Isidro Cariño vs The Commission on Human Rights (204 SCRA 483)

FACTS: On September 17, 1990, some 800 public school teachers in Manila did not attend work and decided to stage rallies in order to air grievances. As a result thereof, eight teachers were suspended from work for 90 days. The issue was then investigated, and on December 17, 1990, DECS Secretary Isidro Cariño ordered the dismissal from the service of one teacher and the suspension of three others. The case was appealed to the Commission on Human Rights. In the meantime, the Solicitor General filed an action for certiorari regarding the case and prohibiting the CHR from continuing the case. Nevertheless, CHR continued trial and issued a subpoena to Secretary Cariño. ISSUE: Whether or not CHR has the power to try and decide and determine certain specific cases such as the alleged human rights violation involving civil and political rights. HELD: No. The CHR is not competent to try such case. It has no judicial power. It can only investigate all forms of human rights violation involving civil and political rights but it cannot and should not try and decide on the merits and matters involved therein. The CHR is hence then barred from proceeding with the trial.

CHREA vs.CHR (G.R. No. 155336 November 25, 2004)

FACTS: Congress passed RA 8522, otherwise known as the General Appropriations Act of 1998. It provided for Special Provisions Applicable to All Constitutional Offices Enjoying Fiscal Autonomy. On the strength of these special provisions, the CHR promulgated Resolution No. A98-047 adopting an upgrading and reclassification scheme among selected positions in the Commission. By virtue of Resolution No. A98-062, the CHR “collapsed” the vacant positions in the body to provide additional source of funding for said staffing modification. The CHR forwarded said staffing modification and upgrading scheme to the DBM with a request for its approval, but the then DBM secretary denied the request. In light of the DBM’s disapproval of the proposed personnel modification scheme, the CSC-National Capital Region Office, through a memorandum, recommended to the CSC-Central Office that the subject appointments be rejected owing to the DBM’s disapproval of the plantilla reclassification. Meanwhile, the officers of petitioner CHR-employees association (CHREA) in representation of the rank and file employees of the CHR, requested the CSC-Central Office to affirm the recommendation of the CSC-Regional Office. The CSC-Central Office denied CHREA’s request in a Resolution and reversed the recommendation of the CSC-Regional Office that the upgrading scheme be censured. CHREA filed a motion for reconsideration, but the CSC-Central Office denied the same. CHREA elevated the matter to the CA, which affirmed the pronouncement of the CSC-Central Office and upheld the validity of the upgrading, retitling, and reclassification scheme in the CHR on the justification that such action is within the ambit of CHR’s fiscal autonomy. ISSUE: Can the CHR validly implement an upgrading, reclassification, creation, and collapsing of plantilla positions in the Commission without the prior approval of the Department of Budget and Management? HELD: The petition is GRANTED, the Decision of the CA are hereby REVERSED and SET ASIDE. The ruling CSC-National Capital Region is REINSTATED. The 3 CHR Resolutions, without the approval of the DBM are disallowed. 1. RA 6758, An Act Prescribing a Revised Compensation and Position Classification System in the Government and For Other Purposes, or the Salary Standardization Law, provides that it is the DBM that shall establish and administer a unified Compensation and Position Classification System. The disputation of the CA that the CHR is exempt from the long arm of the Salary Standardization Law is flawed considering that the coverage thereof encompasses the entire gamut of government offices, sans qualification. This power to “administer” is not purely ministerial in character as erroneously held by the CA. The word to administer means to control or regulate in behalf of others; to direct or superintend the execution, application or conduct of; and to manage or conduct public affairs, as to administer the government of the state. 2. The regulatory power of the DBM on matters of compensation is encrypted not only in law, but in jurisprudence as well. In the recent case of PRA v. Buñag, this Court ruled that compensation, allowances, and other benefits received by PRA officials and employees without the requisite approval or authority of the DBM are unauthorized and irregular In Victorina Cruz v. CA , we held that the DBM has the sole power and discretion to administer the compensation and position classification system of the national government. In Intia, Jr. v. COA the Court held that although the charter of the PPC grants it the power to fix the compensation and benefits of its employees and exempts PPC from the coverage of the rules and regulations of the Compensation and Position Classification Office, by virtue of Section 6 of P.D. No. 1597, the compensation system established by the PPC is, nonetheless, subject to the review of the DBM. (It should be emphasized that the review by the DBM of any PPC resolution affecting the compensation structure of its personnel should not be interpreted to mean that the DBM can dictate upon the PPC Board of Directors and deprive the latter of its discretion on the matter. Rather, the DBM’s function is merely to ensure that the action taken by the Board of Directors complies with the requirements of the law, specifically, that PPC’s compensation system “conforms as closely as possible with that provided for under R.A. No. 6758.” ) 3. As measured by the foregoing legal and jurisprudential yardsticks, the imprimatur of the DBM must first be sought prior to implementation of any reclassification or upgrading of positions in government. This is consonant to the mandate of the DBM under the RAC of 1987, Section 3, Chapter 1, Title XVII, to wit: SEC. 3. Powers and Functions. – The Department of Budget and Management shall assist the President in the preparation of a national resources and expenditures budget, preparation, execution and control of the National Budget, preparation and maintenance of accounting systems essential to the budgetary process, achievement of more economy and efficiency in the management of government operations, administration of compensation and position classification systems, assessment of organizational effectiveness and review and evaluation of legislative proposals having budgetary or organizational implications. Irrefragably, it is within the turf of the DBM Secretary to disallow the upgrading, reclassification, and creation of additional plantilla positions in the CHR based on its finding that such scheme lacks legal justification. Notably, the CHR itself recognizes the authority of the DBM to deny or approve the proposed reclassification of positions as evidenced by its three letters to the DBM requesting approval thereof. As such, it is now estopped from now claiming that the nod of approval it has previously sought from the DBM is a superfluity 4. The CA incorrectly relied on the pronouncement of the CSC-Central Office that the CHR is a constitutional commission, and as such enjoys fiscal autonomy. Palpably, the CA’s Decision was based on the mistaken premise that the CHR belongs to the species of constitutional commissions. But the Constitution states in no uncertain terms that only the CSC, the COMELEC, and the COA shall be tagged as Constitutional Commissions with the appurtenant right to fiscal autonomy. Along the same vein, the Administrative Code, on Distribution of Powers of Government, the constitutional commissions shall include only the CSC, the COMELEC, and the COA, which are granted independence and fiscal autonomy. In contrast, Chapter 5, Section 29 thereof, is silent on the grant of similar powers to the other bodies including the CHR. Thus: SEC. 24. Constitutional Commissions. – The Constitutional Commissions, which shall be independent, are the Civil Service Commission, the Commission on Elections, and the Commission on Audit. SEC. 26. Fiscal Autonomy. – The Constitutional Commissions shall enjoy fiscal autonomy. The approved annual appropriations shall be automatically and regularly released. SEC. 29. Other Bodies. – There shall be in accordance with the Constitution, an Office of the Ombudsman, a Commission on Human Rights, and independent central monetary authority, and a national police commission. Likewise, as provided in the Constitution, Congress may establish an independent economic and planning agency. From the 1987 Constitution and the Administrative Code, it is abundantly clear that the CHR is not among the class of Constitutional Commissions. As expressed in the oft-repeated maxim expressio unius est exclusio alterius, the express mention of one person, thing, act or consequence excludes all others. Stated otherwise, expressium facit cessare tacitum – what is expressed puts an end to what is implied. Nor is there any legal basis to support the contention that the CHR enjoys fiscal autonomy. In essence, fiscal autonomy entails freedom from outside control and limitations, other than those provided by law. It is the freedom to allocate and utilize funds granted by law, in accordance with law, and pursuant to the wisdom and dispatch its needs may require from time to time.22 In Blaquera v. Alcala and Bengzon v. Drilon,23 it is understood that it is only the Judiciary, the CSC, the COA, the COMELEC, and the Office of the Ombudsman, which enjoy fiscal autonomy. Neither does the fact that the CHR was admitted as a member by the Constitutional Fiscal Autonomy Group (CFAG) ipso facto clothed it with fiscal autonomy. Fiscal autonomy is a constitutional grant, not a tag obtainable by membership. We note with interest that the special provision under Rep. Act No. 8522, while cited under the heading of the CHR, did not specifically mention CHR as among those offices to which the special provision to formulate and implement organizational structures apply, but merely states its coverage to include Constitutional Commissions and Offices enjoying fiscal autonomy All told, the CHR, although admittedly a constitutional creation is, nonetheless, not included in the genus of offices accorded fiscal autonomy by constitutional or legislative fiat. Even assuming en arguendo that the CHR enjoys fiscal autonomy, we share the stance of the DBM that the grant of fiscal autonomy notwithstanding, all government offices must, all the same, kowtow to the Salary Standardization Law. We are of the same mind with the DBM on its standpoint, thus- Being a member of the fiscal autonomy group does not vest the agency with the authority to reclassify, upgrade, and create positions without approval of the DBM. While the members of the Group are authorized to formulate and implement the organizational structures of their respective offices and determine the compensation of their personnel, such authority is not absolute and must be exercised within the parameters of the Unified Position Classification and Compensation System established under RA 6758 more popularly known as the Compensation Standardization Law. 5. The most lucid argument against the stand of respondent, however, is the provision of Rep. Act No. 8522 “that the implementation hereof shall be in accordance with salary rates, allowances and other benefits authorized under compensation standardization laws.”26 TAKE NOTE: 1. Respondent CHR sharply retorts that petitioner has no locus standi considering that there exists no official written record in the Commission recognizing petitioner as a bona fide organization of its employees nor is there anything in the records to show that its president has the authority to sue the CHR. On petitioner’s personality to bring this suit, we held in a multitude of cases that a proper party is one who has sustained or is in immediate danger of sustaining an injury as a result of the act complained of. Here, petitioner, which consists of rank and file employees of respondent CHR, protests that the upgrading and collapsing of positions benefited only a select few in the upper level positions in the Commission resulting to the demoralization of the rank and file employees. This sufficiently meets the injury test. Indeed, the CHR’s upgrading scheme, if found to be valid, potentially entails eating up the Commission’s savings or that portion of its budgetary pie otherwise allocated for Personnel Services, from which the benefits of the employees, including those in the rank and file, are derived. Further, the personality of petitioner to file this case was recognized by the CSC when it took cognizance of the CHREA’s request to affirm the recommendation of the CSC-National Capital Region Office. CHREA’s personality to bring the suit was a non-issue in the CA when it passed upon the merits of this case. Thus, neither should our hands be tied by this technical concern. Indeed, it is settled jurisprudence that an issue that was neither raised in the complaint nor in the court below cannot be raised for the first time on appeal, as to do so would be offensive to the basic rules of fair play, justice, and due process. 2. In line with its role to breathe life into the policy behind the Salary Standardization Law of “providing equal pay for substantially equal work and to base differences in pay upon substantive differences in duties and responsibilities, and qualification requirements of the positions,” the DBM, in the case under review, made a determination, after a thorough evaluation, that the reclassification and upgrading scheme proposed by the CHR lacks legal rationalization. The DBM expounded that Section 78 of the general provisions of the General Appropriations Act FY 1998, which the CHR heavily relies upon to justify its reclassification scheme, explicitly provides that “no organizational unit or changes in key positions shall be authorized unless provided by law or directed by the President.” Here, the DBM discerned that there is no law authorizing the creation of a Finance Management Office and a Public Affairs Office in the CHR. Anent CHR’s proposal to upgrade twelve positions of Attorney VI, SG-26 to Director IV, SG-28, and four positions of Director III, SG-27 to Director IV, SG-28, in the Central Office, the DBM denied the same as this would change the context from support to substantive without actual change in functions. This view of the DBM, as the law’s designated body to implement and administer a unified compensation system, is beyond cavil. The interpretation of an administrative government agency, which is tasked to implement a statute is accorded great respect and ordinarily controls the construction of the courts. In Energy Regulatory Board v. CA, we echoed the basic rule that the courts will not interfere in matters which are addressed to the sound discretion of government agencies entrusted with the regulation of activities coming under the special technical knowledge and training of such agencies.

EPZA vs. Commission on Human Rights (G.R. No. 101476 April 14, 1992 )

Facts: PD 1980 was issued reserving and designating certain parcels of land in Rosario and General Trias Cavite and was divided for land development. Petitioner, Export Processing Zone Authority (EPZA) purchase a parcel of land from Filoil Refinery Corporation, and before petitioner could take possession of the area, several individuals had entered the premises and planted agricultural products therein without permission from EPZA or its predecessor, Filoil. EPZA paid a P10,000-financial-assistance to those who accepted the same and signed quitclaims. Among them were private respondents (TERESITA VALLES, LORETO ALEDIA). Ten years later, respondent Teresita, Loreto and Pedro, filed in the respondent Commission on Human Rights (CHR) a joint complaint praying for "justice and other reliefs and remedies". Alleged in their complaint was the information that EPZA bulldozed the area with acts in violation of their human rights. CHR issued an Order of injunction commanding EPZA to desist from committing such acts . Two weeks later, EPZA again bulldozed the area. They allegedly handcuffed private respondent Teresita Valles, pointed their firearms at the other respondents, and fired a shot in the air. CHR Chairman Mary Concepcion Bautista issued another injunction Order reiterating her first order and expanded it to include the Secretary of Public Works and Highways, the contractors, and their subordinates. EPZA filed in the CHR a motion to lift the Order of Injunction for lack of authority to issue injunctive writs and temporary restraining orders, but same was denied by the Commission (CHR). Hence, EPZA, filed in SC this special civil action of certiorari and prohibition with a prayer for the issuance of a restraining order and/or preliminary injunction, alleging that the CHR acted in excess of its jurisdiction and with grave abuse of discretion. A temporary restraining order (TRO) was issued ordering the CHR to cease and desist from enforcing and/or implementing the questioned injunction orders. In its comment on the petition, the CHR asked for the immediate lifting of the restraining order. The CHR contends that it’s principal function under Section 18, Art. 13 of the 1987 Constitution, "is not limited to mere investigation" because it is mandated, among others to provide appropriate legal measures for the protection of human rights of all persons within the Philippines, as well as Filipinos residing abroad, and provide for preventive measures and legal aid services to the under privileged whose human rights have been violated or need protection. Issue: WON CHR have jurisdiction to issue a writ of injunction or restraining order against supposed violators of human rights, to compel them to cease and desist from continuing the acts complained of. Held: Petition for certiorari and prohibition is GRANTED. The orders of injunction issued by the respondent Commission on Human Right are ANNULLED and SET ASIDE and the TRO which this Court issued is made PERMANENT. In Hon. Isidro Cariño, et al. vs. Commission on Human Rights, et al., we held that the CHR is not a court of justice nor even a quasi-judicial body. “The most that may be conceded to the Commission in the way of adjudicative power is that it may investigate, i.e., receive evidence and make findings of fact as regards claimed human rights violations involving civil and political rights. But fact-finding is not adjudication, and cannot be likened to the judicial function of a court of justice, or even a quasi-judicial agency or official. The function of receiving evidence and ascertaining therefrom the facts of a controversy is not a judicial function, properly speaking. To be considered such, the faculty of receiving evidence and making factual conclusions in a controversy must be accompanied by the authority of applying the law to those factual conclusions to the end that the controversy may be decided or determined authoritatively, finally and definitely, subject to such appeals or modes of review as may be provided by law. This function, to repeat, the Commission does not have.” The constitutional provision directing the CHR to "provide for preventive measures and legal aid services to the underprivileged whose human rights have been violated or need protection" may not be construed to confer jurisdiction on the Commission to issue a restraining order or writ of injunction for, if that were the intention, the Constitution would have expressly said so. "Jurisdiction is conferred only by the Constitution or by law". It is never derived by implication. The "preventive measures and legal aid services" mentioned in the Constitution refer to extrajudicial and judicial remedies (including a preliminary writ of injunction) which the CHR may seek from the proper courts on behalf of the victims of human rights violations. Not being a court of justice, the CHR itself has no jurisdiction to issue the writ, for a writ of preliminary injunction may only be issued "by the judge of any court in which the action is pending [within his district], or by a Justice of the Court of Appeals, or of the Supreme Court. It may also be granted by the judge of a Court of First Instance [now Regional Trial Court] in any action pending in an inferior court within his district." (Sec. 2, Rule 58, Rules of Court). A writ of preliminary injunction is an ancillary remedy. It is available only in a pending principal action, for the preservation or protection of the rights and interest of a party thereto, and for no other purpose.

BAKER V CARR (369 U.S. 186, 1962)

FACTS: Appellants are persons allegedly qualified to vote for members of the General Assembly of Tennessee representing the counties in which they reside. They brought suit in a Federal District Court in Tennessee on behalf of themselves and others similarly situated, to redress the alleged deprivation of their federal constitutional rights by legislation classifying voters with respect to representation in the General Assembly. They alleged that, by means of a 1901 statute of Tennessee arbitrarily and capriciously apportioning the seats in the General Assembly among the State's 95 counties, and a failure to reapportion them subsequently notwithstanding substantial growth and redistribution of the State's population, they suffer a "debasement of their votes," and were thereby denied the equal protection of the laws guaranteed them by the Fourteenth Amendment. They sought, inter alia, a declaratory judgment that the 1901 statute is unconstitutional and an injunction restraining certain state officers from conducting any further elections under it. The District Court dismissed the complaint on the grounds that it lacked jurisdiction of the subject matter and that no claim was because it belonged to the state legislature. More precisely, the court held that the question before the court was a political one and was not justifiable. Plaintiff appealed. ISSUE: Where a case involves legislative apportionment, is the issue a political one such that it is not appropriately heard by the courts? HELD: No, but for this case they had a special exception. From a review of numerous Supreme Court decisions, there can be no doubt that the federal rule, as enunciated and applied by the Supreme Court, is that the federal courts, whether from a lack of jurisdiction or from the inappropriateness of the subject matter for judicial consideration, will not intervene in cases of this type to compel legislative reapportionment, they made an exception on for this case. In light of the District Court's treatment of the case, they hold (only for this case): (a) That the court possessed jurisdiction of the subject matter; (b) That a justiciable cause of action is stated upon which appellants would be entitled to appropriate relief, (c) Because appellees raise the issue before this Court, that the appellants have standing to challenge the Tennessee apportionment statutes. Beyond noting that we have no cause at this stage to doubt the District Court will be able to fashion relief if violations of constitutional rights are found, it is improper now to consider what remedy would be most appropriate if appellants prevail at the trial. Federal courts consistently refuse to exercise their equity powers in cases posing political issues arising from a state's geographical distribution of electoral strength among its political subdivisions. A federal court cannot pronounce any statute, either of a State or of the United States, void, because irreconcilable with the Constitution, except as it is called upon to adjudge the legal rights of litigants in actual controversies. Deciding whether a matter has in any measure been committed by the Constitution to another branch of government, or whether the action of that branch exceeds whatever authority has been committed, is itself a delicate exercise in constitutional interpretation, and is a responsibility of this Court as ultimate interpreter of the Constitution.

DEUTSCHE GESELLSCHAFT FÜR TECHNISCHE ZUSAMMENARBEIT, also known as GERMAN AGENCY FOR TECHNICAL COOPERATION, (GTZ). V HON. COURT OF APPEALS, HON. ARIEL CADIENTE SANTOS (G.R. No. 152318, April 16, 2009)

FACTS: The governments of the Federal Republic of Germany and the Republic of the Philippines ratified an Agreement concerning Technical Co-operation (Agreement) in Bonn, West Germany. The Agreement affirmed the countries’ common interest in promoting the technical and economic development of their States, and recognized the benefits to be derived by both States from closer technical co-operation," and allowed for the conclusion of "arrangements concerning individual projects of technical co-operation." While the Agreement provided for a limited term of effective of five (5) years, it nonetheless was stated that "the Agreement shall be tacitly extended for successive periods of one year unless either of the two Contracting Parties denounces it in writing three months prior to its expiry," and that even upon the Agreement’s expiry, its provisions would "continue to apply to any projects agreed until their completion." On 10 December 1999, the Philippine government, through then Foreign Affairs Secretary Domingo Siazon, and the German government, agreed to an Arrangement in furtherance of the 1971 Agreement, which affirmed the common commitment of both governments to promote jointly a project called Social Health Insurance Networking and Empowerment (SHINE) which was designed to "enable Philippine families especially poor ones and to maintain their health and secure health care of sustainable quality." The Republic of Germany assigned the GTZ as the implementing corporation for the program while the Philippines designated the Department of Health and the Philippine Health Insurance Corporation (PHILHEALTH). Private respondents were engaged as contract employees hired by GTZ to work for SHINE. But in September of 1999, Anne Nicolay (Nicolay), a Belgian national, assumed the post of SHINE Project Manager. Private respondents' had a misunderstanding with the Project Manager of SHINE. It was claimed that SHINE under Nicolay had veered away from its original purpose to facilitate the development of social health insurance by shoring up the national health insurance program and strengthening local initiatives, as Nicolay had refused to support local partners and new initiatives on the premise that community and local government unit schemes were not sustainable a philosophy that supposedly betrayed Nicolay’s lack of understanding of the purpose of the project. This lead to an exchange of letters which was interpreted to be the resignation of the private respondents. Private respondents then filed a complaint for illegal dismissal to the labor arbiter. GTZ, through counsel, filed a Motion to Dismiss, on the ground that the Labor Arbiter had no jurisdiction over the case, as its acts were undertaken in the discharge of the governmental functions and sovereign acts of the Government of the Federal Republic of Germany. This was opposed by private respondents with the arguments that GTZ had failed to secure a certification that it was immune from suit from the Department of Foreign Affairs, and that it was GTZ and not the German government which had implemented the SHINE Project and entered into the contracts of employment. The Labor Arbiter issued an Order denying the Motion to Dismiss. The Order cited, among others, that GTZ was a private corporation which entered into an employment contract; and that GTZ had failed to secure from the DFA a certification as to its diplomatic status. GTZ did not file a motion for reconsideration to the Labor Arbiters Decision or elevate said decision for appeal to the NLRC. Instead, GTZ opted to assail the decision by way of a special civil action for certiorari filed with the Court of Appeals. The Court of Appeals promulgated a Resolution dismissing GTZs petition, finding that judicial recourse at this stage of the case is uncalled for, the appropriate remedy of the petitioners being an appeal to the NLRC. Thus, the present petition for review under Rule 45, assailing the decision and resolutions of the Court of Appeals and of the Labor Arbiter. ISSUE: 1. WON GTZ can invoke State immunity from suit. HELD: NO, GTZ cannot invoke State immunity from suit even if their activities performed pertaining to SHINE project are government in nature. The principle of state immunity from suit, whether a local state or a foreign state, is reflected in Section 9, Article XVI of the Constitution, which states that the State may not be sued without its consent. In this case, GTZ’s counsel described GTZ as the implementing agency of the Government of the Federal Republic of Germany, however it does not automatically mean that it has the ability to invoke State immunity from suit. They had failed to adduce evidence, a certification from Department of Foreign Affairs which could have been their factual basis for its claim of immunity. At the same time, it appears that GTZ was actually organized not through a legislative public charter, but under private law, in the same way that Philippine corporations can be organized under the Corporation Code even if fully owned by the Philippine government. The apparent equivalent under Philippine law is that of a corporation organized under the Corporation Code but owned by the Philippine government, or a government-owned or controlled corporation (GOCC) without original charter. And it bears notice that Section 36 of the Corporate Code states that every corporation incorporated under this Code has the power and capacity to sue and be sued in its corporate name. The Court is thus holds and so rules that GTZ consistently has been unable to establish with satisfaction that it enjoys the immunity from suit generally enjoyed by its parent country, the Federal Republic of Germany. The nature of the acts performed by the entity invoking immunity remains the most important barometer for testing whether the privilege of State immunity from suit should apply. At the same time, our Constitution stipulates that a State immunity from suit is conditional on its withholding of consent; hence, the laws and circumstances pertaining to the creation and legal personality of an instrumentality or agency invoking immunity remain relevant. Consent to be sued, as exhibited in this decision, is often conferred by the very same statute or general law creating the instrumentality or agency

KILOSBAYAN INCORPORATED VS. GUINGONA (GR No. 113375, May 5 1994)

FACTS: Pursuant to Section 1 of the charter of the PCSO (R.A. No. 1169, as amended by B.P. Blg. 42) which grants it the authority to hold and conduct "charity sweepstakes races, lotteries and other similar activities," the PCSO decided to establish an on- line lottery system for the purpose of increasing its revenue base and diversifying its sources of funds. After learning that the PCSO was interested in operating an on-line lottery system, the Berjaya Group Berhad- a multinational company became interested to offer its services and resources to PCSO. As an initial step, Berjaya Group Berhad (through its individual nominees) organized with some Filipino investors, a Philippine corporation known as the Philippine Gaming Management Corporation (PGMC), which was intended to be the medium through which the technical and management services required for the project would be offered and delivered to PCSO. PCSO formally issued a Request for Proposal (RFP) for the Lease Contract of an on-line lottery system for the PCSO and a bidding was made. The bids submitted by PGMC were evaluated by the Special Pre-Qualification Bids and Awards Committee (SPBAC) for the on-line lottery and its Bid Report was thereafter submitted to the Office of the President. PGMC won the bid and a contract of lease was awarded to them. On 4 November 1993, KILOSBAYAN sent an open letter to Presidential Fidel V. Ramos strongly opposing the setting up to the on-line lottery system on the basis of the following grounds: 1.PGMC does not meet the nationality requirement because it is 75% foreign owned (owned by a Malaysian firm Berjaya Group Berhad); 2.PCSO, under Section 1 of its charter (RA 1169), is prohibited from holding and conducting lotteries “in collaboration, association or joint venture with any person, association, company or entity”; 3.The network system sought to be built by PGMC for PCSO is a telecommunications network. Under the law (Act No. 3846), a franchise is needed to be granted by the Congress before any person may be allowed to set up such; 4.PGMC’s articles of incorporation, as well as the Foreign Investments Act (R.A. No. 7042) does not allow it to install, establish and operate the on-line lotto and telecommunications systems. Petitioners also submit that the PCSO cannot validly enter into the assailed Contract of Lease with the PGMC because it is an arrangement wherein the PCSO would hold and conduct the on-line lottery system in "collaboration" or "association" with the PGMC, in violation of Section 1(B) of R.A. No. 1169, as amended by B.P. Blg. 42, which prohibits the PCSO from holding and conducting charity sweepstakes races, lotteries, and other similar activities "in collaboration, association or joint venture with any person, association, company or entity, foreign or domestic." PGMC and PCSO, through Teofisto Guingona, Jr. and Renato Corona, Executive Secretary and Asst. Executive Secretary respectively, alleged that PGMC is not a collaborator but merely a contractor for a piece of work,( i.e., the building of the network;) and that PGMC is a mere lessor of the network it will build as evidenced by the nature of the contract agreed upon, (i.e., Contract of Lease.) Petitioner seeks to prohibit and restrain the implementation of the "Contract of Lease" executed by the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming Management Corporation (PGMC) in connection with the on- line lottery system, also known as "lotto." ISSUE: WON the oppositions made by the petitioner was valid. HELD: The Court agrees with the petitioners and the challenged Contract of Lease executed by respondent PCSO and respondent PGMC is declared to be contrary to law and invalid. The preliminary issue on the locus standi of the petitioners which was raised by the respondents should be resolved in their favor. The Court finds this petition to be of transcendental importance to the public. The issues it raised are of paramount public interest and of a category even higher than those involved in many of the aforecited cases. The ramifications of such issues immeasurably affect the social, economic, and moral well-being of the people even in the remotest barangays of the country and the counter-productive and retrogressive effects of the envisioned on-line lottery system are as staggering as the billions in pesos it is expected to raise. The legal standing then of the petitioners deserves recognition and, in the exercise of its sound discretion, this Court hereby brushes aside the procedural barrier which the respondents tried to take advantage of. On the substantive issue regarding the provision in Section 1 of R.A. No. 1169, as amending by B.P. Blg. 42, is indisputably clear with respect to its franchise or privilege "to hold and conduct charity sweepstakes races, lotteries and other similar activities." Meaning, the PCSO cannot exercise it "in collaboration, association or joint venture" with any other party. Thus, the challenged Contract of Lease violates the exception provided for in paragraph B, Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, and is, therefore, invalid for being contrary to law.