G.R. No. 111097 - Magtajas vs. Pryce Properties Corp., Inc.

PAGCOR’s Expansion to Cagayan de Oro City
In 1992, the Philippine Amusement and Gaming Corporation (PAGCOR), pursuant to P.D. 1869, decided to expand its casino operations to Cagayan de Oro City by leasing and renovating a portion of Pryce Properties Corporation’s Pryce Plaza Hotel.
The announcement triggered strong opposition from civic organizations, religious groups, women’s and youth organizations, and city officials, who led demonstrations and denounced the project as inimical to public morals and welfare.

Enactment of City Ordinances
On December 7, 1992, the Sangguniang Panlungsod enacted Ordinance No. 3353, prohibiting issuance (and authorizing cancellation) of business permits for any establishment used wholly or partly for casino operations.
On January 4, 1993, the same body passed Ordinance No. 3375-93, outright prohibiting casino operations within city limits and prescribing administrative fines, closure, and imprisonment for violators.

Judicial Proceedings
Pryce Properties Corporation filed a petition for prohibition in the Court of Appeals, joined by PAGCOR, challenging both ordinances as ultra vires, confiscatory, and in conflict with P.D. 1869 and the Local Government Code.
On March 31, 1993, the Court of Appeals declared the ordinances invalid and issued the writ prayed for; its denial of reconsideration on July 13, 1993 led petitioners—Mayor Pablo P. Magtajas and the City of Cagayan de Oro—to elevate the case to the Supreme Court under Rule 45.

Scope of Local Government Police Power
Does the Sangguniang Panlungsod have authority under Sections 16 and 458 of R.A. 7160 to prohibit the establishment and operation of a PAGCOR casino within its territorial jurisdiction?
Should the phrase “gambling and other prohibited games of chance” in Section 458(a)(1)(v) be construed to include legally authorized casinos or only illegal gambling?

Conflict with National Law and Policy
Do Ordinance Nos. 3353 and 3375-93 effectively amend, repeal, or contravene P.D. 1869, which grants PAGCOR exclusive authority to operate casinos in the Philippines?
Are the ordinances discriminatory or partial—targeting casinos while permitting other forms of legalized gambling (e.g., cockfighting) without a rational basis?

Hierarchy of Legal Norms and Precedent
Can a city ordinance override a valid presidential decree with the force of statute, or impair contractual obligations under PAGCOR’s lease?
Was the Court of Appeals correct in declining to follow this Court’s earlier Basco v. PAGCOR decision?