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Topic: Self-Executory and Mandatory as a Rule

Title,Citation,Date: Kilosbayan vs. Morato, G.R. No. 118910, November 16, 1995

FACTS:

The petitioners seek reconsideration of the decision made by the Supreme Court in Kilosbayan v.
Guingona, 232 SCRA 100 which invalidated the contract between Philippine Charity Sweepstakes Office
(PCSO) and the Philippine Gaming Management Corporation (PGMC) which is privately owned.

On January 25, 1995, an Equipment Lease Agreement (ELA) for lease of online lottery was entered
into by PCSO and PGMC with rent computed bi-weekly and with an eight-year term. PCSO will employ its
own personnel and is responsible for the facilities. Upon expiration of term, PCSO can purchase the
equipment at Php25,000,000.00.

The petitioners filed again a petition to declare the amended ELA invalid on grounds that:

a. the new ELA bears resemblance to the contract from the first case.
b. it is still in violation of the PCSO’s charter
c. it is a in violation of the law on public bidding, is not advantageous to the government
and has not been approved by the President.

To answer the petitioners, PCSO and PGMC filed separate comments stating that:

a. the new ELA is a different lease contract without any trace of the prior contract.
b. it does not to go through public bidding as it fell under the exception provided in EO No.
301.
c. whether the ELA is advantageous or not is vested to the PCSO Board of Directors.
d. Petitioners do not have a legal standing as they are not parties to the contract.

ISSUES:

I. Whether or not the petitioners have a legal standing to sue.

II. Whether or not the new ELA between PCSO and PGMC is valid

HELD

I. NO.
The petitioners do not have a legal standing to sue because the ruling of the previous case, that
sustained the petitioners’ standing, is a departure from the settled rulings on the real parties in interest
because there are no constitutional issues involved. Stare decisis cannot be applied. The “law of the
case” doctrine is also inapplicable because the case at bar is not a continuation of the first. The general
rule on the “conclusiveness of judgement” is also not applicable since the claims involved are
substantially different from those involved in the prior case between the parties. The ELA is
substantially different from the Contract of Lease declared void the first case.
II. YES.
What the PCSO is prohibited from doing is from investing in a business engaged in sweepstakes,
races, lotteries and other similar activities. It is prohibited from doing so whether “in collaboration, association
or joint venture” with others or “by itself.”
The provisions of the first contract, wherein features of a joint venture are evident, had been
removed in the ELA.