GR 103533; (December, 1998) (Digest)
G.R. No. 103533 December 15, 1998
MANILA JOCKEY CLUB, INC. AND PHILIPPINE RACING CLUB, INC., petitioners, vs. THE COURT OF APPEALS AND PHILIPPINE RACING COMMISSION, respondents.
FACTS
Petitioners Manila Jockey Club, Inc. (MJCI) and Philippine Racing Club, Inc. (PRCI) were granted franchises by Republic Act Nos. 6631 and 6632, respectively, to operate horse races on specific days (Saturdays, Sundays, and official holidays). These laws allocated “breakages” to designated beneficiaries (provincial/city hospitals, rehabilitation of drug addicts, the Philippine Amateur Athletes Federation, and charitable institutions). Presidential Decree No. 420 created the Philippine Racing Commission (PHILRACOM) with exclusive control over horse racing. PHILRACOM authorized the holding of additional mid-week races (Wednesdays starting 1976, Thursdays in 1984, and Tuesdays starting 1985). In 1978, PHILRACOM opined that breakages from these additional Wednesday races belonged to the racing clubs. Petitioners subsequently used breakages from all mid-week races for their own purposes. In 1986, Executive Orders Nos. 88 and 89 amended the franchise laws, reallocating breakages, with a share now allotted to PHILRACOM. In 1987, the Office of the President opined that PHILRACOM’s share covered breakages from all races, including mid-week races. PHILRACOM then demanded remittance of its share from the mid-week races. Petitioners filed a Petition for Declaratory Relief. The Regional Trial Court ruled that the Executive Orders did not cover mid-week races and that petitioners owned the breakages from those races. The Court of Appeals reversed, declaring that the amended franchise provisions covered breakages from all racing days and ordered petitioners to remit PHILRACOM’s share.
ISSUE
Whether Executive Orders Nos. 88 and 89, which amended the franchise laws (R.A. Nos. 6631 and 6632) regarding the allocation of “breakages,” apply to and cover the disposition of breakages derived from mid-week races (Tuesdays, Wednesdays, Thursdays) authorized by PHILRACOM but not explicitly mentioned in the original franchise acts.
RULING
The Supreme Court DENIED the petition and AFFIRMED the decision of the Court of Appeals. The Court held that Executive Orders Nos. 88 and 89 cover the disposition and allocation of breakages derived from all races conducted by petitioners on any racing day, including those mid-week races authorized by PHILRACOM. The franchise laws, as amended, contain general provisions on the allocation of breakages that apply irrespective of the specific day the races are held. The authority of PHILRACOM to schedule races is separate from the statutory scheme for distributing breakages. The additional racing days authorized by PHILRACOM did not create a new class of breakages exempt from the distribution mandate of the franchise laws. Therefore, petitioners are obligated to remit to PHILRACOM its statutory share of the breakages from the mid-week races.