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13) Raoul Del Mar VS.

G.R. No. 138298
[November 29, 2000]
Facts: The Philippine Amusement and Gaming Corporation (PAGCOR) is a government-owned
and controlled corporation organized and existing under PD No. 1869 which was enacted on
July 11, 1983. Pursuant to Sections 1 and 10 of P.D. No. 1869,PAGCOR requested for legal
advice from the Secretary of Justice as to whether or not it is authorized by its Charter to
operate and manage jai-alai frontons in the country. The Secretary of Justice opined that "the
authority of PAGCOR to operate and maintain games of chance or gambling extends to jai-alai
which is a form of sport or game played for bets and that the Charter of PAGCOR amounts to a
legislative franchise for the purpose." Similar favorable opinions were received by PAGCOR
from the Office of the Solicitor General and the Office of the Government Corporate Counsel.
Thus, PAGCOR started the operation of jai-alai frontons.
On May 6, 1999, petitioner Raoul B. del Mar initially filed a Petition for Prohibition to
prevent respondent PAGCOR from managing and/or operating the jai-alai or Basque pelota
games, by itself or in agreement with Belle Corporation, on the ground that the controverted act
is patently illegal and devoid of any basis either from the Constitution or PAGCOR's own
However, on June 17, 1999, respondent PAGCOR entered into an Agreement with
private respondents Belle Jai-Alai Corporation (BELLE) and Filipinas Gaming Entertainment
Totalizator Corporation (FILGAME) wherein it was agreed that BELLE will make available to
PAGCOR the required infrastructure facilities including the main fronton, as well as provide the
needed funding for jai-alai operations with no financial outlay from PAGCOR, while PAGCOR
handles the actual management and operation of jai-alai.
Thus, on August 10, 1999, petitioner Del Mar filed a Supplemental Petition for
Certiorari questioning the validity of said Agreement on the ground that PAGCOR is without
jurisdiction, legislative franchise, authority or power to enter into such Agreement for the
opening, establishment, operation, control and management of jai-alai games.
Issue: WON the franchise granted to PAGCOR includes the right to manage and operate jaialai
Held: No. On July 11, 1983, President Marcos issued P.D. No. 1869 which reiterated the nature
and scope of PAGCOR's existing franchise to maintain gambling casinos (not a franchise to
operate jai-alai). Section 10 of P.D. No. 1869, from the beginning of its history, was never meant
to confer PAGCOR with a franchise to operate jai-alai. It is a reiteration of Section 1 of P.D. No.
1067-B which is a franchise to maintain gambling casinos alone. Also, the legislative practice is
that for a franchise to operate jai-alai, it should be granted solely for that purpose and the terms
and conditions of the grant are unequivocably defined by the grantor. Such express grant and its
conditionalities protective of the public interest are evidently wanting in P.D. No. 1869, the
present Charter of PAGCOR. There is no reason to resist the beguiling rule that acts of
incorporation, and statutes granting other franchises or special benefits or privileges to
corporations, are to be construed strictly against the corporations; and whatever is not given in
unequivocal terms is understood to be withheld.