City of Bacolod vs. Phuture Visions
While its application was
Velasco, J.
Phuture Visions’s Facts
 Phuture Visions (PV) is a corporation authorized by its articles of
incorporation to operate lotto betting stations and/or gaming outlets as one
of its secondary purposes.
 PV applied with PAGCOR for authority to operate bingo games at SM City
Bacolod. It also applied for authority to operate with SM Prime so that they
can lease space in SM City Bacolod.
o PAGCOR gave them a provision Grant of Authority (PGOA)
o SM Prime sent them an Award Notice.
 PV also applied for an Application for Permit to Engage in Business, Trade,
or Occupation to operate bingo games in SM Bacolod. PV submitted this to
the Permits and Licensing Division of the City Mayor of Bacolod City.
o The Permits and Licensing Division gave PV a Claim Slip for its
permit
 Meanwhile, its Articles of Incorporation was amended – this time, the
articles state that Bingo is its primary purpose.
 Prior to the issuance of a hard copy Mayor’s Permit (the one they applied
for with the Office of the City Mayor) they already began bingo operations
at SM Bacolod.
o However, the day after they began operations (March 2, March 3),
its outlet was padlocked by agents of the Office of the City Legal
Officer, and that a closure order was posted at the entrance of the
bingo outlet.
 PV filed a case for Mandamus and Damages.
o PV claims that the closure was tainted with malice and bad faith
o PV also says that the Office of the City Legal Officer had no
authority to shut down bingo operations, in light of the fact that
PAGCOR has already authorized it to operate (PGOA)
 The RTC conducted a summary hearing. During the course of the
proceedings before it, PV released in open court a hard copy of the mayor’s
permit, giving a copy thereof to petitioner.
o The mayor’s permit stated that it’s authorized to engage in
professional services, band/entertainment services.
o The petitioner’s counsel refused to receive the same, protesting
that it was not the one applied for!
City’s Facts
 PV applied for a renewal of its already-existing mayor’s permit for
professional services, band/entertainment services as its declared line of
business, and where the address was, instead of SM Bacolod, was in PV’s
own office in Lacson Street.
 PV submitted the requirements for the renewal.
being processed, PV was issued the claim slip to claim its actual permit on
March 16 IF the requirements were found to be in order.
 BUT! The requirements were not in order!
o Application form was notarized before the AOI was amended to
reflect the operation of Bingo games
o Failure to pay the necessary permit fees/assessment fees under the
applicable tax ordinances.
 Also, PV started operating without permits! Which was why they had to
padlock it pursuant to a City Tax Ordinance which declares it illegal to
operate a business without first paying the permit fee and obtaining a
Mayor’s Permit.
 The City claims that the claim slip so heavily relied upon was a mere
oversight or human error on the part of the City Government’s employee
who processed the same – not seeing that it was a mere renewal for a
different line of business – professional services, band/entertainment
services.
Lower Courts
 RTC – denied the prayer for the issuance of a temporary mandatory order,
and it also dismissed the case for lack of merit.
 CA – Partially granted the appeal, affirming the denial of the application for
a TMO but the CA reversed the dismissal
o It reinstated the proceedings and remanded it to the RTC for
further proceedings.
o CA said that while the power to renew licenses is discretionary
(and therefore, mandamus cannot be availed of), PV was not given
due notice and hearing as to the closure of the bingo operations.
Arguments before the SC
 The city argues that first of all, it’s immune to a suit for damages, and the
City Mayor and other officials are similarly immune from suit since they were
acting in accordance with their powers.
 PV argues that the immunity from suit was raised for the first time on appeal
and should thus not be considered. Moreover, damages are proper since the
closure was done without proper notice and hearing and with obvious
discrimination.
The City of Bacolod has not given its consent to be sued by issuing licenses Claim Stub was found to be dubious, the aforesaid application wasn’t actually for
Under the 1987 Constitution, the state cannot be sued without its consent. This is Bingo operations but merely a renewal application)
because government efficiency will suffer if its time and energy is spent defending
itself against suits. The state, as well as its political subdivisions are open to suit only That the claim of PV is dubious is further supported by the fact that they themselves
when they consent to it. admit that they only amended their AOI AFTER applying for the permit to operate
Bingo operations.
Consent may either be express or implied. An implied form of consent is the state’s
or the subdivision’s exercise of proprietary functions. Closing Discussion
The City, by imposing its laws, is merely exercising the delegated police power of the
Unfortunately for PV, while the LGC, which permits mayors to grant licenses and state – Bingo is a form of gambling, and its operation is a mere privilege and not a
business permits, vests LGUs with corporate powers, such as that to be sued, the right.
exercise of the licensing power is not an exercise of a proprietary powers.
As a privilege, it can not only be regulated but also be revoked/closed down when
Instead, the licensing power is an exercise of police power. This is because such acts public interests so require.
are essentially regulatory in nature.
In this case, there is merely a damnum absque injuria – the act is hurtful, but not
The City may put up the defense of lack of consent on appeal wrongful. The mere suffering of losses does not give a rise to a right to recover
Waiver from immunity from suit is not lightly inferred as it is a derogation of damages – to warrant recovery, there must be both a right of action for a legal wrong,
sovereignty. Also, the City of Bacolod, as agovernmental agency or instrumentality, and damage
cannot be estopped by the omission, mistake, or error of its officials or agents.
 Estoppel does not lie against the government or any of its agencies from
unauthorized or illegal acts of public officers.
 Insurance Company of North America vs. Osaka Shosen Kaisha
o “The requirement that this defense should be raised at the trial is
only to give the plaintiff a chance to cure the defect of his
complaint, but if, as in this case, the lack of consent of the state
cannot be cured because it is a matter of judicial notice that there
is no law allowing the present suit, (only Congress that can give
such consent) the reason for the rule cannot obtain, hence it is clear
that such non-suability may be raised even on appeal.”
o “the state has to act thru subalterns who are not always prepared
to act in the premises with the necessary capability, and instances
there can be when thru ignorance, negligence or malice, the
interest of the state may not be properly protected because ofthe
erroneous appearance made on its behalf by a government lawyer
or some other officer, hence, as a matter of public policy, the law
must be understood as insulating the state from such undesirable
contingencies”

The City is not liable for damages

Based on the findings of the trial court, it appears that PV had no clear and
unmistakable legal right to operate its Bingo Operations – respondents failed to
establish that it had duly applied for the proper permit for Bingo operations and not
just their old permit referring to professional services, band, and entertainment (the