15. KILOSBAYAN INC VS.

MORATO
246 SCRA 540

Facts: As a result of the Court’s decision in G.R. No. 113375, invalidating the Contract of Lease
between the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming
Management Corp. (PGMC) on the ground that it had been made in violation of the charter of
the PCSO. The contract violated the provision in the PCSO Charter which prohibits PCSO from
holding and conducting lotteries through a collaboration, association, or joint venture. Both
parties again signed an Equipment Lease Agreement (ELA) for online lottery equipment.

The Kilosbayan, Inc. is an organization described in its petition as “composed of civic-spirited

citizens, pastors, priests, nuns and lay leaders who are committed to the cause of truth, justice,
and national renewal.” Kilosbayan again filed a petition to declare amended ELA invalid
because:
1. It is the same as the old contract of lease.
2. It is still violative of PCSO’s charter.
3. It is violative of the law regarding public bidding. It has not been approved by the
President and it is not most advantageous to the government.

PCSO and PGMC filed separate comments:

1. ELA is a different lease contract with none of the vestiges in the prior contract.
2. ELA is not subject to public bidding because it fell in the exception provided in EO No.
301.
3. Power to determine if ELA is advantageous vests in the Board of Directors of PCSO.
4. Lack of funds. PCSO cannot purchase its own online lottery equipment.
5. Petitioners seek to further their moral crusade.
6. Petitioners do not have a legal standing because they were not parties to the contract.

Issue: Whether or not petitioner Kilosbayan, Incorporated has a legal standing to sue.

Held: NONE.

Rationale:
1. 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.
2. 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 G.R. No. 113375, 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.
3. RULE ON “CONCLUSIVENESS OF JUDGMENT” cannot still apply. An issue actually and
directly passed upon and determine 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 if the
relevant facts in the two cases are separate,  even though they be similar or identical,
collateral estoppel does not govern the legal issues which occur in the second case. 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.
4. Since ELA is a different contract, the previous decision does not preclude determination of
the petitioner’s standing.
5. Standing is a concept in constitutional law, not a mere procedural law not to be taken lightly
and here no constitutional question is actually involved. The petitioners do not question the
validity of the law allowing lotteries, but the contract entered into by the PCSO. The more
appropriate issue is whether the petitioners are ‘real parties of interest’.
6. 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.
7. Petitioners do not have such present substantial interests. Questions to the nature or validity
of public contracts maybe made before COA or before the Ombudsman.