031 Alfredo Lim and Rafaelito Garayblas vs. CA, Hon.

Wilfredo Reyes and

Bistro Pigalle Inc.

Facts:
7 Dec. 1992- Bistro filed before RTC a petition for mandamus and
prohibition with prayer for TRO or writ of preliminary injunction against
Lim as Mayor of Manila. Petiion was filed because policemen, under the
instruction of Lim inspected and investigated Bistros license as well as
the work and health permits of the staff. This caused the interruption of
work in Bistros night club and restaurant operations.
Lim also refused to accept Bistros application for a business license
and the work permits application of the staff for 1993.
Bistro argued that Lims refusal to issue the permits were in violation of
the doctrine in Dela Cruz vs. Paras:
Municipal corporations cannot prohibit the operation of nightclubs.
They may be regulated, but not prevented from carrying on their
business.

Trial court issued the TRO on 29 Dec. 1992.

20 Jan. 1993- trial court granted Bistros application for a writ of
prohibitory preliminary injunction.
HOWEVER, despite the order, Lim still issued a closure order on Bistro
effective 23 Jan. 1993 and sent out policemen to carry out his closure
order.
25 Jan. 1993- Bistro filed an urgent motion for contempt against Lim
and the policemen. At the hearing, Bistro withdrew its motion on the
condition that Lim would respect the Courts injunction.
HOWEVER, on Feb. 12, 13, 15, 26 and 27 and March 1 and 2, 1993,
Lim, through his agents and policemen again disrupted Bistros
operations.
17 Feb. 1993- Lim filed a motion to dissolve the injunctive order and to
dismiss the case. He argued that the power of a mayor to inspect and
investigate commercial establishments and their staff is implicit in the
statutory power of the city mayor to issue, suspend or revoke business
permits and licenses. This statutory power is in pursuant with Art. II of
the Revised Charter of the City of Manila and in Sec. 445 par. 3 (iv) of
the Local Gov. Code of 1991.
Trial Court denied Lims motion to dissolve injunction and to dismiss
the case and authorized Bistro to remove the wooden cross-bars which
were placed in their establishments, New Bangkok Club and Exotic
Garden Restaurant.
10 Mar. 1993- Lim filed with the CA a petition for certiorari, prohibition
and mandamus against Bistro and Judge Wilfredo Reyes. CA sustained
the orders of RTC. MFR of Lim-denied.
 1July 1993- Manila City Ordinance No. 7738 took effect. On that same
day, Lim ordered the Western Police District Command to permanently
close down the operations of Bistro which the police immediately
implemented.
CA decision in part held that the Judge granted the writ of preliminary
injunction in order to maintain the status quo while the petition is
pending on the merits.
Issue:

1. W/N respondent judge commit grave abuse of discretion amounting

to lack or excess of jurisdiction in issuing said assailed orders?

2. W/N CA commit reversible errors in rendering its assailed decision?

3. W/N said civil case no. 92-63712 and said CA-g.r. sp no. 30381
become moot and academic when the New Bangkok Club and the
Exotic Garden Restaurant of private respondent were closed on July
1, 1993 pursuant to ordinance no. 7783? (Constitutionality of
ordinance was not raised before the trial court or CA and
issue is still under litigation in another case so the Court
only dealt with the first two issues)

Ruling: Decision of CA is affirmed in toto.

No.

Bistros cause of action in the mandamus and

prohibition proceedings is a property right under its license to
operate. Violation is the work disruption and refusal of Lim to issue a
business and work permit. Bistro filed for mandatory and prohibitory
injunction but the trial court only granted the prohibitory injunction.

The said injunction prevented Lim from interfering or

closing down business of Bistro pending resolution of whether Lim can
validly refuse to issue Bistros business and work permit for 1993.
 Lims argument: the power of a mayor to inspect and investigate
commercial establishments and their staff is implicit in the statutory
power of the city mayor to issue, suspend or revoke business permits and
licenses for violation of the conditions of its license and permit. This
statutory power is in pursuant with Art. II of the Revised Charter of the
City of Manila and in Sec. 445 par. 3 (iv) of the Local Gov. Code of 1991.

Bistros argument: Provisions relied upon by Lim do not

apply in this case. Bistro argues that the LGC of 1991 and the Revised
Charter of the City of Manila do not expressly or impliedly grant Lim
any power to prohibit the operation of night clubs. Lim failed to
specify the violation of Bistro in any of the conditions in the license
and permits. In refusing to accept the application of Bistro, it was
denied of due process of law.

The authority of mayors to issue business licenses and

permits is provided in Sec. 11 (1), Art. II of the Revised Charter of the
City of Manila:

Sec. 11. General duties and powers of the mayor. The general duties and
powers of the mayor shall be:

x x x.

(l) To grant and refuse municipal licenses or permits of all classes

and to revoke the same for violation of the conditions upon
which they were granted, or if acts prohibited by law or municipal
ordinances are being committed under the protection of such licenses
or in the premises in which the business for which the same have been
granted is carried on, or for any other reason of general interest.

Sec. 455 of the LGC of 1991 provides:

(b) For efficient, effective and economical governance the purpose of

which is the general welfare of the City and its inhabitants pursuant to
Section 16 of this Code, the City Mayor shall:
 (3) x x x.

(iv) Issue licenses and permits and suspend or revoke the

same for any violation of the condition upon which said
licenses or permits had been issued, pursuant to law or
ordinance.

Local Government Officials include the City Health Officer or his rep. and
the City Treasurer. LIM HAS NO AUTHORITY TO CLOSE DOWN BISTRO
WITHOUT DUE PROCESS OF LAW.

Lim cannot rely on the Revised Charter of the City of Manila as THERE IS
NOTHING IN THE PROVISION EXPRESSLY OR IMPLIEDLY GRANTING
THE MAYOR THE AUTHORITY TO CLOSE DOWN COMMERCIAL
ESTABLISHMENTS WITHOUT NOTICE AND HEARING. Even if there is
such, the provision will be void.

Constitution requires that Lim should have given Bistro the chance to
rebut the allegations that it violated the conditions of the license or
permit.

Regulatory powers given to municipal corporations must always

be exercised in accordance with law, with utmost observance of
the rights of the people to due process and equal protection of
the law. Such power cannot be exercised arbitrarily.

In this case, Lim DID NOT CHARGE BISTRO OF ANY SPECIFIC VIOLATION of
the condition of its license. STILL, LIM CLOSED down Bistros operation
even before expiration of its business license. Lim also denied Bistros
application without checking if it complied with the legal requirements.

Lims zeal in his campaign against prostitution is commendable and there

is a presumption of good faith on his part; that his motivation was his
concern for his constituents when he implemented his campaign against
prostitution. HOWEVER, there is no excuse in closing Bistro arbitrarily
without due process of law.

2. No.

CA did not err in upholding the orders.

Sole objective of a writ of preliminary injunction is to preserve the status

quo until merits of the case is heard fully. The injunction was intended to
maintain the status quo while petition has not yet been resolved on the
merits.