Kilosbayan, Inc. v Guingona (Constitution)

Kilosbayan, Inc. v Guingona, Corona GR No. 113375 May 5, 1994

Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.cralaw

Davide, Jr., J:

FACTS:
(1) Petitioners contend that denial by the Office of the President of its protest and the statement of
Assistant Executive Secretary Renato Corona that "only a court injunction can stop Malacañang," and the imminent implementation of the Contract of Lease in February 1994, KI LOSBAYAN, with its co-petitioners, filed on 28 January 1994 this petition.
In support of the petition, the petitioners claim that:
. . . X X THE OFFICE OF THE PRESI DENT, ACTING THROUGH RESPONDENTS EXECUTIVE SECRETARY AND/OR ASSISTANT EXECUTIVE SECRETARY FOR LEGAL AFFAIRS, AND THE PCSO GRAVELY ABUSE[D] THEI R DI SCRETI ON AND/OR FUN CTI ONS TANTAMOUN T TO LACK OF JURISDI CTI ON AND/OR AUTHORI TY IN RESPECTIVELY:
(A) APPROVING THE AWARD OF THE CONTRACT TO, AND
(B) ENTERING INTO THE SO-CALLED "CONTRACT OF LEASE" WITH, RESPONDENT PGMC FOR THE INSTALLATION, ESTABLISHMENT AND OPERATI ON OF THE ON-LINE LOTTERY AND TELECOMMUNICATION SYSTEMS REQUIRED AND/OR AUTHORIZED UNDER THE SAID CONTRACT, CONSI DERING THAT:
a) Under Section 1 of the Charter of the PCSO, the PCSO is prohibited from holding and conducting
lotteries "in collaboration, association or joint venture with any person, association, company or entity";
b) Under Act No. 3846 and established jurisprudence, a Congressional franchise is required before
Any person may be allowed to establish and operate said telecommunications system;
c) Under Section 11, Article XII of the Constitution, a less than 60% Filipino-owned and/or controlled corporation, like the PGMC, is disqualified from operating a public service, like the said telecommunications system; and
d) Respondent PGMC is not authorized by its charter and under the Foreign Investment Act (R.A. No. 7042)to install, establish and operate the on-line lot to and telecommunications systems.
(2) Public respondents Executive Secretary Teofisto Guingona, J r., Assistant Executive Secretary Renato Corona, and the PCSO maintain that the contract of lease in question does not violate Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, and that the petitioner's interpretation of the phrase "in collaboration, association or joint venture" in Section 1 is "much too narrow, strained and utterly devoid of logic" for it "ignores the reality that PCSO, as a corporate entity, is vested with the basic and essential prerogative to enter into all kinds of transactions or contracts as may be necessary for the attainment of itspurposes and objectives."

ISSUE:
(a) the locus standi of the petitioners, and
(b) the legality and validity of the Contract of Lease in the light of 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 any person, association, company or entity, whether domestic or foreign."

HELD:
WHEREFORE, the instant petition is hereby GRANTED and the challenged Contract of Lease executed on 17 December 1993 by respondent Philippine Charity Sweepstakes Office (PCSO) and respondent Philippine Gaming Management Corporation (PGMC)is hereby DECLARED contrary to law and invalid.

RATIO:
No interpretation of the said provision to relax or circumvent the prohibition can be allowed since the privilege to hold or conduct charity sweepstakes races, lotteries, or other similar activities is a franchise granted by the legislature to the PCSO. It is a settled rule that "in all grants by the government to individuals or corporations of rights, privileges and franchises, the words are to be taken most strongly against the grantee .... [o]ne who claims a franchise or privilege in derogation of the common rights of the public must prove his title thereto by a grant which is clearly and definitely expressed, and he cannot enlarge it by equivocal or doubtful provisions or by probable inferences. Whatever is not unequivocally granted is withheld. Nothing passes by mere implication.