Republic of the Philippines

COURT OF APPEALS
CEBU CITY
NINETEENTH DIVISION
*****

JOEL C. GARGANERA, CA-G.R. SP No. 03902

Petitioner,
Members:
-versus-
ABARINTOS, P.A. J.,Ch.,
TOMAS R. OSMEÑA, CEBU CITY PERALTA, JR., E. B., &
COUNCIL, CEBU INVESTMENT INGLES, G. T., JJ.
PROMOTIONS CENTER, INC.
AND REGISTER OF DEEDS, CEBU Promulgated:
CITY,
Respondents. April 26, 2011

x--------------------------------------x

DECISION

•INGLES, G. T., J.:

Before Us is an Appeal1 from the November 29, 2007 Decision2 of the

Regional Trial Court, 7th Judicial Region, Branch 10, Cebu City, the
dispositive portion thereof reads as follows:

“WHEREFORE, IN VIEW OF THE FOREGOING, this Court

hereby RESOLVES:

1. To DENY the Motion for Reconsideration

filed by Intervenor ABC-Cebu Chapter;

2. To DENY the Motion for Partial

Reconsideration filed by Petitioner-
complainant;

1
Notice of Appeal dated July 17, 2008; Records at pp. 358-360.
2
Records at pp. 287-299.
CA-G.R SP. NO. 03902
DECISION
2

3. To DISMISS the herein complaint for LACK

OF MERIT;
SO ORDERED”

The pertinent facts precedent to the case are hereunder stated:

Petitioner Joel C. Garganera instituted an action3 in behalf of all the

constituents and taxpayers of Cebu City for prohibition with application
for the issuance of a temporary restraining order and a writ of preliminary
injunction before the Regional Trial Court against Tomas R. Osmeña, then
Mayor of Cebu City, the Cebu City Council, the Register of Deeds of
Cebu City and the Cebu Investment Promotions Center, Inc4.

Petitioner is seeking for the nullification of Proclamation No. 8435

issued by then President Gloria Macapagal Arroyo, amending
Proclamation No. 200-A, dated May 22, 1967, which reserved for national
improvement purposes certain parcels of land of the public domain
located in San Nicolas, Pardo (now part of Cebu City) and Tangke, Talisay
(now Talisay City), Province of Cebu, by reserving a certain portion thereof
as the Cebu South Reclamation Project6 (SRP) and transferring its
ownership to the City Government of Cebu, and declaring such area as
alienable and disposable.

Petitioner alleged that Proclamation No. 843 should be declared

null and void inasmuch as there was no congressional authority allowing
then President Arroyo to transfer ownership of the SRP to the City
Government of Cebu.

Petitioner further alleged that Special Patent No. 3693 issued by the
Department of Environment and Natural Resources granting and
conveying unto the City Government of Cebu tracts of land in the SRP
area pursuant to Proclamation No. 843, as well as Original Certificate of

3
Petition, records at pp. 2-18
4
A corporation duly organized and existing under and by virtue of Philippine laws, which is tasked
as the marketing arm of the Cebu City Government for the SRP.
5
Dated May 16, 2005.
6
The Cebu South Reclamation Project, now called South Road Properties, which covers an area of
approximately 300 hectares, is a project of the Government of the Republic of the Philippines
funded by a loan obtained by it from the Japanese government through its international financing
institution, the Overseas Economic Cooperation Fund (OECF).
CA-G.R SP. NO. 03902
DECISION
3

Title No. 3581 issued to it covering the said properties, are likewise null and
void.

It is also the contention of petitioner that since there is no law

enacted by Congress authorizing Respondent Osmeña, et al., to sell or
lease the SRP or any portion thereof, their acts of marketing, selling or
leasing the same constitute grave abuse of discretion amounting to lack
or excess of jurisdiction for being violative of Section 60 of Commonwealth
Act No. 141, as amended. He likewise asserted that even with
congressional authority, the marketing and selling of the subject
properties to private corporations or associations violate Section 3, Article
XII of the 1987 Constitution. Moreover, a public bidding is allegedly
required prior to selling or leasing the same. Petitioner proceeded to
conclude that respondent Osmeña's act of leasing a portion of the SRP to
BIGFOOT ENTERTAINMENT PHILIPPINES, INC. sans congressional authority
and public bidding, was illegal.

Petitioner then prayed that respondent Cebu City Council be

enjoined from granting respondent Osmeña any authority to sell or lease
the SRP and from ratifying any sale or lease of the said properties.
Petitioner likewise prayed that respondent Osmeña should be prohibited
from selling the SRP.

On April 11, 2007, the Association of Barangay Councils – Cebu City

Chapter, represented by Atty. Sisinio Andales, filed a Motion for Leave to
File an Intervention7 on the ground that the outcome of the case will
affect the status of its ownership of an office building located in the SRP.
Attached to its motion is a Motion to Dismiss8 praying for the dismissal of
the case on the ground that the petition states no cause of action
because of the following reasons, to wit:

1.The respondents are not the real party in

interest;
2.The petition cannot be considered as a
taxpayer's suit;
3.The petitioner is not the real party in
interest.

7
Records at pp. 56-57.
8
Records at pp. 59-65.
CA-G.R SP. NO. 03902
DECISION
4

On April 12, 2007, respondents Osmeña and the Cebu City Council
submitted their Answer with Counterclaim9 where they asseverated that
the reclamation project was made possible through a foreign loan
agreement between the Philippines and Japan; that the said agreement
has the force and effect of law and its implementation does not need
any congressional authority; that the Minutes of Discussion between the
Japanese Government and the Philippine Government partake the
nature of an “Exchange of Notes” between the two sovereign countries
and its contents are valid and binding and must be complied with in
accordance with international treaty obligations; that under the Main
Points of Discussion, the Overseas Economic Cooperation Fund (OECF)
Mission and officials of the Government of the Philippines (GOP)
confirmed that the Cebu City Government (CCG) is the owner of and
shall implement and operate the Cebu South Reclamation; that the CCG
is required to do what is necessary to develop the project into a successful
export processing/economic zone; that Cebu City has validly acquired
title over the SRP inasmuch as, contrary to the claim of petitioner, it is not
only congress or the legislative department but the executive department
as well who has the authority to declare public lands as no longer needed
for public use; that Cebu City's title to the SRP is not for public use or
service but for industrial, commercial and tourism purposes; that the title
specifically states that the land is alienable and disposable, meaning the
use is patrimonial; that the SRP has been designated as a Special
Economic Zone, thus, the disposition thereof is governed by the Philippine
Economic Zone Authority (PEZA) laws, rules and regulations; that PEZA
rules and regulations do not require public bidding for lease of lands
within the Ecozone.

By way of special and affirmative defenses, respondents Osmeña

and the Cebu City Council averred that petitioner has no locus standi in
instituting the present action. They further alleged that petitioner has not
satisfactorily proven that he will suffer an appreciable injury or prejudice
as a taxpayer, a constituent or even as a public official if indeed disposal
of the SRP were allowed.

Respondents Osmeña and the Cebu City Council further averred

that petitioner failed to implead indispensable parties, particularly, the
President, the Executive Secretary, the Department of Environment and
Natural Resources (DENR) Secretary and the Cebu City Government. The

9
Records at pp. 71-103.
CA-G.R SP. NO. 03902
DECISION
5

said entities should have been impleaded considering that petitioner is

not just seeking to prevent the sale or lease of the SRP, but also the
nullification of Proclamation No. 843, Special Patents Nos. 3693 and 3716
and Original Certificate of Title No. 3581.

They likewise contend that petitioner is not the real party in interest
to institute the instant petition because the action is not just for prohibition
but for reversion as well. The only party who can bring an action for
reversion is the government itself through the Office of the Solicitor
General.

They argued that petitioner is estopped from questioning the

allocations for the loan payments due to the fact that the loan
agreement is already a fait accompli and already subject of an
appropriation under the annual General Appropriations Act enacted by
Congress. They alleged that petitioner should have questioned
respondents' act of entering into a contractual obligation at the time the
loan was entered into.

Respondents Osmeña and the Cebu City Council then prayed for
the dismissal of the petition; the denial of petitioner's application for TRO
and writ of preliminary injunction; and that petitioner be made to pay
compensatory damages in such amount as may be proved during trial as
well as exemplary damages in the amount of twenty million pesos.

Respondent Register of Deeds, on the other hand, submitted a

Manifestation10 on April 13, 2007 in lieu of an answer and averred that:
petitioner should have filed a petition for certiorari and not petition for
prohibition; if there has been any violation of the constitution or of the law
in the issuance of the special patents/original certificates of title (OCT),
the appropriate remedy is an action for reversion to be instituted by the
Office of the Solicitor General; the present action is tantamount to a
collateral attack of the OCT of the Cebu City government and finally; that
one of the the subject OCT was issued on September 22, 2005 and hence,
already indefeasible as a Torrens Title after one year from its issuance.

10
Records at pp. 107-111.
CA-G.R SP. NO. 03902
DECISION
6

On April 16, 2007, Respondents Osmeña and the Cebu City Council
filed a Position Paper11 on their opposition to plaintiff's request for TRO on
the following grounds, to wit:

1.“There exist no clear, unmistakable and positive right

of the applicant that needs to be protected;
2.The applicant will not suffer any grave or irreparable
injury or injustice;
3.Applicant is not the real party in interest and is not
entitled to the relief prayed for;
4.Petitioner's act of trying to restrain the disposal by way
of sale or lease portions of the SRP is easily becoming an act
of sabotage to undermine the city government's financial
stability;
5.Selling or leasing SRP is an executive prerogative not
subject to judicial intervention;
6.The provisions of P.D. 1818 and P.D. 605 expressly
prohibit courts against issuing any orders or writs that hamper
development projects of the government.”

On April 20, 2007, petitioner filed his Opposition to the Motion for
Leave to File Intervention12 allegedly because movant failed to present
any documentary evidence to prove its ownership of ABC building
located in the SRP. Moreover, it is not shown that the instant petition to
prohibit the respondents from marketing, selling or leasing the SRP will
affect movant's ownership of its building. A Reply to the Opposition to the
Motion for Leave to File an Intervention13 was submitted by movant before
the court a quo on April 27, 2007 where it refuted petitioners allegation in
the opposition.

Also on April 20, 2007, Jocelyn G. Pesquera, a member of the Cebu

City Council, filed a Position Paper14 on the issue of the propriety of the
issuance of a TRO. An Answer15 was subsequently filed by Jocelyn G.
Pesquera on April 27, 2007. On the other hand, respondent Cebu
Investments Promotions Center submitted an Opposition to Motion for
11
Records at pp. 112-125.
12
Records at pp. 126-130.
13
Records at pp. 152-159.
14
Records at pp. 132-139.
15
Records at pp. 145-151.
CA-G.R SP. NO. 03902
DECISION
7

Issuance of TRO/Preliminary Injunction and Motion to Dismiss16 dated April

23, 2007. These pleadings essentially adopted the arguments already
raised in respondents Osmeña and the Cebu City Council's previous
pleadings.

On May 3, 2007, petitioner submitted its Position Paper17 in support

of the application for the issuance of a Writ of Preliminary Injunction and
TRO where he emphasized that he posses legal standing inasmuch as the
issue involved is of “transcendental public importance.” Petitioner further
argued that a TRO and a writ of preliminary injunction should be issued for
the following reasons:

1.Irreparable injury will be caused to him as a taxpayer

because the Cebu City government is already marketing,
selling and leasing the SRP despite legal doubt;
2.He will suffer as a taxpayer from these illegal
transactions because “public office is public trust;”
3.He, and the rest of the citizens has the right to
equitable diffusion of natural resources;
4.Respondents' acts, if not restrained, injure public
good and make a mockery of the constitution;
5.The prohibition against the issuance of TRO or writs of
preliminary injunctions against government infrastructure and
other natural resources development projects is not
applicable in the instant case inasmuch as what is sought to
be prohibited is only the marketing, selling or leasing of the
SRP.

On May 17, 2007, an Order18 was issued by the court a quo, the
dispositive portion thereof reads:

“WHEREFORE, IN VIEW OF THE FOREGOING

CONSIDERATION, this Court hereby RESOLVES:

16
Records at pp. 140-144.
17
Records at pp. 163-171.
18
Records at pp. 173-189.
CA-G.R SP. NO. 03902
DECISION
8

1.To ALLOW the Petition finding petitioner Joel C.

Garganera to have legal standing to file an action against
the herein respondents;
2.To DENY the issuance of a Temporary Restraining
Order;
3.To DENY the Motion to Intervene filed by the
Association of Barangay Councils-Cebu City Chapter; and
4.To SET the case for hearing on the respondents'
Affirmative Defenses on May 24, 2007 at 8:30 in the morning.

SO ORDERED.”

Movant Association of Barangay Councils-Cebu City Chapter then

moved for the reconsideration19 of the May 17, 2007 Order. Movant
asserted that it is the owner of the office building located in the SRP and
that the required authorization and permits were secured. As proof
thereof, it attached the following documents in its motion: Consent and
Authority20 issued by the City Administrator; Locational Clearance and
Certificate of Zoning Compliance issued by the Land Use and Zoning
Division of the City Zoning Board; Building Permit, Electrical Permit and
Sanitary/Plumbing Permit21 issued by the Office of the Building Official.

Movant further averred that the petition is actually an action for

reversion which was surreptitiously captioned as an action for prohibition.

Petitioner likewise moved for the partial reconsideration22 of the

May 17, 2007 Order particularly with regard to the denial of his prayer for
the issuance of a TRO.

In his motion, petitioner likewise argued that the questioned order

has disposed of the main issue of the case when it made the
pronouncement that “Cebu City is now the legal and rightful owner of
the SRP estate, described as alienable and disposable” and that “the City
Government of Cebu, through its mayor and legislative council, can
validly dispose the SRP estate, be it by sale or lease.”
19
Records at pp. 200-203.
20
Records at p. 204.
21
Records at pp. 205-207.
22
Records at pp. 208-215.
CA-G.R SP. NO. 03902
DECISION
9

Thereafter, the parties were directed to submit their position

paper/memoranda to support their respective claims, which was duly
complied with by both petitioner and respondents.

On November 29, 2007, the court a quo issued the assailed Order23
in the manner and tenor above quoted.

A Motion for Reconsideration24 was filed by petitioner which was

opposed by respondents Osmeña and the Cebu City Council per its
Comments/Opposition to Plaintiff's Motion for Reconsideration.25 The said
motion was denied by the court a quo per its Order26 dated June 25,
2008.

Henceforth, a Notice of Appeal27 was filed by herein petitioner

which was duly approved by the court a quo per Order28 dated
September 30, 2008.

Pursuant to Rule 44, Section 10 of the 1997 Rules of Civil Procedure,

petitioner, now appellant, submitted his Memorandum29 where the
following issues are raised:

1.Can the Cebu City government sell SRP without

violating the Public Land Act and the Constitution?
2.Can the President or the executive department
convey real property owned by the national government to
the city without congressional authority?
3.Can the Cebu City government sell or lease SRP
without need of public bidding?
4.Does the registration or issuance of title in the name
of the City of Cebu necessarily operate to convert the nature

23
Records at pp. 287-299.
24
Records at pp. 301-309.
25
Records at pp. 312-340.
26
Records at pp. 347-352.
27
Records at pp. 358-360.
28
Records at p.361.
29
Rollo at pp. 92-120.
CA-G.R SP. NO. 03902
DECISION
10

of the land from alienable lands of the public domain into

private or patrimonial lands?
5.Does petitioner Joel C. Garganera have the legal
personality to file the instant suit?
6.The instant petition is one of transcendental public
importance and involves culpable violation of the
Constitution, the Public Land Act and other related laws, thus,
can be the subject of the courts power of judicial review.

Respondent-Appellee Cebu Investments Promotions Center (CPIC)

likewise submitted its Memorandum30 and raised the following grounds in
opposition to the appeal, to wit:

1.The petition states no cause of action and no

jurisdiction on the subject of the petition was acquired by this
court;
2.Cebu City has validly acquired title over the SRP and
also has the congressional authority under R.A. 7916 to sell,
lease or otherwise dispose of the SRP properties.

Respondent-Appellee Tomas Osmeña and the Cebu City Council

likewise submitted their Memorandum31 where it refuted the legal
issues/points raised in petitioner-appellant's memorandum.

We find it proper to resolve first the right mode of appeal and

whether the issue involved in the instant appeal is purely a question of
law and therefore not within our jurisdiction.

The following are two modes of appeal from a final order of the trial
court in the exercise of its original jurisdiction:

(1) by writ of error to the Court of Appeals under Section 2(a),

Rule 41 of the Rules of Court which provides that –

30
Rollo at pp. 125-154.
31
Rollo at pp. 155-173.
CA-G.R SP. NO. 03902
DECISION
11

“SECTION. 2. Modes of appeal. — (a) Ordinary appeal.

— The appeal to the Court of Appeals in cases decided by
the Regional Trial Court in the exercise of its original jurisdiction
shall be taken by filing a notice of appeal with the court
which rendered the judgment or final order appealed from
and serving a copy thereof upon the adverse party. No
record on appeal shall be required except in special
proceedings and other cases of multiple or separate appeals
where the law or these Rules so require. In such cases, the
record on appeal shall be filed and served in like manner.”

(2) by an appeal by certiorari to the Supreme Court under

Section 2(c), Rule 41 in relation to Rule 45, which provides that –

“(c) Appeal by certiorari. — In all cases where only

questions of law are raised or involved, the appeal shall be to
the Supreme Court by petition for review on certiorari in
accordance with Rule 45.”

The Supreme Court in the case of Jose Santos vs. Committee on

Claims Settlement, and Government Service Insurance System (GSIS)32,
citing Posadas-Moya and Associates Construction Co., Inc. v. Greenfield
Development Corporation, et al.33, distinguished a question of fact from a
question of law, as follows:

“A question of law exists when there is doubt or

controversy on what the law is on a certain state of facts.
There is a question of fact when the doubt or difference arises
from the truth or the falsity of the allegations of facts.

Explained the Court:

A question of law exists when the doubt or controversy

concerns the correct application of law or jurisprudence to a
certain set of facts; or when the issue does not call for an
examination of the probative value of the evidence
presented, the truth or falsehood of facts being admitted. A
question of fact exists when the doubt or difference arises as
to the truth or falsehood of facts or when the query invites

32
G.R. No. 158071, April 02, 2009.
33
G.R. No. 141115, June 10, 2003.
CA-G.R SP. NO. 03902
DECISION
12

calibration of the whole evidence considering mainly the

credibility of the witnesses, the existence and relevancy of
specific surrounding circumstances as well as their relation to
each other and to the whole, and the probability of the
situation."

In another case, the Supreme Court elucidated thus - “A question

of law arises when there is doubt as to what the law is on a certain state of
facts, while there is a question of fact when the doubt arises as to the truth
or falsity of the alleged facts. For a question to be one of law, the same
must not involve an examination of the probative value of the evidence
presented by the litigants or any of them. The resolution of the issue must
rest solely on what the law provides on the given set of circumstances.
Once it is clear that the issue invites a review of the evidence presented,
the question posed is one of fact. Thus, the test of whether a question is
one of law or of fact is not the appellation given to such question by the
party raising the same; rather, it is whether the appellate court can
determine the issue raised without reviewing or evaluating the evidence,
in which case, it is a question of law; otherwise it is a question of fact.34

The facts of the case are clearly not in dispute. All the parties have
essentially admitted the existence of the SRP, that it was funded by a loan
obtained from the national government of Japan; the existence of
Proclamation No. 843 and the Special Patents and Original Certificates
of Title issued pursuant thereto; that the Cebu City government is already
marketing, selling and leasing the SRP; that a certain portion thereof is
already leased to Bigfoot Entertainment Philippines, Inc. sans a public
bidding and; that petitioner is the Barangay Captain of Barangay Tinago
and a taxpayer.

Clearly then, the issues raised in the instant appeal are pure
questions of law, as follows:

1.Can the Cebu City government sell SRP without

violating the Public Land Act and the
Constitution?

34
Erlinda R. Velayo-Fong vs. Spouses Raymond And Maria Hedy Velayo, G.R. No. 155488.
December 6, 2006.
CA-G.R SP. NO. 03902
DECISION
13

2.Can the President or the executive department convey real

property owned by the national government to the city
without congressional authority?
3.Can the Cebu City government sell or lease SRP without
need of public bidding?
4.Does the registration or issuance of title in the name of the
City of Cebu necessarily operate to convert the nature of
the land from alienable lands of the public domain into
private or patrimonial lands?
5.Does petitioner Joel C. Garganera have the legal
personality to file the instant suit?

The foregoing issues do not deal with questions of fact. The test of
whether a question is one of law or of fact is whether the appellate court
can determine the issues raised without reviewing or evaluating the
evidence, in which case, it is a question of law; otherwise, it is a question
of fact. Applying the test to the instant case, it is clear that the questions
raised above are undoubtedly questions of law because they center on
what law to apply in this case considering the factual circumstances
earlier discussed. These facts are admitted and therefore, there is no need
for an examination of the probative value of the evidence presented.
What needs to be determined are the applicable laws under the given
facts.

Hence, considering that the instant appeal raised only pure

questions of law, the same is not proper in an ordinary appeal under Rule
41 of the Rules of Court but should have been raised by way of petition for
review on certiorari under Rule 45.

Section 2, Rule 50 of the Rules of Court is thus applicable. It provides

that:-

“SEC. 2. Dismissal of improper appeal to the Court of

Appeals. – An appeal under Rule 41 taken from the Regional
Trial Court to the Court of Appeals raising only questions of
law shall be dismissed, issues purely of law not being
reviewable by said court. Similarly, an appeal by notice of
appeal instead of by petition for review from the appellate
judgment of a Regional Trial Court shall be dismissed.
CA-G.R SP. NO. 03902
DECISION
14

An appeal erroneously taken to the Court of Appeals

shall not be transferred to the appropriate court but shall be
dismissed outright.”

In conclusion, the instant appeal is hereby dismissed for lack of

jurisdiction.

Even if we set aside the issue of lack of jurisdiction, we still find the
instant appeal bereft of merit.

Contrary to petitioner's contention, the President or the executive

department may convey real property owned by the national
government to the city government of Cebu without congressional
authority. As correctly pointed out by the court a quo -

“In the case of Francisco Chavez vs. PEA et al.35, the

Supreme Court opined that 'the President has the authority to
classify inalienable lands of the public domain pursuant to
Section 6 of CA No. 141.' In the same case, the Supreme
Court added that 'there must be a law or presidential
proclamation officially classifying these reclaimed lands as
alienable or disposable and open to disposition or
concession.36 In order, therefore, to validly classify reclaimed
lands as alienable and disposable there must EITHER be a LAW
passed by Congress declaring the same as alienable or
disposable OR a Presidential Proclamation declared by the
President of the Philippines. In the case at bar, it was a
Presidential Proclamation that President Arroyo signed
TRANSFERRING ownership of the SRP to the City of Cebu. It is
also significant to note that Presidential Proclamation 843 was
declared by President Arroyo upon recommendation of the
Secretary of Environment and Natural Resources.” (Emphasis
original.)

This finding is duly supported by Section 6 of Commonwealth Act

No. 141, which provides that:

35
G.R. No. 133250, July 9, 2002.
36
Ibid.
CA-G.R SP. NO. 03902
DECISION
15

“Sec. 6. The President, upon the recommendation of

the Secretary of Agriculture and Commerce, shall from time
to time classify the lands of the public domain into –

(a) Alienable or disposable,

(b) Timber, and
(c)Mineral lands,

and may at any time and in like manner transfer such lands
from one class to another, for the purpose of their
administration and disposition.”

Anent petitioner's contention that the Cebu City's act of selling the
SRP is in violation of the Public Land Act and the Constitution, we find the
same devoid of merit. As pointed out by the respondents in their
memorandum, Cebu City is capable of acquiring and selling reclaimed
land to private individuals as well as private corporations. This is in
accordance with the Supreme Court's Resolution37 in the Francisco
Chavez vs. PEA et al. cited earlier, to wit:

“The City of Cebu is a public corporation and is

qualified, under the 1935, 1973, and 1987 Constitutions, to
hold alienable or even inalienable lands of the public
domain. There is no dispute that a public corporation is not
covered by the constitutional ban on acquisition of alienable
public lands. Both the 9 July 2002 Decision and the 6 May
2003 Resolution of this Court in the instant case expressly
recognize this.

Cebu City is an end user government agency, just like

the Bases Conversion and Development Authority or the
Department of Foreign Affairs. Thus, Congress may by law
transfer public lands to the City of Cebu to be used for
municipal purposes, which may be public or patrimonial.
Lands thus acquired by the City of Cebu for a public purpose
may not be sold to private parties. However, lands so
acquired by the City of Cebu for a patrimonial purpose may
be sold to private parties, including private corporations.”

37
November 11, 2003.
CA-G.R SP. NO. 03902
DECISION
16

It is also quite clear that the City of Cebu has acquired the subject
properties as a corporate entity and that the same was acquired not for
public use or service but for industrial, commercial and tourism purposes.
Even in its Project Description it was so provided that the objective of the
Cebu South Reclamation Project is to accelerate the economic growth in
Metro Cebu by providing employment and additional area for industrial
and export processing use.

It is also beyond dispute that the SRP is registered with the Philippine
Economic Zone Authority (PEZA) as a Special Economic Zone. Hence, it is
the PEZA rules and regulations that govern the lease of properties within
the zone. Section 1Rule V of the Implementing Rules and Regulations to
Implement Republic Act No. 7916 provides that:

“Section 1. Qualifications – Lands and buildings within

an ECOZONE can be leased only to ECOZONE
enterprises/entities authorized by or registered with the PEZA
and owned or controlled either by Philippine Nationals or by
aliens under such terms and conditions as the Board may
formulate.”

From the foregoing provision it can be inferred that the lease of

lands in the Ecozone are not subject to the public bidding requirement
but only to the terms and conditions that the Board has formulated.

It should also be noted that Section 48 of Republic Act No. 7916

provides that national laws shall prevail vis-a-vis ECOZONE rules,
regulations and standards, unless there is a clear intent in this Act or other
Acts of Congress to vest the ECOZONE specific power and privileges not
otherwise allowed under existing laws.

Thus, herein petitioner cannot validly claim that the lease to

BIGFOOT ENTERTAINMENT PHILIPPINES, INC. of a portion of the SRP without
public bidding, is illegal

WHEREFORE, all premises considered, this appeal is DISMISSED on the

grounds elucidated above.
CA-G.R SP. NO. 03902
DECISION
17

SO ORDERED.

GABRIEL T. INGLES
Associate Justice

WE CONCUR:

PAMPIO A. ABARINTOS EDUARDO B. PERALTA, JR.

Associate Justice Associate Justice

CERTIFICATION
Pursuant to Article VIII, Section 13 of the Constitution, it is hereby
certified that the conclusions in the above decision were reached in
consultation before the case was assigned to the writer of the opinion of
the court.

PAMPIO A. ABARINTOS
Associate Justice
Chairman, Nineteenth Division