CHAVEZ VS NHA

Facts: Petitioner Francisco Chavez in his capacity as taxpayer seeks to declare null and void the
Joint Venture Agreement (JVA) between the NHA and R-II Builders Inc (RBI) for being
unconstitutional and invalid, and to enjoin respondents particularly respondent NHA from
implementing and/or enforcing the said project and other agreements related thereto. On March 1,
1988, then President Corazon C. Aquino issued Memorandum Order No. 161 (MO 161) approving
and directing the implementation of the Comprehensive and Integrated Metropolitan Manila Waste
Management Plan. Specifically, respondent NHA was ordered to conduct feasibility studies and
develop low-cost housing projects at the dumpsite and absorb scavengers in NHA resettlement/lowcost housing projects.
Pursuant to MO 161-A, NHA prepared the feasibility studies which resulted in the formulation of the
Smokey Mountain Development Plan and Reclamation of the Area Across R-10 or the Smokey
Mountain Development and Reclamation Project (SMDRP). SMDRP aimed to convert the Smokey
Mountain dumpsite into a habitable housing project, inclusive of the reclamation of the area across
R-10, adjacent to the Smokey Mountain as the enabling component of the project. Once finalized, the
Plan was submitted to President Aquino for her approval.
On January 17, 1992, President Aquino proclaimed MO 415, approving and directing the
implementation of the SMDRP through a private sector joint venture. Said MO stipulated that the
land area covered by the Smokey Mountain dumpsite is conveyed to the NHA as well as the area to
be reclaimed across R-10. In the same MO 415, President Aquino created an Executive Committee
(EXECOM) to oversee the implementation of the Plan and an inter-agency technical committee
(TECHCOM) was created composed of the technical representatives of the EXECOM. Based on the
evaluation of the pre-qualification documents, the EXECOM declared the New San Jose Builders,
Inc. and RBI as top two contractors. Thereafter, TECHCOM submitted its recommendation to the
EXECOM to approve the RBI proposal which garnered the highest score.
On October 7, 1992, President Ramos authorized NHA to enter into a JVA with RBI. Afterwards,
President Ramos issued Proclamation No. 465 increasing the proposed area for reclamation across
R-10 from 40 hectares to 79 hectares. On September 1, 1994, pursuant to Proclamation No. 39, the
DENR issued Special Patent No. 3591 conveying in favor of NHA an area of 211,975 square meters
covering the Smokey Mountain Dumpsite. The land reclamation was completed in August 1996.
Sometime later in 1996, pursuant likewise to Proclamation No. 39, the DENR issued Special Patent
No. 3598 conveying in favor of NHA an additional 390,000 square meter area. After some time, the
JVA was terminated. RBI demanded the payment of just compensation for all accomplishments and

costs incurred in developing the SMDRP plus a reasonable rate of return. In a Memorandum of
Agreement (MOA) executed by NHA and RBI, both parties agreed to terminate the JVA and other
subsequent agreements, which stipulated, among others, that unpaid balance may be paid in cash,
bonds or through the conveyance of properties or any combination thereof.

ISSUE: Whether petitioner has the requisite locus standi to file this case

HELD:
Respondents argue that petitioner Chavez has no legal standing to file the petition.
Only a person who stands to be benefited or injured by the judgment in the suit or
entitled to the avails of the suit can file a complaint or petition.[47] Respondents
claim that petitioner is not a proper party-in-interest as he was unable to show that
he has sustained or is in immediate or imminent danger of sustaining some direct
and personal injury as a result of the execution and enforcement of the assailed
contracts or agreements.[48] Moreover, they assert that not all government
contracts can justify a taxpayers suit especially when no public funds were utilized
in contravention of the Constitution or a law.
We explicated in Chavez v. PCGG that in cases where issues of transcendental
public importance are presented, there is no necessity to show that petitioner has
experienced or is in actual danger of suffering direct and personal injury as the
requisite injury is assumed. We find our ruling in Chavez v. PEA as conclusive
authority on locus standi in the case at bar since the issues raised in this petition
are averred to be in breach of the fair diffusion of the countrys natural resources
and the constitutional right of a citizen to information which have been declared to
be matters of transcendental public importance. Moreover, the pleadings especially
those of respondents readily reveal that public funds have been indirectly utilized in
the Project by means of Smokey Mountain Project Participation Certificates (SMPPCs)
bought by some government agencies.
Hence, petitioner, as a taxpayer, is a proper party to the instant petition before the
court.