Roble Arrastre, Inc. vs. Villaflor

Facts:

Petitioner Roble Arrastre, Inc. was a cargo‑handling service operator authorized by the Philippine Ports Authority (PPA) to render arrastre and stevedoring services at the Municipal Port of Hilongos, Leyte, and held municipal Business Permits for 1992 and 1993. While its renewal with the PPA was pending, the PPA issued a 90‑day hold‑over authority in December 1993. Petitioner applied for renewal of its municipal business permit for 1994 with respondent Hon. Altagracia Villaflor, Municipal Mayor of Hilongos, but the mayor denied the renewal on the ground that the Sangguniang Bayan had passed Resolution No. 93‑27 objecting to the grant of a five‑year arrastre contract to Roble Arrastre because of alleged ties between the arrastre company and a shipping line competing on the Cebu–Hilongos route.

Aggrieved, petitioner filed with the Regional Trial Court (RTC), Branch XVIII, Hilongos, Leyte, a Petition for Mandamus with Preliminary Mandatory Injunction (Special Civil Action No. H‑237), arguing that issuance of business permits under Section 444(b)(3)(iv) of R.A. No. 7160 (Local Government Code) is ministerial where the applicant has complied with documentary requirements and paid fees, and that the PPA, not the mayor, has authority to determine arrastre contracts. Respondent mayor answered that issuance of permits is discretionary, invoked Resolution No. 93‑27, and counterclaimed damages and attorney’s fees.

Petitioner later filed a Supplemental Petition attaching a five‑year PPA contract supposedly granted effective March 1, 1994; the RTC admitted it. At pre‑trial the parties stipulated to certain facts (existence of prior permit, payment, barangay clearance). The RTC denied submission on the pleadings and, on March 29, 1995, granted the mandamus petition, finding that the PPA has exclusive authority over cargo‑handling contracts (citing P.D. No. 857) and ordering respondent mayor to approve the 1994 application; the mayor’s counterclaim was dismissed. The RTC denied respondent’s motion for reconsideration.

The Court of Appeals, in CA‑G.R. SP No. 40621, reversed by Decision dated October 7, 1996 (and denied reconsideration on February 13, 1997). The CA held that under Section 444(b)(3)(iv) the mayor’s power to issue, suspend or revoke licenses is an exercise of delegated police power and involves official discretion; hence mandamus was not the proper remedy. The CA also ruled the main prayer (forcing issuance of the 1994 permit) had become moot and academic.

Petitioner filed a Petition for Review on Certiorari to the Supreme Court (Rule 45), assailing the CA’s reliance on precedents such as Mateo v. Court...(Pro-only)

Issues:

• Was it valid for the Court of Appeals to rely on Mateo v. Court of Appeals and Pedro v. Provincial Board of Rizal in ruling that the respondent mayor had full discretion in issuing or renewing the business permit, precluding mandamus, despite petitioner’s compliance with documentary requirements and payment of fees?

• Did the Court of Appeals correctly interpret Section 444(b)(3)(iv) of the Local Government Code as a grant of police power and discretionary authority to the respondent mayor to deny the permit?

• Did the Court of Appeals err in declining to apply Symaco v. Aquino (which petitioner invoked) so as to compel issuance of the permit where there was prior compliance?

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Ruling:

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Ratio:

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Doctrine:

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