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Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 113375 May 5, 1994
KILOSBAYAN, INCORPORATED, JOVITO R. SALONGA, CIRILO A. RIGOS,
ERME CAMBA, EMILIO C. CAPLONG, JR., JOSE T.APOLO, EP!RAIM TENDERO,
"ERNANDO SANTIAGO, JOSE ABCEDE, C!RISTINE TAN, "ELIPE L. GO#ON,
RA"AEL G."ERNANDO, RAOL V. VICTORINO, JOSE CNANAN, $INTIN S.
DOROMAL, SEN. "REDDIE %EBB, SEN. %IGBERTO TA&ADA,a'( REP. JOKER
P. ARROYO, petitioners,vs.TEO"ISTO GINGONA, JR., )' *)+ a-a)y a+
E/0)20 S00ay, O)0 o *0 P0+)(0' RENATO CORONA, )' *)+ a-a)y
a+A++)+a' E/0)20 S00ay a'( C*a)6a' o *0 P0+)(0')a 02)08 Co66)00 o'
*0 Loo, O)0 o *0 P0+)(0'P!ILIPPINE C!ARITY S%EEPSTAKES O""ICE a'(
P!ILIPPINE GAMING MANAGEMENT CORPORATION, respondents.
Jovito R. Salonga, Fernando Santiago, Emilio C. Capulong, Jr.
and Felipe L. Gozon for petitioners.
Renato L. Cayetano and Eleazar B. Reyes for PGC.
Gamaliel G. Bong!o, "s!ar #araan and Jedideo$ Sin!ero for
intervenors.
DAVIDE, JR., J.:
This is a special civil action for prohibition and injunction,
with a prayer for a temporary restraining order and preliminary
injunction, which
seeks to prohibit and restrain the implementation of the
"Contract of Lease" executed by the hilippine Charity !weepstakes
ffice #C!$and the hilippine %aming &anagement Corporation
#%&C$ in connection with the on' line lottery system, also
known as "lotto."
etitioner (ilosbayan, )ncorporated #()L!*++-$ avers that it is a
non'stock domestic corporation composed of civic'spirited
citiens,pastors, priests, nuns, and lay leaders who are committed
to the cause of truth, justice, and national renewal. The rest of
the petitioners,
except !enators /reddie 0ebb and 0igberto Ta1ada and
2epresentative 3oker . +rroyo, are suing in their capacities as
members of the*oard of Trustees of ()L!*++- and as taxpayers and
concerned citiens. !enators 0ebb and Ta1ada and 2epresentative
+rroyo aresuing in their capacities as members of Congress and as
taxpayers and concerned citiens of the hilippines.
The pleadings of the parties disclose the factual antecedents
which triggered off the filing of this petition.
ursuant to !ection 4 of the charter of the C! #2.+. -o. 4456, as
amended by *.. *lg. 78$ which grants it the authority to hold
andconduct "charity sweepstakes races, lotteries and other similar
activities," the C! decided to establish an on' line lottery system
for thepurpose of increasing its revenue base and diversifying its
sources of funds. !ometime before &arch 4669, after learning
that the C! wasinterested in operating an on'line lottery system,
the *erjaya %roup *erhad, "a multinational company and one of the
ten largest publiccompanies in &alaysia," long "engaged in,
among others, successful lottery operations in +sia, running both
Lotto and :igit games, thru itssubsidiary, !ports Toto
&alaysia," with its "affiliate, the )nternational Totaliator
!ystems, )nc., . . . an +merican public company engaged inthe
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
C!." +s an initial step, *erjaya %roup *erhad #through its
individual nominees$organied with some /ilipino investors in
&arch 4669 a hilippine corporation known as the hilippine
%aming &anagement Corporation#%&C$, which "was intended to
be the medium through which the technical and management services
re;uired for the project would be
offered and delivered to C!."1
*efore +ugust 4669, the C! formally issued a 2e;uest for roposal
#2/$ for the Lease Contract ofan on'line lottery system for the C!.
2elevant provisions of the 2/ are the following$ years.
4.>. The Lessor is expected to submit a comprehensive
nationwide lottery developmentplan #":evelopment lan"$ which will
include the game, the marketing of the games, andthe logistics to
introduce the games to all the cities and municipalities of the
countrywithin five #>$ years.
xxx xxx xxx
4.?. The Lessor shall be selected based on its technical
expertise, hardware and software
capability, maintenance support, and financial resources. The
:evelopment lan shallhave a substantial bearing on the choice of
the Lessor. The Lessor shall be a domesticcorporation, with at
least sixty percent #5@A$ of its shares owned by
/ilipinoshareholders.
xxx xxx xxx
The ffice of the resident, the -ational :isaster Control
Coordinating Council, thehilippine -ational olice, and the -ational
*ureau of )nvestigation shall be authoried touse the nationwide
telecommunications system of the /acilities /ree of Charge.
4.B. pon expiration of the lease, the /acilities shall be owned
by C! without any
additional consideration.3
xxx xxx xxx
8.8. *3DCT)ED!
The objectives of C! in leasing the /acilities from a private
entity are as follows, 58 !C2+ 8?>M per liter or 4>4.@>
per barrel of imported crude oil and 4.@@ per liter of imported oil
productsG 5 case of*1uino vs. Commission on Ele!tions, 53this
Court, despite its une;uivocal ruling thatthe petitioners therein
had no personality to file the petition, resolved nevertheless to
pass upon theissues raised because of the far'reaching implications
of the petition. 0e did no less in -e Guia vs.C"ELEC 54where,
although we declared that :e %uia "does not appear to havelo!us
standi,astanding in law, a personal or substantial interest," we
brushed aside the procedural infirmity "consideringthe importance
of the issue involved, concerning as it does the political exercise
of ;ualified votersaffected by the apportionment, and petitioner
alleging abuse of discretion and violation of the Constitutionby
respondent."
0e find the instant petition to be of transcendental importance
to the public. The issues it raised are ofparamount public interest
and of a category even higher than those involved in many of the
aforecitedcases. The ramifications of such issues immeasurably
affect the social, economic, and moral well'beingof the people even
in the remotest barangays of the country and the counter'productive
and retrogressiveeffects of the envisioned on'line lottery system
are as staggering as the billions in pesos it is expected toraise.
The legal standing then of the petitioners deserves recognition
and, in the exercise of its sounddiscretion, this Court hereby
brushes aside the procedural barrier which the respondents tried to
takeadvantage of.
+nd now on the substantive issue.
!ection 4 of 2.+. -o. 4456, as amending by *.. *lg. 78,
prohibits the C! from holding and conductinglotteries "in
collaboration, association or joint venture with any person,
association, company or entity,
whether domestic or foreign." !ection 4 provides99$ Fe does not
also allege any legal right that has beenviolated by respondent. )f
for this alone, petitioner does not appear to have any cause
ofaction.
Fowever, considering the importance of the issue involved,
concerning as it does thepolitical exercise of ;ualified voters
affected by the apportionment, and petitioner allegingabuse of
discretion and violation of the Constitution by respondent, 0e
resolved to brushaside the ;uestion of procedural infirmity, even
as 0e perceive the petition to be one ofdeclaratory relief. 0e so
held similarly through &r. 3ustice Ddgardo L. aras in"sme9avs.
Commission on Ele!tions.
) view the present case as falling within the -e Guia case
doctrine. /or, when the contract of lease in;uestion seeks to
establish and operate a nationwide gambling network with
substantial if not controllingforeign participation, then the issue
is of paramount national interest and importance as to justify
andwarrant a relaxation of the above'mentioned procedural rule on
lo!us standi.
8. The charter of the C! I 2epublic +ct -o. 4456 as amended by *
-o. 78 Iinsofar as relevant, reads6. The !upreme Court dismissedthe
petition, holding that Cuyegkeng had not made a claim to the
position held by Cruand therefore could not be regarded as a proper
party who had sustained an injury as aresult of the ;uestioned
act.
)n People v. )era, it was held that the %overnment of the
hilippines was a proper partyto challenge the constitutionality of
the robation +ct because, more than any other, itwas the government
itself that should be concerned over the validity of its own
laws.
)nE3 Parte Levitt, the petitioner, an +merican taxpayer and
member of the bar, filed amotion for leave to ;uestion the
;ualifications of 3ustice *lack who, he averred, had beenappointed
to the .!. !upreme Court in violation of the Constitution of the
nited !tates.The Court dismissed the petition, holding that Levitt
was not a proper party since he was
not claiming the position held by 3ustice *lack.
The rule before was that an ordinary taxpayer did not have the
proper party personality to;uestion the legality of an
appropriation law since his interest in the sum appropriatedwas not
substantial enough. Thus, inCustodio v. Senate President, a
challenge by anordinary taxpayer to the validity of a law granting
back pay to government officials,including members of Congress,
during the period corresponding to the 3apaneseccupation was
dismissed as having been commenced by one who was not a
properparty.
!ince the first Emergen!y Po/ersCases, however, the rule has
been changed and it isnow permissible for an ordinary taxpayer, or
a group of taxpayers, to raise the ;uestion ofthe validity of an
appropriation law. +s the !upreme Court then put it. "The
transcendentalimportance to the public of these cases demands that
they be settled promptly anddefinitely, brushing aside, if we must,
technicalities of procedure."
)n 'olentino v. Commission on Ele!tions, it was held that a
senator had the proper partypersonality to seek the prohibition of
a plebiscite for the ratification of a proposedconstitutional
amendment. )n P:(LC"S* v. Jimenez, an organiation of taxpayers
andcitiens was held to be a proper party to ;uestion the
constitutionality of a law providingfor special retirement benefits
for members of the legislature.
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)nSanidad v. Commission on Ele!tions, the !upreme Court upheld
the petitioners asproper parties, thus I
+s a preliminary resolution, 0e rule that the petitioners in
L'7757@#ablo C. !anidad and ablito E. !anidad$ possess lo!us
standitochallenge the constitutional premise of residential :ecree
-os. 664,
4@94, and 4@99. )t is now an ancient rule that the valid source
of astatute I residential :ecrees are of such nature I may be
contestedby one who will sustain a direct injury as a result of its
enforcement. +tthe instance of taxpayers, laws providing for the
disbursement of publicfunds may be enjoined, upon the theory that
the expenditure of publicfunds by an officer of the !tate for the
purpose of executing anunconstitutional act constitutes a
misapplication of such funds. Thebreadth of residential :ecree -o.
664 carries an appropriation of /ive&illion esos for the
effective implementation of its purposes.residential :ecree -o.
4@94 appropriates the sum of Dight &illionesos to carry out its
provisions. The interest of the aforenamedpetitioners as taxpayers
in the lawful expenditure of these amounts ofpublic money
sufficiently clothes them with that personality to litigate
thevalidity of the :ecrees appropriating said funds. &oreover,
as regardtaxpayer=s suits, this Court enjoys that open discretion
to entertain thesame or not. /or the present case, 0e deem it sound
to exercise thatdiscretion affirmatively so that the authority upon
which the disputed:ecrees are predicated may be in;uired into.
)n Lozada v. Commission on Ele!tions,however, the petitioners
were held without legalstanding to demand the filling of vacancies
in the legislature because they had only "ageneralied interest=
shared with the rest of the citienry."
Last 3uly 9@, 4669, we further relaxed the rule on standing
in"posa, et al. v. :on. Fulgen!io S. Fa!toran,Jr., 7where we
recognied the lo!us standiof minors representing themselves as well
as generationsunborn to protect their constitutional right to a
balanced and healthful ecology.
) am perfectly at peace with the drift of our decisions
liberaliing the rule on lo!us standi. The oncestubborn
disinclination to decide constitutional issues due to lack of lo!us
standiis incompatible with theexpansion of judicial power mandated
in section 4 of +rticle E))) of the Constitution, i.e., "to
determinewhether or not there has been a grave abuse of discretion,
amounting to lack or excess of jurisdiction onthe part of any
branch or instrumentality of the government." +s we held thru the
ground breaking
ponen!iaof r. Justi!e Cruz in -aza v. Singson, ;this provision
no longer precludes the Court fromresolving political ;uestions in
proper cases. *ut even perusing this provision as a constitutional
warrantfor the court to enter the once forbidden political thicket,
it is clear that the re;uirement of lo!us standihasnot been
jettisoned by the Constitution for it still commands courts in no
uncertain terms to settle only"actual controversies involving
rights which are legally demandable and enforceable." !tated
otherwise,courts are neither free to decide allkinds of cases
dumped into their laps nor are they free to open theirdoors to all
parties or entities claiming a grievance. The rationale for this
constitutional re;uirement oflo!us standiis by no means trifle. )t
is intended "to assure a vigorous adversary presentation of the
case,and, perhaps more importantly to warrant the judiciary=s
overruling the determination of a coordinate,democratically elected
organ of government." 9)t thus goes to the very essence of
representativedemocracies. +s &r. 3ustice owell carefully
explained in&.S. v.Ri!$ardson, 1
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confrontations between the life'tenured branch and the
representative branches ofgovernment will not, in the long run, be
beneficial to either. The public confidenceessential to the former
and the vitality critical to the latter may well erode if we do
notexercise self' restraint in the utiliation of our power to
negative the actions of the otherbranches. 0e should be ever
mindful of the contradictions that would arise if ademocracy were
to permit at large oversight of the elected branches of government
by anon'representative, and in large measure insulated, judicial
branch. &oreover, theargument that the Court should allow
unrestricted taxpayer or citien standingunderestimates the ability
of the representative branches of the /ederal %overnment torespond
to the citien pressure that has been responsible in large measure
for thecurrent drift toward expanded standing. )ndeed, taxpayer or
citien advocacy, given itspotentially broad base, is precisely the
type of leverage that in a democracy ought to beemployed against
the branches that were intended to be responsive to public
attitudesabout the appropriate operation of government. "0e must as
judges recall that, as &r.3ustice Folmes wisely observed, the
other branches of %overnment are ultimateguardians of the liberties
and welfare of the people in ;uite as great a degree as
thecourts."
nrestrained standing in federal taxpayer or citien suits would
create a remarkablyillogical system of judicial supervision of the
coordinate branches of the /ederal%overnment. 2andolph=s proposed
Council of 2evision, which was repeatedly rejected bythe /ramers,
at least had the virtue of being systematicG every law passed by
thelegislature automatically would have been previewed by the
judiciary before the law couldtake effect. n the other hand, since
the judiciary cannot select the taxpayers or citienswho bring suit
or the nature of the suits, the allowance of public actions would
produceuneven and sporadic review, the ;uality of which would be
influenced by the resourcesand skill of the particular plaintiff.
+nd issues would be presented in abstract form,contrary to the
Court=s recognition that "judicial review is effective largely
because it is notavailable simply at the behest of a partisan
faction, but is exercised only to remedy aparticular, concrete
injury." Sierra Clu v. orton, 7@> .!. ?8?, ?7@'?74, n. 45
#46?8$.
+ lesser but not insignificant reason for screening the standing
of persons who desire to litigateconstitutional issues is economic
in character. %iven the sparseness of our resources, the capacity
ofcourts to render efficient judicial service to our people is
severely limited. /or courts to indiscriminatelyopen their doors to
alltypes of suits and suitors is for them to unduly overburden
their dockets, andultimately render themselves ineffective
dispensers of justice. To be sure, this is an evil that
clearlyconfronts our judiciary today.
rescinding from these premises, and with great reluctance, ) am
not prepared to concede the standing tosue of petitioners. n a
personal level, they have not shown that elemental injury in fact
which will endowthem with a standing to sue. )t must be stressed
that petitioners are in the main, seeking the nullity not ofa law
but of a Contract of Lease. -ot one of the petitioners is a party
to the Contract of Lease executedbetween C! and %&C. -one of
the petitioners participated in the bidding, and hence they are
notlosing bidders. They are complete strangers to the contract.
They stand neither to gain nor to loseeconomically by its
enforcement. )t seems to me unusual that an unaffected third party
to a contract couldbe allowed to ;uestion its validity. etitioner
(ilosbayan cannot justify this officious interference on the
ground of its commitment to "truth, justice and national
renewal." !uch commitment to truth, justice andnational renewal,
however noble it may be, cannot give (ilosbayan a roving commission
to check thevalidity of contracts entered into by the government
and its agencies. (ilosbayan is not a privatecommission on
audit.
-either can ) perceive how the other petitioners can be
personally injured by the Contract of Leasebetween C! and %&C
even if petitioner !alonga assails as unmitigated fraud the
statisticalprobability of winning the lotto as he compared it to
the probability of being struck twice by lightning. Thereason is
obvious< none of the petitioners will be exposed to this alleged
fraud for all of them profess to
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abjure playing the lotto. )t is self'evident that lotto cannot
physically or spiritually injure him who does notindulge in it.
etitioners also contend they have lo!us standias taxpayers. *ut
the case at bench does not involve anyexpenditure of public money
on the part of C!. )n fact, paragraph 8 of the Contract of Lease
providesthat it is %&C that shall build, furnish, and maintain
at its o/n e3pense and risk the facilities for the n'
Line Lottery !ystem of C! and shall bear all maintenance and
other costs. Thus, %&C alleged it hasalready spent 87>&
in e;uipment and fixtures and would be investing close to 4 billion
to supplyade;uately the technology and other re;uirements of C!.
11)f no tax money is being illegally deflectedin the Contract of
Lease between C! and %&C, petitioners have no standing to
impugn its validity astaxpayers. ur ruling in -umlao v. Comele!,
1settled this issue well enough, viz4, andsections 7, 4, and > *
*lg. >8, do not directly involve the disbursement of public
funds.0hile, concededly, the elections to be held involve the
expenditure of public moneys,nowhere in their etition do said
petitioners allege that their tax money is "being extractedand
spent in violation of specific constitutional protections against
abuses of legislativepower" #/last v. Cohen, 968 .!. B9 465@M$, or
that there is a misapplication of suchfunds by respondent
C&DLDC #see ascual vs. !ecretary of ublic 0orks, 44@ hil.
994 465@M$, or that public money is being deflected to any
improper purpose. -either dopetitioners seek to restrain respondent
from wasting public funds through theenforcement of an invalid or
unconstitutional law. #hilippine Constitution +ssociation
vs.&athay, 4B !C2+ 9@@ 4655M$, citing P$ilippine Constitution
*sso!iation vs. Gimenez, 4>!C2+ 7?6 465>M$. *esides, the
institution of a taxpayer=s suit, per se, is no assurance of
judicial review. +s held by this Court in +an vs. a!apagal#79
!C2+ 5?? 46?8M$,speaking through our present Chief 3ustice, this
Court is vested with discretion as towhether or not a taxpayer=s
suit should be entertained.
-ext, petitioners plead their standing as "concerned citiens."
+s citiens, petitioners are pleading thatthey be allowed to
advocate the constitutional rights of ot$er persons /$o are not
efore t$e !ourt andwhose protection is allegedly their concern. +
citien1uacitien suit urges a greater relaxation of the ruleon lo!us
standi. ) feel no aversion to the further relaxation of the rule on
standing to accommodate what in
other jurisdictions is known as an assertion of5us tertii in
constitutional litigation provided the claimant candemonstrate<
#4$ an injury in fact to himself, and #8$ the need to prevent the
erosion of a preferredconstitutional right of a third person. +s
stressed before, the first re;uirement of injury in fact cannot
beabandoned for it is an essential element for the exercise of
judicial power. +gain, as stressed by &r.3ustice owell, viz<
13
The revolution in standing doctrine that has occurred,
particularly in the 48 years sinceBa0er v. Carr, supra,has not
meant, however, that standing barriers have disappearedaltogether.
+s the Court noted in !ierra Club, "broadening the categories of
injury thatmay be alleged in support of standing is a different
matter from abandoning there;uirement that the party seeking review
must himself have suffered an injury." 7@> .!.,at ?9B . . .
)ndeed, despite the diminution of standing re;uirements in the last
decade, theCourt has not broken with the traditional re;uirement
that, in the absence of a specificstatutory grant of the right of
review, a plaintiff must allege some particularied injury thatsets
him apart from the man on the street.
) recognie that the Court=s allegiance to a re;uirement of
particularied injury has onoccasion re;uired a reading of the
concept that threatens to transform it beyondrecognition. E.G.,
Ba0er v. Carr, supra4 Flast v. Co$en, supra. *ut despite
suchoccasional digressions, the re;uirement remains, and ) think it
does so for the reasonsoutlined above. )n recognition of those
considerations, we should refuse to go the lastmile towards
abolition of standing re;uirements that is implicit in broadening
the"precarious opening" for federal taxpayers created by /last, see
968 .!., at 445 #&r.
