Rimando vs. Naguilian Emission Testing Center, Inc.

Factual Background

The respondent corporation operated an emission testing business on a parcel of land from 2005 to 2007 and sought renewal of its business permit by filing an application and paying the required fees on January 18, 2008. The subject parcel was described as formerly belonging to the national government and later certified by the Department of Environment and Natural Resources as alienable and disposable. The petitioner, then the mayor of the Municipality of Naguilian, refused to issue the renewed business permit unless the respondent executed a contract of lease with the municipality. The respondent accepted the prospect of a lease subject to proposed revisions that the petitioner found unacceptable. The parties failed to agree, and the respondent filed a petition for mandamus and damages in the RTC to compel issuance of the business permit.

Trial Court Proceedings

On May 26, 2009, the RTC denied the petition for mandamus and damages. The RTC found that Tax Declaration No. 002-01197 declared the municipality the owner of the parcel, that Section 6A.01 of the Municipality’s Revenue Code authorized the municipality to require a contract of lease for operations on municipal real property, and that a mayor’s duty to issue business permits was discretionary and therefore not subject to compulsion by mandamus. The RTC entered a dispositive order denying the petition for lack of merit.

Court of Appeals Ruling

The respondent appealed to the Court of Appeals. In its March 30, 2011 decision the CA first characterized the appeal as dismissible on grounds of mootness because the period for which the business permit was sought had lapsed, but the CA proceeded to decide the case for academic purposes. The CA disagreed with the RTC and held that the facts warranted issuance of a writ of mandamus. The CA concluded that a municipal tax declaration did not justify conditioning permit renewal upon execution of a lease. The CA also declared Sangguniang Bayan Resolution No. 2007-81 void for failure to comply with the Local Government Code and its Implementing Rules and Regulations. The CA found that the petitioner was not liable for damages because his actions were performed in the exercise of official duties under the presumption of good faith, and observed that the civil action had become moot upon expiration of the petitioner’s mayoral term. The CA reversed and set aside the RTC decision.

Petition for Review to the Supreme Court

The petitioner moved for reconsideration in the Court of Appeals, contesting the CA’s pronouncement that Sangguniang Bayan Resolution No. 2007-81 was void and arguing that a petition for mandamus was not the proper remedy to resolve questions of land ownership. The motion was denied. The petitioner then filed a petition for review on certiorari under Rule 45, Rules of Court, seeking annulment of the CA decision and reinstatement of the RTC judgment.

Issues Presented to the Supreme Court

The Supreme Court considered whether the petition for mandamus remained justiciable given the lapse of the period for which the business permit was sought and the expiration of the petitioner’s term, whether a mayor may be compelled by mandamus to issue a business permit, and whether the CA properly adjudicated the validity of municipal action and the ownership of the subject land in the mandamus proceeding.

Supreme Court Ruling

The Supreme Court held that the petition for mandamus had become moot and academic due to the expiration of the permit period and the petitioner’s term as mayor, and that the controversy ceased to present a justiciable matter because any remedy would be without practical relief. The Court further held that the Court of Appeals erred in its dispositive relief. Although the CA was not precluded from resolving the issues for academic purposes, its decretal reversal of the RTC was improperly couched because the CA’s factual conclusions on ownership and on the invalidity of Sangguniang Bayan Resolution No. 2007-81 were unsubstantiated by convincing evidence and could no longer afford practical relief. The Supreme Court reiterated that the overriding and decisive factor in the appeal was mootness and that the proper disposition was dismissal rather than reversal. The Court also ruled that a mayor’s power to issue business permits is a delegated police power and therefore discretionary; such power cannot be compelled by mandamus. Consequently, the Supreme Court set aside the Court of Appeals decision and reinstated the RTC decision dated May 26, 2009.

Legal Basis and Reasoning

The Court applied the established doctrine that a case is moot and academic when it ceases to present a justiciable controversy so that any determination would be without practical use or enforceable effect. The Court