G.R. No. 137149, July 28, 1999
Ismael A. Mathay, Jr., in his capacity as Mayor of Quezon City, petitioner, vs. Felt Foods, Inc., respondent.

FACTS

Petitioner Mayor Ismael Mathay, Jr. issued a temporary business permit to respondent Felt Foods, Inc. to operate “Club Georgio,” valid until December 31, 1997. In November 1997, based on police reports of violations (e.g., lack of sanitary permits), the Mayor ordered the establishment’s closure and initiated an investigation. After the respondent’s general manager failed to appear in the investigation, the Mayor cancelled the permit on December 15, 1997. The permit then expired by its own terms on December 31, 1997.
On February 16, 1998, respondent filed a case with the Regional Trial Court (RTC) to annul the closure order, alleging a violation of due process, and prayed for a writ of preliminary mandatory injunction to compel the Mayor to allow reopening. The RTC granted the writ. The Mayor moved to dismiss, arguing the cause of action was mooted by the permit’s expiration on December 31, 1997, but the RTC denied the motion. The Court of Appeals sustained the RTC, ruling no grave abuse of discretion was committed and that the factual basis for the closure could be threshed out during trial.

ISSUE

Whether the respondent’s cause of action and the propriety of the writ of preliminary mandatory injunction were rendered moot and academic by the expiration of its temporary business permit on December 31, 1997.

RULING

Yes. The Supreme Court granted the petition, set aside the Court of Appeals decision, dissolved the injunction, and ordered the dismissal of the RTC case. The legal logic is anchored on the doctrine of mootness. The respondent’s complaint sought to annul the closure order and compel the reopening of the business via injunction, asserting a property right under the license. This asserted right was entirely derived from the temporary business permit. When that permit expired by its own terms on December 31, 1997, the respondent ceased to have any legal right to operate the business that the courts could protect. The core issue of the closure order’s validity was thus rendered moot by this supervening event.
The Court emphasized that courts will not adjudicate moot cases. The expiration of the permit foreclosed any right to demand specific performance, such as reopening under the expired license. Any injury from the alleged unlawful closure during the permit’s term should be pursued through a claim for damages, not an injunction, which is a remedy to protect an existing right. Since the respondent’s complaint did not claim damages and the license had expired, the RTC and the Court of Appeals erred in upholding the injunction. The writ effectively allowed operation without a permit, usurping the Mayor’s administrative function.