HON. LIM vs. HON.

PACQUING

Facts:
In May 1988, Associated Development Corporation (ADC) tried to operate a Jai-Alai.
The government through Games and Amusement Board intervened and invoked
Presidential Decree No. 771 which expressly revoked all existing franchises and
permits to operate all forms of gambling facilities (including Jai-Alai) by local
governments. ADC assails the constitutionality of P.D. No. 771.

Issues:
WON P.D. No. 771 is violative of the Constitution.
WON intervention by the Republic of the Philippines at this stage of the proceedings
is proper.
WON the Associated Development Corporation has a valid franchise to maintain and
operate jai-alai.

Held:
There is nothing on record to show or even suggest that PD No. 771 has been
repealed, altered or amended by any subsequent law or presidential issuance.
Neither can it be tenably stated that the issue of the continued existence of ADC's
franchise by reason of the unconstitutionality of PD No. 771 was settled in G.R. No.
115044, for the decision of the Court's First Division in said case, aside from not
being final, cannot have the effect of nullifying PD No. 771 as unconstitutional, since
only the Court En Banc has that power under Article VIII, Section 4(2) of the
Constitution.
And on the question of whether or not the government is estopped from contesting
ADC's possession of a valid franchise, the well-settled rule is that the State cannot
be put in estoppel by the mistakes or errors, if any, of its officials or agents
(Republic v. Intermediate Appellate Court, 209 SCRA 90). Consequently, in the light
of the foregoing expostulation, we conclude that the republic (in contra distinction
to the City of Manila) may be allowed to intervene in G.R. No. 115044. The Republic
is intervening in G.R. No. 115044 in the exercise, not of its business or proprietary
functions, but in the exercise of its governmental functions to protect public morals
and promote the general welfare.

Respondent ADC does not possess the required congressional franchise to

operate and conduct the jai-alai under RA 954 and PD 771. Since ADC has no
franchise from Congress to operate the jai-alai, it may not so operate even if it has a
license or permit from the City Mayor to operate the jai-alai in the Cityof Manila.
WHEREFORE, for the foregoing reasons, judgment is hereby rendered:
1. allowing the Republic of the Philippines to intervene in G.R. No. 115044.
2. declaring Presidential Decree No. 771 valid and constitutional.
3. declaring that respondent Associated Development corporation (ADC) does not
possess the required congressional franchise to operate and conduct the jai-alai
under Republic Act No. 954 and Presidential Decree No. 771.