E. Republic vs. Court of Appeals

EN BANC
[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.
SYLLABUS
1. STATUTORY CONSTRUCTION; LAW IS CLEAR; NO ROOM FOR

INTERPRETATION AND CONSTRUCTION BUT ONLY FOR APPLICATION. — 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.
2. ID.; ID.; RESORT TO EXTRINSIC AIDS IS UNWARRANTED. — 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 unavailing to supplant or rectify any mistake or omission in the law.
3. ID.; EXPRESSIO UNIUS EST EXCLUSIO ALTERIUS. — 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". All
things viewed in proper perspective, we reiterate what was said in Ponce v. Gomez (L-
21870) and Ponce v. City of Cebu (L-22669) 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."
4. REMEDIAL LAW; EVIDENCE; PROBATIVE VALUE; LETTER RELIED UPON BY
RREC IS NO PROOF THAT IT HAD RECLAIMED 55 HECTARES OF LAND. — 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
sub-contracts for subject reclamation project but RREC never complied with such
requirements and conditions sine qua non. TECcHA
5. ID.; ACTION; NOTICE OF LIS PENDENS; NECESSARY IN AN ACTION FOR

RECOVERY OF POSSESSION; CASE AT BAR. — A notice of lis pendens is necessary
when the action is for recovery of possession or ownership of a parcel of land. In the
CD Technologies Asia, Inc. 2020 cdasiaonline.com
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. EHcaAI
6. CIVIL LAW; LAND TITLES; TORRENS SYSTEM OF REGISTRATION;

TORRENS TITLE CANNOT BE COLLATERALLY ATTACKED. — 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 certi cate of title can never be the subject of a
collateral attack. It cannot be altered, modi ed, or cancelled except in a direct
proceeding instituted in accordance with law.
7. ID.; HUMAN RELATIONS; NO ONE SHALL UNJUSTLY ENRICH ITSELF AT
THE EXPENSE OF ANOTHER. — 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 dredge- ll
poured in, worth P10,926,071.29, as veri ed by the former Ministry of Public Highways,
and as claimed by RREC itself in its aforequoted letter dated June 25, 1981.
DECISION
PURISIMA , J : p
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. Cdpr
In G.R. No. 103882, the Republic of the Philippines, as petitioner, assails the
Decision, dated January 29, 1992 and Amended Decision, dated April 28, 1992, of the
Court of Appeals, 1 which a rmed with modi cation the Decision of the former Court
of First Instance of Rizal (Branch 7, Pasay City) in Civil Case No. 2229-P, 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 I of said law, reads:
"SEC. 1. Authority is hereby granted to all municipalities and chartered
cities to undertake and carry out at their own expense the reclamation by
dredging, lling, or other means, of any 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 April 24, 1959, the Pasay City and RREC entered into an Agreement 2 for the
reclamation of the foreshore lands in Pasay City.
On December 19, 1961, the Republic of the Philippines ("Republic") led a
Complaint 3 for Recovery of Possession and Damages with Writ of Preliminary
Preventive Injunction and Mandatory Injunction, docketed as Civil Case No. 2229-P
before the former Court of First Instance of Rizal, (Branch 7, Pasay City).
On March 5, 1962, the Republic of the Philippines led an Amended Complaint 4
questioning subject Agreement between Pasay City and RREC (Exhibit "P") on the
grounds that the subject-matter 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 any public bidding.
The Answers 5 of RREC and Pasay City, dated March 10 and March 14, 1962,
respectively, averred that the subject-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 de nition 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 of Rizal (Branch 7, Pasay City) issued an Order 6 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 same trial court issued a writ of preliminary injunction 7
which enjoined the defendants, RREC and Pasay City, their agents, and all persons
claiming under them "from further reclaiming or committing acts of dispossession".
Thereafter, a Motion to Intervene 8 , dated June 27, 1962, was led 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 case. The
Motion was granted by the trial court and the Answer attached thereto admitted. 9
The defendants and the intervenors then moved to dismiss 1 0 the complaint of
the Republic, placing reliance on Section 3 of Republic Act No. 5187, which reads:
"Section 3. Miscellaneous Projects. llcd
xxx xxx 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 fty 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, nally, 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. . . ." (emphasis 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 Law and Conscience Union, Inc. ("PLCU") moved to
intervene 1 1 , alleging as legal interest in 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, the lower court of origin allowed the said intervention 1 2 .
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
rst Amended Complaint, (3) the Answer of Defendant Republic Real Estate
Corporation to the rst Amended Complaint, (4) the Answer of Defendant Pasay
City to the rst 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 led by the O ce of the Solicitor General, and all the
documentary evidence by the parties to wit: (a) Plaintiff's Exhibits "A" to "YYY-4",
(b) Defendant Republic Real Estate Corporation's Exhibits "1-RREC" to "40-a" and
(c) Intervenor Pasay Law and Conscience Union, Inc.'s., Exhibits "A-PLACU" to "C-
PLACU", the Court hereby:
(1) Denies the "Motion to Dismiss" led on January 10, 1968, by
Defendant Republic Real Estate Corporation and Intervenors Bautista, et. al., as it
is the nding 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: prLL
(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 speci cations 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
speci cations 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 sub-contractor 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. 6-8)
Dissatis ed 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. 3-A issued, amending Presidential Decree No. 3, thus: prLL
"SEC. 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 of the Philippines ("CDCP") signed a Contract 1 3 for the Manila-Cavite
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 28, 1992, the Court of Appeals came out with a Decision 1 4
dismissing the appeal of the Republic and holding, thus:
"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 speci cation 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 plaintiff-appellant to turn over to Pasay City the
ownership and possession over all vacant spaces in the twenty-one 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 (60%)
percent of the Twenty-One (21) hectares of land already reclaimed by it, to be
exercised within one (1) year from the nality 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 Fifty-Five (55) hectares, and not only Twenty-one (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:
submission of the RREC's plans and speci cation 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 plaintiff-appellant 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 nality of this Decision, at the same terms and
condition embodied in the Pasay City-RREC 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. prcd
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:
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 FINDING THAT RREC HAD RECLAIMED 55

HECTARES AND IN ORDERING THE TURN-OVER 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:
I
THE COURT OF APPEALS ERRED IN NOT DECLARING PRESIDENTIAL DECREE
NO. 3-A 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:
dredging, lling, or other means, of any foreshore lands bordering them, and to
Communications."
It is the submission of the petitioner, Republic of the Philippines, that there are no
foreshore lands along the seaside of Pasay City 1 5 ; that what Pasay City has are
submerged or 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 I of the immediately
aforequoted law is that de ned 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 de nes 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 xed at the line to which the ordinary means tide ows: 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 con ned to but a portion of the shore, in itself a very limited
area.' (p. 6, Intervenors appellees' brief).
Bearing in mind the (Webster's and Law of Waters) de nitions 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.
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 than that defined by Webster . . .cdphil
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 xing 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 signi cance of particular
expressions will largely depend upon the connection in which they are found and
their relation to the general subject-matter 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 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. 317-319).
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 nancial position to handle all this work. On the
other hand, with a greater autonomy, many chartered cities and provinces
are nancially 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 in order 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. . . (emphasis 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 so-called
'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 nance the reclamation of land
in said city.
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. Signi cantly, 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 con rmed 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: cda
'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 self-
supporting because the proceeds from the sales or leases of lands
so reclaimed will be more than su cient 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 . . .".
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, Congress 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 de nition of
'foreshore' lands.
The opinion of the then Secretary of Justice Mabanag, who was at
that time the chief law o cer and legal adviser of the government and
whose o ce 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 (L-21870) and Ponce vs. City of Cebu
(L-2266}, by a unanimous vote of six (6) justices (the other ve (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. 312-313). But notwithstanding said
interpretation by the Supreme Court of RA 1899 in the Ponce cases,
Congress enacted a law covering the same areas previously embraced in a
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 non-conformity 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 for interpretation or
construction, but only for application. 1 6 So also, resort to extrinsic aids, like the
records of the constitutional convention, is unwarranted, the language of the law being
plain and unambiguous. 1 7 Then, too, opinions of the Secretary of Justice are unavailing
to supplant or rectify any mistake or omission in the law. 1 8 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 ow of the tide." (Words and Phrases,
"Foreshore") prcd
"A strip of land margining a body of water (as a lake or stream); the part of
a seashore between the low-water line usually at the seaward margin of a low-tide
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 (L-21870) and Ponce v. City of Cebu (L-22669)
despite the enactment of Republic Act No. 5187 ("RA 5187"), the relevant portion of
which, reads:
"Section 3. Miscellaneous Projects
xxx xxx 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
the contractor which shall not exceed fty percent of the area reclaimed by the
to the contrary notwithstanding: Provided, nally, that the foregoing provisions
respected. . . .
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 (L-21870) and Ponce v. City of Cebu (L-22669) 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;" (emphasis 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:
xxx xxx xxx
I. Facts —
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 attorney-in-fact 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 xxx xxx
3. On March 16, 1961, the Municipal Council of Navotas passed

Resolution No. 22 approving and ratifying the contract. llcd
xxx xxx 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), ve 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.)
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 s shing harbor by deep-sea shing operators as well as
a shing ground of sustenance sherman. 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 ow 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 6-0 with ve 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 xxx 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
non-compliance 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.
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 sub-contracts for subject reclamation project but RREC
never complied with such requirements and conditions sine qua non.
No contracts or sub-contracts or agreements, plans, designs, and/or -
speci cations of the reclamation project were presented to re ect 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
certi cation 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 testi ed on any reclamation work done by
RREC, and extent thereof, as of April 26, 1962. Not a single contractor, sub-contractor,
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 unidenti ed 55 hectares they allegedly
reclaimed. But this burden of proof RREC and Pasay City miserably failed to discharge.
cdphil
So also, in the decision of the Pasay Court of First Instance dismissing the
complaint of plaintiff-appellant, now petitioner Republic of the Philippines, the lifting of
the writ of Preliminary Injunction issued on April 26, 1962 would become effective only
has soon as Defendant Republic Real Estate Corporation and Defendant Pasay City
shall have submitted the corresponding plans and speci cations to the Director of
Public Works and shall have obtained approval thereof, and as soon as corresponding
public bidding for the award to the contractor and sub-contractor that will undertake
the reclamation project shall have been effected." ( Rollo, pp . 127- 129, 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
"21-A" 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 led 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 ve (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 stipulated speci cations 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 nal 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 RREC-Pasay 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, O ce 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 ), what could be seen in front of and behind it
was all water (TSN, Sept. 29, 1997, pages 127-128 ). 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 speci cation 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 non-compliance 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,
i t (RREC) opted to le 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 factual and
realistic, so much so that on June 25, 1981 RREC in its reply letter to the Solicitor
General stated: cdasia
"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 in ation that has supervened since 1962 to the
present, and even less than the present legal rate of 12% per annum." 1 9
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 NO. BUILDING AREA OCT/TCT
42 Gloria Maris 9,516 sq.m. OCT 159 in the

Restaurant name of GSIS
3 Asean Garden 76,299 sq.m. OCT 10251 in the
name of CCP
12 Folk Arts Theater 1.7503 hec. TCT 18627 in the
and PICC parking name of CCP
space
22 landscaped with 132,924 sq.m. TCT 75676 in the
sculpture of Asean name of CCP
Artists-site of
Boom na Boom
23 open space, back 34,346 sq.m. TCT 75677 in the
of Philcite name of CCP
24 Parking space for 10,352 sq.m. TCT 75678 in the
Star City, CCP, name of CCP
Philcite
25 open space 11,323 sq.m. TCT 75679 in the
occupied by Star name of CCP
City
28 open space, 27,689 sq.m. TCT 75684 in the
beside PICC name of CCP
29 open space, 106,067 sq.m. TCT 75681 in the
leased by El name of CCP
Shaddai
We discern no factual basis nor any legal justi cation therefor. In the rst 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 certi cates 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:
"Section 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
a rmative relief is claimed in his answer, may record in the o ce 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 ling 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."
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
certi cate 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 shall unjustly enrich
oneself/itself at the expense of another, 2 0 we believe; and so hold, that Pasay City and
RREC should be paid for the said actual work done and dredge- ll poured in, worth
P10,926,071.29, as veri ed 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 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 bene cent
cause of all, must unquestionably refine our nature, and elevate us in the scale of being."
WHEREFORE: cdphil
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. 2229-P 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 certi cates 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
TWENTY-SIX THOUSAND SEVENTY-ONE AND TWENTY-NINE 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.
Narvasa, C .J ., I dissent: Ponce is not binding precedent, and P.D. 3-A is in utter
nullity:
Davide, Jr., J ., also that of the concurring opinion of Mr. Justice Puno.
Bellosillo, Quisumbing, Melo and Pardo, JJ ., concur.
Separate Opinions
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 multi-faceted concept. The
revered and, at times, controversial President John Fitzgerald Kennedy, in one of his
numerous speeches, elevated art to the level of a pyscho-social necessity of man when
he said" . . . (A)rt establishes the basic human truths which must serve as the
touchstone of our judgment." Indeed, there is no question that art satis es 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 nds 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 of the Manila Bay covering the Manila-Pasay-Parañaque 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 certi ed 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 led 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 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 de nition 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 led 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. Speci cally, 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 led a complaint in
intervention.
On May 24, 1972, the court a quo rendered a judgment on the pleadings,
upholding the validity of Ordinance Nos. 121 and 158 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 speci cations in the reclamation approved by
the Director 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. cdtai
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. 3-A, 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. 3-A, 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 Manila-
Cavite 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 led a claim for P30,396,878.20 with the then Ministry of Public
Highways (MPH) for its actual reclamation 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 O ce 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 O ce 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, a rming the trial
court's judgment with the following modi cations: (a) the requirement on public
bidding and submission of plans and speci cations 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 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 nding 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. 3-A 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 non-impairment 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 modi cation 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 nding 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 de ned 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 de nition 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 ux 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. No. 5187, for example, Congress speci ed the
areas that may be reclaimed in the construction of the Manila-Cavite 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. 3-A, 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 one-kilometer 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 carried
out by the municipality or chartered city concerned 2 with the aid of funds which it may
borrow from third persons or lending institutions. 3 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 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 in which
the principal has been originally received," 4 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. 3-A 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. 3-A, 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.
P.D. No. 3-A 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
speci cally allows such payment, albeit based on quantum meruit. Incidentally, while
RREC attacks the constitutionality of P.D. No. 3-A, and only at this late stage in the
proceedings, it relied on this "quantum meruit compensation" clause in the same decree
when it led 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,
nding that RREC had reclaimed 55 hectares, was, in its own words, merely "tentative,
pending the submittal of corroborative documents"; hence, it does not amount to the
"certi cation" 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 bene t 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 the case of Eastern Shipping Lines, Inc. v. Court of Appeals, 5 the Court 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 quanti cation 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 nally
adjudged. . ." (Citations omitted)
These are the only circumstances under which interest in the concept of actual or
compensatory damages, liquidated or otherwise, may be justi ed. 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 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 ling 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 bene cence of loyal
patrons, the so-called "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, re ection, 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.
PANGANIBAN , J ., concurring :
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) nulli es (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 justi es 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 de nition of foreshore land does not include areas that
are fully submerged by the sea.
The Manila Bay area is, therefore, de nitely 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. Title 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 successor-in-interest). Such titles are unaffected by the
claims of RREC and cannot be collaterally attacked 1 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 bene t of the government. It is a time-honored principle that
no one, not even the government, may be enriched at the expense of another, 2
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 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 3-A 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 (MPH) (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 to "the hope of gaining, balanced by the danger of losing." 3 The parties usually
make reciprocal concessions in order to avoid litigation or terminate a pending one. 4
However, 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. 5 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. 6 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 su cient 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
in uence 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.
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 in ation that has supervened since 1962 . . ."
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
dredge-fill work. In the words of the ponencia:
"Undoubtedly, what RREC claimed for was the payment for what it had
done on, and for the dredge- ll 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 dredge- ll 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 (consisting of Associate Justices Arturo B.
Buena, chairman; Minerva P. Gonzaga-Reyes 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.
PUNO , J ., concurring :
Petitioners seek to modify the Decision and Amended Decision of the Court of
Appeals in CA-G.R. CV No. 51349 1 which ordered the Republic of the Philippines to
award thirty- ve (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 sea-wall 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 xed 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 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
reclamation project contemplated in Ordinance No. 121. 2
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 bene cial 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
Ordinance Nos. 121 and 158. 3 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 per cent (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 fty (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 certi es that fty (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, RREC entered into contracts to sell with third
persons 4 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 led against Pasay City and RREC Civil Case No.
2229-P 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 District, Branch VII, Pasay City. 5 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 on Pasay City and
RREC but these were not heeded. 6
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 cities of Manila and Pasay and the municipality of Parañaque and does not
include a portion of "Manila Bay" as certi ed 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 low-water 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 led to harass and vilify the Pasay City Government and RREC who
acted in good faith and with good intentions for the bene t of the city and national
government. 7
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
Bay Beach Resort until further orders of the court." 8 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, 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. 2229-P. 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" led a complaint in intervention, joining
cause with the National Government.
On February 8, 1972, intervenors Jose Bautista, et al. led 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 speci cations 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
rst 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 led by the O ce of the Solicitor General, and all the
documentary evidence by the parties to wit: (a) Plaintiff's Exhibits "A" to 'YYY-4",
(b) Defendant Republic Real Estate Corporation's Exhibits "1-RREC" to "40-a" and
(c) Intervenor Pasay Law and Conscience Union, Inc., Exhibits "A-PLACU" to C-
PLACU", the Court hereby;
(1) Denies The Motion To Dismiss' led on January 10, 1968,
by Defendant Republic Real Estate Corporation and Intervenors Bautista, et
al., as it is the nding 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 speci cations
in the reclamation approved by the Director of Public Works, and to
have all the contracts and subcontracts for said 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 speci cations 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."
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 Swo-40880 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 Manila Bay area consisting of 257,898 square meters 9 under Swo-
40880, 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 the parcel of land reserved in Proclamation No. 316.
10
On January 11, 1973, President Marcos issued P.D. No. 3-A amending the Public
Works Act, R.A. No. 5187. P.D. No. 3-A 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 meruit." Pursuant to P.D. 3-A,
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) to undertake the "Manila-Cavite Coastal Road
Project." 1 1 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 Center Complex and the Financial Center Complex. 1 2
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 Swo-04-000078 and 400,000 square meters under Swo-04-00141
totalling 504,717 square meters 1 3 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 of real property owned and operated by the government. 1 4 On the same day,
President Marcos issued P.D. No. 1085 decreeing that the reclaimed "foreshore and
off-shore areas of the Manila Bay from the CCP, passing through Pasay City, Parañaque,
Las Piñas, 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 led a claim with the then Ministry of Public Highways pursuant to
P.D. No. 3-A. RREC proposed to settle the case amicably by seeking from the
government payment of P30,396,878.20 representing the value of the reclamation
work based on 1974 price levels. 1 5 The Solicitor General, with the assistance of the
Ministry of Public Highways, counter-proposed 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 counter-proposal unless an additional
six per cent (6%) interest from 1962 up to the time of payment be made. 1 6 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 led 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. 3-A. Without objection from the Solicitor General, RREC and Pasay City
presented their additional evidence. 1 7
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 ve (3.5)
hectares within the CCP Complex covered by TCT No. 75676 of the CCP. 1 8 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 per cent (6%) and
twelve per cent (12%) per annum from 1962 to December 31, 1986. 1 9 The proposal
was referred to the O ce of the President for consideration. 2 0 While the proposal was
pending, RREC increased its cash demand to P175,000,000.00 and then to
P245,000,000.00. The Office of the President found the proposals unacceptable. 2 1
The proceedings before the Court of Appeals resumed on November 14, 1990.
22 On January 28, 1992, the Court of Appeals a rmed with modi cation 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 twenty-one (21) hectares of Manila Bay
per admission of RREC's counsel in its appellee's brief, 2 3 and ordered the National
Government to turn over to Pasay City all spaces with no permanent improvement on
the 21-hectare reclaimed area. The Court of Appeals also sustained RREC's irrevocable
option to purchase sixty per cent (60%) of the 21-hectare land to be exercised within
one (1) year from nality of the decision. The dispositive portion of the decision reads
as follows:
"WHEREFORE, the decision appealed from is hereby AFFIRMED with the
following modifications:
submission of RREC's plans and speci cations to the Department of Public

ownership and possession over all vacant spaces in the twenty-one 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.
3. Sustaining RREC's irrevocable option to purchase sixty (60) per cent
of the twenty-one (21) hectares of land already reclaimed by it, to be exercised
within one (1) year from the nality of this decision, at the same terms and
conditions embodied in the Pasay City-RREC reclamation contract, and enjoining
appellee Pasay City to respect RREC's option." 2 4
RREC and Pasay City moved for reconsideration of the decision mainly claiming
that RREC had reclaimed a total of fty- ve (55), not twenty-one (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 fifty-five (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 thirty- ve (35) hectares of
open land, speci cally the Trade and Convention Site and several vacant lots in the CCP
Complex, 2 5 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 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 75676;
5. Lot No. 25 with an area of 11,323 sq. m. covered by TCT No. 75679;
6. Lot No. 28 with an area of 17,689 sq. m. covered by TCT No. 757684;
8. Lot No. 42 with an area of 9,516 sq. m. covered by OCT 159;
9. Lot No. 23 (portion only) with an area of 15,925 sq. m. covered by
TCT 75677. 2 6
The Court of Appeals held:
"WHEREFORE, the dispositive portion of our Decision dated January 28,
1992 is hereby AMENDED to read as follows:

submission of the RREC's plans and speci cations to the Department of Public

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 nality of this Decision, at the same terms and conditions
embodied in the Pasay City-RREC reclamation contract, and enjoining Pasay City
to respect RREC's irrevocable option." 2 7
Both parties appealed to this Court.

In September 1992, the Cultural Center of the Philippines, through the O ce of
the Government Corporate Counsel, led a petition-in-intervention 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 protect its properties which are indispensable to its
existence. 2 8
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 nancial support from the National Government and to nance its
projects, it has been subsisting on the income derived from the earnings of its real
property. 2 9
On September 10, 1997, the Second Division of this Court issued a Resolution
remanding the case to the Court of Appeals, former Thirteenth Division, 3 0 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 respective measurements of the areas referred
to." 3 1
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 su cient evidence to disprove the nding in the Amended
Decision that RREC and Pasay City were able to reclaim fty- ve (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 those without structures, otherwise
referred to as "open spaces." 3 2
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.
I n 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 fty- ve (55) instead of merely thirty- ve (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 NINE (9) LOTS TITLED
IN THE NAME OF CCP." 3 3
CCP claims that:

"I. THE COURT OF APPEALS ERRED IN FINDING THAT RREC
ACTUALLY RECLAIMED AN AREA OF FIFTY FIVE HECTARES OF THE MANILA
BAY.
II. THE HONORABLE COURT OF APPEALS ERRED IN ORDERING THE
TURNOVER TO RREC OF NINE PARCELS OF LAND REGISTERED IN THE NAME OF
CCP." 3 4
RREC and Pasay City contend that:

"I. THE COURT OF APPEALS ERRED IN NOT DECLARING P.D. No. 3-A
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 QUESTIONED RECLAMATION
CONTRACT AND THE RECLAIMED AREA." 3 5
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. 3-A unconstitutional?
(b) Can the President, by the issuance of P.D. No. 3-A, 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.
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, lling, or other means, of any foreshore lands bordering them , and to
Communications."
R.A. No. 1899 authorizes municipalities and chartered cities to undertake and carry out
at their own expense the reclamation by dredging, lling or other means, of any
foreshore lands bordering their respective territories. The law itself speci es what
lands may be reclaimed and these are foreshore lands. It did not, however, de ne the
term foreshore lands.
Four years before R.A. No. 1899 was passed, the term "foreshore lands" was
de ned by the Court of Appeals in the case of Hacut v. Director of Lands 3 6 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 ux and re ux of the tides. It is indicated by a middle line between the
highest and lowest tides." 3 7
RREC and Pasay City contend that this dictionary de nition 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 lands within its territory. Congress authorized
Bacolod City to raise funds not exceeding P6 million to nance the project. 3 8 Bacolod
City, according to RREC and Pasay City, reclaimed 1,600,000 square meters which was
not limited to the foreshore as de ned 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 to determine legislative intention from its
language. 3 9 The history of events transpiring during the process of enacting a law,
from its introduction in the legislature to its nal validation has generally been the rst
extrinsic aid to which courts turn to construe an ambiguous act. 4 0 We bear in mind,
however, that extrinsic aids are resorted to only if the words of the statute are
ambiguous. 4 1 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. 4 2 When a statute is clear, it must be taken to mean exactly what it says. 4 3
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. 4 4 The verba legis 4 5 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. 4 6 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. 4 7
"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 4 8 and Ponce v. City of Cebu. 4 9 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
per cent (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.
Almost twenty years thereafter, this Court again de ned foreshore lands in the
1984 case of Republic v. Court of Appeals. 5 0 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 . . .
'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." 5 1
Based on this de nition, 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 speci cally altered the courts'
interpretation if it so desired. 5 2 The presumption is that the legislature was acquainted
with, and had in mind, the judicial construction of the words in the prior enactment. 5 3
It was the dictionary de nition 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 Manila-
Cavite Coastal Road Project, to wit:
"Section 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,
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
the contractor which shall not exceed fty per cent of the area reclaimed by the
to the contrary notwithstanding: Provided, nally , That the foregoing provisions
respected —— P600,000,000."
By adding the term "submerged areas" in the reclamation of Manila Bay for the Coastal
Road Project, Congress tacitly recognized the limited dictionary meaning of "foreshore
lands."
This de nition of foreshore lands was again recognized in P.D. No. 3-A, a
legislative measure issued by the Chief Executive in 1972 . P.D. 3-A 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 been no need for the legislative and executive branches of
government to include "submerged areas" or "areas under water" in subsequent laws . R.
A. 5187 and P.D. 3-A were passed after this Court de ned "foreshore lands" in the
Ponce cases. The adoption of an amendment throws light on the meaning of the act
before it was amended. 5 4 Indeed, where the terms of a statute have acquired a settled
meaning through judicial interpretation, and the statute is changed by amendment or re-
enactment, 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. 5 5
Both the judicial and legislative interpretations lead to the inescapable
conclusion that R.A. No. 1899 is limited to the 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 sovereign and most strongly as against the grantee. 5 6 Statutory
grants by the legislature, when they delegate sovereign authority, or confer special
bene ts or exemptions are to be construed strictly against the grantee. 5 7 Statutes in
derogation of common or general rights are strictly construed and rigidly con ned to
cases clearly within their scope and purpose. 5 8 Grants of public land derogate from
sovereign authority and are to be construed strictly against the grantee. 5 9
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, lling, or other means, of any foreshore lands bordering them, and to
Communications. Cdpr
xxx xxx 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 low-water 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 de nition 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 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 per cent (60%) of the area sought to be reclaimed as beyond the foreshore
but upheld as valid forty per cent (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 the intention of men of ordinary intelligence
and discretion. 6 0 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. 6 1 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 agents. 6 2 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 de ned "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 well-taken. 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 ne, the resolution of the issue depended on
the de nition of foreshore land and the Court of Appeals adopted its dictionary
meaning.
T h e 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:
dredging, lling, or other means, of any foreshore lands bordering them , and to
Communications.
SEC. 2. Any and all lands reclaimed, as herein provided, shall be the
property of the respective municipalities or chartered cities: Provided, however,
That the new foreshore along the reclaimed areas shall continue to be the
property of the National Government.
SEC. 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 xed 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.
SEC. 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 rst 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.
SEC. 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 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.
SEC. 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 certi cate accomplished therefor, free
from any tax or other public impost arising from currency conversion, any existing
law to the contrary notwithstanding.
SEC. 7. Bonds issued under this Act shall be exempt from taxation,
which fact shall be stated on the face of the certi cates which shall be issued in
accordance with this Act.
SEC. 8. Should the receipts accruing under section four be insu cient
to service adequately bonds issued under this Act, the sinking fund de ciency
shall be made good by the general funds of the municipality or chartered city in
such manner that the annual contribution shall be su cient 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.
SEC. 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 speci cations 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.
SEC. 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
city itself by administration in consultation with the Secretary of Finance and the
Secretary of Public Works and Communications. To nance the project, the municipal
government is authorized to contract indebtedness with any third person, or issue
bonds under terms and conditions to be xed 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 rst 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 o ce 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 and chartered

dredging, filling or other means of any foreshore lands bordering them;
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
speci cations 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.
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
certi ed by the City Engineer and accomplished in accordance with plans
and speci cations 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 certi ed 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 speci cations 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.
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 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
xed 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.
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 Attorney-in-fact 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 sub-contractors, 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-in-fact, 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 sub-
contractors are not acceptable because prejudicial to the interest of the
City in the discretion of the Attorney-in-fact, then, the Attorney-in-fact 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 shermen's wharf where banca-owners 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 one-half 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 reclamation
hereinabove mentioned, to hire 80% of the laborers who are bona- de
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"
xxx xxx xxx." 6 3
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 one-kilometer
stretch shall start from the Pasay City-Manila border and end at the Pasay City-
Parañaque 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 any foreshore is confined to a few meters along the coast; 6 4
(2) The reclamation under R.A. No. 1899 must be undertaken by the
chartered city or municipality by administration. 6 5 In the Agreement, reclamation was
undertaken and administered by RREC not Pasay City. 6 6
RREC and Pasay City claim that RREC was the attorney-in-fact 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. 6 7 Expressio unius est exclusio alterius.
(3) Assuming that R.A. No. 1899 allows reclamation by contract, the
reclamation contract with RREC was not awarded by Pasay City through public bidding.
68
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 sub-contracts
be submitted rst 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 quali ed, or
when the bids 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 attorney-in-fact 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 attorney-
in-fact," then the attorney-in-fact "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 sub-contracting 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 nanced by
loans obtained from third persons or lending institutions.
Under the Agreement, Pasay City was to borrow money from RREC to nance the
reclamation project. 6 9 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 per cent (6%) per annum computed from the date of its actual
disbursement in behalf of the City; 7 0 and (3) by the express grant of an irrevocable
option to purchase 60% of the entire lands reclaimed. 7 1
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 borrow money only from RREC to nance 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 fty (50) hectares
of the contract area. Indeed, even before RREC could reclaim said fty (50) hectares, it
was already selling lots to the public. In sum, RREC was to lend money to Pasay City to
nance the project which RREC was going to undertake. 7 2 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 currency in which the principal had been originally received.
73
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 . . ."
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 demand after 50 hectares shall
have been reclaimed. 7 4 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 per cent (60%) of the land reclaimed at a xed
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 certi es that fty (50)
hectares of the project have been reclaimed in accordance with the plans and
speci cations approved by the Director of Public Works. 7 5 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
implies that Pasay City's "debt" shall be payable in land. 7 6
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 as under what terms they may be granted such privilege. 7 7 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, the
State retains its rights over its property as dominus. 7 8
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 bene t 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. 3-A, took over the reclamation project
of RREC and Pasay City. P.D. No. 3-A 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. 3-A 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
reclaimed 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 belonging to the sovereign. 7 9 The doctrine was adopted and enshrined in the
1935, 8 0 1973 8 1 and 1987 Constitutions. 8 2 The State is, by the Constitution, the owner
of all lands belonging to the public domain, the waters, minerals, sheries, forests and
all natural resources therein.
Spain, in its earlier decrees, embodied the universal feudal theory that all lands
were held from the Crown. 8 3 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 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, con rming them in what they now have
and giving them more if necessary, all the rest of said lands may remain free and
unencumbered for us to dispose of as we may wish." 8 4
This decree dictated that all those lands which had not been granted by Philip, or in his
name, or by the kings who preceded him, belonged to the Crown. 8 5 The king, as the
representative of the people, assumed, asserted, and had title to all the land in the
Philippines, except as far as he saw fit to permit private titles to be acquired. 8 6
The Regalian doctrine was also recognized in the common law of England and
was introduced into the United States. 8 7 The English possessions in America were
claimed by right of discovery. 8 8 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 the exclusive power granted them, were vested in him. 8 9 The Crown,
according to the principles of the British law, was the proper organ to dispose of the
public domains. 9 0
The Crown's title to the land extended to all land covered by navigable waters in
which the tide ebbs and ows. 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 ows, and of all
lands below high-water mark, within the jurisdiction of the Crown of England, were in
the King. 9 1 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 shing 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 the representative of the nation and for the public benefit. 9 2
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, now the state, and to no one person in particular. 9 3
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 have been considered as legally equivalent to the national land. 9 4
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:
1. The coasts or maritime frontiers of Spanish 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 xxx 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.
xxx xxx xxx."
The coast sea and its shores 9 5 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 1889 9 6 and
property of public dominion under the Civil Code of 1950 . 9 7 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.
It is part of the patrimony under safeguard of the State. 9 8
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, without
proper authorization from the government. 9 9 The foreshore lands and those under
water were controlled by the government as agent of the State and were held in trust
for the benefit of the public. 1 0 0
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."

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 of the person reclaiming, pursuant only to
an express grant. 1 0 1 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 and
was now available for private appropriation or ownership. 1 0 2 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 a rmed 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 a rmed
the power of the National Government, as agent of the State, to reclaim the foreshore
and lands under water. The law, in pertinent part, reads:
"Section 1. The control and disposition of the foreshore as de ned in
existing law, and the title to all Government or public lands made or reclaimed by
the Government by dredging or lling 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 lling 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.
(b) Upon the completion of such plats 1 0 3 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 Governor-General 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 speci ed in said advertisement,
for commercial and business purposes, such leases to run for a period of
ninety-nine years . . ."
xxx xxx 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 Governor-General 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 speci ed in said
advertisement, for wharves, docks, piers, marine railways, or other appropriate
structures for a term not to exceed ninety-nine 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 bene cial use of such leased
foreshore or lands under water as may be speci ed in the lease, subject, however,
to all vested rights or easements of owners of lands adjacent to such foreshore or
lands under water.
xxx xxx xxx" 104
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:
"Section 56. The lands disposable under this title shall be classi ed as
follows:
(a) Lands reclaimed by the Government by dredging, lling, or other
means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the
shores or banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
xxx xxx xxx
Section 58. The lands comprised in classes (a), (b), and (c) of section
fty-six shall be disposed of to private parties by lease only and not otherwise, as
soon as the Governor-General, 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, speci cally Title III thereof, were substantially
reenacted in Commonwealth Act 141, the Public Land Act of 1936. 1 0 5 Commonwealth
Act No. 141 has remained in effect at present.
Foreshore lands are lands of public dominion intended for public use. 1 0 6 So too
are lands reclaimed by the government by dredging, lling, 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 rst 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.
Reclamation refers to the lling of submerged land by deliberate act and
reclaiming title thereto. 1 0 7 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. 1 0 8
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 speci c municipalities the right to reclaim
land. The Philippine Legislature passed laws granting municipalities the right to reclaim
foreshore or marshy lands within their respective territories. 1 0 9 The rule remained,
nonetheless, that no person, public or private, could undertake reclamation work and
own the land they reclaimed without a speci c 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 reclaim foreshore lands bordering their respective
territories. 1 1 0 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 principle in Manila Lodge No. 761 v. Court of Appeals 1 1 1 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
which resulted in unfair advantage to the grantee. 1 1 2 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 .
C. The State, through P.D. No.
3-A, validly revested in the
National Government the
right to reclaim.
P.D. No. 3-A 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.
Presidential Decree No. 3-A 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 Commander-in-Chief 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:
SEC. 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."
SEC. 2. This Decree shall take effect immediately.
xxx xxx xxx
P.D. No. 3-A revested in the National Government the power to undertake
reclamation projects. P.D. No. 3-A was an amendment to P.D. No. 3 which reads as
follows:
"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
nancial 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 Commander-in-Chief
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 seventy-two."
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. 3-A amended P.D. No. 3 by declaring reclamation as a national project.
D. No right to irrepealable laws —
R.A. No. 1899 validly repealed.
P.D. No. 3-A 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 nance vital infrastructure projects . To ensure
the priority and completion of these projects, the National Government saw it t to
integrate all reclamation projects and take over the same in sync with the national
agenda. 1 1 3
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 nancial 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 eighty-seven 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 Complex. It is composed of lots for
the Central Bank of the Philippines, the Government Service Insurance System, the
Social Security System, the Philippine National Bank and the Development Bank of the
Philippines. 1 1 4
The CCP is a "non-municipal public corporation" 1 1 5 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 preservation, promotion, enhancement and
development. 1 1 6 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 self-
expression in cultural affairs; and encourage the organization of cultural groups and the
staging of cultural exhibitions. 1 1 7 The properties of the CCP, both real and personal, are
administered and held in trust by the Board of Trustees of the CCP for the benefit of the
Filipino people. 1 1 8 Income derived from its projects and operations are invested by the
Board of Trustees in a Cultural Development Fund set up to attain the objectives of the
CCP. 1 1 9
The site of the CCP was chosen for historical reasons. Much of our history and
culture ourished along the shores of Manila Bay. This is where the early Filipinos under
Rajah Lakandula made their settlement. This is also where the 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, the Filipinos and Americans
heroically fought the Japanese. 1 2 0
Unlike other decrees of President Marcos, P.D. No. 3-A was not revoked by
President Corazon C . Aquino. 1 2 1 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 the country in accordance with the national agenda. 1 2 2
E. P.D. No. 3-A does not
violate the equal
protection clause.
P.D. No. 3-A 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 as to rights conferred and responsibilities imposed. 1 2 3 The equal
protection clause is not infringed by legislation which applies only to those persons
falling within a speci ed class, if it applies alike to all persons within such class. P.D. 3-
A 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 . . . legally existing or whose validity has been accepted by
the National Government . . ." It provides for the take-over 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. 3-A 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 3-A were promulgated after then President Marcos
declared martial law on September 21, 1972. 1 2 4 The President invoked his emergency
powers under Proclamation No. 1081 and General Order No. 1 in enacting both P.D.'s.
1 2 5 As Commander-in-Chief 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, in ation and economic crisis was recognized by this Court in
Aquino, Jr. v. Commission on Elections. 1 2 6 This Court upheld the legislative power of
the President as owing from his martial law powers and the transitory provisions of
the 1973 Constitution. 1 2 7 Noteworthy, the Freedom 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. 3-A does not authorize
taking of property without just
compensation.
No property can be taken without just compensation. P.D. No. 3-A 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 and
labor as much as the plaintiff reasonably deserves. 1 2 8 P.D. No. 3-A did not declare a
xed non-negotiable 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. 3-A and later attack
it as unconstitutional.
RREC and Pasay City did not challenge the constitutionality of P.D. No. 3-A before
the Court of Appeals. For this Court to exercise the power of judicial review, the
question of constitutionality must be raised at the earliest opportunity. 1 2 9 And RREC
and Pasay City not only failed to challenge the constitutionality of the decree, worse,
they used P.D. No. 3-A in seeking compensation from the National Government. P.D.
No. 3-A was issued in 1973. Five (5) years later, in 1978, RREC led a claim for quantum
meruit compensation on the basis of P.D. No. 3-A 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 led 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. 3-A on the basis of quantum meruit.
RREC's ip- opping stance on P.D. No. 3-A cannot be countenanced. It cannot be
allowed to use P.D. No. 3-A upon its convenience. Its attack on P.D. No. 3-A 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 fty-
ve (55) hectares of Manila Bay from 1959 to 1962. This was allegedly con rmed by
RREC's evidence adduced at the Commissioners' hearings. 1 3 0 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 rst is the "Cost 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 (MPH). 1 3 1 The second is the
letter dated June 6, 1979 of then Minister of Public Highways Baltazar Aquino
addressed to Mr. Vicente Asuncion, Jr., Executive Vice-President of RREC. 1 3 2 The third
is the letter dated June 10, 1981 of then Solicitor General Estelito Mendoza also to Mr.
Asuncion, Jr. 1 3 3 The Court of Appeals held:
"One of said evidences (Exh. 17-A) 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 fty-
five (55) hectares:"
prLL
On the basis of this actual inspection, the then Minister of Public

Highways, Minister Baltazar Aquino, wrote the Executive Vice-President of RREC
acknowledging RREC's accomplishment at "approximately fty- ve (55)
hectares." The said letter (Exh. 15) reads in part:
xxx xxx 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
fifty-five (55) hectares of Manila Bay.
These documents and their contents were not even disputed by plaintiff-
appellant as far as "the extent of the work accomplished as above certi ed" (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 fty- ve
hectares.
To our mind, plaintiff-appellant's assertion needs no further elaboration
since thru the naked eye it can easily be seen and discerned that plaintiff-
appellant, all along, believed and admitted that the fty- ve (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
certi ed that RREC has reclaimed approximately fty- ve (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 o cials of the government, who is [sic] always presumed
to have regularly performed his [sic] functions (see Sec. 3[m], Rule 131 of the
Rules of Court), is always accorded high probative value by courts.'' 1 3 4
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.
The testimonies of RREC's witnesses tend to confirm the correctness of the
assumption in Exhibit 15 that RREC has reclaimed approximately fty- ve (55)
hectares as of 1962." 1 3 5
These ndings and conclusions of the Court of Appeals are grossly erroneous
and cannot be a rmed. The "Cost Data Items of Work Covered by the Republic Real
Estate Corporation For Work Performed in Manila Bay" is a tabulation of the ndings 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 nding of the
Court of Appeals, this entry does not amount to a certi cation by the MPH . It merely
describes the item of work where dredge ll was allegedly measured. The "Cost Data
Items of Work . . ." 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. 3-A 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. 2229-R, CFI
of Rizal, Branch VIII, Pasay City, now pending appeal with the Court of Appeals
(CA-G.R. 51349-R), we are con ning 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:
ITEMS OF WORK QUANTITY

RREC CLAIM MPH FINDINGS
1. Improvement of existing
submerged breakwater,
353.00 m. long (Sta 0+000
Sta. 0+353); construction of a
seawall/breakwater, 47 M.
long (Sta. 0+353-Sta. +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
Structures 2,707.02 Cu.M. 1,806.24 Cu.M.
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 pre-operating (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 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
Minister." 1 3 6
The letter above-quoted 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 "certi cation" 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 nding is
provisional; it is not nal . Its nality was conditioned on RREC's submission of
documents to corroborate the MPH's tentative ndings. And there is no showing RREC
submitted such documents so as to elevate the tentative status of the MPH ndings to
a full-fledged certification.
The "Items of Work" tabulating RREC's claim and the Ministry of Public Highways'
ndings 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 ll was found
and measured. In fact, the quantity of dredge ll 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 above-noted case by asking payment, 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 unjusti ed . 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
——————
10,926,071.29
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
Solicitor General" 1 3 7
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 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 meters of dredge ll for the reclamation of Manila Bay.
1 3 8 RREC now claims before this Court that this amount of dredge ll covered 55
hectares and the entry "reclamation of approximately 55 has." in Minister Aquino's letter
certi ed to such nding. The Solicitor General presented evidence before the Court of
Appeals Commissioners that disproves RREC's claim . In its reply to an o cial 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 mis-
reading or mis-appreciation, 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 letter-exhibit will indicate that it is

simply not possible physically for RREC to have reclaimed 55 has. based
on scienti c technical and engineering considerations . Please note the
following, viz:
(i) The hydrographic nature of the area or the physical contour
and con guration 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 20-year 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 ll but an additional 3 more
(technically described as +3 meters 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 ll based on this computation
i.e. 10 cu.m. of dredge ll 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 letter-
exhibit of the MPH validated only a total accomplishment of 1,574,891
cu.m. of dredge ll. In terms of hectares, this is equivalent to only 15.74
has. of accomplishment.
(ii) The abovecited letter-exhibit of the MPH did not really certify
to a 55 ha. accomplishment. What was certi ed or validated was the
quantity of work accomplished measured principally in terms of cubic
meters of dredge ll through a tabular comparison of what is claimed by
RREC vis a vis the ndings of MPH. Looking at the tabular presentation
and noting the big difference in physical accomplishment between the
claims of RREC and the ndings 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 . . .
(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 certi ed by the MPH in the cited letter-exhibit of some
1,574,891 cu.m. or 15.74 has (say 16 has). To insist that this volume of
cubic meters as certi ed by the MPH is su cient 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 the 1,574,891 cu.m. validated
by MPH. This is simply not possible. 1 3 9
This opinion was rendered on June 19, 1992 by then Acting General Manager Manuel R.
Berina, Jr. of the PEA. Engineer Berina a rmed the contents of his opinion before the
Court of Appeals Commissioners. As an expert witness, Engineer Berina testi ed that
he and his staff exhausted the scenarios of reclaiming land in Manila Bay with
1,574,891 cubic meters of dredge ll . They found that in no way could such quantity of
dredge ll reclaim fty- ve (55) hectares . Assuming that 1,574,891 cubic meters
indeed lled 55 hectares, this produced a slice of land 55 hectares in area but with a
thickness or depth of only 2.8 meters of dredge ll. 1 4 0 The reclamation of Manila Bay
requires that the seabed be lled up to sea level, in addition, this lled up portion must
be raised to a minimum of three (3) meters from sea level to withstand the changing
tide. 1 4 1 The 55 hectares of 2.8 meters of reclaimed land means that the land was
never below sea level. If so, there was nothing to reclaim from the beginning. 1 4 2
B. There is overwhelming evidence
that RREC did not reclaim
fifty-five hectares
of Manila Bay.
The general rule in this jurisdiction is that actual ndings of the Court of Appeals
are not reviewable but are nal and conclusive on the Supreme Court. This is not a hard
and fast rule, however. The Supreme Court may review such ndings where the
judgment of the appellate court is based on a misapprehension of facts, or the
inferences made therein are manifestly mistaken, absurd or impossible. 1 4 3
The allegation that RREC failed to reclaim fty- ve (55) hectares of Manila Bay is
supported by the following evidence:
(1) The aerial photographs of the Manila Bay area taken by the Armed Forces
of the Philippines (AFP) in 1966 and 1968 and led with the AFP Mapping Center . 1 4 4
The AFP Mapping Center is the custodian of aerial lms, negatives, photographs and
documents kept by the government for the making of military maps and other
purposes. 1 4 5 Captain Bailey Nograles, Chief of the AFP Mapping and Surveying Division
of the Center, testi ed that the negatives of the photographs have been in the
possession of his o ce since the time they were taken and have never been altered.
1 4 6 The photographs were reproduced by his staff from the o ce archives upon
request by the CCP in 1997. They were released upon approval by the commanding
officer of the Mapping Center. 1 4 7
The photographs form a series of aerial views of Manila Bay. 1 4 8 On the left
margin of each photograph are some gures — a square, rectangle, circle and clocks
and dials. Capt. Nograles identi ed 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 lm roll number, the lens serial number, the
camera number, the type of plane used in taking the photograph, and the altitude. 1 4 9
The rst photograph indicates that it was taken on March 8, 1966. 1 5 0 The second,
third, fourth and fth 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 at approximately ve-second intervals from the other. 1 5 1 The second series of
photographs clearly indicate the date they were taken as "4-2-68" or April 2, 1968, and
all other entries. 1 5 2
The entries in the photographs have been summarized in the ight data
presented by Capt. Nograles. Flight data are usually entered into the lm negatives by
the company or person who developed the aerial photographs. 1 5 3 Capt. Nograles
merely reproduced the data from the lm negative. The ight data for the rst six aerial
photographs indicate that they were taken on March 8, 1966. 1 5 4 The second flight data
showed that the next three photographs were taken in 1968. 1 5 5
The photographs are presumed to have been taken by the military in the regular
course of duty. 1 5 6 They form part of the o cial 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. 1 5 7 As o cial documents, the photographs are public
documents and therefore need no authentication. 1 5 8 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. 1 5 9
The series of photographs show a strip of mass jutting out from the mainland
towards Manila Bay. The mass is an irregularly-shaped 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 veri ed his ndings
with the use of maps and computer digital analysis. Architect Manosa found that the
mass extended from the mainland to the bay for about one kilometer. 1 6 0 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
thereby increasing the area to nineteen point six (19.6) hectares. 1 6 1
Architect Manosa is an architect and environmental planner and has been
President for twenty-one years of the Planning Resources and Operations Systems, Inc.,
a corporation specializing in city planning and consulting services. 1 6 2 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 trace the sequence of changes in an urban
area. 1 6 3 Architect Manosa's testimony was not discredited on cross and additional
cross-examinations by RREC and Pasay City. 1 6 4
(2) The photographs of the CCP site taken in 1967 and 1968 during the
construction of the CCP main building as identi ed and presented by Architect Ruben
A. Protacio, the Managing Partner of the architectural rm of Leandro V . Locsin and
Partners. 1 6 5 Leandro V. Locsin and Partners conceptualized the blueprint of the CCP
main building. As a member of the rm, Architect Protacio was personally involved in
the project from design to the completion of the building. 1 6 6 Architect Protacio
presented and identi ed 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 veri ed by
Architect Protacio and his team members by personal inspection of the site. 1 6 7 These
photographs were found in the archives of Leandro V. Locsin and Partners and were
certi ed 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 identi ed by the photographer as to their production and testi ed 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. 1 6 8 Once proved, the court may admit it subject to
impeachment as to its accuracy. 1 6 9 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. 1 7 0 The photographs show that
the CCP main building was the very rst improvement constructed on the reclaimed
area. The area where the CCP main building itself was being constructed was clearly
above-water. Behind the construction was land but further beyond where the Folk Arts
Theater (FAT) now stands had some parts in water. 1 7 1 The CCP main building was
constructed facing east, towards Roxas Boulevard on the mainland. To the immediate
left of the main building 1 7 2 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 now existing are located, were the waters of the bay. 1 7 3 It was all sea.
Architect Protacio himself testi ed that when his rm, Leandro V. Locsin and
Partners, constructed the FAT in 1974, and the PICC and the Philippine Plaza in 1975,
reclamation of the land was done simultaneously with the construction of the buildings.
174
(3) The eyewitness testimony of Architect Antonio S. Dimalanta whose rm,

Trans-Asia 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 rm
surveyed the area and coordinated with the Department of Public Works (DPW) who
lled in the land to bring it to the level of Roxas Boulevard. 1 7 5 During the construction
of the CCP main building, his rm surveyed the land periodically as the DPW
continuously reclaimed. 1 7 6 The DPW also lled in the patches of water behind the CCP
main building such that by 1968, the condition of the land improved. 1 7 7 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 o ce
submitted to the rm of Leandro V. Locsin and Partners. 1 7 8 The photograph shows
continuous land, sandy, behind the CCP main building all the way to the seawall. 1 7 9 To
the left rear of the CCP main building, however, were the waters of the bay and along its
shores were shanties. 1 8 0
According to Architect Dimalanta, reclamation by the DPW never ceased and was
never interrupted. 1 8 1 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 ground-breaking 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 and the neighboring Philippine Navy
Compound. 1 8 2 Much of the surrounding area of the site was under water. 1 8 3
Mrs. Rose Duavit Cruz was with the O ce 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 testi ed 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 was under water during high tide and had to be
lled in. 1 8 4 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 lling
materials in Manila to be dumped there." 1 8 5 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 nance the cost of lling it up. It was the Department of
Public Works and the Philippine Navy that lled up the land and continued the
reclamation. 1 8 6 Eventually, the land was lled by materials delivered by trucks twenty-
four (24) hours a day. 1 8 7 Reclamation extended to the area to the left rear of the CCP
main building which was still underwater. 1 8 8 In the early 1970's, the Construction
Development Corporation of the Philippines (CDCP) took over and continued the
reclamation southwards to Buendia. 1 8 9
(5) The testimony of RREC's and Pasay City's witness, Mr. Lauro Marquez and
the "General Development Plan'' 1 9 0 and "Contract to Sell'' 1 9 1 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 testi ed 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 hectares. Each sale was evidenced by a
Contract to Sell 1 9 2 executed by RREC and the buyer. The Contract to Sell incorporated
and made reference to the Reclamation Agreement between RREC and Pasay City,
speci cally the provision where RREC must reclaim at least fty (50) hectares before it
can be allowed to subdivides 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 and developed at least fifty (50) hectares of Manila Bay. 1 9 3
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 Engineer and City Mayor of Pasay in November 1960. 1 9 4 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 rst fty- ve (55)
hectares of the Pasay reclamation project." Mr. Marquez admitted on the witness stand
that the General Development Plan attached the Contract to Sell covered Phase I of the
project and that this covered an aggregate area of 347,752 square meters or thirty four
point seven (34.7) hectares only. 1 9 5 In other words, the General Development Plan did
not cover fty- ve (55) hectares but merely thirty-four 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
that he could not produce it before the Commissioners. 1 9 6 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:
"WHEREAS, the PARTY OF THE SECOND PART 197will require and use
additional funds to proceed with the reclamation project on the terms and
conditions of the above-mentioned agreements, and the PARTY OF THE
FIRST PART, 1 9 8 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 above-
mentioned 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 above-quoted
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 attorney-in-fact 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 identi ed 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:
1. . . . 199
As the area covered by the attached General Development Plan after
reclamation, shall still be surveyed and subdivided and the 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. ...
3. The PARTY OF THE FIRST PART may take possession of the above-
mentioned 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 .
xxx xxx xxx
6. Upon full payment of the above-mentioned 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 reason
invalidated by the court, nor for any fortuitous events." 2 0 0
RREC promised to sell the lot indicated in the 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 RREC. RREC expressly acknowledged that it was going to exercise its
irrevocable option to purchase the reclaimed land indicated in the General Development
Plan at the proper time;" and that as the area covered in the Plan after reclamation "shall
still be surveyed and subdivided . . . subject to the review and approval by the
government, the area 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 nance 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 at the General
Development Plan before they decided to buy. 2 0 1
There is no evidence that the provisions of the Contract to Sell had been
amended and that 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 fty- ve (55) hectares of
Manila Bay before it was taken over by the National Government is belied by the
evidence — overwhelmingly and unmistakably so. What the evidence shows is that
RREC, as attorney-in-fact of Pasay City, started reclaiming land in Manila Bay in 1959
pursuant to the Reclamation 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 nance 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
certi ed 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 un nished 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 lling 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
Swo-40880 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 was the same
land originally reserved under Proclamation No. 100 but with almost two hectares
added on the western side adjacent to the seawall. 2 0 2 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 all
other lots within the rectangular mass left by RREC. 2 0 3 In other words, Swo-40880
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
Swo-04-000078 and Swo-04-00141. 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 Island Pavilion, the parking lots and Boom na Boom now stand.
204
The Solicitor General, through the PEA, claims that RREC was able to reclaim
fteen point seventy-four (15.74) hectares of land from Manila Bay. 2 0 5 The CCP claims
that based on the 1966 aerial photographs examined by Architect Protacio the
rectangular land mass reclaimed by RREC measured approximately sixteen point eight
(16.8) hectares. 2 0 6 RREC and Pasay City did not present further evidence before the
Court of Appeals Commissioners to prove the size of the area they 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 fty- ve (55) hectares of Manila Bay.
What is clear, nevertheless, is that RREC, on behalf of Pasay City, was able to reclaim,
albeit un nished, 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
National Government should not be unjustly enriched 2 0 7 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 per cent (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 per cent (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 per cent (6%)
interest per annum from 1962 until full payment of the obligation.
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. 2 0 8 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 only question discussed relates to the amount to be paid. 2 0 9 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 a rming 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 signi cance, 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. 2 1 0 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.''
2 1 1 Rizal saw our rich cultural heritage and believed in the potentialities of his
countrymen in the eld 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 ery 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 of the best there is in
the culture of other lands. 2 1 2
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 ful llment 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 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 world-class 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. LibLex
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.
xxx xxx xxx."
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 pursuits cannot but be doomed as a "people without a soul." 2 1 3 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 CA G.R. CV No. 51349. The Reclamation
Agreement 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.
Mendoza, J ., concurs.
Footnotes
1. Penned by Associate Justice Quirino D. Abad Santos and concurred by Associate
Justices Arturo B. Buena and Minerva Gonzaga-Reyes.
2. Exhibit "P"; Folder No. I, Record on Appeal, p. 24.
3. Annex "A"; Record on Appeal, pp. 10-17.

4. Annex "E"; Record on Appeal, pp. 64-73.
5. Annexes "F" and "G"; Record on Appeal, pp. 74-105.
6. Annex "H", Record on Appeal, p. 106.
7. Annex "I"; Record on Appeal, p. 107.
8. Annex "J"; Record on Appeal, pp. 109-128.

E. Republic vs. Court of Appeals

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E. Republic vs. Court of Appeals

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EN BANC

[G.R. No. 103882. November 25, 1998.]

REPUBLIC OF THE PHILIPPINES , petitioner, vs . THE HONORABLE

[G.R. No. 105276. November 25, 1998.]

PASAY CITY AND REPUBLIC REAL ESTATE CORPORATION,

1. STATUTORY CONSTRUCTION; LAW IS CLEAR; NO ROOM FOR

5. ID.; ACTION; NOTICE OF LIS PENDENS; NECESSARY IN AN ACTION FOR

6. CIVIL LAW; LAND TITLES; TORRENS SYSTEM OF REGISTRATION;

xxx xxx xxx

(2) Renders judgment: prLL

(a) dismissing the Plaintiff's Complaint;

(b) Dismissing the Complaint in Intervention of Intervenor

(c) Enjoining Defendant Republic Real Estate Corporation and

(d) Lifting the preliminary Injunction issued by the Court on April

"SEC. 1. Section 7 of Presidential Decree No. 3, dated September 26,

The provisions of any law to the contrary notwithstanding, the reclamation

All reclamations made in violation of this provision shall be forfeited to the

On November 20, 1973, the Republic and the Construction Development

2. Ordering plaintiff-appellant to turn over to Pasay City the ownership

3. Sustaining RREC's irrevocable option to purchase sixty (60%)

From the Decision and Amended Decision of the Court of Appeals

THE COURT OF APPEALS ERRED IN FINDING THAT RREC HAD RECLAIMED 55

THE COURT OF APPEALS ERRED IN NOT AWARDING DAMAGES IN FAVOR OF

Let us first tackle the issues posed in G.R. No. 103882.

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To said opinion on the interpretation of the R.A. 1899, plaintiff-appellant

'The Bureau of Public Works already prepared a plan for the

Furthermore, as held by the lower court, Congress, after the Supreme

It is presumed that the legislature was acquainted with and had in

The Petition is impressed with merit.

m. For the construction of seawall and limited access highway from

There is nothing in the foregoing provision of RA 5187 which can be interpreted

The Secretary of Agriculture

and Natural Resources

2. On March 15, 1961, a reclamation contract was concluded between

xxx xxx xxx

3. On March 16, 1961, the Municipal Council of Navotas passed

xxx xxx xxx

By authorizing local governments 'to execute by administration any

Inasmuch as the Navotas reclamation contract is substantially similar to

xxx xxx xxx

(SGD) CLAUDIO TEEHANKEE

"We regret that we are not agreeable to the amount of P10,926,071.29

42 Gloria Maris 9,516 sq.m. OCT 159 in the

Under the aforecited provision of law in point, a notice of lis pendens is

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Proceedings before the Court of Appeals

(b) Dismissing the Complaint In Intervention of

The National Government appealed to the Court of Appeals.

2. Ordering the plaintiff-appellant to turn over to Pasay City the

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

2. Ordering the plaintiff-appellant to turn over to Pasay City the

Both parties appealed to this Court.

CCP claims that:

RREC and Pasay City contend that:

In sum, the main issues are:

(b) Are the Reclamation Agreements between Pasay City and

3. (a) Did the Court of Appeals, in its Amended Decision and

xxx xxx xxx