SC voids Marcos Sr.-PTA lease contract for Paoay property

The Supreme Court (SC) has declared as void a lease contract over a property in Paoay, Ilocos Norte between former President Ferdinand Marcos Sr. and the Philippine Tourism Authority. 

In a 55-page decision promulgated in November 2023, the SC En Banc declared void for being unconstitutional a 1978 Lease Contract between Marcos Sr. and the PTA, now the Tourism Infrastructure and Enterprise Zone Authority.

The SC dismissed two petitions filed by the Estate of Marcos against the Presidential Commission on Good Government and the PTA, and the Republic of the Philippines.

It affirmed with modification the Court of Appeals ruling that dismissed the Marcos estate’s action for unlawful detainer for lack of jurisdiction as well as a Sandiganbayan ruling that declared the lease contract void.

“Having established that the 1978 Lease Contract between Marcos Sr. and respondent PTA is void, any rights arising therefrom have no legal basis,” it said.

“Accordingly, petitioner’s claim over the possession, ownership, and payment of rental fees on the subject premises in its unlawful detainer suit finds no justification,” it added.

Marcos entered the lease contract in December 1978 covering parcels of land in Barangay Suba with an aggregate area of 576,787 square meters. 

In the petition, the Estate argued that the Sandiganbayan failed to prove the ill-gotten nature of the parcels of land. It also argued that the Court of Appeals erred in ruling over the case as it had knowledge that there was ongoing litigation with the Sandiganbayan.

The SC, however, ruled that there was no evidence showing that the land was transferred to Marcos Sr. before the lease contract was executed. 

“Evidently, Marcos Sr. had no legal claim of ownership over the properties whatsoever. While the lessor does not need to be the owner of the property, they must possess an authority or a right to lease it… or at the very least, act as an agent of the owner, usufructuary, or lessee,” it said.

“Seeing as Marcos, Sr. had no authority over the property, either as owner or possessor, he likewise had no authority to enter into the 1978 Lease Contract,” it added.

Aside from this, the court said that the Paoay Lake and all its extremities are considered a national park.

“Being a national park, the lots were public lands and remained part of the inalienable land of the public domain, and thus incapable of private appropriation,” the SC said.        

Aside from this, the Court noted that the property was leased at a nominal rental fee of P1 per year.

“The extremely low rental fee was but a scheme to circumvent the constitutional prohibition against the President holding any financial interest in any contract with a government agency,” the SC said.

According to the SC, the government has the right and obligation to recover the properties in question.

“However, no matter how obvious and valid that right and duty may be, its fair and reasonable exercise is necessary to ensure that the fundamental rights of private property and free enterprise are accorded the proper respect and adequate protection they deserve,” it said.

“As such, this Court refrains from resolving the issue of ownership of the lots with granted free patents or free patent applications,” it added.—LDF, GMA Integrated News