G.R. No. L-30697 August 2, 1982
GILBERTO M. DUAVIT, in his capacity as Assistant Executive Secretary, and THE PHILIPPINE CHARITY SWEEPSTAKES OFFICE, petitioners, vs. HON. HERMINIO MARIANO, in his capacity as Judge of the Court of First Instance of Rizal, Branch X, Pasig, and MANILA JOCKEY CLUB, INC., respondents.

FACTS

The Games and Amusements Board (GAB) approved the 1969 calendar of horse races for the Manila Jockey Club, Inc. (MJC). Subsequently, the Philippine Charity Sweepstakes Office (PCSO) recommended the suspension of MJC’s license due to alleged undeclared income from charity-sponsored races. Acting on this, Assistant Executive Secretary Gilberto Duavit, by direct order dated June 4, 1969, directed the GAB to suspend MJC’s license and transfer its scheduled races to the Philippine Racing Club’s track. The GAB then notified MJC of a hearing on the charges.
MJC filed a petition for prohibition with the Court of First Instance of Rizal, arguing that Duavit acted without legal authority, as the power to issue and suspend licenses was exclusively vested by law in the GAB. Respondent Judge Herminio Mariano issued a temporary restraining order and later a writ of preliminary injunction, enjoining the implementation of Duavit’s directive and restraining the petitioners from depriving the GAB of its statutory powers.

ISSUE

Whether the respondent Judge committed grave abuse of discretion in issuing the restraining order and preliminary injunction against the implementation of the Assistant Executive Secretary’s directive suspending MJC’s license.

RULING

The Supreme Court granted the petition, but on grounds of mootness. The Court’s legal analysis proceeded in two steps. First, it examined the substantive issue of authority. The Court noted that under Republic Act No. 309, the GAB possessed the exclusive power to issue, suspend, or revoke licenses for horse racing entities. The Office of the President could only review such actions through a proper appeal from a GAB decision. Therefore, the Assistant Executive Secretary’s direct order suspending MJC’s license and transferring its races was an ultra vires act, encroaching upon the GAB’s statutory prerogatives. On this substantive point, the respondent Judge’s orders restraining the implementation of that directive were legally correct.
However, the Court ultimately set aside the challenged orders because the case had become moot and academic. Presidential Decree No. 420, which took effect in 1974, created the Philippine Racing Commission (PHILRACOM) and transferred all relevant powers over horse racing (except specific betting-related functions) from the GAB to this new entity. Consequently, the GAB no longer held the exclusive licensing authority that was the subject of the injunction. The respondent Judge could no longer enforce his orders restraining acts against the GAB’s powers, as those powers had been legislatively removed. Since the fundamental issue had been rendered ineffective by a supervening event, the petition was granted and the writs of certiorari and prohibition were issued.