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G.R. No. 115044

January 27, 1995
Art III, Sec 1
The case revolves around Ordinance No. 7065 that authorized the Mayor of the City of
Manila to grant a franchise to the Associated Development Corporation for the corporation to
be able to establish, maintain and operate a jai-alai in the said city. This ordinance was made
before the enactment of the Martial Law.
During the Martial Law, Former President Marcos issued Presidential Decree No. 771
revoking the powers of the Local Government to grant permits and cancelled all existing jaialai franchises. Corazon Aquino repealed this decree after the EDSA Revolution. The
respondent then filed a petition for mandamus and specific performance compelling the
Mayor to issue a permit or license in favor of Associated Development Corporation to which
RTC granted.
The City of Manila filed an action to annul the franchise of private respondent claiming that
private respondent had abandoned its franchise granted under Ordinance No. 7065 and that
said ordinance had been repealed by P.D. No. 771. Also, the petitioners claim that the trial
court had traduced the law when it made it appear in its decision that Ordinance No. 7065
was still in full force and effect.
The respondents, on the other hand, squarely assail the constitutionality of PD No. 771 as
violative of the equal protection and non-impairment clauses of the Constitution. In this
connection, counsel for ADC contends that this Court should really rule on the validity of PD
No. 771 to be able to determine whether ADC continues to possess a valid franchise.
1. Whether or not PD 771 is violative of the equal protection and non impairment clauses of
the constitution?
1. NO. PD 771 is not unconstitutional.
On the alleged violation of the non-impairment and equal protection clauses of the
Constitution, it should be remembered that a franchise is not in the strict sense a simple
contract but rather it is more importantly, a mere privilege especially in matters which are
within the government's power to regulate and even prohibit through the exercise of the
police power. Thus, a gambling franchise is always subject to the exercise of police power for
the public welfare.
Furthermore, there was no violation by PD No. 771 of the equal protection clause since the
decree revoked all franchises issued by local governments without qualification or exception.
ADC cannot allege violation of the equal protection clause simply because it was the only

Prepared by: Jeah Maureen P. Dominguez, 1C

one affected by the decree, for as correctly pointed out by the government, ADC was not
singled out when all jai-alai franchises were revoked.

Prepared by: Jeah Maureen P. Dominguez, 1C