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[Government as Protector of the People Parens Patriae]

Kilosbayan, Inc. v. PCSO Chairman Manuel Morato

G.R. No. 118910, July 17, 1995
Ponente: Justice Mendoza
The case is about the contract (i.e., the Equipment Lease Agreement
(ELA) between the Philippine Charity Sweepstakes Office (PCSO) and
Phil. Gaming Mgt Corp (PGMC) that was subsequently made after a
ruling in a previous case (Kilosbayan Inc. vs Guingona), wherein the
initial contract by same parties, a Joint Venture Agreement (JVA), was
deemed null and void mainly because of the provision in PCSOs
Under Section 1 of the Charter of the PCSO, the PCSO is prohibited
from holding and conducting lotteries in collaboration, association or
joint venture with any person, association, company or entity"...

In short, the ELA was a substitute for the JVA. But the ELA was still
questioned by Kilosbayan. Kilosbayan Inc. filed a petition for
Prohibition, Review and/or Injunction, seeking to declare the Equipment
Lease Agreement (ELA) between the Philippine Charity Sweepstakes
Office and the Philippine Gaming Management Corp. invalid.

Arguments of the petitioner:

That the amended ELA is null and void because it is basically the same
as the JVA
That assuming that the ELA is different, it is still null and void because
it is inconsistent with PCOs charter and the previous decision by the
same court.
That the ELA was null and void because it violates the law concerning
the furnishing of supplies, materials and equipment:
(a) It was awarded and executed without the public bidding required
under said laws and COA rules and regulations,
(b) it has not been approved by the PH President,
(c) it is not most advantageous to the government.

Issue: WON petitioner has legal standing.

No. The petitioners have neither standing nor substantial interest to make
them real parties in interest. SC differentiates legal standing from real
parties in interest.

On Legal Standing: Although Kilosbayan invoked Principles and State Policies

in Art. II
(Secs. 5,12,13,& 17) of the Constitution, said provisions are not self executing
provisions, wherein the disregard of which can give rise to a cause of action
in the courts.
They do not embody judicially enforceable constitutional rights but guidelines
Although the agreement was made by a government corporation, there is,
however, no allegation that public funds are being misspent so as to make
this action a public one...
On real parties in interest: This case involves basically questions of contract
law. Thus, the real parties are those who are parties to the agreement.
On PCSO charter: The PCSO does not absolutely prohibit it from holding or
conducting lottery "in collaboration, association or joint venture" with another
party. What the PCSO is prohibited from doing is to invest in a business
engaged in sweepstakes races, lotteries and similar activities, and it is
prohibited from doing so whether in "collaboration, association or joint
venture" with others or "by itself." The reason for this is that these are
competing activities and the PCSO should not invest in the business of a
On COA bidding: The fact remains that the Equipment Lease Agreement in
question did not have to be submitted to public bidding as a condition for its
validity. E.O. No. 301, applies only to contracts for the purchase of supplies,
materials and equipment. It does not refer to contracts of lease of equipment
like the ELA.

Standing is a concept in constitutional law where parties not involved
can invoke their rights as concerned citizens valuing public interest. However,
no constitutional question is actually involved.
Real party in interest is whether he is "the party who would be benefitted
or injured by the judgment, or the 'party entitled to the avails of the suit