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165109 Facts: The Sangguniang Panlalawigan of Cagayan passed several resolutions authorizing Gov. Edgar Lara to negotiate sign and e!ecute contracts or agree"ents for the issuance and flotation of #onds to fun the priority pro$ects of the governor and for the construction and develop"ent of a %ew Cagayan Town Center su#$ect to the approval and ratification of #y the Sangguniang Panlalawigan. Su#se&uently the planning design construction and site develop"ent of the pro$ect was awarded to 'sset (uilders Corporation. Petitioners )anuel )a"#a *ay"und Guz"an and Leonidaz Fausto a *epresentative of Cagayan and "e"#ers of the Sangguniang Panlalawigan respectively filed a petition for 'nnul"ent of Contracts entered into #y Gov. Lara in connection with the %ew Cagayan Town Center pro$ect. The Court dis"issed the petition for lac+ of course of action stating a"ong others that petitioners did not have the locus standi to file the present case as they are not parties to the &uestioned contract. ,ssue: -hether or not petitioners have locus standi to file the petition. *uling: The Supre"e Court ruled that petitioners have legal standing to sue as ta!payers. ' ta!payer is allowed to sue where there is a clai" that pu#lic funds are illegally dis#ursed or that the pu#lic "oney is #eing deflected to any i"proper purpose or that there is wastage of pu#lic funds through the enforce"ent of an invalid or unconstitutional law. .owever for a ta!payer/s suit to prosper two re&uisites "ust #e "et: 012 pu#lic funds derived fro" ta!ation are dis#ursed #y a political su#division or instru"entality and in doing so a law is violated or so"e irregularity is co""itted and 032 the

petitioner is directly affected #y the alleged act. ' ta!payer need not #e a party to the contract to challenge its validity. 's long as ta!es are involved people have a right to &uestion the contracts entered into #y the govern"ent. ,n this case although the construction of the town center would #e pri"arily sourced fro" the proceeds of the #onds a govern"ent support would still #e spent for paying the interest of the #onds. 's to the second re&uisite the court has rela!ed the stringent 4direct in$ury test5 wherein ordinary citizens and ta!payers were allowed to sue even if they failed to show direct in$ury #y invo+ing 4transcendental i"portance5 4para"ount pu#lic interest5 or 4far6reaching i"plications.5