8/6/2019 Magtajas v Pryce

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Magtajas v. Pryce Properties Corp. [GR 111097, 20 July 1994]Ponente: En Banc, Cruz (J): 12 concur

Facts:

The Philippine Amusement and Gaming Corporation (PAGCOR) is acorporation created directly by Presidential Decree 1869 to help centralizeand regulate all games of chance, including casinos on land and sea withinthe territorial jurisdiction of the Philippines (the constitutionality of thedecree was sustained in Basco v. Philippine Amusements and GamblingCorporation).

Cagayan de Oro City, like other local political subdivisions, is empowered toenact ordinances for the purposes indicated in the Local Government Code.It is expressly vested with the police power under what is known as theGeneral Welfare Clause embodied in Section 16. Its SangguniangPanglungsod derives its powers, duties and functions under Section 458 ofsaid Code.

In 1992, following its success in several cities, PAGCOR decided to expandits operations to Cagayan de Oro City. To this end, it leased a portion of abuilding belonging to Pryce Properties Corporation Inc., renovated andequipped the same, and prepared to inaugurate its casino there during theChristmas season.

The reaction of the Sangguniang Panlungsod of Cagayan de Oro City wasswift and hostile. On 7 December 1992, it enacted Ordinance 3353 (AnOrdinance Prohibiting the issuance of business permit and cancelingexisting business permit to any establishment for the using and allowing tobe used its premises or portion thereof for the operation of Casino). On 4

January 1993, it adopted a sterner Ordinance 3375-93 (An Ordinanceprohibiting the operation of Casino and providing penalty for violationtherefore).

Pryce assailed the ordinances before the Court of Appeals, where it wasjoined by PAGCOR as intervenor and supplemental petitioner. The Courtfound the ordinances invalid and issued the writ prayed for to prohibit theirenforcement. Reconsideration of the decision was denied on 13 July 1993.Cagayan de Oro City and its mayor filed a petition for review under Rules ofCourt with the Supreme Court.

Issue: Whether the Sangguniang Panlungsod of Cagayan de Oro can prohibit theestablishment of a casino, or gambling, operated by PAGCOR through an ordinanceor resolution.

Held: No,

The morality of gambling is not justiciable issue. Gambling is not illegal perse. While it is generally considered inimical to the interests of the people,there is nothing in the Constitution categorically proscribing or penalizinggambling or, for that matter, even mentioning it at all.

It is left to Congress to deal with the activity as it sees fit. In the exercise ofits own discretion, the legislature may prohibit gambling altogether or allowit without limitation or it may prohibit some forms of gambling and allowothers for whatever reasons it may consider sufficient.

Further, there are two kinds of gambling, to wit, the illegal and thoseauthorized by law. Legalized gambling is not a modern concept; it isprobably as old as illegal gambling, if not indeed more so. The suggestion

that the Local Government Code (LGC) authorize Local Government Units(LGUs) to prohibit all kinds of gambling would erase the distinction between

these two forms of gambling without a clear indication that this is the will oflegislature.

Ordinances should not contravene a statute as municipal governments areonly agents of the national government. Local councils exercise onlydelegated legislative powers conferred on them by Congress as thenational lawmaking body. The delegate cannot be superior to the principalor exercise powers higher than those of the latter.