Title
Magtajas vs. Pryce Properties Corp., Inc.
Case
G.R. No. 111097
Decision Date
Jul 20, 1994
Cagayan de Oro City's ordinances prohibiting PAGCOR-operated casinos were invalidated by the Supreme Court, affirming national law supremacy over local regulations.

Case Summary (G.R. No. 143581)

Enactment of Ordinance No. 3353 Prohibiting Business Permits for Casinos

On December 7, 1992, the Sangguniang Panlungsod passed Ordinance No. 3353, barring issuance or renewal of business permits for any establishment allowing casino or gambling operations, and prescribing escalating penalties up to permanent revocation and imprisonment.

Adoption of Ordinance No. 3375-93 Banning Casino Operations

On January 4, 1993, Ordinance No. 3375-93 was enacted, outright prohibiting casino operations within the city, authorizing administrative fines and imprisonment for proprietors and managers, and taking effect ten days post-publication.

Petition to the Court of Appeals and Grant of Writ of Prohibition

Pryce filed a petition in the Court of Appeals, joined by PAGCOR, challenging both ordinances as beyond the Sangguniang Panlungsod’s authority. On March 31, 1993, the Court of Appeals invalidated the ordinances and issued the requested writ of prohibition, denying reconsideration on July 13, 1993.

Issues Presented on Appeal

Petitioners contended that:

  1. The City Council lacked power to ban a PAGCOR casino.
  2. “Gambling and other prohibited games of chance” in Section 458 of the LGC refers only to illegal gambling.
  3. The ordinances effectively annul P.D. 1869.
  4. The ordinances are discriminatory and unreasonable under the LGC and Constitution.
  5. The Court of Appeals misapplied Basco v. PAGCOR (197 SCRA 53).

Legislative Powers of Local Government Units under the 1987 Constitution and Local Government Code

Article X and Section 16 of the 1987 Constitution affirm local autonomy and grant local government units (LGUs) broad police and corporate powers for general welfare. Under Section 458 of RA 7160, the Sangguniang Panlungsod may enact ordinances to suppress activities inimical to morals, including “gambling and other prohibited games of chance.”

Scope of “Gambling and Other Prohibited Games of Chance” in the LGC

By noscitur a sociis, “gambling” in Section 458(a)(1)(v) is read alongside “other prohibited games of chance,” meaning only illegal gambling—not forms of gambling expressly authorized by law.

Authority of PAGCOR under P.D. 1869 and its Relation to the LGC

P.D. 1869 created PAGCOR to centralize and regulate all games of chance, including casinos. The decree, having the force of statute, remains valid unless expressly repealed or amended. The LGC did not list P.D. 1869 in its specific repealing clause (Section 534) and cannot by implication abolish PAGCOR’s charter.

Repealing Clause Analysis and Implied Repeal Doctrine

Section 534(f) of the LGC broadly repeals laws inconsistent with the Code, but P.D. 1869 is not among those specifically enumerated. Courts do not favor implied repeal absent clear legislative intent. Subsequent statutes tapping PAGCOR revenues (RA 7309, RA 7648) demonstrate the charter’s continued vitality.

Harmonizing P.D. 1869 and the Local Government Code

Both laws must be read harmoniously: LGUs may prevent and suppr

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