Magtajas vs. Pyrce Properties Corporation, Inc.

G.R. No. 111097, July 20, 1994

Facts: In 1992, PAGCOR decided to expand its operations to Cagayan de Oro City and leased a
portion of a building belonging to Pyrce Properties Corporation, Inc. to be the venue of the
casino. Everyone in the town opposed the project, and as a response, the Sangguniang
Panlungsod of Cagayan de Oro City enacted Ordinance No. 3353 on December 7, 1992
prohibiting the issuance of business permit and cancelling existing business permit to any
establishment for the using and allowing its premises to be used or portion thereof for the
operation of casino. On January 4, 1993, it adopted a sterner Ordinance no. 3375-93 prohibiting
the operation of casino and providing penalty for violation therefor. Respondents assailed the
ordinances before the CA and the latter declared them invalid. Hence, this petition for review
filed by Petitioners.

Issue: Whether or not Cagayan de Oro City exercised its police power properly

Held: NO. Cagayan de Oro City is empowered to enact ordinances for the purpose indicated in
the Local Government Code. It is expressly vested with the police power under what is known as
the General Welfare Clause (sec. 16 of LGC). In addition, Section 458 of the said code also
authorizes the local government units to regulate properties and businesses within their territorial
limits in the interest of the general welfare. However, the ordinances enacted by the Sangguniang
Panlungsod of Cagayan de Oro City are invalid because they violate P.D. 1869 (charter of
PAGCOR). Municipal governments are only agents of the national government; the former
exercise only delegated legislative powers conferred on them by Congress as the national
lawmaking body. The congress retains control of the local government units although in
significantly reduced degree now than under our previous constitutions. The power to create still
includes the power to destroy – the power to grant still includes the power to withhold or recall.
It was not competent for the Sangguniang Panlungsod of Cagayan de Oro City to enact said
ordinances since casino gambling is authorized by P.D. 1869, which has the status of a statute
that cannot be amended or nullified by a mere ordinance.