KILOSBAYAN, INCORPORATED, JOVITO R. SALONGA, CIRILO A. RIGOS, ERME CAMBA, EMILIO C. CAPULONG, JR., JOSE T. APOLO, EPHRAIM TENDERO, FERNANDO SANTIAGO, JOSE ABCEDE, CHRISTINE TAN, FELIPE L. GOZON, RAFAEL G. FERNANDO, RAOUL vs. . VICTORINO, JOSE CUNANAN, QUINTIN S. DOROMAL, SEN. FREDDIE WEBB, SEN.…
- G.R. Number: G.R. No. 113375
- Promulgated: 1994-05-05
- Ponente: Davide, Jr., J.
Doctrine
The Court may, in its discretion, relax or brush aside strict locus standi requirements in cases of transcendental public importance to permit adjudication of pressing constitutional or legal issues.
Statutes authorizing gambling activities must be strictly construed and doubts resolved to limit the powers claimed under such authority.
The true nature of a contract is determined by the intent of the parties and the contract's provisions, not merely its title; substance (e.g., participatory revenue sharing and co-investor features) may show a joint venture despite the label 'lease.'
Facts
Kilosbayan, Inc. filed a special civil action for prohibition and injunction seeking to restrain implementation of a "Contract of Lease" between the Philippine Charity Sweepstakes Office (PCSO) and Philippine Gaming Management Corporation (PGMC) for an on-line lottery system (lotto).
The challenged contract contains provisions on objectives, duties and responsibilities of the lessor and PCSO, definitions, subject matter, rental fee, lease period, representations, telecommunications, stock dispersal, non-competition, hold harmless, security, penalties and termination.
PGMC, in its Comment, asserted it was merely an independent contractor building and maintaining a lottery system for PCSO and denied being a co-operator or joint venturer with PCSO.
The Court limited the issues for resolution to (a) petitioners' locus standi and (b) legality and validity of the Contract of Lease under Section 1 of R.A. No. 1169 as amended by B.P. Blg. 42.
Issues
Whether the petitioners have locus standi to maintain the special civil action.
Whether the Contract of Lease between PCSO and PGMC violates Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, which prohibits PCSO from holding and conducting lotteries "in collaboration, association or joint venture" with any person or entity.
Ruling
The petition is GRANTED; the Contract of Lease executed on 17 December 1993 by PCSO and PGMC is declared contrary to law and INVALID.
The Temporary Restraining Order issued on 11 April 1994 is MADE PERMANENT; no pronouncement as to costs.
The Court resolved the petition on two issues: standing (held in favor of petitioners) and contract validity (held violative of the statutory prohibition on collaboration/joint venture).
Keywords
G.R. No. 113375, special civil action for prohibition and injunction, temporary restraining order and preliminary injunction, Contract of Lease, on-line lottery system, lotto, Philippine Charity Sweepstakes Office (PCSO), Philippine Gaming Management Corporation (PGMC), Kilosbayan, Incorporated (KILOSBAYAN), R.A. No. 1169, as amended by B.P. Blg. 42, Request for Proposal (RFP), Facilities, Development Plan, domestic corporation, sixty percent (60%) Philippine ownership, build-lease basis, Master Games Plan, technology transfer, citizenship requirement, line lottery system