LAW 121 - Kilosbayan v. Morato (G.R. No. 118910)

KILOSBAYAN V.
MORATA
G.R. No. 118910
NOVEMBER 16, 1995
J. MENDOZA
SUBJECT MATTER:
Self-Executory and Non-Self-Executory Provisions
DOCTRINE AND APPLICABLE CONCEPT(S):

Sections 5, 12, 13 and 17 of Article II of the Constitution do not embody judicially enforceable constitutional rights but
guidelines for legislation. These are not, however, self-executing provisions, the disregard of which can give rise to a
cause of action in the courts.
ACTION BEFORE THE SUPREME COURT:

Motion for reconsideration for the Court’s dismissal of the Petition for Prohibition, Review and/or Injunction seeking to
declare the Equipment Lease Agreement between the Philippine Charity Sweepstakes Office and the Philippine Gaming
Management Corp. invalid.
Petitioners: Kilosbayan, Incorporated, Jovito R. Salonga, Cirilo A. Rigos, Erme Camba, Emilio C.
Parties Capulong, Jr., Jose T. Apolo, Ephraim Tendero, Fernando Santiago, Jose Abcede,
Christine Tan, Rafael G. Fernando, Raoul V. Victorino, Jose Cunanan, Quintin S. Doromal,
Sen. Freddie Webb, Sen. Wigberto Tañada, Rep. Joker P. Arroyo
Respondents: Manuel L. Morato, in his capacity as Chairman of the Philippine Charity Sweepstakes
Office, and the Philippine Gaming Management Corporation
RELEVANT FACTS FROM PREVIOUS RELATED CASES

 G.R. NO. 113375, MAY 5, 1994
o Contract of Lease between PCSO and PGMC was declared contrary to law and invalid by the Supreme
Court as it violates the exception provided in paragraph B, section 1 of R.A. No. 1169, as amended by
B.P. Blg. 42, which prohibits the PCSO from holding and conducting lotteries "in collaboration, association
or joint venture with” another.
o Petition is found to be of paramount public interest and of transcendental importance to the public. The
legal standing then of the petitioners deserves recognition.
 G.R. NO. 118910, JULY 17, 1995
o PCSO and PGMC signed an Equipment Lease Agreement (ELA) whereby the latter leased on-line lottery
equipment and accessories to the PCSO in consideration of a rental equivalent to 4.3% of the gross
amount of ticket sales derived by the PCSO from the operation of the lottery which in no case shall be
less than an annual rental computed at P35,000.00 per terminal in commercial operation.
o Petitioners contested that the new lease agreement was the same as the old one and was still violative of
PCSO’s charter.
o Supreme court dismissed the petition, and held that:
 petitioners have neither standing to bring this suit nor substantial interest to make them real
parties in interest within the meaning of Rule 3, Sec. 2;
 a determination of the petitioners' right to bring this suit is not precluded or barred by the decision
in the prior case between the parties;
 the Equipment Lease Agreement is valid as a lease contract under the Civil Code and is not
contrary to the charter of the PCSO; and
 under Sec. 1 (A) of its charter (R.A. 1169), the PCSO has authority to enter into a contract for the
holding of an on-line lottery, whether alone or in association, collaboration or joint venture with
another party, so long as it itself holds or conducts such lottery; and
BLOCK 1-H (CARIÑO) – LAW 121, SILVA

FACTS:
● Petitioners insisted that the decision in the first case has already settled (1) whether they had a standing to sue
and (2) whether under its charter (R.A. No. 1169, as amended) PCSO could enter into any form of association or
collaboration with any party in operating an on-line lottery.
● Thus, the petitioners contend that these issues can no longer be reopened.
ISSUES) AND HOLDINGS:

1. Whether or not the petitioners had standing? - NO
2. Whether or not the ELA is violative of PCSO’s charter like the lease agreement in the first ruling? – NO
RATIO:
1. The Court held that the case did not raise issues of constitutionality but only of contract of law, which petitioners,
not being privies to the agreement, cannot raise.
○ Real issue is whether the petitioners were real party-in-interest
i. Real party in interest: Whether they were the party who would be benefited or injured by the
judgment or the party entitled to the avails of the suit
ii. Petitioners invoked Sec. 5, 12, 13 and 17 of the Constitution.
 The Court reiterated that these provisions are not self-executing. They do not confer
rights which can be enforced in the courts but only provide guidelines for legislative or
executive branch.
2. The Court noted that the provisions of the first contract, which were considered to be features of a joint venture
agreement were removed.
○ Petitioners contended that the first ruling was the “law of the case.”
i. However, the Court said that “the law of the case” doctrine was inapplicable because this case is
not a continuation of the first one.
○ Petitioners also said that inquiry into the same question as to the meaning of the statutory provision is
barred by the doctrine of res judicata.
i. The general rule on the "conclusiveness of judgment," however, is subject to the exception that a
question may be reopened if it is a legal question and the two actions involve substantially
different claims.
ii. The ELA was substantially different from the Contract of Lease declared void in the first case.
○ The Court held that it seems that the only possible interpretation of Section 1 (A) and (B) of R.A. No. 1169
in light of its text and legislative history is that what 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."
DISPOSITIVE:
FOR THE FOREGOING REASONS, the motion for reconsideration of petitioners is DENIED with finality.
SO ORDERED.
BLOCK 1-H (CARIÑO) – LAW 121, SILVA

LAW 121 - Kilosbayan v. Morato (G.R. No. 118910)

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KILOSBAYAN V.

DOCTRINE AND APPLICABLE CONCEPT(S):

ACTION BEFORE THE SUPREME COURT:

RELEVANT FACTS FROM PREVIOUS RELATED CASES

BLOCK 1-H (CARIÑO) – LAW 121, SILVA

ISSUES) AND HOLDINGS:

BLOCK 1-H (CARIÑO) – LAW 121, SILVA

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