G.R. No. 100152 ; March 31, 2000
Acebedo Optical Company, Inc., petitioner, vs. The Honorable Court of Appeals, Hon. Mamindiara Mangotara, in his capacity as Presiding Judge of the RTC, 12th Judicial Region, Br. 1, Iligan City; Samahang Optometrist Sa Pilipinas — Iligan City Chapter, Leo T. Cahanap, City Legal Officer, and Hon. Camilo P. Cabili, City Mayor of Iligan, respondents.

FACTS

Petitioner Acebedo Optical Company, Inc. applied for a business permit in Iligan City. The City Mayor issued the permit but imposed restrictive conditions, including prohibitions on operating an optical clinic, examining or prescribing eyeglasses, and selling prescription lenses without an independent optometrist’s prescription. Later, the Samahang Optometrist sa Pilipinas (SOPI) complained that Acebedo violated these conditions. After an investigation by the City Legal Officer, the City Mayor cancelled Acebedo’s permit. Acebedo filed a petition for certiorari, prohibition, and mandamus in the Regional Trial Court (RTC), alleging denial of due process, equal protection, and that the Mayor lacked authority to impose such conditions. The RTC dismissed the petition for failure to exhaust administrative remedies. The Court of Appeals affirmed the dismissal.

ISSUE

Whether the City Mayor acted within his authority in imposing the special conditions on Acebedo’s business permit and whether such conditions, once accepted, became binding as a private contract.

RULING

The Supreme Court ruled that the City Mayor acted within his authority. The legal logic is anchored on the Mayor’s delegated police power under the Local Government Code. The Court clarified that a business permit is not a contract between the government and the grantee but a privilege granted under the state’s police power to regulate businesses for public welfare. The conditions imposed were merely a restatement of the prohibitions under the Optometry Law ( R.A. No. 1998 ), which reserves the practice of optometry, including examination and prescription, to duly licensed individuals and prohibits corporations from engaging in such practice. The Court emphasized that while a corporation like Acebedo can engage in the commercial aspects of selling optical goods, it cannot perform acts constituting the practice of optometry. Therefore, the Mayor’s conditions were a valid exercise of regulatory power to ensure compliance with existing law, not an ultra vires act. The Court also held that the principle of estoppel does not apply to validate an otherwise unauthorized condition, but here, the conditions were authorized. Consequently, the petition was denied, upholding the Mayor’s actions and the permit’s cancellation for violations.