MAGTAJAS v. PRYCE PROPERTIES, 234 SCRA 255 (Digested Case)

MAGTAJAS v. PRYCE PROPERTIES

Re: General principles (Sec. 1-5, LGC 1991)

FACTS: 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. The reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. It enacted ordinances which both prohibit the issuance of business permit and cancel existing business permit to any establishment for the using and allowing to be used its premises or portion thereof for the operation of casino, and impose penalty thereto. The petitioners argue that LGUs may prohibit the operation of casinos because they involve games of chance, which are detrimental to the people. Gambling is not allowed by general law and even by the Constitution itself. The legislative power conferred upon local government units may be exercised over all kinds of gambling and not only over "illegal gambling" as the respondents erroneously argue. Even if the operation of casinos may have been permitted under P.D. 1869, the government of Cagayan de Oro City has the authority to prohibit them within its territory pursuant to the authority entrusted to it by the Local Government Code.

ISSUE: WON LGUs are empowered to enact ordinances prohibiting the operation of PAGCOR within the formers' jurisdiction.

HELD: No. We hold that the power of PAGCOR to centralize and regulate all games of chance, including casinos on land and sea within the territorial jurisdiction of the Philippines, remains unimpaired. P.D. 1869 has not been modified by the Local Government Code, which empowers the local government units to prevent or suppress "only" those forms of "gambling prohibited" by law. Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be amended or nullified by a mere ordinance. Hence, it was not competent for the Sangguniang Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353 prohibiting the use of buildings for the operation of a casino and Ordinance No. 3375-93 prohibiting the operation of casinos. For all their praiseworthy motives, these ordinances are contrary to P.D. 1869 and the public policy announced therein and are therefore ultra vires and void.