Lim vs.

Pacquing
240 SCRA 649
FACTS
Associate Development Corporation (ADC) filed a motion for execution of a final judgment rendered earlier which
ordered the Mayor of the City of Manila, Hon. Alfredo S. Lim, to immediately issue to ADC the permit/license to
operate jai-alai in Manila under Manila Ordinance No. 7065. Respondent Judge Pacquing issued in a civil case the
following orders which were assailed by Mayor Lim:
1.
2.
3.

Order dated 28 March 1994 directing Mayor Lim to issue the permit/license to operate the jai-alai in favor of
ADC;
Order dated 11 April 1994 directing Mayor Lim to explain why he should not be cited for contempt for noncompliance with the order dated 28 March 1994;
Order dated 20 April 1994 reiterating the previous order directing Mayor Lim to immediately issue the
permit/license to ADC

Petitioner Teofisto Guingona, Jr., as executive secretary, issued a directive to then chairman of the Games and
Amusement Board (GAB) Francisco R. Sumulong, Jr. to hold the grant of authority to ADC to operate the jai-alai in
the City of Manila until the following legal questions are properly resolved:
a.
b.

WON PD 771 (which revoked all existing jai-alai franchises issued by local governments as of August 20,
1975) is constitutional;
Whether the City of Manila had the power to issue a jai-alai franchise in view of Executive Order No. 392
(which transferred from local governments to the GAB the power to regulate jai-alai)

ADC then filed another petition seeking to prevent GAB from withdrawing the provisional authority that had earlier
been granted to ADC. The RTC of Manila, through Judge Vetino Reyes, issued a TRO enjoining the GAB from
withdrawing ADCs provisional authority. Said TRO was then converted into a writ of preliminary injunction upon
ADCs posting of a bond.
Subsequently, the Republic of the Philippines, through the GAB, intervened in the case and the respondents were
made to comment on the motions filed by GAB. Meanwhile, Judge Reyes issued another order, this time, granting
ADC a writ of preliminary mandatory injunction against Guingona and GAB to compel them to issue in favor of ADC
the authority to operate the jai-alai. Guingona and the new GAB chairman then filed another petition assailing the
order of Judge Reyes.
ISSUES
1.

WON intervention by the Republic of the Philippines at this stage of the proceedings is proper;

2.

WON PD 771 is constitutional;

3.

WON the Associated Development Corporation has a valid and subsisting franchise to maintain and operate
the jai-alai;

4.

WON there was grave abuse of discretion committed by respondent Judge Reyes in issuing the TRO (later,
writ of preliminary injunction) and the writ of preliminary mandatory injunction

RULING
1.

YES. The State cannot be put in estoppel by the mistakes or errors, if any, of its officials or agents. The
Republic is intervening in the exercise, not of its business or propriety functions, but in the exercise of its
governmental functions to protect public morals and promote the general welfare.

2.

YES. PD No. 771 is valid and constitutional. It is a valid exercise of the inherent police power of the state.

3.

NO. The Congress did not delegate to the City of Manila the power to franchise wagers or betting,
including the jai-alai, but retained for itself such power to franchise. What Congress delegated to the City of
Manila in R.A. No. 409, with respect to wagers or betting, was the power to license, permit or regulate
which therefore means that a license or permit issued by the City of Manila to operate a wager or betting

activity, such as the jai-alai where bets are accepted, would not amount to something meaningful UNLESS
the holder of the permit or license was also FRANCHISED by the national government to so operate. Since
ADC has no franchise from Congress to operate the jai-alai, it may not so operate even if it has license or
permit from the City Mayor to operate the jai-alai in the City of Manila.

4. YES. Respondent judge should have taken judicial notice of Republic Act No. 954 and PD 771, under
Section 1 rule 129 of the Rules of court. These laws negate the existence of any legal right on the part of
ADC to the reliefs it sought so as to justify the issuance of a writ of preliminary injunction. Since PD No. 771
and Republic Act No. 954 are presumed valid and constitutional until ruled otherwise by the Supreme Court
after due hearing, ADC was not entitled to the writs issued and consequently, there was grave abuse of
discretion in issuing them.