Lim v.

Pacquing
G.R. No. 115044 - 240 SCRA 649 - January 27, 1995

To be discussed below are two consolidated cases bearing GR No. 115044 and GR
No. 117263. Petitioner and respondent for the first are Mayor Alfredo Lim and Judge
Pacquing respectively. Petitioners for the second case are Teofisto Guingona, Jr. and
Dominador R. Cepeda while the respondents are Judge Vetino Reyes and Associated
Development Corporation.

FACTS:
Judge Pacquing issued an order directing Manila mayor Alfredo S. Lim to issue a
permit/license to operate a jai-alai in favor of Associated Development Corporation
(ADC). Due to the mayor’s noncompliance, the judge issued an order directing mayor Lim
to explain why he should not be cited in contempt. Another order was then sent afterwards
reiterating the order to grant license/permit to ADC.
Mayor Lim filed petition in GR No. 115044 but the same was dismissed. An order
to immediately release the permit/license was then passed.

Executive Secretary Guingona issued a directive to then chairman of the Games and
Amusements Board (GAB), Francisco R. Sumulong, Jr. to hold the grant of the license.
This prompted ADC to file a case for prohibition, mandamus, and injunction with prayer
for temporary restraining order and preliminary injunction, which were granted by the RTC
Judge Reyes.
Thus, Guingona and Sumulong filed a petition assailing the orders of the judge.

The Court analyzed the pertinent laws on the subject:

In 1951, Executive Order No. 392 transferred the authority to regulate jai-alais from
local government to the Games and Amusements Board (GAB).
In 1953, Republic Act No. 954 was passed, entitled " An Act to Prohibit With Horse
Races and Basque Pelota Games (Jai-Alai), …" The law stated that for a person to operate
a basque pelota(jai-alai) game, he must have been granted a legislative franchise.
In 1971, however, the Municipal Board of Manila passed Ordinance No. 7065
entitled "An Ordinance Authorizing the Mayor To Allow And Permit The Associated
Development Corporation To Establish, Maintain And Operate A Jai-Alai In The City Of
Manila…."
In 1975, Presidential Decree No. 771 was issued entitled "Revoking All Powers and
Authority of Local Government(s) To Grant Franchise, License or Permit And Regulate
Wagers Or Betting By The Public On … Jai-Alai Or Basque Pelota, …", and Section 3
thereof, expressly revoked all existing franchises and permits issued by local governments.
Subsequently, Presidential Decree No. 810, entitled "An Act granting The Philippine
Jai-Alai And Amusement Corporation A Franchise To Operate, Construct And Maintain
A Fronton For Basque …" was promulgated.
 However, in 1987, then President Aquino issued Executive Order No. 169 expressly
repealing PD 810 and revoking and cancelling the franchise granted to the Philippine Jai-
Alai and Amusement Corporation.

ISSUE:
Whether ADC possessed a valid franchise to maintain and operate a jai-alai.
Whether PD No. 771 was in violation of the equal protection clause and non-
impairment clause.

HELD:
ADC did not possess a valid franchise.

Congress did not delegate to the City of Manila the power "to franchise" the jai-alai,
but retained for itself such power "to franchise". It is still necessary for a person to seek a
franchise from the national government to operate. The authority to grant franchises for the
operation of jai-alai frontons is in Congress, while the regulatory function is vested in the
GAB. Such regulatory functions include the power to license, permit, or regulate.
Thus, since ADC did not obtain a franchise from Congress, it was not allowed to
operate a jai-alai.

PD No. 771 was not in violation of the non-impairment clause.

“[A] franchise is…a mere privilege specially in matters which are within the
government's power to regulate and even prohibit through the exercise of the police power.
Thus, a gambling franchise is always subject to the exercise of police power for the public
welfare.”
“[j]ai-alai, when played for bets, is pure and simple gambling.” It cannot be
analogous to the operation of a public utility for it is a mere privilege.

PD No. 771 was not in violation of the equal protection clause.

“There was no violation by PD No. 771 of the equal protection clause since the
decree revoked all franchises issued by local governments without qualification or
exception.”
“ADC was not singled out when all jai-alai franchises were revoked.”

Joseph Kim O. Buenafe

Constitutional rights are not absolute. The inherent police power of the state may at all
times be invoked in order to preserve the interests of the common good over the individual.