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ALFREDO LIM v. CA

FACTS:

Respondent Bistro Pigalle Inc. filed a petition for mandamus and prohibition against petitioner Alfredo Lim, then Mayor of Manila, after Lim ordered the inspection and investigation of Bistro’s license and work permits, causing the stoppage of work in Bistro’s night club and restaurant operations. Lim also refused to issue Bistro’s business license and work permits for the year 1993. Bistro argued that Lim’s actions violated the doctrine laid down by the Supreme Court in De la Cruz vs. Paras that municipal corporations cannot prohibit the operation of nightclubs, but can only regulate them. The trial court issued temporary restraining orders and a writ of prohibitory preliminary injunction, enjoining Lim from interfering with Bistro’s operations. Despite the court’s orders, Lim issued a closure order on Bistro’s operations and disrupted its business operations on several occasions. Lim filed a motion to dissolve the injunction and dismiss the case, which the trial court denied. Lim then filed a petition for certiorari, prohibition, and mandamus with the Court of Appeals, which was denied. Manila City Ordinance No. 7783 took effect and Lim ordered the permanent closure of Bistro’s operations. The Court of Appeals held that the trial court did not commit grave abuse of discretion in issuing the injunction.

ISSUES:

  1. Did the respondent judge commit grave abuse of discretion in issuing the assailed orders of granting the writ of preliminary injunction?

  2. Did the respondent Court of Appeals commit reversible errors in rendering its assailed decision and resolution?

  3. Did the civil case and the appellate case become moot and academic?

  4. Whether the Mayor of Manila has the power to close down private commercial establishments without due process of law.

  5. Whether the Mayor of Manila has the power to order police raids on commercial establishments.

  6. Whether the Mayor of Manila violated the prohibition on police raids as stated in Ordinance No. 7716.

RULING:

  1. The petition is without merit. The Court dealt only with the first two issues raised by the petitioner since the constitutionality of the ordinance was not raised and is still under litigation in another case. The Court upheld the findings of the Court of Appeals, stating that the trial court did not commit grave abuse of discretion in issuing the preliminary injunction. The Court held that the authority of mayors to issue business licenses and permits includes the power to suspend, revoke, or refuse to issue the same, but such power is only justified when there is a violation of the conditions of the permits and licenses.

  2. No, the Mayor of Manila does not have the power to close down private commercial establishments without due process of law. Due process requires that the establishment be given notice and opportunity to be heard before any action is taken against it. The Constitution's due process clause protects property rights, which include the right to operate a business.

  3. No, the Mayor of Manila does not have the power to order police raids on commercial establishments. Ordinance No. 7716 expressly prohibits police raids and inspections for the purpose of enforcing sanitary rules and regulations, inspecting licenses and permits, and/or enforcing internal revenue and customs laws and regulations. Only the City Health Officer or his representative, as well as the City Treasurer, are authorized to inspect and investigate such establishments.

  4. Yes, the Mayor of Manila violated the prohibition on police raids as stated in Ordinance No. 7716. His act of directing policemen to raid the commercial establishments disregarded the express prohibition in the ordinance.

PRINCIPLES:

  • The issuance of a writ of preliminary injunction is within the discretion of the court and will only be interfered with if there is clear abuse thereof.

  • The power of mayors to issue business licenses and permits includes the power to suspend, revoke, or refuse to issue them, but such power is premised on the violation of the conditions of these licenses and permits.

  • The power to issue licenses and permits is dependent on compliance with the conditions on which they were issued, while the power to refuse issuance is premised on non-compliance with prerequisites. Due process must be observed by giving notice and opportunity to be heard.

  • Regulatory powers of municipalities must be exercised in accordance with the law and with utmost observance of due process and equal protection of the law. Whimsical, arbitrary, and despotic exercise of power is not allowed.

  • Property rights, including the right to operate a business, are protected by the due process clause of the Constitution. Closure of private commercial establishments without due process violates this right.

  • Provisions or actions that violate constitutional due process rights are void.