreement and Ordinances, the objects of which
involve such public property, are thus null and void.
(2) Reclaimed Area Belongs to CCP
As a consequence, the Cultural Center of the Philippines

(CCP), to which PD Nos. 15 and 774 have conveyed
ownership of the reclaimed land, remains the lawful owner
of the subject land. Titles to the nine (9) lots, which
Respondent Court wrongfully ordered to be turned over to
Pasay City, had long been issued in favor of CCP (one
subsequently to the GSIS as a successorininterest). Such
titles are unaffected1 by the claims of RREC and cannot be
collaterally attacked in this litigation.
(3) No Factual Basis for

Determination of Compensation
Even if the Agreement and Ordinances were null and void,

it cannot be denied that RREC and the city government of
Pasay spent time, money and effort which undoubtedly
inured to the benefit of the government. It is a time
honored principle that no one, not even the 2 government,
may be enriched at the expense of another, particularly
one who, like RREC and Pasay City, acted in good faith.
While RREC and Pasay City should be compensated for
their work on the reclamation project, I respectfully submit
that the amount of such compensation must be supported
by
_________________
1 Halili v. Court of Industrial Relations, 257 SCRA 174, 184, May 30,
1996.
2 Art. 22, Civil Code. Commissioner of Internal Revenue v. Fireman’s
Fund Ins. Co., 148 SCRA 315, 324, March 9, 1987; Ramie Textiles, Inc. v.
Mathay, Sr., 89 SCRA 586, 592, April 30, 1979.
340

substantial and material proof of the reasonable expenses

they incurred. But, the records of the case are bereft of any
such factual evidence.
However, the records do indicate some attempts of the
parties to reach an amicable settlement as a consequence of
the promulgation of PD 3A by former President Ferdinand
Marcos. Thus, in 1978, RREC sought the amount of
P30,396.878.20 representing the supposed monetary value
of the reclamation work that it had undertaken so far. The

then Ministry of Public Highways (MPII) (and later the
solicitor general also) rejected this offer in 1981 and,
instead, counteroffered P10,926,071.29 as the reasonable
value of such work. RREC replied that it would consider
such amount only if it would bear six (6) percent interest
per annum from 1962 up to the time of payment. It
submitted other proposals, but all were rejected by the
government. No final extrajudicial settlement was ever
reached.
Obviously, the offers and counteroffer were made by the
parties with a view to arriving at a compromise agreement.
At that point, they were not submitted as evidence, but
only as a means of arriving at a peaceful settlement prior
to judgment. By then, the case, which had commenced in
December 1961 and was still on appeal with the Court of
Appeals, was already dragging on for two decades.
Nature of Compromise
A compromise is an agreement between two or more
parties whereby their differences are adjusted in a manner
which they mutually agree on, and which they prefer to3
“the hope of gaining, balanced by the danger of losing.”
The parties usually make reciprocal concessions
4
in order to
avoid litigation or terminate a pending one.
___________________
3 Del Rosario v. Madayag, 247 SCRA 767, August 28, 1995.

4 Galay v. Court of Appeals, 250 SCRA 629, December 4, 1995; Domingo
v. Court of Appeals, 255 SCRA 189, March 20, 1996; Sanchez v. Court of
Appeals, 279 SCRA 647, 675, September 29, 1997.
341
VOL. 299, NOVEMBER 25, 1998 341

However, basic is the rule on evidence that in civil cases,

an offer of compromise cannot be taken as an admission of
liability; nor
5
can it be admissible as an evidence against
the offeror. The offer to compromise a claim or a cause of
action is not an admission that the claim is valid, but
merely admits that there is a dispute and that6
an amount
is to be paid to avoid or end the controversy. I submit that
an unaccepted offer or counteroffer of compromise cannot
be the basis of the sum to be adjudged in favor of or against
a party, more so if such sum is unsupported by competent

evidence. In such case, the court itself insofar as it adopts
the amount either offered or counteroffered would be bereft
of factual basis for its decision. Where the proposed
compromise is not accepted, the parties to the litigation
would be back to square one: they have to present before
the court sufficient and credible evidence to prove their
respective claims.
As a rule, an offer or a counteroffer given in an effort to
reach a compromise should not be accorded evidentiary
value on its face, because by its very nature, a compromise
is concessionary. And if one of the parties does not concur,
the court cannot impose an amount based on the
unaccepted offer, even if the culpability of a party has been
duly established. The amount of any such liability must be
independently ascertained with competent evidence.
Otherwise, this Court would be setting a dangerous
precedent. Hence, parties would not submit offers to
compromise for fear that such offers, if not accepted, would
be used by the Court against them. Upon the other hand,
parties may offer bloated amounts in the hope that said
sums could influence the court to eventually grant them a
relief more than they deserve. In any event, the rationale
for the policy encouraging compromises would be defeated.
__________________
5 § 26, Rule 130, Rules of Court. See also Servicewide Specialists, Inc. v.
Court of Appeals, 257 SCRA 643, 656, June 26, 1996.
6 Servicewide Specialists, Inc., ibid., citing 15A CJS Compromise and
Settlement § 22.
342

In the case at bar, we should bear in mind that when

RREC conceded in 1981 to the solicitor general’s
counteroffer of P10,926,071.29, provided the amount would
bear 6 percent interest per annum, it was with the caveat
that such interest rate was already “very much less than
the accepted rate of inflation that has supervened since
1962 x x x.” Indeed, if we are to compare current prices
with those of three and a half decades ago, or even
seventeen years ago, such interest rate on the principal
may no longer compensate the 1962 expense. In other
words, what may have been a “fair and reasonable”
compromise in 1981 may no longer be acceptable at this

time. In any event, the solicitor general’s counteroffer, not
being supported with factual evidence, still cannot be the
basis of a judicial award.
Need to Receive Evidence of Value

of RREC Accomplishment
In the instant case, there appears no dispute that RREC
has undertaken partial work for the Manila Bay
reclamation project to the extent of 1,558,395 cubic meters
of dredgefill work. In the words of the ponencia:
“Undoubtedly, what RREC claimed for was the payment for what
it had done on, and for the dredgefill of 1,558,395 cubic meters
used for the reclamation project worked on.”
This case must therefore be remanded for the purpose of

receiving evidence of the peso value of the 1,558,395 cubic
meters of dredgefill work undisputedly done by RREC.
WHEREFORE, I vote for the following:
1. The DECLARATION of the nullity of (a) the

Reclamation Agreement between Pasay City and
RREC and (b) Ordinance Nos. 121 and 158 of Pasay
City
2. The RETENTION of ownership of the reclaimed
land in favor of the Cultural Center of the
Philippines
3. The REMAND of the case to the Commission
composed of the former Thirteenth Division of the
Court of Appeals
343
VOL. 299, NOVEMBER 25, 1998 343

Pilapil vs. Garchitorena
(consisting of Associate Justices Arturo B. Buena,

chairman; Minerva P. GonzagaReyes and Quirino
D. Abad Santos, Jr.) for the sole purpose of
receiving evidence of the peso value of the work
accomplished by RREC and Pasay City for which
they shall be paid by the national government.
Petition in G.R. No. 103882 granted while in G.R. No.

105276 denied.
Note.—When the Constitution speaks of national

patrimony, it refers not only to the natural resources of the

Philippines, as the Constitution could have very well used
the term natural resources, but also to the cultural heritage
of the Filipinos. (Manila Prince Hotel vs. Government
Service Insurance System, 267 SCRA 408 [1997])
——o0o——
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8/4/2016 SUPREME COURT REPORTS ANNOTATED VOLUME 299

VOL. 299, NOVEMBER 25, 1998 199

REPUBLIC OF THE PHILIPPINES, petitioner, vs. THE

PASAY CITY and REPUBLIC REAL ESTATE

Reclamations; Republic Act 1899; Foreshore Lands; Statutory

Same; Same; Same; Same; Administrative Law; When the law

unavailing to supplant or rectify any mistake or omission in the

200 SUPREME COURT REPORTS ANNOTATED

Republic vs. Court of Appeals

Same; Same; Same; Words and Phrases; “Foreshore Lands,”

Same; Same; Same; Same; Statutory Construction; That

Same; Same; Same; Same; The term “foreshore” refers to “that

Republic Act No. 1899 should be understood in the sense attached

Same; Same; Same; Same; Municipal Corporations; Local

VOL. 299, NOVEMBER 25, 1998 201

Republic vs. Court of Appeals

Land Titles; Actions; Lis Pendens; A notice of lis pendens is

Same; Same; Torrens Titles; A torrens title cannot be

Equity; Reclamations; No one, not even the government, shall

appearing that something compensable was accomplished by them,

202 SUPREME COURT REPORTS ANNOTATED

Republic vs. Court of Appeals

Supreme Court; National Patrimony; Cultural Heritage; It is

ROMERO, J., Separate Opinion:

Reclamations; Foreshore Lands; Municipal Corporations;

literally converge, thus excluding submerged lands. This

Same; Same; Same; Same; Same; Police Power; Republic Act

VOL. 299, NOVEMBER 25, 1998 203

Republic vs. Court of Appeals

delegates some of its sovereign powers either to the legislature or

PUNO, J., Concurring Opinion:

Reclamations; Statutory Construction; Verba Legis Rule; If a

to determine legislative intention from its language. The history

Same; Same; Foreshore Lands; Words and Phrases;

204 SUPREME COURT REPORTS ANNOTATED

Republic vs. Court of Appeals

cities and municipalities under Republic Act 1899 is limited to

sixty percent (60%) of the area sought to be reclaimed was beyond

Same; Same; Same; Same; When decisions of the Supreme

VOL. 299, NOVEMBER 25, 1998 205

Republic vs. Court of Appeals

Same; Same; Same; Same; The term “foreshore lands” clearly

thereafter, they are to be understood and interpreted in the same

Same; Same; Same; Same; Legislative grants are to be

Same; Same; Same; Same; The plain meaning of a provision

206 SUPREME COURT REPORTS ANNOTATED

Republic vs. Court of Appeals

been within the intention of men of ordinary intelligence and

not obtain in R.A. No. 1899 limiting reclamation to foreshore

Same; Same; Same; Same; Estoppel; Government cannot be

Same; Same; Same; Same; Judgments; Doctrine of Stare

Same; Same; Same; Same; Administrative Law; Municipal

VOL. 299, NOVEMBER 25, 1998 207

Republic vs. Court of Appeals

and the required “administration” by the municipal corporation

that reclamation shall be done by the local government unit by

Same; Natural Resources; Regalian Doctrine; The right to

Same; Same; Same; Municipal Corporations; Being a public

208 SUPREME COURT REPORTS ANNOTATED

4 Annex “E”; Record on Appeal, pp. 6473.

hibits “A” to “YYY4,” (b) Defendant Republic Real Estate

13 Rollo, G.R. No. 103882, pp. 853869.

2. Ordering plaintiffappellant to turn over to Pasay City the