CIVIL PROCEDURE

PARTIES: LOCUS STANDI AND TAXPAYERS SUIT

TATAD V. GARCIA
GR NO. 114222 April 6, 1995
Francisco Tatad, John Osmena and Rodolfo Biazon, petitioners,
vs.
Hon. Jesus Garcia, in his capacity as the Secretary of the
Department of Transportation & Communications, and EDSA
LRT CORPORATION, LTD., respondents.
Facts:
This is a petition under Rule 65 of the Revised Rules of Court to
prohibit respondents from further implementing the Revised
and Restated Agreement to Build, Lease and Transfer a Light
Rail Transit System for EDSA and the Supplemental Agreement
to the same project.
Petitioners Francisco Tatad, John Osmena and Rodolfo Biazon
are members of the Philippine Senate and are suing in their
capacities as Senators and as taxpayers. Respondent Jesus
Garcia was then Secretary of the DOTC, while private
respondent EDSA LRT CORPORATION, Ltd. is a private
corporation organized under the laws of Hongkong.
In 1989, DOTC planned to construct a light railway transit line
along EDSA, which shall traverse the cities of Pasay, Quezon,
Mandaluyong and Makati. The objective is to provide a mass
transit system along EDSA and to alleviate the congestion in
the metropolis.
On March 15, 1990, then DOTC Secretary Oscar Orbos, acting
upon a proposal to construct the EDSA LRT III on a BuildOperate-Transfer (BOT) basis, had invited Elijahu Levin from
the Eli Levin Enterprises, Inc to send a technical team to
discuss the project with the DOTC.
On July 9, 1990, RA No. 6957 referred to as the Build-OperateTransfer (BOT) was signed by then President Corazon Aquino.
The said Act provides for two schemes for the financing,
construction and operation of government projects through
private initiative and investment: BOT or Build-Transfer (BT).
In accordance with the provisions of RA 6957 and to set the
EDSA LRT III project underway, the Prequalification Bids and
Awards Committee and the Technical Committee were formed.
The prequalification criteria totalling 100% are as follows: a.)
Legal aspects 10%; b.) Management/Organizational
capability 30%; c.) Financial capability- 30%; and d.)
Technical capability 30%.
Of the 5 applicants, only the EDSA LRT Consortium met the
requirements of garnering at least 21 points per criteria,
except for Legal aspects, and obtaining an over-all passing
mark of at least 82 points. The Legal aspects referred to
provided that the BOT/BT contractor-applicant meet the
requirements specified in the Constitution and other pertinent
laws.
Subsequently, Sec. Orbos was appointed Executive Secretary
to the President of the Philippines and was replaced by
Nicomedes Prado. The latter recommended the award of the
EDSA LRT III project to the sole complying bidder, the EDSA
LRT Consortium, and requested for authority to negotiate with
the said firm for the contract pursuant to the BOT Law.
Authority was granted to proceed with the negotiations. The
EDSA LRT Consortium submitted its proposal to DOTC.

Finding the proposal to be in compliance with the bid

requirements, DOTC and EDSA LRT Corporation, Ltd., in
substitution of the EDSA LRT Consortium, entered into an An
Agreement to Build, Lease and Transfer a Light Rail Transit
System for EDSA under the terms of the BOT Law.
Secretary Prado, thereafter, requested presidential approval of
the contract.
Exec. Sec. Franklin Drilon, who replaced Sec. Orbos, informed
Sec. Prado that the President could not grant the requested
approval for failure to comply with the requirements of the BOT
Law.
In view whereof, Sec. Drilon, the DOTC and private respondent
re-negotiated the agreement. On April 22, 1992, the parties
entered into a Revised and Restated Agreement to Build,
Lease and Transfer and Light Rail Transit System for EDSA. On
May 6, 1992, DOTC, represented by Sec. Jesus Garcia, Sec.
Prado and private respondent entered into a Supplemental
Agreement to the April Revised Agreement so as to clarify their
respective rights and responsibilities.
The two agreements were approved by President Fidel Ramos.
According to the agreements, the EDSA LRT III will use light rail
vehicles from the Czech and Slovak Federal Republics and will
have a maximum carrying capacity of 450,000 passengers a
day. The system will have its own power facility. It will also
have 13 passenger stations and one depot in 16-hectare
government property at North Avenue.
Private respondents shall undertake and finance the entire
project required for a complete operational light rail transit
system. Target completion date is approximately 3 years from
the implementation date of the contract. Upon full and partial
completion and viability thereof, private respondent shall
deliver the use and possession of the completed portion to
DOTC which shall operate the same. DOTC shall pay private
respondent rentals on aj monthly basis through an Irrevocable
Letter of Credit. The rentals shall be determined by an
independent and internationally accredited inspection firm to
be appointed by the parties.
As agreed upon, private respondents capital shall be
recovered from the rentals to be paid by the DOTC which, in
turn, shall come from the earnings of the EDSA LRT III. After 25
years and DOTC shall have completed payment of the rentals,
ownership of the project shall be transferred to the latter for a
consideration of only US $1.00.
In their petition, petitioners argued that the agreement of April
22, 1992, as amended by the Supplemental Agreement of May
6, 1993, in so far as it grants EDSA LRT COPORTATION, LTD., a
foreign corporation, the ownership of EDSA LRT III, a public
utility, violates the constitution, and hence, is unconstitutional.
They contend that the EDSA LRT III is a public utility, and the
ownership and operation thereof is limited by the Constitution
to Filipino citizens and domestic corporations, not foreign
corporations like private respondent.
Issue:
Whether or not the EDSA LRT III assumes all the obligations
and liabilities of a common carrier.
Held:
What private respondent owns are the rail tracks, rolling stocks
like the coaches, rail stations, terminals and the power plant,
not a public utility. While a franchise is needed to operate
these facilities to serve the public, they do not by themselves
constitute a public utility. What constitutes a public utility is
not their ownership but their use to serve the public.

1.

2.

3.

4.

Section 11 of Article XII of the Constitution provides:

No franchise, certificate or any other form of authorization for
the operation of a public utility shall be granted except to
citizens of the Philippines or to corporations or associations
organized under the laws of the Philippines at least sixty per
centum of whose capital is owned by such citizens, nor shall 1.
such franchise, certificate or authorization be exclusive
character or for a longer period than 50 years.
2.
The right to operate a public utility may exist independently
and separately from the ownership of the facilities thereof. One
can own said facilities without operating them as a public
utility, or conversely, one may operate a public utility without
owning the facilities used to serve the public. The devotion of
property to serve the public may be done by the owner or by
the person in control thereof who may not necessarily be the
owner thereof.
While private respondent is the owner of the facilities
necessary to operate the EDSA LRT III, it admits that it is not
enfranchised to operate a public utility. In view of this
incapacity, private respondent and DOTC agreed that on
completion date, private respondent will immediately deliver
possession of the LRT system by of lease for 25 years, during
which period DOTC shall operate the same as a common
carrier and private respondent shall provide technical
maintenance and repair services to DOTC.
Since DOTC shall operate the EDSA LRT III, it shall assume all
the obligations and liabilities of a common carrier. For this
purpose, DOTC shall indemnify and hold harmless private
respondent from any losses, damages, injuries or death which
may be claimed in the operation or implementation of the
system, except losses, damages, injury or death due to defects
in the EDSA LRT III on account of the defective condition of
equipment or facilities or the defective maintenance of such
equipment facilities.

merely a contractor for a piece of work, i.e., the building of the

network; 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.
ISSUE: Whether or not Kilosbayan is correct.
HELD: Yes, but only on issues 2, 3, and 4.
On the issue of nationality, it seems that PGMCs
foreign ownership was reduced to 40% though.
On issues 2, 3, and 4, Section 1 of R.A. No. 1169, as
amended by B.P. Blg. 42, 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. There is undoubtedly a
collaboration between PCSO and PGMC and not merely a
contract of lease. The relations between PCSO and PGMC
cannot be defined simply by the designation they used, i.e., a
contract of lease. Pursuant to the wordings of their agreement,
PGMC at its own expense shallbuild, operate, and manage
the network system including its facilities needed to operate
a nationwide online lottery system. PCSO bears no risk and all
it does is to provide its franchise in violation of its charter.
Necessarily, the use of such franchise by PGMC is a violation of
Act No. 3846.
Oposa vs. Factoran Case Digest (G.R. No. 101083, July 30,
1993)
FACTS:
The plaintiffs in this case are all minors duly represented and
joined by their parents. The first complaint was filed as a
taxpayer's class suit at the Branch 66 (Makati, Metro Manila),
of the Regional Trial Court, National capital Judicial Region
against defendant (respondent) Secretary of the Department
of Environment and Natural Reasources (DENR). Plaintiffs
alleged that they are entitled to the full benefit, use and
enjoyment of the natural resource treasure that is the
country's virgin tropical forests. They further asseverate that
they represent their generation as well as generations yet
unborn and asserted that continued deforestation have caused
a distortion and disturbance of the ecological balance and
have resulted in a host of environmental tragedies.

Wherefore, the petition is DISMISSED.

KILOSBAYAN V. GUINGONA
Kilosbayan Inc vs Teofisto Guingona, Jr.
232 SCRA 110 Business Organization Corporation Law
PCSOs Charter
In 1993, the Philippine Charity Sweepstakes Office decided to
put up an on-line lottery system which will establish a national
network system that will in turn expand PCSOs source of
income.
A bidding was made. Philippine Gaming Management
Corporation (PGMC) won it. A contract of lease was awarded in
favor of PGMC.
Kilosbayan opposed the said agreement between PCSO and
PGMC as it alleged that:
PGMC does not meet the nationality requirement
because it is 75% foreign owned (owned by a Malaysian firm
Berjaya Group Berhad);
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;
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;
PGMCs 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.
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

Plaintiffs prayed that judgement be rendered ordering the

respondent, his agents, representatives and other persons
acting in his behalf to cancel all existing Timber License
Agreement (TLA) in the country and to cease and desist from
receiving, accepting, processing, renewing or approving new
TLAs.
Defendant, on the other hand, filed a motion to dismiss on the
ground that the complaint had no cause of action against him
and that it raises a political question.
The RTC Judge sustained the motion to dismiss, further ruling
that granting of the relief prayed for would result in the
impairment of contracts which is prohibited by the
Constitution.
Plaintiffs (petitioners) thus filed the instant special civil action
for certiorari and asked the court to rescind and set aside the
dismissal order on the ground that the respondent RTC Judge
gravely abused his discretion in dismissing the action.
ISSUES:
(1) Whether or not the plaintiffs have a cause of action.
(2) Whether or not the complaint raises a political issue.
(3) Whether or not the original prayer of the plaintiffs result in
the impairment of contracts.
RULING:
First Issue: Cause of Action.
Respondents aver that the petitioners failed to allege in their
complaint a specific legal right violated by the respondent

Secretary for which any relief is provided by law. The Court did
not agree with this. The complaint focuses on one fundamental
legal right -- the right to a balanced and healthful ecology
which is incorporated in Section 16 Article II of the
Constitution. The said right carries with it the duty to refrain
from impairing the environment and implies, among many
other things, the judicious management and conservation of
the country's forests. Section 4 of E.O. 192 expressly mandates
the DENR to be the primary government agency responsible
for the governing and supervising the exploration, utilization,
development and conservation of the country's natural
resources. The policy declaration of E.O. 192 is also
substantially re-stated in Title XIV Book IV of the Administrative
Code of 1987. Both E.O. 192 and Administrative Code of 1987
have set the objectives which will serve as the bases for policy
formation, and have defined the powers and functions of the
DENR. Thus, right of the petitioners (and all those they
represent) to a balanced and healthful ecology is as clear as
DENR's duty to protect and advance the said right.

Submitted for decision is this case, in the nature of challenges

(inter alia) to the jurisdiction of the Regional Director of the
Department of Labor and Employment to act on money claims.

A denial or violation of that right by the other who has the

correlative duty or obligation to respect or protect or respect
the same gives rise to a cause of action. Petitioners maintain
that the granting of the TLA, which they claim was done with
grave abuse of discretion, violated their right to a balance and
healthful ecology. Hence, the full protection thereof requires
that no further TLAs should be renewed or granted.

Held:
In addition, it is held that the regional offices of the
Department of Labor are charged alone with "mediation and
conciliation" and, should the parties fail to agree, they must
refer the case to the labor arbiters.

After careful examination of the petitioners' complaint, the

Court finds it to be adequate enough to show, prima facie, the
claimed violation of their rights.
Second Issue: Political Issue.
Second paragraph, Section 1 of Article VIII of the constitution
provides for the expanded jurisdiction vested upon the
Supreme Court. It allows the Court to rule upon even on the
wisdom of the decision of the Executive and Legislature and to
declare their acts as invalid for lack or excess of jurisdiction
because it is tainted with grave abuse of discretion.
Third Issue: Violation of the non-impairment clause.
The Court held that the Timber License Agreement is an
instrument by which the state regulates the utilization and
disposition of forest resources to the end that public welfare is
promoted. It is not a contract within the purview of the due
process clause thus, the non-impairment clause cannot be
invoked. It can be validly withdraw whenever dictated by
public interest or public welfare as in this case. The granting of
license does not create irrevocable rights, neither is it property
or property rights.
Moreover, the constitutional guaranty of non-impairment of
obligations of contract is limit by the exercise by the police
power of the State, in the interest of public health, safety,
moral and general welfare. In short, the non-impairment clause
must yield to the police power of the State.
The instant petition, being impressed with merit, is hereby
GRANTED and the RTC decision is SET ASIDE.
RULE 3
SECTION 1. WHO MAY BE PARTIES
ST. ANNE MEDICAL CENTER V. PAREL
G.R. No. 78554 August 25, 1989
St. Anne Medical Center, petitioner
vs Henry Parel, etc., respondents
Ponente: Sarmiento
Facts:

This case stemmed from a complaint filed against St. Anne

Medical Center for underpayment of wages, ECOLA and other
money claims. Then Director Parel ordered that St. Anne
Medical Center reinstitute the 127 employees with their money
claims, excluding the 6 employees found to be holding
managerial positions.
The director of the hospital then sought reconsideration
alleging that Parel erred in imposing the money award: (1) in
the absence of notice and hearing; (2) that the said award was
not supported by evidence; and (3) that there was pending
with the National Labor Relations Commission an Identical
complaint filed by the complaining employees of the hospital.
(4) The jurisdiction of RD of DOLE to act on money claims is
assailed.

The fact alone that at the time Director Parel entered into the
picture, the respondents-workers had earlier commenced
identical proceedings in the National Labor Relations
Commission, labor arbitrage section, is enough to warrant the
grant of this petition. (The Complaint in the NLRC was filed on
January 28, 1987, 7 while the Regional Director received the
Complaint on February 9,1987.) 8 The rule in civil cases is that
the acquisition of jurisdiction by a court of concurrent
jurisdiction (assuming that the Regional Director exercises
concurrent jurisdiction with the Labor Arbiter in view of the
promulgation of Republic Act No. 6715, which took effect on
March 19, 1989) divests another of its own jurisdiction. The
same rule should apply to labor cases. On account hereof, we
set aside the challenged order.
WHEREFORE, the petition is GRANTED. The order of Regional
Director Henry Parel is SET ASIDE.

CHING V. CA
Alfredo Ching v. CA, Pedro Asedillo
Facts:
Alfredo Ching is the legitimate son of Ching Leng;
Ching Leng bought a property from Sps. Nofuente and the
former registered the property in her name on September 18,
1961, her postal address was in Pasay City;
Ching Leng died in Boston and his legitimate son was
appointed as administrator of her estate;
13 years after the death of Ching Leng, a suit was
commenced on December 27, 1978 by private respondent
Pedro Asedillo against Ching Leng for the reconveyance of said
property;
An amended complaint was made by private respondent
alleging that on account of the fact that the defendant has
been residing abroad up to the present, and it is not known
whether the defendant is still alive or dead, he or his
estate may be served by summons and other processes only
by publication.
Summons by publication was made through Economic
Monitor, newspaper of general circulation in Province of Rizal,

Pasay City. Since no responsive pleading was filed after the

lapse of 60 days, judgment on the merits in favor of private
respondents was made.
Consequently, the title of Ching Leng was cancelled and
transferred to private respondent who sold the same to Villa
Esperanza Dev., Inc.
Petitioner learned of the decision, and so he filed a petition to
set it aside as null and void for lack of jurisdiction;
Lower court decision:
RTC: At first, granted the verified petition to set aside as null
and void the prior order of the RTC; however, on motion by
private respondent, the same was set aside. So, petitioner filed
for reconsideration but was denied.
*the case was elevated directly to SC
Issue: WON reconveyance and cancellation of title is in
personam which cannot give jurisdiction to the court by service
of summons by publication.
(Note: private respondents argue that they are quasi in rem)
Ruling: Yes, reconveyance and cancellation of title are acts in
personam.
Actions in personam and actions in rem differ in that the
former are directed against specific persons and seek personal
judgments, while the latter are directed against the thing or
property or status of a person and seek judgments with
respect thereto as against the whole world.
An action to recover a parcel of land is a real action but it is an
action in personam, for it binds a particular individual only
although it concerns the right to a tangible thing.
Private respondents action for reconveyance and cancellation
of title being in personam, the judgment in question is null and
void for lack of jurisdiction over the person of the deceased
defendant Ching Leng. Verily, the action was commenced
thirteen (13) years after the latters death.
According to Dumlao v. Quality plastic products, the decision of
the lower court insofar as the deceased is concerned is void for
lack of jurisdiction over his person. He was not, and he could
not have been validly served with summons. He had no more
civil personality, that its fitness to be subject of legal relations
was lost through death.
Ching Leng is an innocent purchaser for value as shown by the
evidence adduced in his behalf by petitioner herein, tracking
back the roots of his title since 1960, from the time the decree
of registration was issued.
The sole remedy of the landowner whose property has been
wrongfully or erroneously registered in anothers name after
one year from the date of the decree is not to set aside the
decree but respecting it and to bring an ordinary action in the
ordinary court of justice for damages if the property has
transferred to an innocent purchaser for value.
BARLIN V. RAMIREZ
REV. JORGE BARLIN, in his capacity as apostolic administrator
of this vacant bishopric and legal representative of the general
interests of the Roman Catholic Apostolic Church in the diocese
of Nueva Caceres,Plaintiff-Appellee, vs. P. VICENTE RAMIREZ,
ex-rector of the Roman Catholic Apostolic Parochial Church of
Lagonoy, AND THE MUNICIPALITY OF LAGONOY,DefendantsAppellants.
FACTS:
The def., Ramirez, having been appointed by the pltff parish
priest, took possession of the church on 7/5/01. He
administered if as such under the orders of his superiors until
11/14/02. His successor having been then appointed, the latter
made a demand on this def. for the delivery to him of the

church, convent, and cemetery, and the sacred ornaments,

books, jewels, money, and other prop. of the church. The def.,
by a written document of that date, refused to make such
delivery, stating that "the town of Lagonoy, in conjunction w/
the parish priest of thereof, has seen fit to sever connection w/
the Pope at Rome and his representatives in these Islands, and
to join the Filipino Church, the head of w/c is at Mla.
In 1/4, the pltff. brought this action against def., alleging in his
amended complaint that the Roman Catholic Church was the
owner of the church bldg, the convent, cemetery, the books,
money, and other prop. belonging thereto, and asking that it
be restored to the possession thereof and that the def. render
an account of the prop. w/c he had received and w/c was
retained by him, and for other relief. The CFI-Ambos Camarines
ruled in favor of the pltff.
HELD:
It is suggested by the appellant that the Roman Catholic
Church has no legal personality in the Philippine Islands. This
suggestion, made with reference to an institution w/c
antedates by almost a thousand years any other personality in
Europe, and w/c existed "when Grecian eloquence still
flourished in Antioch, and when idols were still worshipped in
the temple of Mecca," does not require serious consideration.
Barlin v Ramirez [GR L-2832, Nov 24, 1906]ATV
A very old case that happened in 1906, in the pueblo of
Lagonoy, province of Ambos Camarines. TheRoman Catholic
Church which had been razed to the ground in 1869 was
reconstructed, from government funds andfrom voluntary
labor of the townspeople, upon orders of the town officials,
also based on general laws andguidelines of the Spanish
government. Reconstruction was completed in 1873, and until
1902 a Roman Catholic priest administered this church, until it
came under the care of P Vicente Ramirez.In November 1902,
a successor to Ramirez was appointed but he refused to
turn over the church, conventand other properties. This was
the point in history when Spain ceded authority to the United
States and all its property together with it. Many Filipino clergy
rebelled against the Roman Catholic Church whom they said
refusedto recognize and grant the rights of the Filipino
priests. This Filipino priests joined together and formed the
UnitedFilipino Church, who, though not recognizing the Roman
Catholic Church, nonetheless continued to hold office
andceremonies in the Roman Catholic tradition, on the
condition that unless the Roman Catholic Church
recognizedthem, they will hold on to their church properties
and refuse to turn them over.For reason, REV. JORGE BARLIN, in
his capacity as apostolic administrator of this vacant bishopric
andlegal representative of the general interests of the Roman
Catholic Apostolic Church in the diocese of NuevaCaceres
came to file a case against P. VICENTE RAMIREZ, ex-rector of
the Roman Catholic Apostolic ParochialChurch of Lagonoy and
the Municipality of Lagonoy.Rev Barlin held that the church and
its adjuncts were a property of the Roman Catholic Church,
whilePadre Ramirez held that the town of Lagonoy was the
owner of the property.The court held that the church was a
property of the Roman Catholic Church. There was a law that
statesthat all church buildings were made by the Spanish
government and representatives in the Philippines
usinggovernment and private local funds, but the Spanish
government implemented this to the effect that the churches
andits income were dedicated for the propagation of the
faith. Hence, its properties were beyond the commerce of
man.Priests held them in the concept of guardians or
stewards.The truth is that, from the earliest times down to the
cession of the Philippines to the United States,churches and
other consecrated objects were considered outside of
the commerce of man. They were not public property, nor
could they be subjects of private property in the sense that
any private person could the owner thereof.They constituted a
kind of property distinctive characteristic of which was that it

was devoted to the worship of GodFurthermore, the

municipality cannot show evidence of title, right of ownership
or possession.On the contention that the Roman Catholic
Church no longer had legal and juridical personality in
theislands, since the latter half of the third century, and more
particularly since the year 313, when Constantine, by theedict

of Milan, inaugurated an era of protection for the church, the

latter gradually entered upon the exercise of suchrights as
were required for the acquisition, preservation, and
transmission of property the same as any other juridicalentity
under the laws of the Empire.