G.R. No. 115044 September 1, 1994.
HON. ALFREDO S. LIM, in his capacity as Mayor of Manila; and THE CITY OF MANILA, petitioners, vs. HON. FELIPE G. PACQUING, as Judge, Regional Trial Court of Manila; and ASSOCIATED DEVELOPMENT CORPORATION, respondents.

FACTS

On September 7, 1971, the Municipal Board of Manila passed Ordinance No. 7065, granting private respondent Associated Development Corporation a franchise to operate a jai-alai in the city. Private respondent took preparatory steps to establish the jai-alai. On August 20, 1975, President Ferdinand E. Marcos promulgated Presidential Decree No. 771, revoking the powers of local governments to grant such franchises and canceling all existing ones. Subsequently, P.D. No. 810 granted a franchise to the Philippine Jai-Alai and Amusement Corporation. After the EDSA Revolution, President Corazon C. Aquino issued Executive Order No. 169, repealing P.D. No. 810. On May 5, 1988, private respondent sought to resume operations under its franchise, but Mayor Gemiliano C. Lopez denied the request. Private respondent then filed a petition for mandamus and specific performance (Civil Case No. 88-45660). On September 9, 1989, the Regional Trial Court, Branch 40, Manila, ruled that Ordinance No. 7065 created a binding contract and ordered the City to issue the necessary permit/license. Mayor Lopez appealed but later withdrew the appeal, making the judgment final and executory. The City of Manila later filed an action to annul the franchise (Civil Case No. 91-58913), which was dismissed, and no appeal was taken. When Mayor Alfredo S. Lim assumed office, he refused to issue the permit. Private respondent filed a motion to compel issuance. On March 28, 1994, the trial court granted the motion, ordering Mayor Lim to issue the permit upon compliance with requirements. Orders dated April 11, 1994, and April 20, 1994, denied reconsideration and reiterated the directive. Petitioners filed this petition for certiorari.

ISSUE

Whether the trial court committed grave abuse of discretion in issuing the Orders dated March 28, 1994, April 11, 1994, and April 20, 1994, which compelled Mayor Lim to issue a permit/license to private respondent pursuant to Ordinance No. 7065.

RULING

The Supreme Court dismissed the petition. The Court held that the trial court did not commit grave abuse of discretion. The decision in Civil Case No. 88-45660 had become final and executory after the withdrawal of the appeal. The principle of res judicata barred relitigation of the issue of the validity and enforceability of Ordinance No. 7065. The Court found that P.D. No. 771 could not validly revoke the franchise granted under Ordinance No. 7065, as it constituted a contract between the City of Manila and private respondent, and its impairment would violate the non-impairment clause of the Constitution. The Court also noted that the City of Manila had waived the defense of repeal by P.D. No. 771 by not pleading it in the original mandamus case and by its subsequent actions, including issuing permits and collecting fees pursuant to the final judgment. The Orders of the trial court were merely for the execution of a final judgment, which is a ministerial duty.