G.R. No. 165109 December 14, 2009
DEL CASTILLO, J.
Lessons Applicable: locus standi, direct injury test, citizen suit
Laws Applicable:
FACTS:
- Sangguniang Panlalawigan of Cagayan passed several resolutions authorizing Governor Edgar R. Lara to negotiate, sign and execute contracts with:
- Preferred Ventures Corp. - as financial advisor of the province of Cagayan regarding the bond floatation undertaken
- Asset Builders Corporation - rewarded the right to plan, design, construct and develop the proposed town center
- RCBC as trustee of the bond undertaken
- MICO as guarantor
- LBP as official depositary bank of the province
- In total, the provincial will incur a total cost of P 231, 908, 232.39 and P 187M for the 7 years of subsidizing the interest of the bonds from which the construction will be primarily sourced
- Petitioners Manuel N. Mamba, Representative of the 3rd Congressional District of the Province of Cagayan and Raymund P. Guzman and Leonides N. Fausto, both members of the Sangguniang Panlalawigan of Cagayan filed a Petition for Annulment of Contracts or Injunction with prayer for Temporary Restraining Order against Edgar R. Lara, Jenerwin C. Bacuyag et al, as members of the Sangguniang Panlalawigan of Cagayan and other contracting parties as indispenable and necessary parties.
- Respondent filed their Answers and Motion to Dismiss stating as one of the grounds that petition lack locus standi in court.
- RTC: dismissed the petition for Lack of Cause of Action or locus standi due to failure of the petitioners to show that their rights were prejudiced. - sustained even on petitioner's Motion for Reconsideration
HELD: YES. A taxpayer is allowed to sue whether there is a claim that public funds are illegally disbursed or that the public money is being deflected to any improper purpose, or that there is wastage of public funds through the enforcement of an invalid or unconstitutional law.
- 2 requisites must be met:
- (1) public funds derived from taxation are disbursed by a political subdivision or instrumentality and in doing so, a law is violated or some irregularity is committed - Records show an appropriation of P25 M for the interest of the bond
- (2) the petitioner is directly affected by the alleged act - the court has relaxed the stringent direct injury test bearing in mind that locus standi is a procedural technicality. By invoking transcendental importance, paramount public interest, or far-reaching implications, ordinary citizens and taxpayers were allowed to sue even if they failed to show direct injury. In cases where serious legal issues were raised or where public expenditures of millions of pesos were involved, the court did not hesitate to give standing to taxpayers
- Another point to consider is that local government units now possess more powers, authority and resources at their disposal, which in the hands of unscrupulous officials may be abused and misused to the detriment of the public. To protect the interest of the people and to prevent taxes from being squandered or wasted under the guise of government projects, a liberal approach must therefore be adopted in determining locus standi in public suits.