G.R. No. 78592 - Municipality of Malolos vs. Libangang Malolos, Inc.

Case Summary (G.R. No. 78592)

Factual Background

Libangang operated the cockpit arena since 1914. Before the expiration of its license, it sought renewal for 1985. The Acting Mayor of Malolos denied renewal, relying on Sangguniang Bayan Resolutions Nos. 6 and 9, which disallowed Libangang’s operation on the ground that the cockpit was within a prohibited area.

After the denial of renewal, and pursuant to Section 4 of P.D. No. 1802-A, Libangang filed, on January 22, 1985, a complaint with the PGC, docketed as Case No. 59, captioned “Malolos Libangang Cockpit vs. Municipal Mayor of Malolos.” The complaint sought review of the action taken by the Mayor and the council. Libangang also requested authority to resume operations pending the hearing and determination of the merits. The PGC, in a Resolution dated January 31, 1985, allowed Libangang to resume operation.

The Injunction Case in the Regional Trial Court

Following the PGC’s resolution, on February 2, 1985, the petitioner Municipality filed with the Regional Trial Court, Branch XV, Malolos, Bulacan a Petition for Certiorari and Prohibition (Civil Case No. 7973-M), referred to as the “Injunction Case.” The petition sought to restrain and enjoin Libangang from operating the cockpit arena and to obtain a declaration that the PGC had no jurisdiction to order resumption of operations.

On February 22, 1985, the PGC filed a motion to dismiss the Injunction Case on jurisdictional grounds. It argued that, under Sec. 9(3) of Batas Pambansa Blg. 129, exclusive appellate jurisdiction to review orders of quasi-judicial agencies and instrumentalities was vested in the Court of Appeals, not the trial court.

After hearing, the RTC, through Judge Manuel E. Yuzon, issued an Order dated August 20, 1985, dismissing the Injunction Case for lack of merit and for want of jurisdiction. Petitioner moved for reconsideration. Thereafter, RTC Judge Felipe Villajuan, Jr., acting on reconsideration, issued an Order dated January 28, 1986, later amended motu proprio on February 5, 1986, setting aside the prior dismissal. Judge Villajuan then issued a Writ of Preliminary Injunction, directing Libangang to desist from operating the cockpit pending trial.

Resort to the Court of Appeals

Unsettled by the RTC’s issuance of the injunction and its reinstated jurisdictional posture, the PGC and Libangang filed with the Court of Appeals on September 23, 1986 a petition to annul the RTC orders issued by Judge Villajuan. On January 12, 1987, the Court of Appeals rendered the questioned Decision. It reversed Judge Villajuan’s orders, dissolved the Writ of Preliminary Injunction, and ruled that the RTC had no jurisdiction to proceed, reasoning that PGC’s assumption of jurisdiction precluded the trial court from entertaining the case. The Court of Appeals also held that the municipal controversy should have been resisted at the PGC level and awaited final determination there.

The Issues Raised for Resolution

The Supreme Court identified two principal issues for resolution: first, whether the RTC had jurisdiction to review orders of the PGC; and second, whether the authority of city and municipal mayors to issue cockpit licenses was subject to review and supervision by the PGC.

Arguments and Holdings as to RTC Jurisdiction

On the first issue, the Court held that no reversible error had been committed by the Court of Appeals. It sustained the view that the RTC had no jurisdiction over the controversy, because the matter was lodged in the Court of Appeals under BP Blg. 129. Section 9(3) of the statute provided that the Intermediate Appellate Court (as then designated) exercised exclusive appellate jurisdiction over final judgments, decisions, resolutions, orders, or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, subject to constitutional and statutory exceptions. The Court of Appeals was therefore the proper forum for review.

The Supreme Court also treated the argument about the non-finality of Judge Villajuan’s order as not decisive. It reasoned that the PGC was statutorily at parity with the RTC. By analogy to the rule that a court had no power to interfere by injunction with the judgments or decrees of a court of concurrent or coordinate jurisdiction, as stated in Hacbang vs. Leyte Autobus Co., Inc. (No. L-17907, May 20, 1963, 8 SCRA 103), the trial court likewise had no jurisdiction to interfere with the PGC and the subject matter of the controversy.

The Mayor’s Licensing Power and the PGC’s Role

On the second issue, the Supreme Court partially disagreed with the Court of Appeals. The Court of Appeals had held that mayors’ power to license cockpits was subject to review and supervision by the PGC. The Supreme Court ruled that this question had been jurisprudentially settled against the Court of Appeals’ view by Philippine Gamefowl Commission and Hee Acusar vs. IAC (Nos. L-72969-70, December 17, 1986, 146 SCRA 294) and reiterated in Deang vs. IAC (G.R. No. 71313, promulgated on September 24, 1987).

In Hee Acusar, the Court compared the powers of the PGC and those of city and municipal officials under the governing laws, including P.D. No. 1802, P.D. No. 1802-A, and the Local Government Code. It concluded that the municipal mayor, with authorization from the Sangguniang Bayan, had the primary power to issue licenses for ordinary cockpits. It further recognized that even the regulation of cockpits vested in municipal officials, subject only to guidelines issued by the PGC. Under that ruling, the PGC could not substitute its own discretion for the discretion exercised by municipal authorities in determining whether and to whom licenses should be issued.

The Supreme Court emphasized the doctrinal distinction drawn in Hee Acusar between what the PGC could do through “review and supervision,” and what it could not do, namely, exercise control over municipal decisions. It held that reliance by the Court of Appeals and the Solicitor General on Section 4 of P.D. No. 1802-A—particularly the phrase that municipal mayors acted “subject to its review and supervision”—was misplaced because “review and supervision” carried meanings different from control. Citing Hee Acusar, the Court explained that supervision did not allow the supervisor to annul the acts of the subordinate, as annulment belonged to control. Supervision allowed the supervisor to ensure lawful performance; review allowed determination of whether correction was necessary, but correction had to be undertaken by the authority exercising control or through the courts, unless the subordinate corrected itself after notice from the supervising authority.

The Supreme Court also rejected the attempt to anchor the PGC’s authority to order Libangang’s resumption of operations in the Rules of Procedure of the PGC, specifically Section 2, Rule IX, which allowed temporary operation or closure upon a clear showing of substantial evidence of violation of cockfighting laws and PGC rules, or to maintain status quo between or among parties. The Court reasoned that the provision related to temporary operation or closure due to violations or to maintain status quo. It did not govern licensing or permit issuance, which, by the earlier doctrinal framework, appertained to local authorities.

Disposition of the Case

The Supreme Court therefore reversed and

Case Syllabus (G.R. No. 78592)

The Municipality of Malolos filed a Petition for Review on Certiorari seeking reversal of the Court of Appeals decision that held the Regional Trial Court had no jurisdiction over the controversy and that the Philippine Gamefowl Commission (PGC) could supervise local action on cockpit licensing.
The Court of Appeals reversed the orders issued by RTC Judge Felipe N. Villajuan, Jr., dissolving a Writ of Preliminary Injunction and directing that the controversy be pursued within the PGC-authorized review structure.
The private respondent, Libangang Malolos, Inc., sought PGC review of a denial of renewal of its cockpit license and obtained PGC authority to resume operations pending hearing.
The PGC participated as a petitioner in the Court of Appeals review of the RTC orders, asserting that the RTC lacked jurisdiction because review of quasi-judicial agency orders lies with the Court of Appeals under Batas Pambansa Blg. 129.

Parties and Procedural Posture

The petitioner was the Municipality of Malolos.
The respondents were Libangang Malolos, Inc., represented by Ceferino Tiongson, and the Philippine Gamefowl Commission.
The petition sought review of the Court of Appeals Decision in CA-G.R. SP No. 09686, titled "Philippine Gamefowl Commission, et al., vs. Hon. Felipe N. Villajuan, Jr., et al."
The Court of Appeals had annulled the RTC orders issued by Judge Villajuan, Jr. after reconsideration, dissolved the Writ of Preliminary Injunction, and ruled on both jurisdiction and the scope of municipal licensing authority.
The controversy reached the Supreme Court to determine the correct forum for review of PGC actions and the legal character of the PGC’s supervisory power over local cockpit licensing.

Key Factual Allegations

Libangang Malolos, Inc. operated the "Malolos Cockpit Arena at sitio Canlapan, Barangay Sto. Rosario, Malolos, Bulacan" since 1914 under municipal licensing arrangements.
Before its license expired, Libangang applied for renewal for 1985.
The Acting Mayor of Malolos denied renewal based on Sangguniang Bayan Resolutions Nos. 6 and 9 that disallowed operation because the cockpit was within a prohibited area.
On January 22, 1985, because of non-renewal and pursuant to Section 4 of P.D. No. 1802-A, Libangang filed with the PGC a complaint docketed as Case No. 59, titled "Malolos Libangang Cockpit vs. Municipal Mayor of Malolos", seeking review of the mayor and council’s action.
Libangang also sought authority to resume operations pending resolution on the merits.
In a Resolution dated January 31, 1985, the PGC allowed Libangang to resume operation.
On February 2, 1985, the Municipality of Malolos filed a Petition for Certiorari and Prohibition with the Regional Trial Court, Branch XV, Malolos, Bulacan (Civil Case No. 7973-M), seeking to restrain the cockpit operation and to declare that the PGC had no jurisdiction to order resumption.
On February 22, 1985, the PGC moved to dismiss the RTC injunction case, arguing that under Sec. 9(3) of Batas Pambansa Blg. 129, exclusive appellate jurisdiction to review quasi-judicial agency orders was vested in the Court of Appeals.
The RTC originally dismissed the injunction case in an order dated August 20, 1985, then reversed course on reconsideration when Judge Felipe N. Villajuan, Jr. set aside the predecessor’s order, issued a Writ of Preliminary Injunction, and directed Libangang to desist from operating pending trial.
On September 23, 1986, the PGC and Libangang filed with the Court of Appeals a petition to annul the RTC orders.
The Court of Appeals, on January 12, 1987, reversed the RTC orders, dissolving the writ and ruling that the PGC’s earlier assumption of jurisdiction precluded the RTC from entertaining the mayor’s case.

Statutory Framework

The Court relied on Sec. 9(3) of Batas Pambansa Blg. 129, which vested the Intermediate Appellate Court with exclusive appellate jurisdiction over final judgments, decisions, resolutions, orders, or awards of regional trial courts and quasi-judicial agencies, instrumentalities, boards, or commissions.
The Court also cited the Interim Rules of Court promulgated on January 11, 1983, particularly "16. Cases reviewable by the Intermediate Appellate Court," which echoed the same general rule on appellate review of quasi-judicial bodies.
The Court considered Rule VIII of the Rules of Procedure of the PGC, which provided for appeals from PGC rulings to the Intermediate Appellate Court, and further appeal by certiorari to the Supreme Court as provided in Rule 45 of the Rules of Court.
The Supreme Court treated the PGC as statutorily at par with the RTC for purposes of the jurisdictional principle against interference by injunction with a coordinate tribunal, citing Hacbang vs. Leyte Autobus Co., Inc., No. L-17907, May 20, 1963, 8 SCRA 103.
For the substantive licensing issue, the Court discussed the local and PGC powers under P.D. No. 1802, P.D. No. 1802-A, and the Local Government Code.
The Court addressed Section 4 of P.D. No. 1802-A, which states that city and municipal mayors, with the concurrence of their respective Sanggunians, shall have authority to license and regulate regular cockfighting pursuant to PGC rules and regulations and subject to the PGC’s review and supervision.
The Court also considered the PGC’s pr