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Kilosbayan vs Guingona GR No. 113375, May 5, 1994 Pursuant to Section 1 of the charter of the PCSO (R.A. No.

1169, as amended by B.P. B !. "#$ %hich !rants it the authority to ho d and conduct &charity s%ee'sta(es races, otteries and other simi ar acti)ities,* the PCSO decided to estab ish an on+ ine ottery system for the 'ur'ose of increasin! its re)enue base and di)ersifyin! its sources of funds. ,he Phi i''ine -amin! .ana!ement Cor'oration (P-.C$ %hich is or!ani/ed by Berhad !rou', a mu tinationa com'any and one of the ten ar!est 'ub ic com'anies in .a aysia, %as !ranted to 'ro)ide the technica and mana!ement ser)ices for the needed for 'ro0ect in the form of a ease contract a''ro)ed by the President. 123OSBA4AN sent an o'en etter to President 5ide 6. Ramos stron! y o''osin! the settin! u' of the on+ ine ottery system on the basis of serious mora and ethica considerations. ,he 'rotest %as denied by the Office of the President, contem' atin! that &on y a court in0unction can sto' .a aca7an!* . 8ence, this 'etition arise. ISSUES: 1. 9hether or not the 'etitioners ha)e ocus standi. #. 9hether or not the Contract of 3ease in the i!ht of Section 1 of R.A. No. 1169, as amended by B.P. B !. "#, %hich 'rohibits the PCSO from ho din! and conductin! otteries &in co aboration, association or 0oint )enture %ith any 'erson, association, com'any or entity, %hether domestic or forei!n.* is e!a and )a id. HE !: 1. ,he Court ru ed that 'etitioners ha)e e!a standin! considerin! that the ramifications of such issues immeasurab y affectin! the socia , economic, and mora %e +bein! of the 'eo' e e)en in the remotest baran!ays of the country and the counter+'roducti)e and retro!ressi)e effects of the en)isioned on+ ine ottery system are as sta!!erin! as the bi ions in 'esos it

is e:'ected to raise. ,he e!a standin! then of the 'etitioners deser)es reco!nition, settin! aside its 'rocedura technica ity. #. Section 1 of R.A. No. 1169, as amended by B.P. B !. "#, 'rohibits the PCSO from ho din! and conductin! otteries &in co aboration, association or 0oint )enture %ith any 'erson, association, com'any or entity, %hether domestic or forei!n.* ,here is undoubted y a co aboration bet%een PCSO and P-.C and not mere y a contract of ease. ,he re ations bet%een PCSO and P-.C cannot be defined sim' y by the desi!nation they used, i.e., a contract of ease. ,he contract;s nature can be understood to form the intent of the 'arties as e)ident in the 'ro)isions of the contract. Artic e 1<=1 of the CC 'ro)ides that the intent of contractin! 'arties are determined in 'art throu!h their acts. ,he on y contribution PCSO %i be !i)in! is the authority to o'erate. PCSO bears no ris( and a it does is to 'ro)ide its franchise. Pursuant to the %ordin!s of their a!reement, P-.C at its o%n e:'ense sha bui d, o'erate, and mana!e the net%or( system inc udin! its faci ities needed to o'erate a nation%ide on ine ottery system. 2ndeed, PCSO cannot share the franchise in any %ay. C ear y, the cha en!ed Contract of 3ease )io ates the e:ce'tion 'ro)ided for in 'ara!ra'h B, Section 1 of R.A. No. 1169, as amended by B.P. B !. "#, and is, therefore, in)a id for bein! contrary to a%.