Professional Documents
Culture Documents
Kilosbayan, Incorporated vs. Morato
Kilosbayan, Incorporated vs. Morato
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* EN BANC.
541
542
543
544
the real parties are those who are parties to the agreement or are
bound either principally or subsidiarily or are prejudiced in their
rights with respect to one of the contracting parties and can show
the detriment which would positively result to them from the
contract even though they did not intervene in it (Ibañez v.
Hongkong & Shanghai Bank, 22 Phil. 572 [1912]), or who claim a
right to take part in a public bidding but have been illegally
excluded from it. (See De la Lara Co., Inc. v. Secretary of Public
Works and Communications, G.R. No. L-13460, Nov. 28, 1958).
Same; Same; Same; Same; Same; Same; Same; Same; Words
and Phrases; “Present Substantial Interest,” Explained.—These
are parties with “a present substantial interest, as distinguished
from a mere expectancy or future, contingent, subordinate, or
consequential interest. . . . The phrase ‘present substantial
interest’ more concretely is meant such interest of a party in the
subject matter of the action as will entitle him, under the
substantive law, to recover if the evidence is sufficient, or that he
has the legal title to demand and the defendant will be protected
in a payment to or recovery by him.” (1 MORAN, COMMENTS
ON THE RULES OF COURT 154-155 [1979])
Same; Same; Same; Same; Same; Same; Same; Same;
Commission on Audit; Ombudsman; Petitioners do not have such
present substantial interest in the Equipment Lease Agreement
(ELA) as would entitle them to bring this suit; Questions as to the
nature or validity of public contracts or the necessity of public
bidding can be raised in an appropriate case before the
Commission on Audit or before the Ombudsman.—But petitioners
do not have such present substantial interest in the ELA as would
entitle them to bring this suit. Denying to them the right to
intervene will not leave without remedy any perceived illegality in
the execution of government contracts. Questions as to the nature
or validity of public contracts or the necessity for a public bidding
before they may be made can be raised in an appropriate case
before the Commission on Audit or before the Ombudsman.
Same; Same; Same; Same; Same; Same; Same; Same;
Solicitor General; Quo Warranto; If it should be thought that a
government corporation has offended its corporate charter or
misused its franchise, the Solicitor General is authorized to bring
an action for quo warranto.—In addition, the Solicitor General is
authorized to bring an action for quowarranto if it should be
thought that a government corporation, like the PCSO, has
offended against its corporate charter or misused its franchise.
(Rule 66, §2(a) (d))
545
546
this is defined in Civil law, may call for some form of collaboration
or association between the parties since lease is a “consensual,
bilateral, onerous and commutative contract by which one person
binds himself to grant temporarily the use of a thing or the
rendering of some service to another who undertakes to pay some
rent, compensation or price.” (5 PADILLA, CIVIL CODE 611
[6TH ED. 1974]).
Same; Same; Same; The ELA is a lease contract that contains
none of the features of the former contract which were considered
“badges of a joint venture agreement.”—We hold that the ELA is a
lease contract and that it contains none of the features of the
former contract which were considered “badges of a joint venture
agreement.” To further find fault with the new contract would be
to cavil and expose the opposition to the contract to be actually an
opposition to lottery under any and all circumstances.
Same; Same; Same; Gambling; The morality of gambling is
not a justiciable issue; Gambling is not illegal per se.—But “[t]he
morality of gambling is not a justiciable issue. Gambling is not
illegal per se. . . . It is left to Congress to deal with the activity as
it sees fit.” (Magtajas v. Pryce Properties Corp. Inc., 234 SCRA
255, 268 (1994). Cf. Lim v. Pacquing, G.R. No. 115044, Jan. 27,
1995) In the case of lottery, there is no dispute that, to enable the
Philippine Charity Sweepstakes Office to raise funds for charity,
Congress authorized the Philippine Charity Sweepstakes Office
(PCSO) to hold or conduct lotteries under certain conditions.
Same; Statutory Construction; Statutes; R.A. 1169; The
Supreme Court’s interpretation of R.A. 1169 in the earlier
Kilosbayan case must be reexamined.—In G.R. No. 113375 it was
held that the PCSO does not have the power to enter into any
contract which would involve it in any form of “collaboration,
association or joint venture” for the holding of sweepstakes races,
lotteries and other similar activities. This interpretation must be
reexamined especially in determining whether petitioners have a
cause of action.
Same; Same; Same; Same; The charter of the PCSO does not
absolutely prohibit it from holding or conducting lottery “in
collaboration, association or joint venture” with another party.—
We hold that the charter of 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
547
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 competitor.
Same; Same; Same; Same; The prohibition in §1(B) of R.A.
1169 is not so much against the PCSO entering into any
collaboration, association or joint venture with others as against
PCSO investing in the business of another franchise holder which
would directly compete with PCSO’s own charity sweepstakes
races, lotteries or similar activities.—To harmonize pars. (A) and
(B), the latter must be read as referring to the authority of the
PCSO to invest in the business of others. Put in another way, the
prohibition in §1(B) is not so much against the PCSO entering
into any collaboration, association or joint venture with others as
against the PCSO investing in the business of another franchise
holder which would directly compete with PCSO’s own charity
sweepstakes races, lotteries or similar activities. The prohibition
applies whether the PCSO makes the investment alone or with
others.
Same; Same; Same; Same; The contrary construction given to
§1 in the previous decision is based on remarks made by then
Assemblyman, now Mr. Justice, Davide during the deliberations
on what later became B.P. Blg. 42, amending R.A. No. 1169, in
connection with a proposal to give the PCSO the authority “to
engage in any and all investments”—and it is reasonable to
suppose that the members of the Batasan Pambansa, in approving
the amendment, understood it as referring to the exception to par.
(B) of §1 giving the PCSO the power to make investments.—The
contrary construction given to §1 in the previous decision is based
on remarks made by then Assemblyman, now Mr. Justice, Davide
during the deliberations on what later became B.P. Blg. 42,
amending R.A. No. 1169. It appears, however, that the remarks
were made in connection with a proposal to give the PCSO the
authority “to engage in any and all investments .” It was to
provide exception with regard to the type of investments which
the PCSO is authorized to make that the Davide amendment was
adopted. It is reasonable to suppose that the members of the
Batasan Pambansa, in approving the amendment, understood it
as referring to the exception to par. (B) of §1 giving the PCSO the
power to make investments. Had it been their intention to
prohibit the PCSO from entering into any collaboration,
association or joint venture with others even in instances when
the sweepstakes races, lotteries or similar activities are operated
by it (“itself”), they would have made the amendment not in par.
(B), but in par. (A), of §1, as the logical place for the amendment.
548
PADILLA, J.,Concurring:
549
rate for the use thereof and, as long as PCSO agrees to the
amount of such rentals, as justifying an adequate net return to it,
then the contract is valid and binding between the parties thereto.
This is the essence of freedom to enter into contracts.
Commission on Audit; Judicial Review; Doctrine of Primary
Jurisdiction; The Supreme Court should not preempt the
determination and judgment of the COA on matters which are
within its primary jurisdiction under the Constitution.—On the
allegation of lack of public bidding on the ELA, the Commission
on Audit (COA) has yet to resolve a case where the issue of the
validity of the ELA due to lack of public bidding has been
squarely raised. This matter surfaced during the hearing of the
present case. Needless to say, the Court should not preempt the
determination and judgment of the COA on matters which are
within its primary jurisdiction under the Constitution.
Constitutional Law; Separation of Powers; On the question as
to whether the ELA is grossly disadvantageous to the government,
such matter involves basically a policy-determination by the
executive branch which the Supreme Court should not ordinarily
reverse or substitute with its own judgment.—As to whether or not
the ELA is grossly disadvantageous to the government, it should
be stressed that the matter involves, basically, a policy—
determination by the executive branch which this Court should
not ordinarily reverse or substitute with its own judgment, in
keeping with the time honored doctrine of separation of powers.
FELICIANO, J.,Dissenting:
550
551
REGALADO, J.,Dissenting:
Actions; Res Judicata; Law of the Case; The “law of the case”
may also arise from an original holding of a higher court on a writ
of certiorari, and is binding not only in subsequent appeals or
proceedings in the same case, but also in a subsequent suit between
the same parties.—Accordingly, the “law of the case” may also
arise from an original holding of a higher court on a writ of
certiorari, and is binding not only in subsequent appeals or
proceedings in the same case, but also in a subsequent suit
between the same parties. What I wish to underscore is that
where, as in the instant case, the holding of this highest Court on
a specific issue was handed down in an original action for
certiorari, it has the same binding effect as it would have had if
promulgated in a case on appeal. Furthermore, since in our
jurisdiction an original action for certiorari to control and set
aside a grave abuse of official discretion can be commenced in the
Supreme Court itself, it would be absurd that for its ruling
therein to constitute the law of the case, there must first be a
remand to a lower court which naturally could not be the court of
origin from which the postulated second appeal should be taken.
Same; Same; Same; Constitutional Law; Parties; Locus
Standi; The concept of a cause of action in public interest cases
should not be straightjacketed within its usual narrow confines in
private interest litigations.—It is true that a right of action is the
right or standing to enforce a cause of action. For its purposes, the
majority urges the adoption of the standard concept of a real
party in interest based on his possession of a cause of action. It
could not have failed to perceive, but
552
553
554
555
MENDOZA, J.:
556
557
I PETITIONERS’ STANDING
558
bring the suit. The majority was thus a tenuous one that is
not likely to be maintained in any subsequent litigation. In
addition, there have been changes in the membership of
the Court, with the retirement of Justices Cruz and Bidin
and the appointment of the writer of this opinion and
Justice Francisco. Given this fact it is hardly tenable to
insist on the maintenance of the ruling as to petitioners’
standing.
Petitioners argue that inquiry into their right to bring
this suit is barred by the doctrine of “law of the case.” We
do not think this doctrine is applicable considering the fact
that while this case is a sequel to G.R. No. 113375, it is not
its continuation. The doctrine applies only when a case is
before a court a second time after a ruling by an appellate
court. Thus in People v. Pinuila, 103 Phil. 992, 999 (1958),
it was stated:
560
court, as the presumption is that all the facts in the case bearing
on the point decided have received due consideration whether all
or none of them are mentioned in the opinion. (5 C.J.S. 1286-87)”
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561
562
564
565
2. RENTAL
During the effectivity of this Agreement and the term of this lease
as provided in paragraph 3 hereof, LESSEE shall pay rental to
LESSOR equivalent to FOUR POINT THREE PERCENT (4.3%)
of the gross amount of ticket sales from all of LESSEE’s on-line
lottery
567
The PCSO now bears all losses because the operation of the
system is completely in its hands. This feature of the new
contract negates any doubt that it is anything but a lease
agreement.
It is contended that the rental of 4.3% is substantially
the same as the 4.9% in the old contract because the
reduction is negligible especially now that the PCSO
assumes all business risks and risk of loss of, or damage to,
equipment. Petitioners allege that:
568
ELA, not to mention the additional P25 million that the PCSO
has to pay the PGMC if the former exercises its option to
purchase the equipment at the end of the lease period under the
amended ELA.
(Petition, p. 37)
To be sure there is nothing unusual in fixing the rental as a
certain percentage of the gross receipts. The lease of space
in commercial buildings, for example, involves the payment
of a certain percentage of the receipts in rental. Under the
Civil Code (Art. 1643) the only requirement is that the
rental be a “price certain.” Petitioners do not claim here
that the rental is not a “price certain,” simply because it is
expressed as a certain percentage of the total gross amount
of ticket sales.
Indeed it is not alone the fact that in the old contract the
rental was expressed in terms of percentage of the net
proceeds from the sale of tickets which was held to be
characteristic of a joint venture agreement. It was the fact
that, in the prior case, the PGMC assumed, in addition, all
risks of loss from the operation of the lottery, with the
distinct possibility that nothing might be due it. In the
view of the Court this possibility belied claims that the
PGMC had no participation in the lottery other than being
merely the lessor of equipment.
In the new contract the rental is also expressed in terms
of percentage of the gross proceeds from ticket sales
because the allocation of the receipts under the charter of
the PCSO is also expressed in percentage, to wit: 55% is set
aside for prizes; 30% for contribution to charity; and 15%
for operating expenses and capital expenditures. (R.A. No.
1169, §6) As the Solicitor General points out in his
Comment filed in behalf of the PCSO:
a. The 4.3% rental rate for the equipment is well within the
maximum of 15% net receipts fixed by law;
b. To obviate any violation of the law, it is best to express
large operating costs for budgetary purposes as a
percentage of
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8. REPAIR SERVICES
570
571
tion.
We hold that the ELA is a lease contract and that it
contains none of the features of the former contract which
were considered “badges of a joint venture agreement.” To
further find fault with the new contract would be to cavil
and expose the opposition to the contract to be actually an
opposition to lottery under any and all circumstances. But
“[t]he morality of gambling is not a justiciable issue.
Gambling is not illegal per se. . . . It is left to Congress to
deal with the activity as it sees fit.” (Magtajas v. Pryce
Properties Corp. Inc., 234 SCRA 255, 268 (1994). Cf. Lim v.
Pacquing, G.R. No. 115044, Jan. 27, 1995) In the case of
lottery, there is no dispute that, to enable the Philippine
Charity Sweepstakes Office to raise funds for charity,
Congress authorized the Philippine Charity Sweepstakes
Office (PCSO) to hold or conduct lotteries under certain
conditions.
We therefore now consider whether under the charter of
the PCSO any contract for the operation of an on-line
lottery system, which involves any form of collaboration or
association, is prohibited.
In G.R. No. 113375 it was held that the PCSO does not
have the power to enter into any contract which would
involve it in any form of “collaboration, association or joint
venture” for the holding of sweepstakes races, lotteries and
other similar activities. This interpretation must be
reexamined especially in determining whether petitioners
have a cause of action.
We hold that the charter of 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 competitor.
It will be helpful to quote the pertinent provisions of
R.A. No. 1169, as amended by B.P. Blg. 42:
572
573
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574
575
576
576 SUPREME COURT REPORTS ANNOTATED
Kilosbayan, Incorporated vs. Morato
577
concerned; and
f. Whenever the purchase is made from an agency of the
government.
578
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580
CONCURRING OPINION
PADILLA, J.:
582
583
FELICIANO, J.,Dissenting:
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584
584 SUPREME COURT REPORTS ANNOTATED
Kilosbayan, Incorporated vs. Morato
585
“When parsed, it will be seen that under §1, the PCSO is given
authority to do any of the following: (1) to hold or conduct charity
sweepstakes races, lotteries or similar activities; and/or (2) to
invest—whether ‘by itself or in collaboration, association or joint
venture with any person, association, company or entity’ in any
‘health and welfare-related investments, programs, projects and
activities which may be profit-oriented,’ except those which are
engaged in any of ‘the activities mentioned in the preceding
paragraph (A),’ i.e., sweepstakes races, lotteries and similar
activities, for the obvious reason, as already states, that these are
competing activities.” (Underscoring in the original)
586
587
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2 Opening paragraph, Section 1, Revised PCSO charter.
588
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“x x x. Had it been [the legislators’] intention to prohibit the PCSO from entering
into any collaboration, association or joint venture with others even in instances
when the sweepstakes races, lotteries or similar activities are operated by it
(‘itself’), they would have made the amendment not in par. (B), but in par. (A), of
§1, as the logical place for the amendment.”
In the very next page, the majority opinion quotes then Assemblyman
Davide, Jr.:
589
II
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letter (a) which is the holding and conducting of sweepstakes races, lotteries and other
similar acts.” (Emphases supplied)
It is submitted that Assemblyman Davide’s statement is entirely clear and captures the
essence of the amendment he offered with such economy of words.
590
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4 See, e.g., Beltran v. PAIC Finance Corporation, 209 SCRA 105 (1992);
Investors Finance Corporation v. Court of Appeals, 193 SCRA 701 (1991).
5 The majority also seek to bolster the second proposition by what is
essentially an argumentum ad absurdum. Should rescue operations after
a calamity like an earthquake require the use of heavy equipment, there
is no law that requires the government to go (with or without a public
bidding) shopping for equipment first before commencing such rescue
operations. As a practical matter, the government (through, e.g.,
591
III
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the Department of Public Works and Highways) would simply order its
own equipment to be brought forthwith to the scene of the disaster. Or the
government may resort to the “requisition” or the temporary expropriation
of the use of personal property, i.e., heavy equipment, and thereafter pay
compensation for such use.
592
592 SUPREME COURT REPORTS ANNOTATED
Kilosbayan, Incorporated vs. Morato
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593
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7 During the oral hearing of this case, at least one Member of the Court
requested counsel for PGMC to enlighten the Court as to the structure of
the rental provisions, that is to say, to indicate to the Court the factors or
kinds of factors deemed relevant in setting the percentage figure
constituting the rental rate. (TSN, 3 March 1995, pp. 47-57) No useful
information was furnished to the Court either during the hearing or in the
pleadings filed thereafter. There has also been no showing of how the
percentage rate and structure of the rental provisions of ELA compare
with the rental provisions in comparable contracts in other parts of the
world.
595
DISSENTING OPINION
REGALADO, J.:
596
596 SUPREME COURT REPORTS ANNOTATED
Kilosbayan, Incorporated vs. Morato
1 2
from the first lotto case, then to the jai alai controversy,
and now this so-called sequel to the lottery dispute. The
second is a constitutional tenet so hoary with age that for
the majority to still belabor the same would somehow
reflect unfavorably upon the dissenting members.
Upon the other hand, the Court may even be
misunderstood as adopting an adjudicative pattern
designed against transparency of and inquiry into public
affairs. The misperception could very well be that it is
glossing over the validity of the lottery contract by seeking
refuge in the rule of locus standi, and suppressing concern
over societal mores on gambling by invoking the doctrine of
non-justiciability.
Coming to the real task at hand, we have this
resuscitation of the nagging question of locus standi. In the
first lotto case, the Court excepted petitioners from the
traditional locus standi proscription because the issues
raised on the indiscriminate operation of a nationwide on-
line lottery system are of paramount public interest and of
a category higher than those involved in former cases
wherein the application of that rule was sustained. Respect
for that holding was accordingly 3 observed and enjoined in
Tatad, et al. vs. Garcia, etc., et al.
That the Court acted correctly in the original case,
instead of clinging to the hidebound constitutional dictum
of indeterminate vintage, has been demonstrated in the
various opinions filed in the jai alai case with illustrations
of the frequent reexamination of constitutional precepts in
the courts of the United States itself from which they
originated. Thus, creating exceptions to said doctrines and
even rejecting the same in the interest of justice are not
unusual, and this Court has likewise done so presumably
since it agrees that one ought not to be more popish than
the Pope.
Withal, the relaxation of the locus standi doctrine in the
first lotto case is impugned and lamented in the second one
now at
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1 Kilosbayan, Inc., et al. vs. Guingona, Jr., etc., et al., G.R. No. 113375,
May 5, 1994, 232 SCRA 110.
2 Lim, etc., et al. vs. Pacquing, etc., et al., G.R. No. 115044, and
Guingona, Jr., et al. vs. Reyes, et al., G.R. No. 117263, jointly decided on
January 27, 1995.
3 G.R. No. 114222, April 6, 1995.
597
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4 People vs. Medina, Cal., Cal. Rptr. 630, 635, 492 P.2d 686, cited in
Black’s Law Dictionary, 6th ed., 887.
598
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5 White vs. Higgins, C.C.A. Mass., 116 F.2d 312; Fleming vs. Campbell,
148 Kan. 516, 83 P.2d 708.
599
rights of the parties. That is the actual and basic role that
it was conceived to play in judicial determinations, just like
the rationale for the doctrines of res judicata and
conclusiveness of judgment.
Accordingly, the “law of the case” may also arise from an7
original holding of a higher court on a writ of certiorari,
and is binding not only in subsequent appeals or
proceedings in the same case,8 but also in a subsequent suit
between the same parties. What I wish to underscore is
that where, as in the instant case, the holding of this
highest Court on a specific issue was handed down in an
original action for certiorari, it has the same binding effect
as it would have had if promulgated in a case on appeal.
Furthermore, since in our jurisdiction an original action for
certiorari to control and set aside a grave abuse of official
discretion can be commenced in the Supreme Court itself, it
would be absurd that for its ruling therein to constitute the
law of the case, there must first be a remand to a lower
court which naturally could not be the court of origin from
which the postulated second appeal should be taken.
2. Obviously realizing that continued reliance on the
locus standi bar to petitioner’s suit is not an ironclad
guaranty against it, the majority position has taken a
different tack. It now invokes the concept of and the rules
on a right of action in ordinary civil actions and,
prescinding from its previous position, insists that what is
supposedly determinative of the issue of representation is
contract law and not constitutional law. On the predicate
that petitioners are not parties to the contract, primarily or
subsidiarily, they then are not real parties in interest, and
for lack of cause of action on their part they have no right
of action. Ergo, they cannot maintain the present petition.
As a matter of a conventional rule of procedure, the
syllogism of the majority can claim the merit of logic but,
even so, only on
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6 Atchison, T. & S.F. Ry. Co. vs. Railroad Comm. of California, 209 Cal.
460, 288 P. 775.
7 Goodkind vs. Wolkowsky, 147 Fla. 415, 2 So.2d 723; Atlantic Coast
Line R. Co. vs. Sperry Flour Co., 63 Ga. App. 611, 11 S.E. 2d 809.
8 Oglethorpe University vs. City of Atlanta, 180 Ga. 152, 178 S.E. 156.
600
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9 59 Am. Jur. 2d, Parties, 429, citing State vs. Estate of Frankel, 94 Misc. 2d
105, 404 NYS2d 954.
601
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602
judicata.
It is undeniable that in that case and the one at bar,
there is identity of parties, subject matter and cause of
action. Evidently, the judgment in G.R. No. 113375 was
rendered by a court of competent jurisdiction, it was an
adjudication on the merits, and has long become final and
executory. There is, to be sure, an attempt to show that the
subject matter in the first action is different from that in
the instant case, since the former was the original contract
and the latter is the supposed expanded contract. I am not
persuaded by the proffered distinction.
The removal and replacement of some objectionable
terms of a contract, which nevertheless continues to
operate under the
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603
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604
605
DISSENTING OPINION
I.
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606
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607
608
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609
“To engage in any and all investments and related profitoriented 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 funds for health and
medical assistance and services and charitable grants.” [Record of the
Batasan, vol. Two, 993)
“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 .
610
MR. ZAMORA:
We accept the amendment, Mr. Speaker.
MR. DAVIDE:
Thank you, Mr. Speaker.
THE SPEAKER:
Is there any objection to the amendment? (Silence) The
amendment, as amended, is approved.” [Id., 1007,
emphasis supplied]
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611
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612
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7 Zarate vs. Director of Lands, 39 Phil. 747, 749 [1919], citing American
cases. See also Fernando vs. Crisostomo, 90 Phil. 585 [1951]; Padilla vs.
Paterno, 93 Phil. 884 [1953]; People vs. Penuila, 103 Phil. 992 [1958];
Kabigting vs. Director of Prisons, 6 SCRA 281 [1962]; People vs. Olarte, 19
SCRA 494 [1967]; Ramos vs. Intermediate Appellate Court, 171 SCRA 93
[1989].
613
sufficient. 8
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614
(b) In all other cases the judgment or order is, with respect to the
matter directly adjudged or as to other matter that could have
been raised in relation thereto, conclusive between the parties
and their successors in interest by title subsequent to the
commencement of the action or special proceedings, litigating for
the same thing in the same title and in the same capacity.
ings.
The justifications given in the majority opinion to
underrate the ruling on locus standi and to ultimately
discard it are unconvincing. It is not at all true, as the
majority opinion contends, that “[t]he previous ruling
sustaining petitioners’ in-
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615
616
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617
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15 43 SCRA 677 [1972]. See also Macasiano vs. NHA, 224 SCRA 236
[1993].
618
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619
620
621
II.
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622
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623
624
renewed or entered into without public bidding except under any of the
following situations:
xxx
(e) In cases where it is apparent that the requisition of the needed
supplies through negotiated purchase is most advantageous to the
government to be determined by the Department Head concerned; and
xxx
625
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626
JUSTICE DAVIDE:
Mr. Counsel you just admitted a while ago that it is
extremely difficult to comply with the revised charter
of the Philippine Charity Sweepstakes Office insofar
as collaboration, joint venture, association are
concerned?
ATTY. REYES:
Yes, Your Honor.
627
JUSTICE DAVIDE:
But if given the chance to rewrite this contract, what
proposal would you give, what recommendation would
you give to your client?
ATTY. REYES:
Your Honor, that is why I said I would leave it to the
business judgment of my client.
JUSTICE DAVIDE:
As a lawyer what kind of a contract would you
recommend to be rewritten, to satisfy the law, to
satisfy the judgment of this Court in the first case?
ATTY. REYES:
The safest, Your Honor, is a sale.
JUSTICE DAVIDE:
Sale, meaning the Philippine Charity Sweepstakes
Office will buy everything?
ATTY. REYES:
Yes, Your Honor.
JUSTICE DAVIDE:
Why did you not recommend that to your client
instead you went into the process [of drafting the]
ELA.
ATTY. REYES:
Because, Your Honor, they do not have the money.
They are going to use the proceeds from the gains for
the payment of the rental but they do not have the
cash.
JUSTICE DAVIDE:
In the event that this Court will now strike down this
agreement as also void, would you recommend that to
your client as a third contract?
ATTY. REYES: 22
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628
RENTAL
During the effectivity of this Agreement and the term of this lease
as provided in paragraph 3 hereof, LESSEE shall pay rental to
LESSOR equivalent to FOUR POINT THREE PERCENT (4.3%)
of the gross amount of ticket sales from all of LESSEE’s on-line
lottery operations in the Territory, which rental shall be
computed and payable bi-weekly, net of withholding taxes on
income, if any: provided that, in no case shall the annual
aggregate rentals per year during the term of the lease be less
than the annual minimum fixed rental computed at P35,000.00
per terminal in commercial operation per annum, provided,
further that the annual minimum fixed rental shall be reduced
pro-rata for the number of days during the year that a terminal is
not in commercial operation due to repairs or breakdown. In the
event the aggregate bi-weekly rentals in any year falls short of
the annual minimum fixed rental computed at P35,000.00 per
terminal in commercial operation, the LESSEE shall pay such
shortfall from out of the proceeds of the then current ticket sales
from LESSEE’s on-line lottery operations in the Territory (after
payment first of prizes and agents’ commissions but prior to any
other payments, allocations or disbursements) until said shortfall
shall have been fully settled, but without prejudice to the
payment to LESSOR of the then current bi-weekly rentals in
accordance with the provisions of the first sentence of this
paragraph 2.
629
REPAIR SERVICES
_______________
24 Clause 1.
630
_______________
631
632
633
_______________
634
_______________
635
The national government may enter into agreement for the lease
purchase of equipment subject to public bidding, the approval of
the Office of the Management, and to other pertinent accounting
and auditing religions. Details of the payments shall be indicated
in the lease purchase agreement and accompanied with a
certification of availability of equipment outlay authorized for the
agency to cover the full contract cost. The lease purchase
agreement may be entered into
636
_______________
637
638
639
640
It then concludes:
Petitioners have not shown that more favorable terms could have
been obtained by the PCSO or that at any rate the ELA, which
the PCSO concluded with the PGMC, is disadvantageous to the
government.
VITUG, J.:
641
642
643
they see fit. The legislative and executive branches are not
bound to seek the Court’s advice as to what to do or not to
do. (Tan vs. Macapagal, 43 SCRA 677 [1972])
The duty of the Supreme Court to exercise its power of
judicial review must still be performed in the context of a
concrete case or controversy. (Tolentino vs. Secretary of
Finance, 235 SCRA 630 [1994])
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