Recreation & Amusement Assn. v. City of Manila
REITERATIONFacts
The Antecedents: The Recreation and Amusement Association of the Philippines, Inc. (RAAP), an alleged non-stock corporation whose members are licensed owners and operators of Five-Ball-Flipper-Action-Pinball machines in Manila, filed a complaint seeking to restrain the City of Manila officials from enforcing Ordinance No. 3628. This ordinance amended Sections 773 and 774 of the Revised Ordinances of the City of Manila, prohibiting the operation of pinball machines within a 200-meter radius of churches, hospitals, institutions of learning, public markets, plazas, and government buildings, and increasing the annual license fee from P55 to P300. Procedural History: The trial court issued a preliminary injunction upon RAAP's posting of a P2,000 bond. The defendants filed a motion to dismiss, arguing that RAAP lacked legal capacity to sue and that the complaint stated no cause of action. They contended that RAAP was not registered and that the individual members, not the association, were the real parties in interest. The defendants also asserted that Ordinance No. 3628 was a valid exercise of police power and that the Mayor had discretionary power to issue licenses. Despite the pending motions and the plaintiff's opposition, the trial court issued a resolution declaring Ordinance No. 3628 valid, dismissing the complaint, and dissolving the injunction. RAAP's motion for reconsideration was denied. The Petition: RAAP appealed to the Supreme Court, assigning errors to the trial court for ruling on the constitutionality of the ordinance prematurely, for finding the Mayor's power to grant licenses discretionary and uncontrollable by mandamus, and for declaring the ordinance valid and constitutional.
Issue(s)
Whether the plaintiff association has the legal capacity to sue as a corporation despite non-registration. Whether Ordinance No. 3628 is a valid exercise of police power by the City of Manila. Whether the issuance of municipal licenses and permits for pinball machines is a discretionary act that cannot be controlled by mandamus.
Ruling
The Supreme Court affirmed the order of the trial court dismissing the case and dissolving the injunction. The Court held that Ordinance No. 3628 is valid and constitutional, and that the plaintiff association lacked the legal capacity to sue.
Ratio Decidendi
On Issue 1: The Court held that the plaintiff lacks the legal capacity to sue because it is not a corporation duly registered in accordance with law. The right to be and act as a corporation is not a natural or civil right but a franchise that can only be created under special authority from the State. Inquiries from the Securities and Exchange Commission (SEC) and the Bureau of Commerce confirmed that the association was not in their files, rendering it a mere group of individuals without a separate juridical personality. As such, the group is incompetent to act as a corporate entity or maintain an action in court. Under the Rules of Court, 'lack of legal capacity to sue' applies when the plaintiff is not a corporation duly registered according to law. On Issue 2: The Court ruled that Ordinance No. 3628 is a valid and constitutional exercise of the police power vested in the Municipal Board of Manila. Under Republic Act No. 409 (The Revised Charter of the City of Manila), specifically Section 18(l) and (kk), the city has the authority to regulate slot machines and enact ordinances for the general welfare. Prohibiting these machines within 200 meters of sensitive public spaces like schools and churches is a reasonable measure to protect the youth and maintain public order. The determination of whether such devices are inimical to the population is a legislative prerogative within the city's charter powers. Consequently, the ordinance does not violate the constitutional rights of the operators, as their business is subject to the State's overarching regulatory authority. On Issue 3: The Court affirmed that the City Mayor's power to grant or refuse licenses is a discretionary function that cannot be compelled by a writ of mandamus. Mandamus only lies to compel the performance of a ministerial duty where the officer has no choice but to act. In the case of municipal permits, the Mayor must exercise judgment to ensure that the applicant complies with all safety, zoning, and public welfare regulations. Since the Mayor is tasked with evaluating these conditions, his refusal to issue a permit cannot be overturned by the courts unless there is a clear showing of grave abuse of discretion. Therefore, the prayer to compel the issuance of permits under an old ordinance was legally untenable.
Main Doctrine
An association not registered as a juridical entity lacks the legal capacity to sue. Furthermore, the regulation of pinball machines through licensing and zoning restrictions falls within the legitimate exercise of police power by the City of Manila.