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Constitutional Law II - Book 2005 - Magtajas v. Pryce Properties Corp.

[GR 111097, 20 July 1994]

Magtajas v. Pryce Properties Corp. [GR 111097, 20 July 1994] En Banc, Cruz (J): 12 concur Facts: The Philippine Amusement and Gaming Corporation (PAGCOR) is a corporation created directly by Presidential Decree 1869 to help centralize and regulate all games of chance, including casinos on land and sea within the territorial jurisdiction of the Philippines (the constitutionality of the decree was sustained in Basco v. Philippine Amusements and Gambling Corporation). Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the purposes indicated in the Local Government Code. It is expressly vested with the police power under what is known as the General Welfare Clause embodied in Section 16. Its SangguniangPanglungsod derives its powers, duties and functions under Section 458 of said Code. In 1992, following its success in several cities, PAGCOR decided to expand its operations to Cagayan de Oro City. To this end, it leased a portion of a building belonging to Pryce Properties Corporation Inc., renovated and equipped the same, and prepared to inaugurate its casino there during the Christmas season. The reaction of the SangguniangPanlungsod of Cagayan de Oro City was swift and hostile. On 7 December 1992, it enacted Ordinance 3353 (An Ordinance Prohibiting the issuance of business permit and canceling existing business permit to any establishment for the using and allowing to be used its premises or portion thereof for the operation of Casino). On 4 January 1993, it adopted a sterner Ordinance 3375-93 (An Ordinance prohibiting the operation of Casino and providing penalty for violation therefore). Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as intervenor and supplemental petitioner. The Court found the ordinances invalid and issued the writ prayed for to prohibit their enforcement. Reconsideration of the decision was denied on 13 July 1993. Cagayan de Oro City and its mayor filed a petition for review under Rules of Court with the Supreme Court. Issue: Whether the SangguniangPanlungsod of Cagayan de Oro can prohibit the establishment of a casino, or gambling, operated by PAGCOR through an ordinance or resolution. Held: The morality of gambling is not justiciable issue. Gambling is not illegal per se. While it is generally considered inimical to the interests of the people, there is nothing in the Constitution categorically proscribing or penalizing gambling 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 of its own discretion, the legislature may prohibit gambling altogether or allow it without limitation or it may prohibit some forms of gambling and allow others for whatever reasons it may consider sufficient. Further, there are two kinds of gambling, to wit, the illegal and those authorized by law. Legalized gambling is not a modern concept; it is probably 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 of legislature. Ordinances should not contravene a statute as municipal governments are only agents of the national government. Local councils exercise only delegated legislative powers conferred on

them by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than those of the latter.