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FACTS:
Alice Reyes Van Dorn, a Filipino Citizen and private respondent, Richard
Upton, a US citizen, was married in Hong Kong in 1979. They established
their residence in the Philippines and had 2 children. They were divorced in
Nevada, USA in 1982 and petitioner remarried, this time with Theodore Van
Dorn. A suit against petitioner was filed on June 8, 1983, stating that
petitioners business in Ermita Manila, the Galleon Shop, is a conjugal
property with Upton and prayed therein that Alice be ordered to render an
accounting of the business and he be declared as the administrator of the
said property.
ISSUE: Whether or not the foreign divorce between the petitioner and private
respondent in Nevada is binding in the Philippines where petitioner is a
Filipino citizen.
HELD:
FACTS:
Edward E. Christensen, though born in New York, migrated to California,
where he resided and consequently was considered a California citizen. In
1913, he came to the Philippines where he became a domiciliary until his
death. However, during the entire period of his residence in this country he
had always considered himself a citizen of California. In his will executed on
March 5, 1951, he instituted an acknowledged natural daughter, Maria Lucy
Christensen as his only heir, but left a legacy of sum of money in favor of
Helen Christensen Garcia who was rendered to have been declared
acknowledged natural daughter. Counsel for appellant claims that California
law should be applied; that under California law, the matter is referred back
to the law of the domicile; that therefore Philippine law is ultimately
applicable; that finally, the share of Helen must be increased in view of the
success ional rights of illegitimate children under Philippine law. On the other
hand, counsel for the heir of Christensen contends that inasmuch as it is
clear that under Article 16 of our Civil Code, the national law of the deceased
must apply, our courts must immediately apply the internal law of California
on the matter; that under California law there are no compulsory heirs and
consequently a testator could dispose of any property possessed by him in
absolute dominion and that finally, illegitimate children not being entitled to
anything and his will remain undisturbed.
ISSUE:
Whether or not the Philippine law should prevail in administering the estate
of Christensen?
RULING:
The court in deciding to grant more successional rights to Helen said in effect
that there are two rules in California on the matter: the internal law which
should apply to Californians domiciled in California; and the conflict rule
which should apply to Californians domiciled outside of California. The
California conflict rule says: If there is no law to the contrary in the place
where personal property is situated, is deemed to follow the person of its
owner and is governed by the law of his domicile. Christensen being
domiciled outside California, the law of his domicile, the Philippines, ought to
be followed. Where it is referred back to California, it will form a circular
pattern referring to both country back and forth.
5. But what SOB required was a guarantee from the Rafidain Bank of
Baghdad so Rafidain Bank issued a performance bond in favor of SOB on
the condition that another foreign bank (not Phil Guarantee) would issue the
counter-guarantee. Hence, Al Ahli Bank of Kuwait was chosen to provide the
counter guarantee.
6.Afterwards, SOB and the joint venture of VPECI and Ayjal executed the
service contract. Under the contract, the joint venture would supply
manpower and materials, SOB would refund 25% of the project cost in Iraqi
Dinar and 75% in US dollars at an exchange rate of 1 Dinar to $3.37.
7.The project was not completed. Upon seeing the impossibility of meeting
the deadline, the joint venture worked for the renewal or extension (12x) of
the performance bond up to December 1986.
8. In October 1986, Al Ahli Bank sent a telex call demanding full payment of
its performance bond counter-guarantee. Upon receipt, VPECI requested
Iraq Trade and Economic Development Minister Fadhi Hussein to recall the
telex for being in contravention of its mutual agreement that the penalty will
be held in abeyance until completion of the project. It also wrote SOB
protesting the telex since the Iraqi government lacks foreign exchange to pay
VPECI and the non-compliance with the 75% billings in US dollars.
11. Trial Court ruling: Dismissed. Philguarantee had no valid cause of action
against the respondents. The joint venture incurred no delay in the execution
of the project considering that SOB's violations of the contract rendered
impossible the performance of its undertaking.
Issue:
What law should be applied in determining whether or not contractor (joint
venture) has defaulted?
Held:
The question of whether there is a breach of the agreement which includes
default pertains to the INTRINSIC validity of the contract.
In the case, the service contract between SOB and VPECI contains no
express choice of law. The laws of Iraq bear substantial connection to the
transaction and one of the parties is the Iraqi government. The place of
performance is also in Iraq. Hence, the issue of whether VPECI defaulted
may be determined by the laws of Iraq.
BUT! Since foreign law was not properly pleaded or proved, processual
presumption will apply.
As found by the lower courts: the delay or non-completion of the project was
caused by factors not imputable to the Joint Venture, it was rather due to the
persistent violations of SOB, particularly it's failure to pay 75% of the
accomplished work in US dollars. Hence, the joint venture does not incur in
delay if the other party(SOB) fails to perform the obligation incumbent upon
him.
Brand Marine Services, Inc. (BMSI), a corporation duly organized & existing
under the laws of Connecticut, &Stockton Rouzie, Jr., an American citizen,
entered into a contract
BMSI hired Rouzie as its representative to negotiate the sale of services in
several government projects in thePhilippines for an agreed remuneration of
10% of the gross receipts.
Rouzie secured a service contract w/ the Rep. of Phil. on behalf of BMSI for
the dredging of rivers affected by the Mt.Pinatubo eruption & mudflows.
Rouzie filed before the NLRC a suit against BMSI and Rust International
(Rust) for alleged nonpayment of commissions, illegal termination, & breach
of employment contract.
Upon appeal, the NLRC reversed & dismissed Rouzies complaint on the
ground of lack of jurisdiction.
Rouzie filed an action for damages before the RTC of La Union (where he
was a resident) against Raytheon International. He reiterated that he was not
paid the commissions due him from the Pinatubo dredging project w/c
hesecured on behalf of BMSI. The complaint also averred that BMSI, RUST
and Raytheon had combined & functioned as 1 company.
RULING
(a) YES.
As regards jurisdiction over the parties, the RTC acquired jurisdiction over
Rouzi upon the filing of the complaint. On the other hand, jurisdiction over
the person of Raytheon was acquired by its voluntary appearance in court.
On October 29, 1993, respondent filed with the International Tax Affairs
Division (ITAD) of the BIR a claim for refund of overpaid withholding tax on
royalties arguing that, the antecedent facts attending respondents case fall
squarely within the same circumstances under which said MacGeorge
and Gillette rulings wereissued. Since the agreement was approved by the
Technology Transfer Board, the preferential tax rate of 10% should apply to
the respondent. So, royalties paid by the respondent to SC Johnson and
Son, USA is only subject to 10% withholding tax.
The Commissioner did not act on said claim for refund. Private respondent
SC Johnson & Son, Inc. then filed a petition for review before the CTA, to
claim a refund of the overpaid withholding tax on royalty payments from July
1992 to May 1993.
On May 7, 1996, the CTA rendered its decision in favor of SC Johnson and
ordered the CIR to issue a tax credit certificate in the amount of P163,266.00
representing overpaid withholding tax on royalty payments beginning July
1992 to May 1993.
The CIR thus filed a petition for review with the CA which rendered the
decision subject of this appeal on November 7, 1996 finding no meritin the
petition and affirming in toto the CTA ruling.
Held: It bears stress that tax refunds are in the nature of taxexemptions. As
such they are registered as in derogation of sovereign authority and to be
construed strictissimi juris against the person or entity claiming the
exemption. The burden of proof is upon him who claims the exemption in his
favor and he must be able to justify his claim by the clearest grant of organic
or statute law. Private respondent is claiming for a refund of the alleged
overpayment of tax on royalties; however there is nothing on record to
support a claim that the tax on royalties under the RP-US Treaty is paid
under similar circumstances as the tax on royalties under the RP-West
Germany Tax Treaty.
CIR VS SC JOHNSON & SON, INCS AND CA [G.R. No. 127105. June 25,
1999]
JOHNSON AND SON, INC a domestic corporation organized and operating
under the Philippine laws, entered into a license agreement with SC Johnson
and Son, United States of America(USA), a non-resident foreign corporation
based in the U.S.A. pursuant to which the [respondent] was granted the right
to use the trademark, patents and technology owned by the latter including
the right to manufacture, package and distribute the products covered by the
Agreement and secure assistance in management, marketing and
production from SC Johnson and Son, U. S. A. The said License Agreement
was duly registered with the Technology Transfer Board of the Bureau of
Patents, Trade Marks and Technology Transfer under Certificate of
Registration No. 8064 . For the use of the trademark or technology, SC
JOHNSON AND SON, INC was obliged to pay SC Johnson and Son, USA
royalties based on a percentage of net sales and subjected the same to 25%
withholding tax on royalty payments which respondent paid for the period
covering July 1992 to May 1993.00 On October 29,1993, SC JOHNSON
AND SON, USA filed with the International Tax Affairs Division (ITAD) of the
BIR a claim for refund of overpaid withholding tax on royalties arguing that,
since the agreement was approved by the Technology Transfer Board, the
preferential tax rate of 10% should apply to the respondent. Respondent
submits that royalties paid to SC Johnson and Son, USA is only subject to
10%withholding tax pursuant to the most-favored nation clause of the RP-
US Tax Treaty in relation to the RP-West Germany Tax Treaty. The Internal
Tax Affairs Division of the BIR ruled against SC Johnson and Son, Inc. and
an appeal was filed by the former to the Court of tax appeals. The CTA ruled
against CIR and ordered that a tax credit be issued in favor of SC Johnson
and Son, Inc. Unpleased with the decision, the CIR filed an appeal to the CA
which subsequently affirmed in toto the decision of the CTA. Hence, an
appeal on certiorari was filed to the SC.
THE MAIN ISSUE:
WON SC JOHNSON AND SON, USA IS ENTITLED TO THE MOST
FAVORED NATION TAX RATE OF 10%ON ROYALTIES AS PROVIDED IN
THE RP-US TAX TREATY IN RELATION TO THE RP-WEST GERMANY
TAX TREATY.
The concessional tax rate of 10 percent provided for in the RP-Germany Tax
Treaty could not apply to taxes imposed upon royalties in the RP-US Tax
Treaty since the two taxes imposed under the two tax treaties are not paid
under similar circumstances, they are not containing similar provisions on
tax crediting.
The United States is the state of residence since the taxpayer, S. C. Johnson
and Son, U. S. A., is based there. Under the RP-US Tax Treaty, the state of
residence and the state of source are both permitted to tax the royalties, with
a restraint on the tax that may be collected by the state of source.
Furthermore, the method employed to give relief from double taxation is the
allowance of a tax credit to citizens or residents of the United States against
the United States tax, but such amount shall not exceed the limitations
provided by United States law for the taxable year. The Philippines may
impose one of three rates- 25 percent of the gross amount of the royalties;
15 percent when the royalties are paid by a corporation registered with the
Philippine Board of Investments and engaged in preferred areas of activities;
or the lowest rate of Philippine tax that may be imposed on royalties of the
same kind paid under similar circumstances to a resident of a third state.
Given the purpose underlying tax treaties and the rationale for the most
favored nation clause, the Tax Treaty should apply only if the taxes imposed
upon royalties in the RP-US Tax Treaty and in the RP-Germany Tax Treaty
are paid under similar circumstances. This would mean that private
respondent must prove that the RP-US Tax Treaty grants similar tax reliefs
to residents of the United States in respect of the taxes imposable upon
royalties earned from sources within the Philippines as those allowed to their
German counterparts under the RP Germany Tax Treaty. The RP-US and
the RP-West Germany Tax Treaties do not contain similar provisions on tax
crediting. Article 24 of the RP-Germany Tax Treaty, supra, expressly allows
crediting against German income and corporation tax of 20% of the gross
amount of royalties paid under the law of the Philippines. On the other hand,
Article 23 of the RP-US Tax Treaty, which is the counterpart provision with
respect to relief for double taxation, does not provide for similar crediting of
20% of the gross amount of royalties paid. At the same time, the intention
behind the adoption of the provision on relief from double taxation in the two
tax treaties in question should be considered in light of the purpose behind
the most favored nation clause.
What is the most favored nation clause?
The purpose of a most favored nation clause is to grant to the contracting
party treatment not less favorable than that which has been or may be
granted to the most favored among other countries. It is intended to
establish the principle of equality of international treatment by providing that
the citizens or subjects of the contracting nations may enjoy the privileges
accorded by either party to those of the most favored nation. The essence of
the principle is to allow the taxpayer in one state to avail of more liberal
provisions granted in another tax treaty to which the country of residence of
such taxpayer is also a party provided that the subject matter of taxation, in
this case royalty income, is the same as that in the tax treaty under which
the taxpayer is liable. The RP-US Tax Treaty does not give a matching tax
credit of 20 percent for the taxes paid to the Philippines on royalties as
allowed under the RP-West Germany Tax Treaty, private respondent cannot
be deemed entitled to the 10 percent rate granted under the latter treaty for
the reason that there is no payment of taxes on royalties under similar
circumstances.
TAXATION RELATED TOPICS: What is the purpose of a tax treaty?
The purpose of these international agreements is to reconcile the national
fiscal legislations of the contracting parties in order to help the taxpayer avoid
simultaneous taxation in two different jurisdictions. The goal of double
taxation conventions would be thwarted if such treaties did not provide for
effective measures to minimize, if not completely eliminate, the tax burden
laid upon the income or capital of the investor. Thus, if the rates of tax are
lowered by the state of source, in this case, by the Philippines, there should
be a concomitant commitment on the part of the state of residence to grant
some form of tax relief, whether this be in the form of a tax credit or
exemption. Otherwise, the tax which could have been collected by the
Philippine government will simply be collected by another state, defeating
the object of the tax treaty since the tax burden imposed upon the investor
would remain unrelieved. If the state of residence does not grant some form
of tax relief to the investor, no benefit would redound to the Philippines, i.e.,
increased investment resulting from a favorable tax regime, should it impose
a lower tax rate on the royalty earnings of the investor, and it would be better
to impose the regular rate rather than lose much-needed revenues to another
country.
What is international double taxation and the rationale for doing away with
it?
International juridical double taxation is defined as the imposition of
comparable taxes in two or more states on the same taxpayer in respect of
the same subject matter and for identical periods; The apparent rationale for
doing away with double taxation is to encourage the free flow of goods and
services and the movement of capital, technology and persons between
countries, conditions deemed vital in creating robust and dynamic
economies.
When is there double taxation?
Double taxation usually takes place when a person is resident of a
contracting state and derives income from, or owns capital in, the other
contracting state and both states impose tax on that income or capital.
What are the methods of eliminating double taxation?
First, it sets out the respective rights to tax of the state of source or situs and
of the state of residence with regard to certain classes of income or capital.
In some cases, an exclusive right to tax is conferred on one of the contracting
states; however, for other items of income or capital, both states are given
the right to tax, although the amount of tax that may be imposed by the state
of source is limited.
The second method for the elimination of double taxation applies whenever
the state of source is given a full or limited right to tax together with the state
of residence. In this case, the treaties make it incumbent upon the state of
residence to allow relief in order to avoid double taxation. In this case, the
treaties make it incumbent upon the state of residence to allow relief in order
to avoid double taxation.
What are the methods of relief under the second method?
There are two methods of relief, the exemption method and the credit
method.
Exemption method, the income or capital which is taxable in the state of
source or situs is exempted in the state of residence, although in some
instances it may be taken into account in determining the rate of tax
applicable to the taxpayers remaining income or capital.
Credit method, although the income or capital which is taxed in the state of
source is still taxable in the state of residence, the tax paid in the former is
credited against the tax levied in the latter.
The basic difference between the two methods is that in the exemption
method, the focus is on the income or capital itself, whereas the credit
method focuses upon the tax.
BAYAN v. ZAMORA
October 26, 2012 Leave a comment
BAYAN v. ZAMORA
G. R. No. 138570
October 10, 2000
Facts:
The United States panel met with the Philippine panel to discussed, among
others, the possible elements of the Visiting Forces Agreement (VFA). This
resulted to a series of conferences and negotiations which culminated on
January 12 and 13, 1998. Thereafter, President Fidel Ramos approved the
VFA, which was respectively signed by Secretary Siazon and United States
Ambassador Thomas Hubbard.
Pres. Joseph Estrada ratified the VFA on October 5, 1998 and on May 27,
1999, the senate approved it by (2/3) votes.
Cause of Action:
Petitioners, among others, assert that Sec. 25, Art XVIII of the 1987
constitution is applicable and not Section 21, Article VII.
Following the argument of the petitioner, under they provision cited, the
foreign military bases, troops, or facilities may be allowed in the Philippines
unless the following conditions are sufficiently met:
a) it must be a treaty,
b) it must be duly concurred in by the senate, ratified by a majority of the
votes cast in a national referendum held for that purpose if so required by
congress, and
c) recognized as such by the other contracting state.
Respondents, on the other hand, argue that Section 21 Article VII is
applicable so that, what is requires for such treaty to be valid and effective is
the concurrence in by at least two-thirds of all the members of the senate.
ISSUE: Is the VFA governed by the provisions of Section 21, Art VII or of
Section 25, Article XVIII of the Constitution?
HELD:
Section 25, Article XVIII, which specifically deals with treaties involving
foreign military bases, troops or facilities should apply in the instant case. To
a certain extent and in a limited sense, however, the provisions of section
21, Article VII will find applicability with regard to the issue and for the sole
purpose of determining the number of votes required to obtain the valid
concurrence of the senate.
The Constitution, makes no distinction between transient and permanent.
We find nothing in section 25, Article XVIII that requires foreign troops or
facilities to be stationed or placed permanently in the Philippines.
It is inconsequential whether the United States treats the VFA only as an
executive agreement because, under international law, an executive
agreement is as binding as a treaty.
DECISION
(En Banc)
BUENA, J.:
I. THE FACTS
The Republic of the Philippines and the United States of America entered
into an agreement called the Visiting Forces Agreement (VFA). The
agreement was treated as a treaty by the Philippine government and was
ratified by then-President Joseph Estrada with the concurrence of 2/3 of the
total membership of the Philippine Senate.
The VFA defines the treatment of U.S. troops and personnel visiting the
Philippines. It provides for the guidelines to govern such visits, and further
defines the rights of the U.S. and the Philippine governments in the matter
of criminal jurisdiction, movement of vessel and aircraft, importation and
exportation of equipment, materials and supplies.
Petitioners argued, inter alia, that the VFA violates 25, Article XVIII of the
1987 Constitution, which provides that foreign military bases, troops, or
facilities shall not be allowed in the Philippines except under a treaty duly
concurred in by the Senate . . . and recognized as a treaty by the other
contracting State.
[The Court DISMISSED the consolidated petitions, held that the petitioners
did not commit grave abuse of discretion, and sustained the constitutionality
of the VFA.]
Section 25, Article XVIII disallows foreign military bases, troops, or facilities
in the country, unless the following conditions are sufficiently met, viz: (a) it
must be under a treaty; (b) the treaty must be duly concurred in by the
Senate and, when so required by congress, ratified by a majority of the votes
cast by the people in a national referendum; and (c) recognized as a
treaty by the other contracting state.
There is no dispute as to the presence of the first two requisites in the case
of the VFA. The concurrence handed by the Senate through Resolution No.
18 is in accordance with the provisions of the Constitution . . . the provision
in [in 25, Article XVIII] requiring ratification by a majority of the votes cast in
a national referendum being unnecessary since Congress has not required
it.
This Court is of the firm view that the phrase recognized as a treaty means
that the other contracting party accepts or acknowledges the agreement as
a treaty. To require the other contracting state, the United States of America
in this case, to submit the VFA to the United States Senate for concurrence
pursuant to its Constitution, is to accord strict meaning to the phrase.
Well-entrenched is the principle that the words used in the Constitution are
to be given their ordinary meaning except where technical terms are
employed, in which case the significance thus attached to them prevails. Its
language should be understood in the sense they have in common use.
Moreover, it is inconsequential whether the United States treats the VFA only
as an executive agreement because, under international law, an executive
agreement is as binding as a treaty. To be sure, as long as the VFA
possesses the elements of an agreement under international law, the said
agreement is to be taken equally as a treaty.
The records reveal that the United States Government, through Ambassador
Thomas C. Hubbard, has stated that the United States government has fully
committed to living up to the terms of the VFA. For as long as the United
States of America accepts or acknowledges the VFA as a treaty, and binds
itself further to comply with its obligations under the treaty, there is indeed
marked compliance with the mandate of the Constitution.
RTHUR D. LIM vs. HON. EXECUTIVE SECRETARY (G.R. No. 151445)
Case Digest
Facts:
Arthur D. Lim and Paulino P. Ersando filed a petition for certiorari and
prohibition attacking the constitutionality of Balikatan-02-1. They were
subsequently joined by SANLAKAS and PARTIDO NG MANGGAGAWA,
both party-list organizations, who filed a petition-in-intervention. Lim and
Ersando filed suits in their capacities as citizens, lawyers and taxpayers.
SANLAKAS and PARTIDO on the other hand, claimed that certain members
of their organization are residents of Zamboanga and Sulu, and hence will
be directly affected by the operations being conducted in Mindanao.
Issue:
Ruling:
The MDT is the core of the defense relationship between the Philippines and
the US and it is the VFA which gives continued relevance to it. Moreover, it
is the VFA that gave legitimacy to the current Balikatan exercise.
Lim vs. Executive Secretary G.R. No. 151445 April 11, 2002
July 25, 2009 at 12:11 pm (1)
FACTS :
Beginning 2002, personnel from the armed forces of the United States
started arriving in Mindanao, to take part, in conjunction with the Philippine
military, in Balikatan 02-1. In theory, they are a simulation of joint military
maneuvers pursuant to the Mutual Defense Treaty, a bilateral defense
agreement entered into by the Philippines and the United States in 1951.
On Feb. 2002, Lim filed this petition for certiorari and prohibition, praying that
respondents be restrained from proceeding with the so-called Balikatan 02-
1, and that after due notice and hearing, judgment be rendered issuing a
permanent writ of injuction and/or prohibition against the deployment of US
troops in Basilan and Mindanao for being illegal and in violation of the
Constitution.
Petitioners contend that the RP and the US signed the Mutual Defense
Treaty to provide mutual military assistance in accordance with the
constitutional processes of each country only in the case of a armed attack
by an external aggressor, meaning a third country, against one of them. They
further argued that it cannot be said that the Abu Sayyaf in Basilan
constitutes an external aggressor to warrant US military assistance in
accordance with MDT of 1951. Another contention was that the VFA of 1999
does not authorize American soldiers to engage in combat operations in
Philippine territory.
ISSUE :
Whether or not the Balikatan 02-1 activities are covered by the VFA.
RULING :
Petition is dismissed. The VFA itself permits US personnel to engage on an
impermanent basis, in activities, the exact meaning of which is left
undefined. The sole encumbrance placed on its definition is couched in the
negative, in that the US personnel must abstain from any activity
inconsistent with the spirit of this agreement, and in particular, from any
political activity.
Under these auspices, the VFA gives legitimacy to the current Balikatan
exercises. It is only logical to assume that Balikatan 02-1 a mutual anti
terrorism advising assisting and training exercise falls under the umbrella of
sanctioned or allowable activities in the context of the agreement. Both the
history and intent of the Mutual Defense Treaty and the VFA support the
conclusion that combat-related activities as opposed to combat itself
such as the one subject of the instant petition, are indeed authorized.
Facts:
1. The petitioners filed a petition for mandamus to compel the Office of the
Executive Secretary and the Department of Foreign Affairs to transmit the
signed copy of the Rome Statute of the International Criminal Court to the
Senate of the Philippinesfor its concurrence pursuant to Sec. 21, Art VII of
the 1987 Constitution.
2. The Rome Statute established the Int'l Criminal Court which will have
jurisdiction over the most serious crimes as genocide, crimes against
humanity, war crimes and crimes of aggression as defined by the Statute.
The Philippines through the Chargie du Affairs in UN. The provisions of the
Statute however require that it be subject to ratification, acceptance or
approval of the signatory state.
Issue: Whether or not the Exec. Secretary and the DFA have the ministerial
duty to transmit to the Senate the copy of the Rome Statute signed by a
member of the Philippine mission to the U.N. even without the signature of
the President.
FACTS: The petitioners, Plaridel M. Abaya who claims that he filed the
instant petition as a taxpayer, former lawmaker, and a Filipino citizen, and
Plaridel C. Garcia likewise claiming that he filed the suit as a taxpayer, former
military officer, and a Filipino citizen, mainly seek to nullify a DPWH
resolution which recommended the award to private respondent China Road
& Bridge Corporation of the contract for the implementation of the civil works
known as Contract Package No. I (CP I). They also seek to annul the contract
of agreement subsequently entered into by and between the DPWH and
private respondent China Road & Bridge Corporation pursuant to the said
resolution.
ISSUE: Has petitioners the legal standing to file the instant case against the
government?
HELD: Petitioners, as taxpayers, possess locus standi to file the present suit.
Briefly stated, locus standi is a right of appearance in a court of justice on a
given question. More particularly, it is a partys personal and substantial
interest in a case such that he has sustained or will sustain direct injury as a
result of the governmental act being challenged. Locus standi, however, is
merely a matter of procedure and it has been recognized that in some cases,
suits are not brought by parties who have been personally injured by the
operation of a law or any other government act but by concerned citizens,
taxpayers or voters who actually sue in the public interest. Consequently, the
Court, in a catena of cases, has invariably adopted a liberal stance on locus
standi, including those cases involving taxpayers.
The prevailing doctrine in taxpayers suits is to allow taxpayers to question
contracts entered into by the national government or government- owned or
controlled corporations allegedly in contravention of law. A taxpayer is
allowed to sue where there is a claim that public funds are illegally disbursed,
or that public money is being deflected to any improper purpose, or that there
is a wastage of public funds through the enforcement of an invalid or
unconstitutional law. Significantly, a taxpayer need not be a party to the
contract to challenge its validity.
QUESTION: Must a Taxpayer be a party to a contract in order to challenge
it's validity?
ANSWER: NO. Ratio: TAXPAYER SUIT
Petitioners Plaridel M. Abaya who claims that he filed the instant petition as
a taxpayer, former lawmaker, and a Filipino citizen, and Plaridel C.
Garcia (birds of the same feather ;p) likewise claiming that he filed the suit
as a taxpayer, former military officer, and a Filipino citizen, mainly seek to
nullify a DPWH resolution which recommended the award to private
respondent China Road & Bridge Corporation of the contract for the
implementation of the civil works known as Contract Package No. 1.They
also seek to annul the contract of agreement subsequently entered into by
and between the DPWH and China Road & Bridge Corporation pursuant to
said resolution.
Respondent defends Petitioners dont have Locus Standi since they are not
party to the contract.
ISSUE:
Do petitioners have the LOCUS STANDI (Legal Standing) to file the instant
case against the government notwithstanding that they are not a party to the
contract to challenge its validity?
HELD:
YES. As TAXPAYERS they have Locus Standi to file the present suit.
Ito yung kaya minsan maynaririnig kang nagfafile ng kaso pero wala naman
silang kinalaman sa kontrata or agreement or deal and sinasabi lang nila "at
baket taxpayer ako ah? baket ba?". It is what you call a TAXPAYERS
SUIT. The prevailing doctrine in Taxpayer's Suit is to allow taxpayers to
question government contracts especially pag merong 1. illegal
disbursement of public funds, or 2. the public money is being deflected to
some other purpose or to someone's private bank account, or they see 3.
wastage of public funds through the enforcement of an invalid or
unconstitutional law entered into by the national government or
GOCCs allegedly in contravention of the law.
Ex: Sec. 48, Rule on Civil Procedure if by the laws of the State or country
where the cause of action arose the action is barred, it is also barred in
the Philippines.
Facts:
Cadalin et al. are Filipino workers recruited by Asia Intl Builders Co. (AIBC),
a domestic recruitment corporation, for employment in Bahrain to work for
Brown & Root Intl Inc. (BRII) which is a foreign corporation with
headquarters in Texas. Plaintiff instituted a class suit with the POEA for
money claims arising from the unexpired portion of their employment
contract which was prematurely terminated. They worked in Bahrain for BRII
and they filed the suit after 1 yr. from the termination of their employment
contract.
As provided by Art. 156 of the Amiri Decree aka as the Labor Law of the
Private Sector of Bahrain: a claim arising out of a contract of employment
shall not be actionable after the lapse of 1 year from the date of the expiry of
the contract, it appears that their suit has prescribed.
Plaintiff contends that the prescription period should be 10 years as provided
by Art. 1144 of the Civil Code as their claim arise from a violation of a
contract.
The POEA Administrator holds that the 10 year period of prescription should
be applied but the NLRC provides a different view asserting that Art 291 of
the Labor Code of the Phils with a 3 years prescription period should be
applied. The Solicitor General expressed his personal point of view that the
1 yr period provided by the Amiri Decree should be applied.
Ruling:
The Supreme Court held that as a general rule a foreign procedural law will
not be applied in our country as we must adopt our own procedural laws.
EXCEPTION:
The court ruled that the prescription period applicable to the case should
be Art 291 of the Labor Code of the Phils with a 3 years prescription
period since the claim arose from labor employment.
GENERAL RULE: A foreign procedural law will not be applied in the forum.
EXCEPTION: When the country of the forum has a "borrowing statute," the
country of the forum will apply the foreign statute of limitations.
EXCEPTION TO THE EXCEPTION: The court of the forum will not enforce
any foreign claim obnoxious to the forum's public policy.
FACTS:
HELD:
As a general rule, a foreign procedural law will not be applied in the forum.
Procedural matters, such as service of process, joinder of actions, period
and requisites for appeal, and so forth, are governed by teh laws of the
forum. This is true even if the action is based upon a foreign substantive law.
If by the laws of the state or country where the cause of action arose, the
action is barred, it is also barred in the Philippine Islands.
The courts of the forum will not enforce any foreign claims obnoxious to the
forums public policy. To enforce the one-year prescriptive period of the Amiri
Decree No. 23 of 1976 as regards the claims in question would contravene
the public policy on the protection to labor.