Magtajas v.
Pryce Properties Corporation
FACTS:
In 1992, PAGCOR decided to expand their casino operations into
Cagayan de Oro and leased a portion of a building owned by Pryce
Properties. The city along with other civic groups wanted to stop
PAGCOR from operating a casino in Cagayan de Oro (herein,
CDO), calling such an affront to the welfare of the city.
Therefore, the Sangguniang Panlungsod (herein, SP) of CDO
enacted Ordinance 3353 which would prohibit and cancel business
permits of establishments allowing or using its premises (or a
portion of it) for casino operations. Furthermore, the SP enacted
another Ordinance (Ordinance 3375-93) which outright prohibits
the operation of Casinos as a measure to suppress any activity
inimical to public morals and general welfare of the people and/or
regulate or prohibit such activity pertaining to amusement or
entertainment in order to protect social and moral welfare of the
community.
Pryce Properties (owner of the portion of the lot to be leased to
PAGCOR) assailed both mentioned ordinances before the CA which
succeeded. The CA subsequently declared the ordinances invalid.
However, the Mayor brought the case to the SC to have the
ordinances declared to be valid.
The Mayors argument for the validity of the assailed ordinances
prohibiting operating casinos in CDO are as follows:
1. CDO is empowered to enact ordinances and vested with
police power under the General Welfare Clause (Section
16 of the LGC) and pursuant to such Clause, a Local
Government Units Powers, Duties, Functions (Section
458 of the LGC) include the power to enact
ordinances to prevent, suppress, and impose appropriate
penalties for..gambling and other prohibited games of
chance.
2. Under these provisions, the SP has the power to prohibit
casinos and all other games of chances in the city. Even
if PD 1869 (PAGCORs charter) permits operating
casinos, it is subordinate to whatever ordinances
enacted by the LGU pursuant to the LGC
3. The Mayor also argues that this is consistent with the
policy of local autonomy mandated in the Constitution.
4. Using Statutory Construction, the fact that the LGC
expressly authorized the local government units to
prevent and suppress gambling and other prohibited
games of chance, it meant all forms of gambling. Ubi lex
non distinguit, nec nos distinguere debemos or where
the law does not distinguish, one does not distinguish. It
further argued that if the law would have expressly
excluded gambling authorized by special law, it would
have done so. Instead of stating gambling and other
prohibited games of chance it should have stated
gambling and other prohibited games of chance
EXCEPT those authorized by special law
5. The Mayor also argues that the LGC has already
modified PD 1869 since the LGC was a later enactment
than PD 1869. Basing on this argument, the LGC has
modified pro tanto or modified PD 1869 only to the
extent regarding operation of casinos in LGUs. The
mayor argues that with the enactment of the LGC,
PAGCOR which used to have the power to operate
casinos anywhere in the country, can now only do so
without objection from the local government unit where
it will be operating since the LGC has modified PD 1869.
6. Lastly, the mayor argues that gambling is intrinsically
harmful
Issue: Can a local government unit, pursuant to the general
welfare clause and Section 458 of the LGC, enact an ordinance to
prohibit the operation of Casinos within its territorial jurisdiction
despite the fact that PAGCORs charter (PD 1869) empowers it to
operate casinos nationwide?
Ruling:
No, a local government cannot enact an ordinance in
contravention of a statute.
An ordinance is valid provided it follows the following substantive
requirements:
1. It must not contravene the constitution or any statute
2. It must not be unfair or oppressive
3. It must not be partial or discriminatory
4. It must not prohibit but may regulate trade
5. It must be general and consistent with public policy
6. It must not be unreasonable
Under Sec. 458, LGUs are empowered to prohibit gambling and
other prohibited games of chance. The SC explained that what
the LGU is allowed to prohibit are games of chance that are
prohibited. Logically, an LGU is not allowed to prohibit, by
ordinance or otherwise, games of chance that are no prohibited by
law.
Furthermore, the ordinances enacted by the SP of CDO are invalid
since it contravenes a statute (PD 1869). The argument of the
Mayor that the LGC modified pro tanto PD 1869 so that PAGCOR
can now only operate casinos if the LGUs do not object to it, is
flawed.
As pointed out by the SC, the Mayors argument was merely
playing with words when they averred that the LGC modified
pro tanto PD 1869. What the Mayor was actually saying in that
argument was that the LGC has already repealed PD 1869 since
the Code, using the Mayors argument, has shorn PAGCOR of all
power to centralize and regulate casinos. Basically, the SC
explained that using the Mayors argument that Section 458
mandates the prohibition of all kinds of gambling (illegal or legal)
by the LGUs, then PAGCOR can no longer operate casinos
anywhere at all. Therefore, there is a clash between the LGC and
PD 1869 IF we were to use the argument of the Mayor.
However, there is no proof of express repeal of PD 1869 by the
LGC since the repealing clause (sec. 534) listed down the laws and
provisions expressly repealed by the LGC and PD 1869 is not
included.
Furthermore, there is also no implied repeal in this case given the
principle that implied repeal is frowned upon by our legal system
and the Court must exert all effort to harmonize all laws before
accepting an implied repeal. In the case at bar, there is no
indication at all of an implied repeal of PD 1869. In fact, PD 1869
and the LGC can be harmonized: under the LGC, local government
units shall suppress all kinds of gambling EXCEPT those allowed by
statutes like PD 1869.