Professional Documents
Culture Documents
Kilosbayan Vs Guingona
Kilosbayan Vs Guingona
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Same; Same; Same; The PCSO cannot share its franchise with another
by way of collaboration, association or joint venture.—In short then, by the
exception explicitly made in paragraph B, Section 1 of its charter, the PCSO
cannot share its franchise with another by way of collaboration, association
or joint venture. Neither can it assign, transfer, or lease such franchise. It has
been said that “the rights and privileges conferred under a franchise may,
without doubt, be assigned or transferred when the grant is to the grantee
and assigns, or is authorized by statute. On the other hand, the right of
transfer or assignment may be restricted by statute or the constitution, or be
made subject to the approval of the grantor or a governmental agency, such
as a public utilities commission, except that an existing right of assignment
cannot be impaired by subsequent legislation.”
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Same; Same; Same; Same; Court declares the contract of lease invalid
for being contrary to law.—We thus declare that the challenged Contract of
Lease violates the exception provided for in paragraph B, Section 1 of R.A.
No. 1169, as amended by B.P. Blg. 42, and is, therefore, invalid for being
contrary to law. This conclusion renders unnecessary further discussion on
the other issues raised by the petitioners.
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lotto operations); the residue of the whole exercise will go to PCSO. To any
person with a minimum of business know-how, this is a joint venture
between PCSO and PGMC, plain and simple.
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of any man in the street. The dangers attendant thereto are not hard to
discern and this Court must not allow them to come to pass.
115
116
tors Webb and Tañada and Representative Arroyo are suing in their
capacities as members of Congress and as taxpayers and concerned
citizens of the Philippines.
The pleadings of the parties disclose the factual antecedents
which triggered off the filing of this petition.
Pursuant to Section 1 of the charter of the PCSO (RA. No. 1169,
as amended by B.P. Blg. 42) which grants it the authority to hold and
conduct “charity sweepstakes races, lotteries and other similar
activities,” the PCSO decided to establish an on-line lottery system
for the purpose of increasing its revenue base and diversifying its
sources of funds. Sometime before March 1993, after learning that
the PCSO was interested in operating an online lottery system, the
Berjaya Group Berhad, “a multinational company and one of the ten
largest public companies in Malaysia,” long “engaged in, among
others, successful lottery operations in Asia, running both Lotto and
Digit games, thru its subsidiary, Sports Toto Malaysia,” with its
“affiliate, the International Totalizator Systems, Inc., an American
public company engaged in the international sale or provision of
computer systems, softwares, terminals, training and other technical
services to the gaming industry,” “became interested to offer its
services and resources to PCSO.” As an initial step, Berjaya Group
Berhad (through its individual nominees) organized with some
Filipino investors in March 1993 a Philippine corporation known as
the Philippine Gaming Management Corporation (PGMC), which
“was intended to be the medium through which the technical and
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________________
3 Rollo, 210-211.
118
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4 Rollo, 213.
5 Id., 215.
119
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6 Id., 220.
7 PGMC’s Comment, 7; Rollo, 184.
8 Annex “P” of Petition.
9 Annexes “L” and “N” of Petition.
10 Petition, 9; Rollo, 10. The announcement also stated that GTech Philippines,
Inc. and the Tanjong Public Limited Company had likewise been authorized to
operate separate lotto systems.
11 Id.;Id.
12 Annex “C” of Petition.
120
“1. DEFINITIONS
The following words and terms shall have the following
respective meanings:
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13 Petition, 10; Rollo, 11. The meeting was called to deliberate on the proposed
nationwide on-line lottery program.
14 Id.; Id.
15 Id.; Id.
16 Annex “J” of Petition.
17 Annex “H” of Petition.
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from the date of effectivity of this Contract and shall run for
a period of eight (8) years thereafter, unless sooner termi-
122
PCSO shall be the sole and individual operator of the OnLine Lottery
System. Consequently:
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The voice facility will cover the four offices of the Office of
the President, National Disaster Control Coordinating
Council, Philippine National Police and the National
Bureau of Investigation, and each city and municipality in
the Territory except Metro Manila, and those cities and
municipalities which have easy telephone access from these
four offices. Voice calls from the four offices shall be
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15.1 The LESSOR shall at all times protect and defend, at its
cost and expense, PCSO from and against any and all
liabilities and claims for damages and/or suits for or by
reason of any deaths of, or any injury or injuries to any
person or persons, or damages to property of any kind
whatsoever, caused by the LESSOR, its subcontractors, its
authorized agents or employees, from any cause or causes
whatsoever.
15.2 The LESSOR hereby covenants and agrees to indemnify
and hold PCSO harmless from all liabilities, charges,
expenses (including reasonable counsel fees) and costs on
account of or by reason of any such death or deaths, injury
or injuries, liabilities, claims, suits or losses caused by the
LESSOR’S fault or negligence.
15.3 The LESSOR shall at all times protect and defend, at its
own cost and expense, its title to the facilities and PCSO’s
interest therein from and against any
127
and all claims for the duration of the Contract until transfer
to PCSO of ownership of the serviceable Facilities.
16. SECURITY
17. PENALTIES
128
xxx
20. OWNERSHIP OF THE FACILITIES After expiration of the term
of the lease as provided in Section 4, the Facilities directly required
for the On-Line Lottery System mentioned in Section 1.3 shall
automatically belong in full ownership to PCSO without any
further consideration other than the Rental Fees already paid during
the effectivity of the lease.
21. TERMINATION OF THE LEASE PCSO may terminate this
Contract for any breach of the material provisions of this Contract,
including the following:
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Petitioners submit that the PCSO cannot validly enter into the
assailed Contract of Lease with the PGMC because it is an
arrangement wherein the PCSO would hold and conduct the online
lottery system in “collaboration” or “association” with the PGMC, in
violation of Section 1(B) of R.A. No. 1169, as amended by B.P. Blg.
42, which prohibits the PCSO from holding and conducting charity
sweepstakes races, lotteries, and other similar activities “in
collaboration, association or joint venture with
________________
18 Rollo, 13-14.
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19 Rollo, 16-19.
20 Id., 27-28; 30-32.
21 Id., 27.
131
Lease void 22
and without effect and making the injunction
permanent.
We required the respondents to comment on the petition. In its
Comment filed on 1 March 1994, private respondent PGMC asserts
that “(1) [it] is merely an independent contractor for a piece of work,
(i.e., the building and maintenance of a lottery system to be used by
PCSO in the operation of its lottery franchise); and (2) as such
independent contractor, PGMC is not a co-operator of the lottery
franchise with PCSO, nor is PCSO sharing its franchise, ‘in
collaboration, association or joint venture’ with PGMC—as such
statutory limitation is viewed from the context, intent, and spirit of
Republic Act 1169, as amended by Batas Pambansa 42.” It further
claims that as an independent contractor for a piece of work, it is
neither engaged in “gambling” nor in “public service” relative to the
telecommunications network, which the petitioners even consider as
an “indispensable requirement” of an on-line lottery system. Finally,
it states that the execution and implementation of the contract does
not violate the Constitution and the laws; that the issue on the
“morality” of the lottery franchise granted to the PCSO is political
and not judicial or legal, which should be ventilated in another
forum; and that the “petitioners do not appear to have the legal
standing or real23 interest in the subject contract and in obtaining the
reliefs sought.”
In their Comment filed by the Office of the Solicitor General,
public respondents Executive Secretary Teofisto Guingona, Jr.,
Assistant Executive Secretary Renato Corona, and the PCSO
maintain that the contract of lease in question does not violate
Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, and that the
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22 Rollo, 35.
23 Id., 180-181.
132
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24 Citing Teresa Electric & Power Co., Inc. vs. Public Service Commission, 21
SCRA 198 [1967].
25 175 SCRA 262 [1989].
26 G.R. No. 78716, 22 September 1987.
133
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134
________________
29 G.R. No. L-2044 (Araneta vs. Dinglasan); G.R. No. L-2756 (Araneta vs. Angeles); G.R.
No. L-3054 (Rodriguez vs. Tesorero de Filipinas); G.R. No. L-3055 (Guerrero vs.
Commissioner of Customs); and G.R. No. L-3056 (Barredo vs. Commission on Elections), 84
Phil. 368 [1949].
30 Tan vs. Macapagal, 43 SCRA 677, 680 [1972].
31 Sanidad vs. Commission on Elections, 73 SCRA 333 [1976].
32 112 SCRA 294, 314-315 [1982].
135
In Kapatiran
33
ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc.
vs. Tan, reiterated
34
in Basco vs. Philippine Amusements and Gaming
Corporation, this Court stated:
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136
The Federal Supreme Court of the United States of America has also
expressed its discretionary power to liberalize the rule on locus
standi. In United States vs. Federal Power Commission
37
and Virginia
Rea Association vs. Federal Power Commission, it held:
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137
In line with the liberal policy of this Court on locus standi, ordinary
taxpayers, members of Congress, and even association of planters,
and non-profit civic organizations were allowed to initiate and
prosecute actions before this Court to question the constitutionality
or validity of laws, acts, decisions, rulings, or orders of various
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138
________________
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A. To hold and conduct charity sweepstakes races, lotteries and other similar
activities, in such frequency and manner, as shall be determined, and subject to such
rules and regulations as shall be promulgated by the Board of Directors.
________________
54 Supra.
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“To engage in any and all investments and related profit-oriented projects or
programs and activities by itself or in collaboration, association or joint
venture with any person, association, company or entity, whether domestic
or foreign, for the main purpose of raising 55funds for health and medical
assistance and services and charitable grants.”
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141
“MR. DAVIDE.
Mr. Speaker.
THE SPEAKER.
The gentleman from Cebu is recognized.
MR. DAVIDE.
May I introduce an amendment to the committee amendment?
The amendment would be to insert after ‘foreign’ in the
amendment just read the following: EXCEPT FOR THE
ACTIVITY IN LETTER (A) ABOVE.
When it is a joint venture or in collaboration with any entity such
collaboration or joint venture must not include activity letter (a)
which is the holding and conducting of sweepstakes races,
lotteries and other similar acts.
MR. ZAMORA
We accept the amendment, Mr. Speaker.
MR. DAVIDE.
Thank you, Mr. Speaker.
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THE SPEAKER.
Is there any objection to the amendment?
57
(Silence) The
amendment, as amended, is approved.”
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56 Id., 1006-1007.
57 Record of the Batasan, vol. Two, 1007 (emphasis supplied).
142
________________
58 Id.
59 36 AM. JUR. 2d Franchises § 26 (1968).
60 36 AM. JUR. 2d Franchises § 63 (1968).
143
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64 Id., 121.
65 Id., 839.
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that “the proponent must be able to stand to the acid test of proving
that it is an entity able to take on the role of responsible maintainer
of the on-line lottery system.” The PCSO, however, makes it clear in
its RFP that the proponent can propose a period of the contract
which shall not exceed fifteen years, during which time it is assured
of a “rental” which shall not exceed 12% of gross receipts. As
admitted by the PGMC, upon learning of the PCSO’s decision, the
Berjaya Group Berhad, with its affiliates, wanted to offer its services
and resources to the PCSO. Forthwith, it organized the PGMC as “a
medium through which the technical and management services 66
required for the project would be offered and delivered to PCSO.”
Undoubtedly, then, the Berjaya Group Berhad knew all along that
in connection with an on-line lottery system, the PCSO had nothing
but its franchise, which it67 solemnly guaranteed it had in the General
Information of the RFP. Howsoever viewed then, from the very
inception, the PCSO and the PGMC mutually understood that any
arrangement between them would necessarily leave to the PGMC
the technical, operations, and management aspects of the on-line
lottery system while the PCSO would, primarily, provide the
franchise. The words Gaming and Management in the corporate
name of respondent Philippine Gaming Management Corporation
could not have been conceived just for euphemistic purposes. Of
course, the RFP cannot substitute for the Contract of Lease which
was subsequently executed by the PCSO and the PGMC.
Nevertheless, the Contract of Lease incorporates their intention and
understanding.
The so-called Contract of Lease is not, therefore, what it purports
to be. Its denomination as such is a crafty device, carefully
conceived, to provide a built-in defense in the event that the
agreement is questioned as violative of the exception in Section 1(B)
of the PCSO’s charter. The acuity or skill of its draftsmen to
accomplish that purpose easily manifests itself in the Contract of
Lease. It is outstanding for its careful and
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146
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(a) Rent is defined in the lease contract as the amount to be paid to the
PGMC as compensation for the fulfillment of its obligations under
the contract, including, but not limited to the lease of the Facilities.
However, this rent is not actually a fixed amount. Although it is
stated to be 4.9% of gross receipts from ticket sales, payable net of
taxes required by law to be withheld, it may be drastically reduced
or, in extreme cases, nothing may be due or demandable at all
because the PGMC binds itself to “bear all risks if the revenue from
the ticket sales, on an annualized basis, are insufficient to pay the
entire prize money.” This risk-bearing provision is unusual in a
lessor-lessee relationship, but inherent in a joint venture.
(b) In the event of pre-termination of the contract by the PCSO, or its
suspension of operation of the on-line lottery system in breach of
the contract and through no fault of the PGMC, the PCSO binds
itself “to promptly, and in any event not later than sixty (60) days,
reimburse the LESSOR the amount of its total investment cost
associated with the On-Line Lottery System, including but not
limited to the cost of the Facilities, and further compensate the
LESSOR for loss of expected net profit after tax, computed over
the unexpired terms of the lease.” If the contract were indeed one of
lease, the payment of the expected profits or rentals for the
unexpired portion of the term of the contract would be enough.
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68 Attached to the Contract of Lease as Annex “A” is the Master Games Plan
prepared by the PGMC and approved by the PCSO.
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149
No pronouncement as to costs.
SO ORDERED.
150
151
6.7. Upon effectivity of this Contract, commence the training of PCSO and
other local personnel and the transfer of technology and expertise, such that
at the end of the term of this Contract, PCSO will be able to effectively take-
over the Facilities and efficiently operate the OnLine Lottery System.
(Emphasis supplied)
In the meantime, that is to say during the entire 8-year term of the
contract, it will be PGMC that will be operating the lottery. Only “at
the end of the term of this Contract” will PCSO “be able to
effectively take-over the Facilities and efficiently operate the On-
Line Lottery System.”
Even on the assumption that it is PCSO that will be operating the
lottery at the very start, the authority granted to PGMC by the
agreement will readily show that PCSO will not be acting alone, as
the respondents pretend. In fact, it cannot. PGMC is an
indispensable co-worker because it has the equipment and the
technology and the management skills that PCSO does not have at
this time for the operation of the lottery. PCSO cannot deny that it
needs the assistance of PGMC for this purpose, which was its reason
for entering into the contract in the first place.
And when PCSO does avail itself of such assistance, how will it
be operating the lottery? Undoubtedly, it will be doing so “in
collaboration, association or joint venture” with PGMC, which, let it
be added, will not be serving as a mere “hired help” of PCSO
subject to its control. PGMC will be functioning independently in
the discharge of its own assigned role as stipulated in detail under
the contract. PGMC is plainly a partner of PCSO in violation of law,
no matter how PGMC’s assistance is called or the contract is
denominated.
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154
There is, upon the other1 hand, little substantive dispute that the
possession of locus standi is not, in each and every case, a rigid and
absolute requirement for access to the courts. Certainly that is the
case where great issues of public law are at stake, issues which
cannot be approached in the same way that a court approaches a suit
for the collection of a sum of money or a complaint for the recovery
of possession of a particular piece of land. The broad question is
when, or in what types of cases, the court should insist on a clear
showing of locus standi understood as a direct and personal interest
in the subject matter of the case at bar, and when the court may or
should relax that apparently stringent requirement and proceed to
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________________
1 The requirement of locus standi forms part of the “application of ordinary law
technique to the Constitution” which historically, in the United States, promoted and
reinforced the “legalization” or acceptance of the power of judicial review; S.
Snowiss, Judicial Review and the Law of the Constitution, p. 197 (1990).
2 A stimulating effort is offered by Prof. Laurence H. Tribe, Constitutional
Choices (1985), Chap. 8, where he examined certain trends in, and circumstances
relating to, the caselaw of the Supreme Court of the United States which “make a
satisfactory theory of standing specially elusive” (p. 100).
155
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156
very substantial showing has been made that the Contract of Lease
between the PCSO and the PGMC flies in the face of legal
limitations.
A third consideration of importance in the present case is the lack
of any other party with a more direct and specific interest in raising
the questions here being raised. Though a public bidding was held,
no losing or dissatisfied bidder has come before the Court. The
Office of the Ombudsman has not, to the knowledge of the Court,
raised questions about the legality or constitutionality of the
Contract of Lease here involved. The National Government itself,
through the Office of the Solicitor General, is defending the PCSO
Contract (though it had not participated in the drafting thereof). In a
situation like that here obtaining, the
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3 A.M. Bickel, The Least Dangerous Branch: The Supreme Court at the Bar of
Politics, 169 (1962); brackets supplied.
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to the Petition and to hold that the Contract of Lease between the
PCSO and PGMC in its present form and content, and given the
present state of the law, is fatally defective.
PADILLA, J.:
158
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authorized by law and run by the government, with the activity known as
prostitution. Would prostitution be any less reprehensible were it to be
authorized by law, franchised, and “regulated” by the government, in return
for the substantial revenues it would yield the government to carry out its
laudable projects, such as infrastructure and social amelioration? The
question, I believe, answers itself. I submit that the sooner the legislative
department outlaws all forms of gambling, as a fundamental state policy,
and the sooner the executive implements such policy, the better it will be for
the nation.”
159
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of truth, justice and national renewal as well as members of the Board of Trustees of
KILOSBAYAN as taxpayers and concerned citizens and senators Freddie Webb,
Wigberto Tanada and Representative Joker P. Arroyo as taxpayers, concerned citizens
and legislators.
160
“Before addressing the crux of the controversy, the Court observes that
petitioner does not allege that he is running for reelection, much less, that he
is prejudiced by the election, by district, in Parañaque. As such, he does not
appear to have locus standi, a standing in law, a personal or substantial
interest. (Sanidad vs. COMELEC, G.R. No. L-44640, October 12, 1976, 73
SCRA 333; Municipality of Malabang vs. Benito, G.R. No. L-28113, March
28, 1969, 27 SCRA 533) He does not also allege any legal right that has
been violated by respondent. If for this alone, petitioner does not appear to
have any cause of action.
However, considering the importance of the issue involved, concerning
as it does the political exercise of qualified votes affected by the
apportionment, and petitioner alleging abuse of discretion and violation of
the Constitution by respondent. We resolved to brush aside the question of
procedural infirmity, even as We perceive the petition to be one of
declaratory relief. We so held similarly through Mr. Justice Edgardo L.
Paras in Osmeña vs. Commission on Elections.”
I view the present case as falling within the De Guia case doctrine.
For, when the contract of lease in question seeks to establish and
operate a nationwide gambling network with substantial if not
controlling foreign participation, then the issue is of paramount
national interest and importance as to justify and warrant a
relaxation of the above-mentioned procedural rule on locus standi.
2. The charter of the PCSO—Republic Act No. 1169 as amended
by BP No. 42—insofar as relevant, reads:
161
It is at once clear from the foregoing legal provisions that, while the
PCSO charter allows the PCSO to itself engage in lotteries, it does
not however permit the PCSO to undertake or engage in lotteries in
“collaboration, association or joint venture” with others. The
palpable reason for this prohibition is, that PCSO should not and
cannot be made a vehicle for an otherwise prohibited foreign or
domestic entity to engage in lotteries (gambling activities) in the
Philippines.
The core question then is whether the lease contract between
PCSO and PGMC is a device whereby PCSO will engage in lottery
in collaboration, association or joint venture with another, i.e.
PGMC. I need not go here into the details and different specific
features of the contract to show that it is a joint venture between
PCSO and PGMC. That has been taken care of in the opinion of Mr.
Justice Davide to which I fully subscribe.
On a slightly different plane and, perhaps simplified, I consider
the agreement or arrangement between the PCSO and PGMC a joint
venture because each party to the contract contributes its share in the
enterprise or project. PGMC contributes its facilities, equipment and
know-how (expertise). PCSO contributes (aside from its charter) the
market, directly or through dealers—and this to me is most
important—in the totality or mass of the Filipino gambling elements
who will invest in lotto tickets. PGMC will get its 4.9% of gross
receipts (with assumption of certain risks in the course of lotto
operations); the residue of the whole exercise will go to PCSO. To
any person with a minimum of business know-how, this is a joint
venture between PCSO and PGMC, plain and simple.
162
I submit that the petition before the Court deserves no less than
outright dismissal for the reason that petitioners, as concerned
citizens and as taxpayers and as members of Congress, do not
possess the necessary legal standing to assail the validity of the
contract of lease entered into by the Philippine Charity Sweepstakes
Office and the Philippine Gaming Management Corporation relative
to the establishment and operation of an “On-line Hi-Tech Lottery
System” in the country.
As announced in Lamb vs. Phipps (22 Phil. [1912], 559),
“[J]udicial power in its nature, is the power to hear and decide
causes pending between parties who have the right to sue and be
sued in the courts of law and equity.” Necessarily, this implies that a
party must show a personal stake in the outcome of the controversy
or an injury to himself that can be addressed by a favorable decision
so as to warrant his invocation of the court’s jurisdiction and to
justify the court’s remedial powers in his behalf (Warth vs. Seldin,
422 U.S. 490; Guzman vs. Marrero, 180 U.S. 81; McMicken vs.
United States, 97 U.S. 204). Here, we have yet to see any of
petitioners acquiring a personal stake in the
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millions of citizens spread all over the land who may have just as
many varied reactions relative to the contract in question.
Any effort to infuse personality on petitioners by considering the
present case as a “taxpayer’s suit” could not cure the lack of locus
standi on the part of petitioners. As understood in this jurisdiction, a
“taxpayer’s suit” refers to a case where the act complained of
directly involves the illegal disbursement of public funds derived
from taxation (Pascual vs. Secretary of Public Works, 110 Phil.
[1960] 331; Maceda vs. Macaraig, 197 SCRA [1991]; Lozada vs.
COMELEC, 120 SCRA [1983] 337; Dumlao vs. COMELEC, 95
SCRA [1980] 392; Gonzales vs. Marcos, 65 SCRA [1975] 624). It
cannot be overstressed that no public fund raised by taxation is
involved in this case. In fact, it is even doubtful if the rentals which
the PCSO will pay to the lessor for its operation of the lottery
system may be regarded as “public fund”. The PCSO is not a
revenue-collecting arm of the government. Income or money
realized by it from its operations will not and need not be turned
over to the National Treasury. Rather, this will constitute corporate
funds which will remain with the corporation to finance its various
activities as authorized in its charter. And if ever some semblance of
“public character” may be said to attach to its earnings, it is simply
because PCSO is a government-owned or controlled entity and not a
purely private enterprise.
It must be conceded though that a “taxpayer’s suit” had been
allowed in a number of instances in this jurisdiction. For sure, after
the trail was blazed by Pascual vs. Secretary of Public Works, supra,
several more followed. It is to be noted, however, that in those
occasions where this Court allowed such a suit, the case invariably
involved either the constitutionality of a statute or the legality of the
disbursement of public funds through the enforcement of what was
perceived to be an invalid or unconsti-
164
this Court and seek nullification of said contract, the day may come
when the activities of government corporate entities will ground to a
standstill on account of nuisance suits filed against them by persons
whose supposed interest in the contract is as remote and as obscure
as the interest of any man in the street. The dangers attendant thereto
are not hard to discern and this Court must not allow them to come
to pass.
One final observation must be emphasized. When the petition at
bench was filed, the Court decided to hear the case on oral argument
on the initial perception that a constitutional issue could be involved.
However, it now appears that no question of constitutional
dimension is at stake as indeed the majority barely touches on such
an issue, concentrating as it does on its interpretation of the contract
between the Philippine Charity Sweepstakes Office and the
Philippine Gaming Management Corporation.
I, therefore, vote to dismiss the petition.
DISSENTING OPINION
PUNO, J.:
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“x x x
“Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse
of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government.” (Italics supplied)
________________
4 Ibid.
5 Philippine Political Law, 1989 ed., p. 18 citing Dumlao v. COMELEC, 95 SCRA
392.
6 Ibid., citations omitted.
167
“x x x
“A proper party is one who has sustained or is in immediate danger of
sustaining an injury as a result of the act complained of. Until and unless
such actual or potential injury is established, the complainant cannot have
the legal personality to raise the constitutional question.
“In Tileson v. Ullmann, a physician questioned the constitutionality of a
law prohibiting the use of contraceptives, upon the ground that it might
prove dangerous to the life or health of some of his patients whose physical
condition would not enable them to bear the rigors of childbirth. The court
dismissed the challenge, holding that the patients of the physician and not
the physician himself were the proper parties.
“In Cuyegkeng v. Cruz, the petitioner challenged in a quo warranto
proceeding the title of the respondent who, he claimed, had been appointed
to the board of medical examiners in violation of the provisions of the
Medical Act of 1959. The Supreme Court dismissed the petition, holding
that Cuyegkeng had not made a claim to the position held by Cruz and
therefore could not be regarded as a proper party who had sustained an
injury as a result of the questioned act.
“In People v. Vera, it was held that the Government of the Philippines
was a proper party to challenge the constitutionality of the Probation Act
because, more than any other, it was the government itself that should be
concerned over the validity of its own laws.
“In Ex Parte Levitt, the petitioner, an American taxpayer and member of
the bar, filed a motion for leave to question the qualifications of Justice
Black who, he averred, had been appointed to the U.S. Supreme Court in
violation of the Constitution of the United States. The Court dismissed the
petition, holding that Levitt was not a proper party since he was not
claiming the position held by Justice Black.
“The rule before was that an ordinary taxpayer did not have the proper
party personality to question the legality of an appropriation law since his
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procedure.’
“In Tolentino v. Commission on Elections, it was held that a senator had
the proper party personality to seek the prohibition of a plebiscite for the
ratification of a proposed constitutional amendment. In PHILCONSA v.
Jimenez, an organization of taxpayers and citizens was held to be a proper
party to question the constitutionality of a law providing for special
retirement benefits for members of the legislature.
“In Sanidad v. Commission on Elections, the Supreme Court upheld the
petitioners as proper parties, thus—
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the Court has not broken with the traditional requirement that, in the
absence of a specific statutory grant of the right of review, a plaintiff must
allege some particularized injury that sets him apart from the man on the
street.
I recognize that the Court’s allegiance to a requirement of particularized
injury has on occasion required a reading of the concept that threatens to
transform it beyond recognition. E.G., Baker v. Carr, supra; Flast v. Cohen,
supra. But despite such occasional digressions, the requirement remains, and
I think it does so for the reasons outlined above. In recognition of those
considerations, we should refuse to go the last mile towards abolition of
standing requirements that is implicit in broadening the ‘precarious opening’
for federal taxpayers created by Flast, see 392 U.S., at 116 (Mr. Justice
Fortas, concurring) or in allowing a citizen qua citizen to invoke the power
of the federal courts to negative unconstitutional acts of the Federal
Government.
In sum, I believe we should limit the expansion of federal taxpayer and
citizen standing in the absence of specific statutory authorization to an outer
boundary drawn by the results in Flast and Baker v. Carr. I think we should
face up to the fact that all such suits are an effort ‘to employ a federal court
as a forum in which to air . . . generalized grievances about the conduct of
government or the allocation of power in the Federal System.’ Flast v.
Cohen, 392 U.S., at 106. The Court should explicitly reaffirm traditional
prudential barriers against such public actions. My reasons for this view are
rooted in respect for democratic processes and in the conviction that ‘[t]he
powers of the federal judiciary will be adequate for the great burdens placed
upon them only if they are employed prudently, with recognition of the
strengths as well as the hazards that go with our kind of representative
government.’ Id., at 131
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cultural inequities by equitably diffusing wealth and political power for the
common good.
“To this end, the State shall regulate the acquisition, ownership, use, and
disposition of property and its increments.”
and
175
power for the common good. Whether the act of the legislature in
amending the charter of PCSO by giving it the authority to conduct
lotto and whether the Contract of Lease entered into between PCSO
and PGMC are incongruent to the policy direction of this
constitutional provision is a highly debatable proposition and can be
endlessly argued. Respondents steadfastly insist that the operation of
lotto will increase the revenue base of PCSO and enable government
to provide a wider range of social services to the people. They also
allege that the operation of high-tech lotto will eradicate illegal
jueteng. Petitioners are scandalized by this submission. They dismiss
gambling as evil per se and castigate government for attempting to
correct a wrong by committing another wrong. In any event, the
proper forum for this debate, however cerebrally exciting it may be,
is not
14
this court but congress. So we held in PCSO v. Inopiquez, to
wit:
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“By bringing their suit in the lower court, the private respondents in G.R.
No. 79084 do not question the power of PCSO to conduct the Instant
Sweepstakes game. Rather, they assail the wisdom of embarking upon this
project because of their fear of the ‘pernicious repercussions’ which may be
brought about by the Instant Sweepstakes Game which they have labelled as
‘the worst form of gambling’ which thus ‘affects the moral values’ of the
people.
“The Court, as held in several cases, does not pass upon questions of
wisdom, justice, or expediency of legislation and executive acts. It is not the
province of the courts to supervise legislation or executive orders as to keep
them within the bounds of propriety, moral values and common sense. That
is primarily and even exclusively a concern of the political departments of
the government; otherwise, there will be a violation of the principle of
separation of powers.” (Italics supplied)
I am not also convinced that petitioners can justify their locus standi
to advocate the rights of hypothetical third parties not before the
court by invoking the need to keep inviolate section 11, Article XII
of the Constitution which imposes a nationality requirement on
operators of a public utility. For even assuming arguendo that
PGMC is a public utility, still, the records do not at the moment bear
out the claim of petitioners that PGMC is a foreign owned and
controlled corporation. This factual issue
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“Before addressing the crux of the controversy, the Court observes that
petitioner does not allege that he is running for reelection, much less, that he
is prejudiced by the election, by district, in Parañaque. As such, he does not
appear to have locus standi, a standing in law, a personal or substantial
interest. (Sanidad vs. COMELEC, G.R. No. L-44640, October 12, 1976, 73
SCRA 333; Municipality of Malabang vs. Benito, G.R. No. L-28113, March
28, 1969, 27 SCRA 533). He does not also allege any legal right that has
been violated by respondent. If for this alone, petitioner does not appear to
have any cause of action.
However, considering the importance of the issue involved, concerning
as it does the political exercise of qualified voters affected by
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15 Compare Coleman v. Miller, 307 US 433 [1939]; Mitchell v. Laird, 488 F2d 611 CD.C.
Cir. 1973); Kennedy v. Sampson, 511 F2d 430 CD.C. Cir. 1974).
16 G.R. No. 104712, May 6, 1992, 208 SCRA 420.
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standing’ is whether the party seeking relief has ‘alleged such a personal
stake in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon which the court
so largely depends for illumination of difficult constitutional questions.’
Baker v. Carr, 369 U.S. 186, 204 (1962). In other words, when standing is
placed in issue in a case, the question is whether the person whose standing
is challenged is a proper party to request an adjudication of a particular issue
and not whether the issue itself is justiciable. Thus, a party may have
standing in a particular case, but the federal court may nevertheless decline
to pass on the merits of the case because, for example, it presents a political
question. A proper party is demanded so that federal courts will not be
asked to decide ‘ill-defined controversies over constitutional issues,’ United
public Workers v. Mitchell, 330 U.S. 75, 90 (1947), or a case which is of ‘a
hypothetical or abstract character,’ Aetna Life Insurance Co. v. Haworth,
300 U.S. 227, 240 (1937).”
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180
decide. Real power belongs to him who has power over power.
IN VIEW WHEREOF, and strictly on the ground of lack of locus
standi on the part of petitioners, I vote to DENY the petition.
SEPARATE OPINION
VITUG, J.:
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“x x x. The Court will not pass upon the validity of a statute upon complaint
of one who fails to show that he is injured by its operation. Tyler v. The
Judges, 179 U.S. 405; Hendrick v. Maryland, 234 U.S. 610, 621. Among the
many applications of this rule, none is more striking than the denial of the
right of challenge to one who lacks a personal or property right. Thus, the
challenge by a public official interested only in the performance of his
official duty will not be entertained. Columbus & Greenville Ry. v. Miller,
283 U.S. 96, 99-100. In Fairchild v. Hughes, 258 U.S. 126, the Court
affirmed the dismissal of a suit brought by a citizen who sought to have the
Nineteenth Amendment declared unconstitutional. In Massachusetts v.
Mellon, 262 U.S. 447, the challenge of the federal Maternity Act was not
entertained although made by the Commonwealth on behalf of all its
citizens.”
________________
4 See Pascual v. Secretary of Public Works, 110 Phil. 331; Maceda v. Macaraig,
197 SCRA 771; Lozada v. COMELEC, 120 SCRA 337;
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wise, there indeed would be truth to the charge, in the words of some
constitutionalists, that “judicial tyranny” has been institutionalized
by the 1987 Constitution, an apprehension which should, I submit,
rather be held far from truth and reality.
In sum, while any act of government, be it executive in nature or
legislative in character, may be struck down and declared a nullity
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(Citing Ex Parte Levitt, 302 U.S. 633, cited in 15 SCRA 497, Annotation.)
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________________
6 The provisions of Arts. 195-199 of the Revised Penal Code (Forms of Gambling
and Betting), Republic Act No. 3063 (Horse Racing Bookies), Presidential Decree
No. 483 (Penalizing Betting, Game-fixing or Pointshaving and Machinations in
Sports Contests); No. 449, as amended (Cockfighting Law of 1974); No. 510 (Slot
Machines) in relation to Opinion Nos. 33 and 97 of the Ministry of Justice; No. 1306
(Jai-Alai Bookies) have been repealed by Presidential Decree No. 1602, otherwise
known as the New Gambling Law (Prescribing Stiffer Penalties on Illegal Gambling).
Subsequently, Letter of Instruction No. 816 was issued which excluded certain
prohibited games under Presidential Decree No. 1602.
7 U.S. v. Filart, 30 Phil. 80, 83 (1915); U.S. v. Baguio, 39 Phil. 962, 966.
8 Ly Hong v. Republic, 109 Phil. 635.
186
“c. To undertake any other activity that will enhance its funds generation,
operations and funds management capabilities, subject to the same
limitations provided for in the preceding paragraph.
“It shall have a Board of Directors, hereinafter designated the Board,
composed of five members who shall be appointed, and whose
compensation and term of office shall be fixed, by the President.
“x x x x x x x x x
“Section 9. Powers and functions of the Board of Directors.—The Board
of Directors of the Office shall have the following powers and functions.
“(a) To adopt or amend such rules and regulations to implement the
provisions of this Act.
“x x x x x x x x x.
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“(d) To promulgate rules and regulations for the operation of the Office
and to do such act or acts as may be necessary for the attainment of its
purposes and objectives.” (Italics supplied).
11
In People vs. Dionisio, cited by the petitioners themselves, we
remarked: “What evils should be corrected as pernicious to the body
politic, and how correction should be done, is a matter primarily
addressed to the discretion of the legislative
12
department, not of the
courts x x x.” In Valmonte vs. PCSO, we also said:
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187
“The Court, as held in several cases, does not pass upon questions of
wisdom, justice or expediency of legislation and executive acts. It is not the
province of the courts to supervise legislation or executive orders as to keep
them within the bounds of propriety, moral values and common sense. That
is primarily and even exclusively a concern of the political departments of
the government; otherwise, there will be a violation of the principle of
separation of powers.”
The constraints on judicial power are clear. I feel, the Court must
thus beg off, albeit not without reluctance, from giving due course to
the instant petition.
Accordingly, I vote for the dismissal of the petition.
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This brings me to one more important point: The idea that a norm of
constitutional adjudication could be lightly brushed aside on the
mere supposition that an issue before the Court is of paramount
public concern does great harm to a democratic system which
espouses a delicate balance between three separate but co-equal
branches of government. It is equally of paramount public concern,
certainly paramount to the survival of our democracy, that acts of
the other branches of government are accorded due respect by this
Court. Such acts, done within their sphere of competence, have been
—and should always be—accorded with a presumption of regularity.
When such acts are assailed as illegal or unconstitutional, the burden
falls upon those who assail these acts to prove that they satisfy the
essential norms of constitutional adjudication, because when we
finally proceed to declare an act of the executive or legislative
branch of our government unconstitutional or illegal, what we
actually accomplish is the thwarting of the will of the elected
representatives of
6
the people in the executive or legislative branches
of government. Notwithstanding Article VIII, Section 1 of the
Constitution, since the exercise of the power of judicial review by
this Court is inherently antidemocratic, this Court should exercise a
becoming modesty in acting as a revisor of an act of the executive or
legislative branch. The tendency of a frequent and easy resort to the
function of judicial review, particularly in areas of economic policy
has become lamentably too common as to dwarf the political
capacity of the people expressed through their representatives in the
policy making branches7
of government and to deaden their sense of
moral responsibility.
This court has been accused, of late, of an officious tendency to8
delve into areas better left to the political branches of government.
This tendency, if exercised by a court running
________________
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——o0o——
________________
Economic Policy, 67 Phil. L.J. 332-347 (1993) and Castro & Pison, The Economic
Policy Determining Function of the Supreme Court in Times of National Crisis, 67
Phil. L.J. 354-411 (1993).
192
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