GONZALES vs PAGCOR Case Digest

RAMON A. GONZALES v. PHILIPPINES AMUSEMENT AND GAMING CORPORATION, et al. 

429 SCRA 533 (2004), THIRD DIVISION (Carpio Morales, J.) 

While PAGCOR is allowed under its charter to enter into operator’s and/or management contracts, it is not allowed under the same charter to relinquish or share its franchise, much less grant a veritable franchise to another entity such as SAGE. PAGCOR can not delegate its power in view of the legal principle of delegata potestas delegare non potest, inasmuch as there is nothing in the charter to show that it has been expressly authorized to do so. 

FACTS: Petitioner Ramon A. Gonzales, as a citizen, taxpayer and member of the Philippine Bar, filed a Petition seeking to restrain respondent Philippine Amusement and Gaming Corporation (PAGCOR) from continuing its operations and prohibit it and its co-respondents Sports and Games Entertainment Corporation (SAGE), Best World Gaming and Entertainment Corporation (BEST WORLD), Belle Jai-alai Corporation (BELLE) and Filipinas Gaming Entertainment Totalizator Corporation (FILGAME)from enforcing: (1) the Grant of an Authority and Agreement for the Operation of Sports Betting and Internet Gambling executed between PAGCOR and SAGE; (2) the Grant of Authority to Operate Computerized Bingo Games between PAGCOR and BEST WORLD; and (3) the ―Agreement‖ among PAGCOR, BELLE and FILGAME to conduct jai-alai operations.
 In Del Mar v. Phil. Amusement and Gaming Corp., et al., the Court enjoined PAGCOR, BELLE, and FILGAME from managing, maintaining and operating jai-alai games and from enforcing the agreement entered into by them for that purpose. Then, PAGCOR et al. filed several motions for clarification, which the Supreme Court denied. 

Respondents BELLE and FILGAME filed a Manifestation stating that they were impleaded in the instant petition by reason of the agreement which they executed with PAGCOR. The said agreement was already declared invalid by the Supreme Court. In its comment, the respondent BEST WORLD stated that it had been unable to operate its bingo terminals and bingo games since its closure and shut down by PAGCOR and DILG. 

ISSUE: 

1. Whether or not Presidential Decree (P.D.) 1869, as amended (the PAGCOR Charter), is unconstitutional for having been issued pursuant to an unlawful exercise of legislative power by then President Ferdinand E. Marcos 
2. Whether or not the contracts entered into by PAGCOR with its BELLE and FILGAME are void for being undue delegations by PAGCOR of its franchise to operate and maintain gambling casinos, sports, gaming pools and the like 

HELD: 

That the P.D. 1869 has been rendered moot and academic 

In assailing the constitutionality of P.D. 1869, Gonzales does not point to any inconsistency between it and the present Constitution. Instead, it questions its issuance as an illegal exercise of legislative powers by then President Marcos. 

Indeed, while Gonzales made several poignant observations regarding the jurisprudence in the foregoing cases, the Court is unable to accept his invitation to re-examine said cases for the simple reason that the power conferred on it by the Constitution is limited to the adjudication of actual controversies and the determination of whether a branch or instrumentality of the government has acted with grave abuse of discretion amounting to lack or excess of jurisdiction. Even with its expanded jurisdiction, it is beyond the powers of this Court to re-write history. 

Since Gonzeles did not endeavor to show that P.D. 1869 itself is inconsistent with the Constitution, his prayer that PAGCOR be enjoined from continuing its operations and doing acts in furtherance of its existence must necessarily be denied. 

Movants may derive some satisfaction in the knowledge that Gonzales‘ prayer that respondents be enjoined from enforcing the "Agreement" among PAGCOR, BELLE and FILGAME to conduct jaialai operations and the "Grant of an Authority and Agreement for the Operation of Sports Betting and Internet Gambling" between PAGCOR and SAGE had been granted, albeit in the separate aforementioned cases of Del Mar and Jaworski. 

That the contracts entered into by PAGCOR with BELLE and FILGAME is void 

The second issue has already been raised in the Del Mar cases, this Court ruling that PAGCOR "has a valid franchise to, but only by itself (i.e., not in association with any other person or entity) operate, maintain and/or manage the game of jai-alai," and that, consequently, the Agreement of June 17, 1999 among PAGCOR, BELLE and FILGAME was without force and effect. 

While PAGCOR is allowed under its charter to enter into operator‘s and/or management contracts, it is not allowed under the same charter to relinquish or share its franchise, much less grant a veritable franchise to another entity such as SAGE. PAGCOR can not delegate its power in view of the legal principle of delegata potestas delegare non potest, inasmuch as there is nothing in the charter to show that it has been expressly authorized to do so. In Lim v. Pacquing, the Court clarified that "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 City of Manila." By the same token, SAGE has to obtain a separate legislative franchise and not "ride on" PAGCOR‘s franchise if it were to legally operate on-line Internet gambling.