G.R. No.

212381, April 22, 2015

Recently, the LTO formulated the Motor Vehicle License Plate Standardization Program
(MVPSP) to supply the new license plates for both old and new vehicle registrants.  The DOTC
published in newspapers of general circulation the Invitation To Bid for the supply and delivery
of motor vehicle license plates for the MVPSP and stated that the source of funding in the
amount of P3,851,600,100.00 would be the General Appropriations Act (GAA). However, a
perusal of R.A. No. 10352 or the General Appropriations Act of 2013 (GAA 2013), would show
that Congress appropriated only the amount of P187,293,000.00 under the specific heading of
Motor Vehicle Plate-Making Project.. The Senate Committee on Public Services conducted an
inquiry in aid of legislation on the reported delays in the release of motor vehicle license plates,
stickers and tags by the LTO.

Petitioner, by counsel and assisted by Retired Justice Leonardo A. Quisumbing, instituted this
taxpayer suit, averring that he was a diligent citizen paying his correct taxes to the Philippine
Government regularly; that he was a registered vehicle owner, as evidenced by the Certificate
of Registration of his motor vehicle and a registered licensed driver; that he would be affected
by the government issuance of vehicle plates thru its MVPSP upon his renewal of the
registration of his vehicle; that not being a participant to the bidding process, he could not avail
of the administrative remedies and procedure provided under Republic Act (R.A.) No. 9184 or
the Government Procurement Reform Act, and its Implementing Rules and Regulations (IRR);
that as far as he was concerned, there was no appeal or any plain or speedy remedy available
to him.

For the respondents, the OSG stated that the issues presented had been rendered moot and
academic as the gap in the budget of MVPSP was already bridged and covered by the full and
specific funding by GAA 2014 in the amount of P4,843,753,000.00 for the item “Motor Vehicle
Registration and Driver’s Licensing Regulatory Services.” With the signing of MVPSP on
February 21, 2014, after the enactment of GAA 2014, the OSG claimed that all objections that
petitioner might have, whether right or wrong, had been rendered naught.

On the other hand, JKG-Power Plates averred that petitioner had no locus standi. It pointed out
that petitioner had admitted that he was not one of the bidders in MVPSP and so he would not
suffer any direct injury. Likewise, the present case was not a proper subject of taxpayer suit
because no taxes would be spent for this project. The money to be paid for the plates would not
come from taxes, but from payments of vehicle owners, who would pay P450.00 for every pair
of motor vehicle license plate, and P120.00 for every motorcycle license plate. Out of the
P450.00, the cost of the motor vehicle plate would only be P380.00. In effect, the government
would even earn P70.00 from every pair of plate.

ISSUES

1. Whether the petition should be dismissed for being moot and academic, considering the
assailed deficiencies in appropriation have been substantially complied with.
2. Whether the petitioner has locus standi to bring his case in court.

HELD:
1. NO. The case is already moot and academic; notwithstanding, the substantive issues needed
to be resolved.

The rule is well-settled that for a court to exercise its power of adjudication, there must be an
actual case or controversy – one which involves a conflict of legal rights, an assertion of
opposite legal claims susceptible of judicial resolution. The case must not be moot or academic
or based on extra-legal or other similar considerations not cognizable by a court of justice.
Where the issue has become moot and academic, there is no justiciable controversy, and an
adjudication thereon would be of no practical use or value as courts do not sit to adjudicate
mere academic questions to satisfy scholarly interest, however intellectually challenging. xxx
Nevertheless, there were occasions in the past when the Court passed upon issues although
supervening events had rendered those petitions moot and academic. After all, the moot and
academic principle is not a magical formula that can automatically dissuade the courts from
resolving a case. Courts will decide cases, otherwise moot and academic, if: first, there is a
grave violation of the Constitution; second, the exceptional character of the situation and the
paramount public interest is involved; third, when the constitutional issue raised requires
formulation of controlling principles to guide the bench, the bar, and the public; and fourth, the
case is capable of repetition yet evading review.

In the case at bench, the issues presented must still be passed upon because paramount public
interest is involved and the case is capable of repetition yet evading review. MVPSP is a
nationwide project which affects new and old registrants of motor vehicles and it involves
P3,851,600,100.00 of the taxpayers’ money.

2. YES.Locus standi is defined as the right of appearance in a court of justice on a given

In the present case, petitioner justifies his locus standi by claiming that the petition raises issues
of transcendental importance and that he institutes the same as a taxpayer’s suit. It must be
noted that the Court has provided the following instructive guides to determine whether a matter
is of transcendental importance, namely: “(1) the character of the funds or other assets involved
in the case; (2) the presence of a clear case of disregard of a constitutional or statutory
prohibition by the public respondent agency or instrumentality of the government; and (3) the
lack of any other party with a more direct and specific interest in the questions being raised.”

Petitioner sufficiently showed that his case presents a matter of transcendental importance
based on the above-cited determinants. He elucidated that, first, around P3.851 billion in public
funds stood to be illegally disbursed; second, the IRR of R.A. No. 9184 and R.A. No. 7718 were
violated and the contract for MVPSP was awarded to respondent JKG Power Plates despite the
utter disregard of the said laws; third, there was no other party with a more direct and specific
interest who had raised the issues therein; and fourth, MVPSP had a wide range of impact
because all registered motor vehicles owners would be affected.

DOCTRINE:

1. Government Procurement; Currently, the law that governs the government procurement
processes would be Republic Act (RA) No.9184. —The present petition revolves around the
procurement of MVPSP. Currently, the law that governs the government procurement
processes would be R.A. No. 9184. As early as the year 1900, competitive public biddings were
used by the government to procure materials and to build public infrastructures. Back then,
however, the provisions for the procurement of public projects were to be found in different laws
and regulations. Thus, R.A. No. 9184 was specifically enacted to consolidate the rules on
procurement. Public bidding, as a method of government procurement, is governed by the
principles of transparency, competitiveness, simplicity and accountability. These principles
permeate the provisions of R.A. No. 9184 from the procurement process to the implementation
of awarded contracts. and local government units.

2. Same; Before the enactment of Republic Act (RA) No. 9184, there were already laws that
required sufficient appropriation before the government could enter into a contract. —Before the
enactment of R.A. No. 9184, there were already laws that required sufficient appropriation
before the government could enter into a contract. The Administrative Code of 1987 expressly
prohibits the entering into contracts involving the expenditure of public funds unless two prior
requirements are satisfied. First, there must be an appropriation law authorizing the expenditure
required in the contract. Second, there must be a certification by the proper accounting official
and auditor, attached to the contract, attesting that fund have been appropriated by law and
such funds are available. Failure to comply with any of these two requirements renders the
contract void. The Government Auditing Code of the Philippines also provides for the same
provisions. It further declares that any contract entered into contrary to above cited two
requirements shall be void, and the officer or officers entering into the contract shall be liable to
the government for any consequent damage. These laws were applied by jurisprudence to
invalidate government contracts without proper appropriations. In Osmeña v. COA, 230 SCRA
585 (1994), the Court invalidated a contract entered into by then Mayor Duterte because the
agreed cost for the project was way beyond the appropriated amount. It was stated therein that
“fund availability is, as it has always been, an indispensable prerequisite to the execution of any
government contract involving the expenditure of public funds by all government agencies at all
levels.”

3. Same; A procuring agency must ensure that it has a sufficient appropriation for the project
before commencing the procurement activity