Del Mar v.

PAGCOR

G.R. No. 138298 / November 29, 2000

NATURE Two consolidated petitions concerning the franchise granted to PAGCOR

PETITIONERS Raoul B. Del Mar
RESPONDENTS Philippine Amusement and Gaming Corporation (PAGCOR), Belle Jai-Alai Corporation (BELLE),
Filipinas Gaming Entertainment Totalizator Corporation (FILGAME)

SUMMARY. PAGCOR requested legal advice from the Secretary of Justice if its authorized under its charter to operate
jai-alai games (a form of sport). The Secretary of Justice said that PAGCOR has the authority; hence PAGCOR has the
power under its charter to operate. Petitioner del Mar filed a petition for prohibition preventing PAGCOR from managing
jai-alai since its illegal and devoid of any basis either from the Constitution or PAGCORs own Charter. However,
PAGCOR still entered in an agreement with BELLE and FILGAME, hence, del Mar filed a Petition for Certiorari
questioning the validity of the agreement. Members of the House of Representative also filed a petition stating that
operation of PAGCOR of jai-alai is illegal because it is not included in its scope. Respondents then questioned the locus
standi or legal standing of petitioners filing as taxpayers and members of the House of representatives. As stated by the
Court, they have legal standing to the case since it affects public interest (involves taxes) and affects the powers of the
legislative.
DOCTRINE. Locus Standi or Legal Standing to file a petition as taxpayers and member of the House of Representatives

FACTS.

PAGCOR requested for legal advice from the Secretary of Justice as to whether or not it is authorized by its
Charter to operate and manage jai-alai frontons in the country in relation to Section 1 and 10 of P.D. No. 1869.
The Secretary of Justice opined that the authority of PAGCOR to operate and maintain games of chance or
gambling extends to jai-alai which is a form of sport or game played for bets and that the Charter of PAGCOR
amounts to a legislative franchise for the purpose.
On May 6, 1999, petitioner del Mar filed a Petition for Prohibition to prevent PAGCOR from managing and/or
operating the jai-alai or Basque pelota games on the ground that the act is patently illegal and devoid of any basis
either from the Constitution or PAGCORs own Charter.
On June 17, 1999 however, PAGCOR entered into an agreement with BELLE and FILGAME wherein the latter
parties would provide all the required facilities and requirements for the establishment and operation of jai-alai.
On August 10, 1999, del Mar then filed a Supplemental Petition for Certiorari questioning the validity of the
agreement stating that PAGCOR is without jurisdiction, authority, legislative franchise, or authority to enter into
such agreement for the operation and establishment of jai-alai games.
A little earlier (July 1, 1999), Federico S. Sandoval II and Michael T. Defensor filed a Petition for Injunction. A
Petition in Intervention was filed by Juan Miguel Zubiri alleging that the operation by PAGCOR of jai-alai is illegal
because it is not included in PAGCORs scope.
Petitoners del Mar, Sandoval, Defensor, and intervenor Zubiri are suing as taxpayers and in their capacity as the
members of the House of Representatives.
Respondent questions the locus standi or the standing of the petitioners to file the petition at bar as taxpayers and
as legislators because the operation of jai-alai does not involve the disbursement of public funds.

ISSUES & RATIO.

1. WON petitioners have a locus standi or legal standing to file the petition YES.

As stated by the Court, Respondents stance is without an oven ready legal support. A party suing as taxpayer must
specifically prove that he has sufficient interest in preventing the illegal expenditure of money raised by taxation. In
essence, taxpayers are allowed to sue where there is a claim of illegal disbursement of public funds, or that public money
is being deflected to any improper purpose, or where petitioners seek to restrain respondent from wasting public funds
through the enforcement of an invalid or unconstitutional law. The record shown under their agreement is barren of
evidence that the operation and management of jai-alai by the PAGCOR involves expenditure of public money. The Court
also holds that as members of the House of Representatives, petitioners have legal standing to file the petition at bar. The
operation of jai-alai constitutes an infringement by PAGCOR of the legislatures exclusive power to grant franchise.
Hence, powers of Congress are being impared, so as the powers of each of its members.

DECISION.
Petitioners have legal standing to file the petition
NOTES.

The states issue is only a procedural issue questioning when can taxpayers file a suit.
The substantive issue concerns whether PAGCORs legislative franchise includes the right to manage and operate jai-
alai. It was ruled that PAGCOR DOES NOT HAVE THE RIGHT to operate jai-alai because:
It was not stated under its scope.
In accordance with its historical creation, there is a separate Executive Order which controls the operating of Jai-
Alai (controlled by the Romualdezes) in Manila. PACGORs franchise was never given a franchise to operate jai-
alai.
Tax treatment between jai-alai operations and gambling casinos are distinct from each other.
PAGCOR is engaged in the business affected with public interest.