ANNOTATION

THE TREND OF LIBERAL RECOGNITION OF THE LOCUS STANDI OF LITIGANTS

By JORGE R. COQUIA*

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§ 1. Introduction, p. 519

§ 2. Meaning and Nature of Locus Standi, p. 522

§ 3. Difficulty of Determining Locus Standi, p. 523

§ 4. Locus Standi of Petitioner in cases of Mandamus,

p. 524

§ 5. Locus Standi of Government Officials, p. 524

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§ 1. Introduction

Locus Standi means a place to stand—a standing in law or suit. (Sanidad vs. COMELEC, 95 SCRA 358 [1976])

A review of recent decisions show that the Supreme Court has been liberal in recognizing the Locus Standi of persons or
entities who file actions questioning the validity of a law or actions of the government issuances. In Planters Producers,
Inc. vs. Fertiphil Corporation, 548 SCRA 485 (2008):

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* Member, Board of Editorial Consultants, Supreme Court Reports Annotated (SCRA).

SUPREME COURT REPORTS ANNOTATED

The Trend of Liberal Recognition of the Locus Standi of Litigants

“Petitioner PPI and private respondent Fertiphil are private corporations incorporated under Philippine laws. They are both
engaged in the importation and distribution of fertilizers, pesticides and agricultural chemicals.

On June 3, 1985, then President Ferdinand Marcos, exercising his legislative powers, issued LOI No. 1465 which
provided, among others, for the imposition of a capital recovery component (CRC) on the domestic sale of all grades of
fertilizers in the Philippines. The LOI provides:

“3. The Administrator of the Fertilizer Pesticide Authority to include in its fertilizer pricing formula a capital contribution
component of not less than P10 per bag. This capital contribution shall be collected until adequate capital is raised to
make PPI viable. Such capital contribution shall be applied by FPA to all domestic sales of fertilizers in the Philippines.”

Pursuant to the LOI, Fertiphil paid P10 for every bag of fertilizer it sold in the domestic market to the Fertilizer and
Pesticide Authority (FPA). FPA then remitted the amount collected to the Far East Bank and Trust Company, the
depositary bank of PPI. Fertiphil paid P6,689,144 to FPA from July 8, 1985 to January 24, 1986.

After the 1986 Edsa Revolution, FPA voluntarily stopped the imposition of the P10 levy. With the return of democracy,
Fertiphil demanded from PPI a refund of the amounts it paid under LOI No. 1465, but PPI refused to accede to the
demand.

Fertiphil filed a complaint for collection and damages against FPA and PPI with the RTC in Makati. It questioned the
constitutionality of LOI No. 1465 for being unjust, unreasonable, oppressive, invalid and an unlawful imposition that
amounted to a denial of due process of law. Fertiphil alleged that the LOI solely favored PPI, a privately owned
corporation, which used the proceeds to maintain its monopoly of the fertilizer industry.

In its Answer, FPA, through the Solicitor General, countered that the issuance of LOI No. 1465 was a valid exercise of the
police power of the State in ensuring the stability of the fertilizer industry in the country. It also averred that Fertiphil did
not sustain any damage from the LOI because the burden imposed by the levy fell on the ultimate consumer, not the
seller.

The Supreme Court said that the mere fact of payment of the levy imposed by Letter of Instruction 1465 is sufficient to
acquire locus standi:

“Whether or not the complaint for collection is characterized as a private or public suit, Fertiphil has locus standi to file it.
Fertiphil suffered a direct injury from the enforcement of LOI No. 1465. It was required, and it did pay, the P10 levy
imposed for every bag of fertilizer sold on the domestic market. It may be true that Fertiphil has passed some or all of the
levy to the ultimate consumer, but that does not disqualify it from attacking the constitutionality of the LOI or from seeking
a refund. As seller, it bore the ultimate burden of paying the levy. It faced the possibility of severe sanctions for failure to
pay the levy. The fact of payment is sufficient injury to Fertiphil. Moreover, Fertiphil suffered harm from the enforcement of
the LOI because it was compelled to factor in its product the levy. The levy certainly rendered the fertilizer products of
Fertiphil and other domestic sellers much more expensive. The harm to their business consists not only in fewer clients
because of the increased price, but also in adopting alternative corporate strategies to meet the demands of LOI No.
1465. Fertiphil and other fertilizer sellers may have shouldered all or part of the levy just to be competitive in the market.
The harm occasioned on the business of Fertiphil is sufficient injury for purposes of locus standi.”

“Ruling that the imposition of the P10 CRC was an exercise of the State’s inherent power of taxation, the RTC invalidated
the levy for violating the basic principle that taxes can only be levied for public purpose.”

The decision of the Regional Trial Court was affirmed by the Court of Appeals with some modification. Hence, this petition
for review on certiorari.

§ 2. Meaning and Nature of Locus Standi

A party who suffered direct injury has a locus standi to challenge the validity of a law.

Rule 3, Sec. 2 of the Rules of Civil Procedure reads:

Locus standi is defined as “a right of appearance in a court of justice on a given question.” In private suits, standing is
governed by the “real-parties-in interest” rule as contained in Section 2, Rule 3 of the 1997 Rules of Civil Procedure, as
amended. It provides that “every action must be prosecuted or defended in the name of the real party in interest.”
Accordingly, the “real-party-in-interest” is “the party who stands to be benefited or injured by the judgment in the suit or the
party entitled to the avails of the suit.” Succinctly put, the plaintiff’s standing is based on his own right to the relief sought.
(David vs. Macapagal-Arroyo, 489 SCRA 160 [2006])

The Liberal trend is to allow citizens affected to file suits as interested parties. A real party-in-interest is the party who
stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise
authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party-in-interest.

“The difficulty of determining locus standi arises in public suits. Here, the plaintiff who asserts a “public right” in assailing
an allegedly illegal official action, does so as a representative of the general public. He may be a person who is affected
no differently from any other person. He could be suing as a “stranger,” or in the category of a “citizen,” or “taxpayer.” In
either case, he has to adequately show that he is entitled to seek judicial protection. In other words, he has to make out a
sufficient interest in the vindication of the public order and the securing of relief as a “citizen” or “taxpayer.” (David vs.
Macapagal-Arroyo, 489 SCRA 160 [2006])

§ 3. Difficulty of Determining Locus Standi

The difficulty in determining locus standi arises in public. The petitioner asserts a public right.

“Case law in most jurisdictions now allows both “citizen” and “taxpayer” standing in public actions. The distinction was first
laid down in Beauchamp v. Silk, where it was held that the plaintiff in a taxpayer’s suit is in a different category from the
plaintiff in a citizen’s suit. In the former, the plaintiff is affected by the expenditure of public funds, while in the latter, he is
but the mere instrument of the public concern. As held by the New York Supreme Court in People ex rel Case v. Collins:
“In matter of mere public right, however . . . the people are the real parties . . . It is at least the right, if not the duty, of
every citizen to interfere and see that a public offence be properly pursued and punished, and that a public grievance be
remedied.” With respect to taxpayer’s suits, Terr v. Jordan held that “the right of a citizen and a taxpayer to maintain an
action in courts to restrain the unlawful use of public funds to his injury cannot be denied.” (David vs. Macapagal-Arroyo,
489 SCRA 160 [2006])

However, to prevent just about any person from seeking judicial interference in any official policy or act with which he
disagreed with, and thus hinders the activities of governmental agencies engaged in public service, the United States
Supreme Court laid down the more stringent “direct injury” test in Ex Parte Levitt, later reaffirmed in Tileston v. Ullman.
The same Court ruled that for a private individual to invoke the judicial power to determine the validity of an executive or
legislative action, he must show that he has sustained a direct injury as a result of that action, and it is not sufficient that
he has a general interest common to all members of the public. (Id.)

§ 4. Locus Standi of petitioner in cases of mandamus

To be given due course, a petition for mandamus must have been instituted by a party aggrieved by the alleged inaction
of any tribunal, corporation, board or person which unlawfully excludes said party from the enjoyment of a legal right. The
Court will exercise its power of judicial review only if the case is brought before it by a party who has the legal standing to
raise the constitutional or legal questions. “Legal standing” means a personal and substantial interest in the case such
that the party has sustained or will sustain direct injury as a result of the government act that is being challenged.
(Pimentel, Jr. vs. Office of the Executive Secretary, 462 SCRA 622 [2005])

Legal standing or locus standi is a party’s personal and substantial interest in such a case that he has sustained or will
sustain a direct injury as a result of the governmental act that is being challenged. The term “interest” means a material
interest, an interest in issue affected by the decree, as distinguished from mere interest in the question involved, or a
mere incidental interest. (Jumamil vs. Cafe, 470 SCRA 475 [2005])

§ 5. Locus Standi of Government Officials

The gist of the question of standing is whether a party has “alleged such a personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so
largely depends for illumination of difficult constitutional questions.” (Province of Batangas vs. Romulo, 429 SCRA 736
[2004])

In relation to the claim of a member of Congress to intervene, invoking his prerogative as legislator to curtail the
disbursement without appropriation of public funds to compensate Philippine International Air Terminals Co., Inc.
(PIATCO), as well as that as a taxpayer, it should be noted that the amount which the Court directed to be paid by the
Government to Philippine International Air Terminals Co., Inc. (PIATCO), was derived from money deposited by Manila
International Airport Authority, an agency which enjoys corporate autonomy and possesses a legal personality separate
and distinct from those of the National Government and agencies thereof whose budgets have to be approved by
Congress. (Republic vs. Gingoyon, 481 SCRA 457 [2006])

A national political party likewise meets the standing requirement, provided that it has obtained three seats in the House
of Representatives in a national elections, which entitles it to participate in the legislative process. (Senate of the
Philippines vs. Ermita, 488 SCRA 1 [2006])

Locus standi is defined as “a right of appearance in a court of justice on a given question.” (David vs. Macapagal-Arroyo,
489 SCRA 160 [2006]; Baltazar vs. Ombudsman, 510 SCRA 74 [2006])
Being a mere procedural technicality, the requirement of locus standi may be waived by the Court in the exercise of its
discretion, such as in cases of “transcendental importance,” or where the issues raised have “far-reaching implications.”
(Baltazar vs. Ombudsman, 510 SCRA 74 [2006])

When the issue concerns a public right, it is sufficient that the petitioner is a citizen and has an interest in the execution of
the laws. (Baltazar vs. Ombudsman, 510 SCRA 74 [2006])

A citizen can raise a constitutional question only when (1) he can show that he has personally suffered some actual or
threatened injury because of the allegedly illegal conduct of the government; (2) the injury is fairly traceable to the
challenged action; and (3) a favorable action will likely redress the injury. (Francisco, Jr. vs. Fernando, 507 SCRA 173
[2006])

A party invoking the “transcendental importance” exception to the standing requirement must show, among others, the
presence of a clear disregard of a constitutional or statutory prohibition. (Francisco, Jr. vs. Fernando, 507 SCRA 173
[2006])

This is one of the right cases where the Supreme Court held a liberal recognition of the locus standi of a private citizen.

CONCLUSION

The tendency of the Court in broadcasting the concept of locus standi is in consonance with the constitutional principle of
free access to courts.

Article III, Section 11 of the 1987 Philippine Constitution reads:

“Free access to the courts and quasi-judicial bodies and adequate legal assistance shall not be denied to any person by
reason of poverty.”

This is only fitting as the courts of justice should be as available to the pauper as to the affluent in the protection of their
respective rights. Assuring him that the courts will protect him but only if he is able to afford the prohibitive cost of litigation
is like spreading a Barmecide feast before the hapless indigent. It is at best a cruel deception, at worst a cynical
oppression of the impoverished suitor. (Cruz, Constitutional Law, p. 371)

The aforesaid constitutional provision is implemented by several rules in the Rules of Court liberal to court procedure to
enable citizens free easy access to courts.

Only recently, Chief Justice Reynato S. Puno addressed in a forum vowed to further introduce reform to comply with the
constitutional principle of free access to courts.