GR 115044; (January, 1995) (Digest)
G.R. No. 115044 & G.R. No. 117263. January 27, 1995.
HON. ALFREDO S. LIM, et al. vs. HON. FELIPE G. PACQUING, et al. / TEOFISTO GUINGONA, JR., et al. vs. HON. VETINO REYES, et al.
FACTS
These consolidated cases involve the validity of a jai-alai franchise granted to Associated Development Corporation (ADC) by the City of Manila under Ordinance No. 7065. In 1988, the Regional Trial Court (RTC) of Manila, Branch 40, under Judge Felipe G. Pacquing, ordered the Manila Mayor to issue the corresponding permit/license to ADC. This 1988 judgment became final. In 1994, upon ADC’s motion, Judge Pacquing issued orders directing Mayor Alfredo Lim to execute the 1988 judgment and issue the permit, prompting G.R. No. 115044, which initially challenged these orders as grave abuse of discretion.
Subsequently, Executive Secretary Teofisto Guingona, Jr., citing unresolved legal questions regarding the franchise’s validity under Presidential Decree No. 771 and other laws, directed the Games and Amusements Board (GAB) to withhold authority from ADC. ADC then filed a new case before the RTC of Manila, Branch 40, under Judge Vetino Reyes, which issued a temporary restraining order and later a writ of preliminary mandatory injunction against the Executive Secretary and GAB to compel them to issue the authority to ADC. This led to G.R. No. 117263.
ISSUE
The primary issue is whether Associated Development Corporation possesses a valid and subsisting franchise to operate jai-alai in Manila.
RULING
The Supreme Court ruled that ADC does NOT have a valid franchise. The legal logic proceeds from the fundamental principle that a franchise to operate a jai-alai fronton is a privilege emanating from the sovereign authority of the state. The power to grant such franchises was withdrawn from local governments by Executive Order No. 392, series of 1951, which transferred regulatory authority to the Games and Amusements Board. This withdrawal was absolute and complete. Consequently, when the City of Manila enacted Ordinance No. 7065 in 1971 purporting to grant ADC a franchise, it no longer possessed the legislative power to do so. An ordinance enacted without the requisite authority is void.
The Court further clarified that the 1988 RTC decision, which ordered the issuance of the permit based on this void ordinance, could not validate the franchise. A judgment based on a void law is itself void and creates no rights. The orders of Judges Pacquing and Reyes, which sought to enforce this void judgment and restrain the national government, were issued with grave abuse of discretion. The state, through the GAB, retains the plenary power to regulate and grant authority for jai-alai operations, and local governments cannot contravene national law. Therefore, all orders compelling the issuance of a permit or authority to ADC were nullified.