MANUEL MAMBA V. EDGAR LARAG.R. No. 165109

Facts:The Sangguniang Panlalawigan of Cagayan passed

several resolutions authorizing Gov. Edgar Lara to negotiate, sign and execute contracts or agreements for the issuance and flotation of bonds to fun the priority projects of the governor and for the construction and development of a New Cagayan Town Center subject to the approval and ratification of by the Sangguniang Panlalawigan. Subsequently, the planning, design, construction and site development of the project was awarded to Asset Builders Corporation.

Petitioners Manuel Mamba, Raymund Guzman and Leonidaz Fausto, a Representative of Cagayan and members of the Sangguniang Panlalawigan, respectively, filed a petition for Annulment of Contracts entered into by Gov. Lara in connection with the New Cagayan Town Center project.

The Court dismissed the petition for lack of course of action, stating among others, that petitioners did not have the locus standi to file the present case as they are not parties to the questioned contract.

Issue:Whether or not petitioners have locus standi to file the petition.

Ruling: The Supreme Court ruled that petitioners have legal

standing to sue as taxpayers. A taxpayer is allowed to sue where 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. However, for a taxpayer’s suit to prosper, two 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 and (2) the petitioner is directly affected by the alleged act. A

taxpayer need not be a party to the contract to challenge its validity. As long as taxes are involved, people have a right to question the contracts entered into by the government.

In this case, although the construction of the town center would be primarily sourced from the proceeds of the bonds, a government support would still be spent for paying the interest of the bonds. As to the second requisite, the court has relaxed the stringent “direct injury test” wherein ordinary citizens and taxpayers were allowed to sue even if they failed to show direct injury by invoking “transcendental importance”, “paramount public interest” or “far-reaching implications.”