Case Summary (G.R. No. 198860)
Petitioner and Respondent Claims
The respondent operated an emission–testing business on land certified by the DENR as alienable and disposable public domain. In January 2008 it applied for renewal of its business permit and paid fees. The petitioner refused issuance unless the respondent executed a municipal lease contract on the ground that the municipality owned the land per its tax declaration and local ordinance.
Key Dates
Operation of business: 2005–2007
Permit renewal application: January 18, 2008
RTC decision denying mandamus: May 26, 2009
CA decision reversing RTC: March 30, 2011
CA resolution denying reconsideration: September 30, 2011
SC resolution reinstating RTC: July 23, 2012
Applicable Law
1987 Philippine Constitution (post-1990 decisions)
Local Government Code of 1991, Sections 16 (General Welfare) and 444(b)(3)(iv) (powers of the municipal mayor)
Municipal Revenue Code Section 6A.01 (lease requirement)
Rules of Court, Rule 45 (certiorari)
Facts
- The subject land was formerly government property, later declared alienable by DENR.
- Respondent conducted emission testing therefrom 2005–2007.
- Respondent applied for permit renewal in 2008; petitioner demanded a lease agreement.
- The parties disagreed over lease terms, prompting the respondent’s petition for mandamus and damages.
Ruling of the RTC
The RTC denied mandamus for lack of merit, holding that:
- The municipality owned the land per Tax Declaration No. 002-01197.
- Section 6A.01 authorized requiring a lease.
- Issuance of business permits by a mayor is discretionary, not ministerial.
Ruling of the Court of Appeals
Although declaring the petition moot (permit period lapsed), the CA reversed the RTC for academic purposes, finding:
- Tax declaration alone could not justify mandatory lease.
- Sangguniang Bayan Resolution No. 2007-81 imposing rental fees was void for non-compliance with the Local Government Code.
- No damages against the mayor due to presumption of good faith and expiration of his term.
Supreme Court Ruling
The Supreme Court held the petition for mandamus and the CA’s decision moot and academic due to expiration of the business permit period and the mayor’s term. The Court further ruled:
- A mayor’s power to issue business permits is an exercise of delegated police power (Section 16 and Section 444(b)(3)(iv), Local Government Code of 1991), inherently discretionary.
- A writ of mandamus cannot compel discretionary acts.
- The CA erred in rendering a substantive decision instead of dismissing the appeal for mootness.
Legal Principles
- Mootness Doctrine: A case loses justiciability when the subject matter
Case Syllabus (G.R. No. 198860)
Facts of the Case
- Naguilian Emission Testing Center, Inc. (“respondent”) operates an emission testing business on a parcel of land formerly part of the public domain, later certified by the DENR as alienable and disposable.
- From 2005 to 2007, the respondent conducted its business uninterruptedly on that parcel in the Municipality of Naguilian, La Union.
- On January 18, 2008, the respondent applied for renewal of its business permit and paid the required fees.
- Abraham P. Rimando (“petitioner”), then mayor of Naguilian, refused to issue the renewed permit unless the respondent first executed a lease contract with the municipality.
- The respondent was willing to sign subject to certain revisions, but the petitioner rejected those proposed terms.
- The parties failed to agree, prompting the respondent to file a petition for mandamus and damages before Branch 67 of the RTC of Bauang, La Union.
RTC Decision
- The RTC denied the petition on May 26, 2009 for lack of merit.
- It found that Tax Declaration No. 002-01197 established municipal ownership of the land.
- It held that under Section 6A.01 of the municipal Revenue Code, the municipality could require a lease contract as a condition to business operations on its property.
- It ruled that the issuance of business permits by a mayor is discretionary and not subject to compulsion by mandamus.
CA Decision
- The respondent appealed to the Court of Appeals; the CA dismissed the appeal as moot since the period covered by the permit request had