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Madamba v. Lara (2009)

Manuel Mamba, et al. Vs. Edgar R. Lara, et al. involved a dispute over a governor authorizing the appointment of a financial advisor for bond issuance without competitive bidding. The petitioners filed suit arguing the contracts were illegal. The RTC dismissed the petitions. The Supreme Court ruled the petitioners had legal standing as taxpayers because public funds were being disbursed and two requirements for a taxpayer suit were met: 1) public funds from taxation were being disbursed by a political subdivision and a law was violated, and 2) the petitioners were directly affected by the alleged act.

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50 views

Madamba v. Lara (2009)

Manuel Mamba, et al. Vs. Edgar R. Lara, et al. involved a dispute over a governor authorizing the appointment of a financial advisor for bond issuance without competitive bidding. The petitioners filed suit arguing the contracts were illegal. The RTC dismissed the petitions. The Supreme Court ruled the petitioners had legal standing as taxpayers because public funds were being disbursed and two requirements for a taxpayer suit were met: 1) public funds from taxation were being disbursed by a political subdivision and a law was violated, and 2) the petitioners were directly affected by the alleged act.

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nenenenene
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Manuel Mamba, et al. Vs. Edgar R. Lara, et al., G.R. No.

165109, December 14,


2009
Second Division
Del Castillo

FACTS: The SP of Cagayan passed a resolution authorizing Gov. Lara. To engage the
services of and appoint Preferred Ventures Corporation as financial advisor or
consultant for the issuance and flotation of bonds to fund the priority projects of the
governor without cost and commitment. It also ratified the MOA and provided that
the provincial government of Cagayan shall pay Preferred Ventures Corporation a one-
time fee of 3% of the amount of bonds floated. The governor was also authorized to
negotiate, sign and execute contracts pertinent to the flotation of the bonds of the
province in an amount not to exceed P500 million for the construction and
improvement of his priority projects. The petitioners filed for an Annulment of
Contracts and Injunction with prayer for a Temporary Restraining Order/Writ of
Preliminary Injunction. The RTC dismissed their petitions.

ISSUE: Do the petitioners have legal standing to sue as taxpayers?

RULING: Yes. 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. The two requisites for a taxpayer’s suit are: (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. In this case, the two requisites were met. The
governor requested the Sangguniang Panlalawigan to appropriate an amount of P25
million for the interest of the bond. The Supreme Court explained that the court, in
recent cases, has relaxed the stringent direct injury test bearing in mind that locus standi
is a procedural technicality. By invoking transcendental importance, paramount public
interest, or far-reaching implications, ordinary citizens and taxpayers were allowed to
sue even if they failed to show direct injury. In cases where serious legal issues were
raised or where public expenditures of millions of pesos were involved, the court did
not hesitate to give standing to taxpayers.

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