Mayor PABLO P. MAGTAJAS, et. al. versus PRYCE PROPERTIES CORP. INC. & PAGCOR G.R. No.

111097 July 20, 1994

FACTS: PAGCOR announced the opening of a casino in Cagayan de Oro City where it leased a portion of a building belonging to PPCI. Two Ordinances were passed and approved by the city council prohibiting the issuance of business permits and cancelling the existing one to any establishment for the using and allowing to be used its premises or portion thereof for the operation of casino; and providing for penalty for violation therefor. PPCI joined by PAGCOR challenged the validity of the said ordinances which thereafter were declared invalid.

ISSUE: Whether or not the city council is empowered to prohibit the operation of a PAGCOR gambling casino under its police power under the General Welfare Clause?

HELD: No. Requirements of a valid ordinance: 1. 2. 3. 4. 5. 6. Must not contravene the constitution or any statute Must not be unfair or oppressive Must not be partial or discriminatory Must not prohibit but may regulate trade Must be general and consistent with public policy Must not be unreasonable

PD 1869 which created PAGCOR has the status of statute, therefore the ordinances passed by the city council of CDO cannot be superior to the statute. RATIO: It is because the local governments are mere agents of the national governments and that the delegate cannot be superior to the principal or exercise powers higher than those of the latter. Said statute allowed casino cannot be prohibited by a local governments ordinances.