January 27, 1995 Art III, Sec 1 FACTS: The case revolves around Ordinance No. 7065 that authorized the Mayor of the City of Manila to grant a franchise to the Associated Development Corporation for the corporation to be able to establish, maintain and operate a jai-alai in the said city. This ordinance was made before the enactment of the Martial Law. During the Martial Law, Former President Marcos issued Presidential Decree No. 771 revoking the powers of the Local Government to grant permits and cancelled all existing jaialai franchises. Corazon Aquino repealed this decree after the EDSA Revolution. The respondent then filed a petition for mandamus and specific performance compelling the Mayor to issue a permit or license in favor of Associated Development Corporation to which RTC granted. The City of Manila filed an action to annul the franchise of private respondent claiming that private respondent had abandoned its franchise granted under Ordinance No. 7065 and that said ordinance had been repealed by P.D. No. 771. Also, the petitioners claim that the trial court had traduced the law when it made it appear in its decision that Ordinance No. 7065 was still in full force and effect. The respondents, on the other hand, squarely assail the constitutionality of PD No. 771 as violative of the equal protection and non-impairment clauses of the Constitution. In this connection, counsel for ADC contends that this Court should really rule on the validity of PD No. 771 to be able to determine whether ADC continues to possess a valid franchise. ISSUES: 1. Whether or not PD 771 is violative of the equal protection and non impairment clauses of the constitution? HELD: 1. NO. PD 771 is not unconstitutional. On the alleged violation of the non-impairment and equal protection clauses of the Constitution, it should be remembered that a franchise is not in the strict sense a simple contract but rather it is more importantly, a mere privilege especially in matters which are within the government's power to regulate and even prohibit through the exercise of the police power. Thus, a gambling franchise is always subject to the exercise of police power for the public welfare. Furthermore, there was no violation by PD No. 771 of the equal protection clause since the decree revoked all franchises issued by local governments without qualification or exception. ADC cannot allege violation of the equal protection clause simply because it was the only
Prepared by: Jeah Maureen P. Dominguez, 1C
one affected by the decree, for as correctly pointed out by the government, ADC was not singled out when all jai-alai franchises were revoked.