Kilosbayan v Morato

GR No. 118910
11/16/1995
Facts of the case:
This is a petition seeking to declare the ELA invalid on the ground that it is substantially the
same as the Contract of Lease nullified in G. R. No. 113373, 232 SCRA 110.
Petitioners contended that the amended ELA is inconsistent with and violative of PCSO's charter
and the decision of the Supreme Court of 5 May 1995, that it violated the law on public bidding
of contracts as well as Section 2(2), Article IX-D of the 1987 Constitution in relation to the COA
Circular No. 85-55-A. Respondents questioned the petitioners' standing to bring this suit.
Issue:
Whether or not the petitioners have legal standing.
Held:
No.
Ratio:
petitioners are not the real parties to the contract. Petitioners allege that their standing in the
previous suit was sustained, however, the court held that the previous suit is different from the
present case. ELA is different from the 1993 Contract of Lease. The Law of the case does not
apply, so the ruling in the first case does not apply to the case now. Moreover, petitioners did not
show what particular interest they have for bringing this suit. There was no allegation of misuse
of public funds to make this action a public one.
Since the petitioners have no substantial interest in the ELA that would entitle them to bring this
suit, they are not the real parties to the agreement. The real parties are the ones who can claim a
right or are prejudiced in their rights.
ELA is a lease contract and contains none of the features of the former contract which were
considered badges of a joint venture agreement. The petitioners invoked EO No. 301 but this
doesnt apply to Contracts of Lease of equipment. EO No. 301 only applies to contracts for
purchase of supplies, materials and equipment. Heavy equipment is not a supply.