G.R. No. 43634 - Javier vs. Earnshaw

The plaintiffs, Francisco Javier and Roman Ozaeta, are the owners of a parcel of land at the corner of Kansas Avenue and Tennessee Street, Manila.
They entered into a contract with the Asiatic Petroleum Co. (P. I.), Ltd. wherein the latter was to provide a gasoline pump, an underground tank, and gasoline exclusively for the motor vehicles of the Makabayan Taxicab Co., Inc., operated by the plaintiffs.
A critical part of the arrangement was that the Asiatic Petroleum Co. (P. I.), Ltd. would secure a license from the Mayor of Manila to install and operate the pump and tank in the plaintiffs’ premises.

On April 25, 1934, the plaintiffs sent a letter (Exhibit A-1) to the mayor, highlighting the contract with the Asiatic Petroleum Co. (P. I.), Ltd. and requesting that the necessary license be obtained.
On April 26, 1934, the Asiatic Petroleum Co. (P. I.), Ltd. directly applied for a permit (Exhibit A) to install a gasoline pump and underground tank on the plaintiffs’ property for the exclusive use of the Makabayan Taxicab Co., Inc.
The application was endorsed by the chief of police, the chief of the Fire Department, and the city engineer.
The mayor granted the permit after receiving favorable endorsements, and on May 8, 1934, a written contract between the mayor and the Asiatic Petroleum Co. (P. I.), Ltd. (Exhibit D) confirmed the terms.

The permit was expressly stated to be nontransferable.
It included the condition that the permit was subject to revocation after 30 days from notice if any stipulated condition was violated.

The gasoline pump and underground tank were duly installed, and initially, they were used to supply gasoline exclusively to the Makabayan Taxicab Co., Inc.
The plaintiffs later altered the receipt issued by the city treasurer—changing the term "storage" to "sells"—and began selling gasoline to the public.
This act of selling gasoline to the public led to protests from competing gasoline stations, notably the operator of the Socony Gasoline Station located at the corner of Taft Avenue and Herran Street.
An investigation confirmed the unauthorized sale of gasoline, and the plaintiffs themselves admitted to this violation.

On June 9, 1934, the mayor sent a letter (Exhibit F) to the Asiatic Petroleum Co. (P. I.), Ltd., requiring it to show cause why the license should not be cancelled due to the violation of the permit’s conditions.
This requirement was later communicated to the plaintiffs, who offered explanations via a letter dated June 11, 1934 (Exhibit G).
Finding the explanations unsatisfactory and given the admission of the violation, the mayor on July 16, 1934, warned that the permit would be cancelled after 15 days; the cancellation ensued.
The plaintiffs filed a petition for a writ of preliminary injunction against the permit cancellation, which had been granted on bond and remained in force pending appeal.

Whether ordinance No. 1985 of the City of Manila, specifically paragraph 3 of section 1, is unconstitutional or otherwise invalid.
The issue focused on whether the ordinance unlawfully prohibited the sale of gasoline or merely regulated the installation of gasoline stations through specific conditions.

Whether the mayor, under section 2434 (b) of the Revised Administrative Code, had the authority to enforce the ordinance by cancelling the permit for violation of its conditions.
The plaintiffs questioned if the mayor could act against the permit given the terms of the contract and the nature of the alleged violation.

Whether the plaintiffs, although not the concessionaires (the Asiatic Petroleum Co. (P. I.), Ltd. being the nominal permit-holder), were proper and necessary parties entitled to file the action.
The issue included the argument regarding the direct beneficial interest of the plaintiffs in the permit and its conditions.

Whether the operational practice, as evidenced by the testimony regarding the collection of fees without a license by the city treasurer, affects the requirement to secure a license for the sale of gasoline.
The dispute centered on the differentiation between the issuance of a permit (by the mayor) versus the collection of fees (by the city treasurer).