Magtajas v. Pryce Properties Corporation
NEW DOCTRINEFacts
The Antecedents: PAGCOR announced the opening of a casino in Cagayan de Oro City, leasing a portion of a building from Pryce Properties Corporation, Inc. This announcement was met with strong opposition from civic organizations, religious groups, women's groups, the youth, the mayor, and city legislators. Procedural History: The Sangguniang Panlungsod of Cagayan de Oro City enacted Ordinance No. 3353, prohibiting the issuance and canceling existing business permits for establishments allowing casino operations, and Ordinance No. 3375-93, prohibiting the operation of casinos. Pryce Properties Corporation, Inc. assailed these ordinances before the Court of Appeals, with PAGCOR intervening. The Court of Appeals declared the ordinances invalid and prohibited their enforcement. Reconsideration was denied. The Petition: The City of Cagayan de Oro and its mayor filed a petition for review, arguing that the Sangguniang Panlungsod has the power to prohibit casino operations, that the phrase "gambling and other prohibited games of chance" in the Local Government Code includes all forms of gambling, that the ordinances do not annul P.D. 1869 but are modified by the Local Government Code, and that the ordinances are reasonable and consistent with public policy.
Issue(s)
Whether the Sangguniang Panlungsod of Cagayan de Oro City has the power to prohibit the establishment and operation of a PAGCOR gambling casino within its territorial limits. Whether the phrase "gambling and other prohibited games of chance" in Section 458, par. (a), sub-par. (1)-(v) of R.A. 7160 could only mean "illegal gambling." Whether the questioned Ordinances in effect annul P.D. 1869 and are therefore invalid on that point. Whether the questioned Ordinances are discriminatory to casinos and partial to cockfighting and are therefore invalid on that point. Whether the questioned Ordinances are not reasonable, not consonant with the general powers and purposes of the instrumentality concerned and inconsistent with the laws or policy of the State. Whether the Court of Appeals had no option but to follow the ruling in the case of Basco, et al. v. PAGCOR, G.R. No. 91649, May 14, 1991, 197 SCRA 53 in disposing of the issues presented in this present case.
Ruling
The petition is DENIED and the challenged decision of the respondent Court of Appeals is AFFIRMED. The ordinances are declared invalid and void.
Ratio Decidendi
On the power of the Sangguniang Panlungsod to prohibit casino operations: The Court held that while local government units are empowered to enact ordinances for the general welfare, including the suppression of gambling, the phrase "gambling and other prohibited games of chance" in Section 458 of the Local Government Code should be interpreted in relation to "other prohibited games of chance." This implies that the power to suppress extends only to illegal gambling, not to forms of gambling authorized by law. Presidential Decree No. 1869, which created PAGCOR and authorized it to operate casinos, has the force of a statute and cannot be annulled by a mere ordinance. Therefore, the Sangguniang Panlungsod cannot prohibit the operation of a casino authorized by P.D. 1869. On the interpretation of "gambling and other prohibited games of chance": The Court clarified that the phrase "gambling and other prohibited games of chance" in Section 458 of the Local Government Code refers to illegal gambling. The rule of noscitur a sociis dictates that the meaning of a word or phrase should be interpreted in relation to the words with which it is associated. Since "gambling" is associated with "and other prohibited games of chance," it should be read as referring only to illegal gambling that must be prevented or suppressed. This interpretation excludes legally authorized games of chance. On whether the ordinances annul P.D. 1869: The Court found that the ordinances contravene P.D. 1869. The petitioners' argument that the Local Government Code modified P.D. 1869 was rejected. The repealing clause of the Local Government Code does not explicitly mention P.D. 1869 as one of the laws repealed or modified. Implied repeals are not favored, and there was no clear intention to repeal P.D. 1869. The Court emphasized that a local ordinance cannot annul or modify a national statute like P.D. 1869. On discrimination and partiality: The Court did not directly address the issue of discrimination against casinos and partiality towards cockfighting in detail, but its ruling that the ordinances contravene P.D. 1869 implicitly resolves this by invalidating the ordinances based on their conflict with a higher law. On reasonableness and consistency with public policy: The ordinances were found to be unreasonable and inconsistent with public policy because they attempted to prohibit an activity (casino operation) that was expressly authorized by a statute (P.D. 1869). The Court reiterated that local government units exercise delegated powers and cannot defy or violate the will of the national legislature. The public policy established by P.D. 1869, which allows certain forms of gambling, must be respected. On following the Basco ruling: The Court affirmed that the Basco ruling was relevant and correctly applied. The Basco case also upheld the constitutionality of P.D. 1869 and the authority of PAGCOR, reinforcing the principle that the legislature has the discretion to allow or prohibit forms of gambling, and that courts cannot substitute their judgment on the wisdom of such legislative choices. The present case involved a similar conflict between local ordinances and a national law authorizing gambling.
Main Doctrine
Local government units may prohibit gambling and other prohibited games of chance within their territories, but this power does not extend to authorized forms of gambling, such as casino operations sanctioned by Presidential Decree No. 1869, as the Local Government Code did not repeal or modify this decree. Ordinances that contravene a statute are void.