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F-C No. 11 Kilosbayan Inc
F-C No. 11 Kilosbayan Inc
F-C No. 11 Kilosbayan Inc
118910 (Resolution)
Facts:
1. GR 113375 (KIlosbayan vs. Guingona) held invalidity of the contract between Philippine Charity
Sweepstakes Office (PCSO) and the privately owned Philippine Gaming Management Corporation
(PGMC) for the operation of a nationwide on-line lottery system. The contract violated the provision
in the PCSO Charter which prohibits PCSO from holding and conducting lotteries through a
collaboration, association, or joint venture.
2. Both parties again signed an Equipment Lease Agreement (ELA) for online lottery equipment
and accessories on January 25, 1995. The agreement are as follows:
○ Rental is 4.3% of gross amount of ticket sales by PCSO at which in no case be less than
an annual rental computed at P35,000 per terminal in commercial operation.
○ Rent is computed bi-weekly.
○ Term is 8 years.
○ PCSO is to employ its own personnel and responsible for the facilities.
○ Upon expiration of term, PCSO can purchase the equipment at P25M.
Issues:
1. Whether or not petitioner Kilosbayan, Incorporated has a legal standing to sue.
2. Whether or not the ELA between PCSO and PGMC in operating an online lottery is valid.
Rulings:
In the resolution of the case, the Court held that:
1. No, the Petitioners do not have a legal standing to sue.
○ STARE DECISIS cannot apply. The previous ruling sustaining the standing of the petitioners is
a departure from the settled rulings on real parties in interest because no constitutional issues
were actually involved.
○ LAW OF THE CASE (opinion delivered on a former appeal) cannot also apply. Since the
present case is not the same one litigated by the parties before in Kilosbayan vs. Guingona,
Jr., the ruling cannot be in any sense be regarded as “the law of this case”. The parties are
the same but the cases are not.
○ RULE ON “CONCLUSIVENESS OF JUDGMENT” cannot still apply. An issue actually and
directly passed upon and determined in a former suit cannot again be drawn in question in
any future action between the same parties involving a different cause of action. But the rule
does not apply to issues of law at least when substantially unrelated claims are involved.
When the second proceeding involves an instrument or transaction identical with, but in a form
separable from the one dealt with in the first proceeding, the Court is free in the second
proceeding to make an independent examination of the legal matters at issue.
○ Since ELA is a different contract, the previous decision does not preclude determination of the
petitioner’s standing.
○ Standing is a concept in constitutional law and here no constitutional question is actually
involved. The more appropriate issue is whether the petitioners are ‘real parties of interest’.
○ Question of contract of law: The real parties are those who are parties to the agreement or are
bound either principally 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.
○ Petitioners do not have such present substantial interest. Questions to the nature or validity of
public contracts maybe made before COA or before the Ombudsman.