LIM vs.

PACQUING
September 1, 1994
FACTS:
The City of Manila passed an Ordinance on 1971 allowing the operation of jai-alai. PD
771, which was promulgated after declaration of Martial Law, revoked the powers of
LGU's to grant permits or licenses and cancelling all existing franchises to operate jaialais. Less than two months after PD 771 was issued, the Philippine Jai-Alai and
Amusement Corporation was granted a franchise to operate a jai-alai under PD 810.
However, after EDSA Revolution, PD 810 was repealed. When private respondent
sought to resumeits franchise under the Ordinance, the trial court granted it and ordered
the Mayor to grant the necessary permit. Mayor Lim refused.
ISSUE:
Whether or not a Mayor can refuse to issue a permit to a business which has been
granted a franchise by the Congress.
RULING:
NO. Mayor Lim's vow to clean the city of vices, like gambling, is commendable. But in
the process, he should bear in mind that there are forms of gambling, and jai-alai is one
them, that Congress has deigned to allow. At any rate, the unilateral cancellation of the
franchise, which has the status of a contract, without notice, hearing and justifiable
cause is intolerable in any system where the Rule of Law prevails.