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Kilosbayan et al. vs. Guingona et al.

232 SCRA 110


This civil action for prohibition and injunction, which seeks to prohibit and refrain
the implementation of the contract of lease executed by PCSO and PGMC in
connection with the on-line lottery system.
Facts:
Before August 1993, the PCSO formally issued a Request for Proposal (RFP) for
the lease contract of an on-line lottery system for the PSCO.
On 15 August 1993, Philippine Gaming Management Corporation (PGMC)
submitted its bid to the PCSO. It was evaluated by SPBAC, and thereafter
submitted to the office of the President for approval.
On 04 November 1993, go signal was given to PGMC to operate the country’s on-
line lottery system and the corresponding implementing contract would be
submitted not later than 8 November 1993 for final clearance and approval by the
Chief Executive. This announcement was published to media on 29 October 1993.
On 19 November 1993, media reported that despite of the oppositions made by
Kilosbayan and other petitioners, the Malacanang will pushed through with the
operation of the on-line lottery system nationwide.
On 08 January 1994, Kilosbayan with its co-petitioners filed a petition to the
Supreme Court against the imminent implementation of the contract of lease that
will commence on February 1994. One of the allegations made by the petitioner is
that under Section 1 of the Charter of the PCSO, the same is prohibited from
holding and conducting lotteries in collaboration, association or joint venture with
any person, association, company or entity.
Petitioners are suing in their capacity as members of the board of trustees of
Kilosbayan and the others are suing in their capacity as members of congress.
Moreover, all of the petitioners are suing in their capacities as taxpayers and as a
citizen of the Philippines.
On 1 March 1994, the respondents states that the execution and implementation of
the contract does not violate the constitution and the laws. And also the issue on
the morality of the lottery franchise granted to the PCSO is political and not
judicial and legal, which should be ventilated in another forum; and that the
petitioners do not appear to have legal standing or real interest in the subject
contract and in obtaining the reliefs sought.
Issues:
1. Whether or not the petitioners are on locus standi to file a petition.
2. Whether or not the contract of lease is legal and valid in light of Section 1 of
R.A. No. 1169, as amended by B.P. Blg. 42.
Held:
On 11 April 1994, the parties heard in oral arguments. Thereafter, resolved to
consider the matter submitted to resolution and pending resolution of the major
issues in the case, to issue a temporary restraining order commanding the
respondents and any person acting in their place or upon their instructions to cease
and desist from implementing the challenged Contract of Lease.
1. The first issue on the locus standi of the petitioners should indeed, be resolve
in their favor. Seven Justices of the Supreme Court voted to sustain the
locus standi of the petitioners, while six voted not to. The latter stated that
they wished to express no opinion thereon in view of their stand on this
issue. The Chief Justice took no part because one of the directors of the
PCSO is his brother in law.
2. Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, prohibits the PCSO
from holding and conducting lotteries “in collaboration, association or joint
venture with any person, association, company or entity, whether domestic
or foreign.” The Seven Justices of the Supreme Court were of the opinion
that the contract of lease violates the exception to Section 1(B) of R.A. No.
1169, as amended by B.P. Blg. 42, and is, therefore, invalid and contrary to
law.

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