Del Mar v.
PAGCOR o Section 1 of PD 1067-B provides the nature and term
of PAGCOR’s franchise to maintain gambling casinos
Facts: (not a franchise to operate jai-alai);
o Section 2 of the same decree spells out of the scope
PAGCOR requested for legal advice from the Secretary of Justice
of the PAGCOR franchise to maintain gambling
as to whether or not it is authorized by its Charter to operate
casinos (not a franchise to operate jai-alai);
and manage jai-alai frontons (courts) in the country.
o PD 1399, amending PD 1067-A and PD 1067-B did not
The Secretary of Justice opined that the authority of PAGCOR to
have any amendments that changed the nature and
operate and maintain games of chance or gambling extends to
scope of the PAGCOR franchise to maintain gambling
jai-alai which is a form of sport or game played for bets and that
casinos.
the Charter of PAGCOR amounts to a legislative franchise for the
o EO No. 169, issued by President Corazon Aquino,
purpose.
revoked the franchise of the Philippines Jai-Alai and
Petitioner Raoul B. Del Mar initially filed a Petition for
Amusement Corporation controlled by the
Prohibition (GR 138298) to prevent PAGCOR from managing
Romualdezes to operate jai-alai in Manila. PAGCOR’s
and/or operating the jai-alai or Basque pelota games, by itself
franchise to operate gambling casinos was not
of in agreement with Belle Corporation, on the ground that the
revoked; but neither was it given a franchise to
controverted act is patently illegal and devoid of any basis
operate jai-alai.
either from the Constitution or PAGCOR’s own Charter.
It is abundantly clear from the aforequoted laws, executive
PAGCOR later entered into an agreement with Belle Jai Alai
orders and decrees that the legislative practice is that a
Corporation, wherein Belle will make available to PAGCOR the
franchise to operate jai-alai is granted solely for that purpose
required facilities, as well as provide the needed funding for jai-
and the terms and conditions of the grant are unequivocably
alai operations with no financial outlay from PAGCOR, while
defined by the grantor. Such express grant and its
PAGCOR handles the actual management and operation of jai-
conditionalities protective of the public interest are evidently
alai.
wanting in PD 1869, the present Charter of PAGCOR.
Petitioner Del Mar filed a Supplemental Petition for Certiorari
In fine, PD 1869 does not have the standard marks of a law
questioning the validity of the agreement on the ground that
granting a franchise to operate jai-alai as those found under PD
PAGCOR is without jurisdiction, legislative franchise, authority
810 or EO 135. PD 1869 deals with details pertinent alone to the
or power to enter into such Agreement for the opening,
operation of gambling casinos.
establishment, operation, control and management of jai-alai
The short point is that PD 1869 does not have the usual
games.
provisions with regards to jai-alai.
Petitioners Federico S. Sandoval II and Michael T. Defensor filed
Legislative franchise to operate jai-alai is imbued with public
a Petition for Injunction (GR 138982) to enjoin PAGCOR from
interest and involves an exercise of police power. The familiar
operating or managing said jai-alai games.
rule is that laws which grant the right to exercise a part of the
In this case, a Petition in Intervention was filed by Juan Miguel
police power of the state are to be construed strictly and any
Zubiri alleging that the operatin by PAGCOR of jai-alai is illegal
doubt must be resolved against the grant.
because it is not included in the scope of PAGCOR’s franchise
A statute which legalizes a gambling activity or business should
which covers only games of chance.
be strictly construed and every reasonable doubt must be
resolved to limit the powers and rights claimed under its
Procedural Issue:
authority.
Does the Court have jurisdiction to take original cognizance of In addition, PAGCOR’s franchise was not granted by a real
a petition for injunction because it is not one of those actions Congress where the passage of the law requires a more rigorous
specifically mentioned in Sec. 1, Rule 57? process; it was enacted in the exercise of the legislative power
of President Marcos. It is self-evident that there is a need to be
Substantive Issue: extra cautious in treating this alleged grant of a franchise as a
grant by the legislature, as a grant by the representatives of our
Does PAGCOR have the authorization to manage or otherwise people, for plainly it is not.
operate jai-alai games?
Ruling on Procedural Issue:
YES. It is axiomatic that what determines the nature of an action
and hence, the jurisdiction of the court, are the allegations of
the pleading and the character of the relief sought.
A cursory perusal of the petition in GR 138982 will show that it
is actually one for Prohibition.
Even assuming arguendo, that it is an action for injunction, this
Court has the discretionary power to take cognizance of the
petition at bar if compelling reasons, or the nature and
importance of the issues raised, warrant the immediate exercise
of its jurisdiction.
Rules of procedure are but tools designed to facilitate the
attainment of justice such that when its rigid applications tends
to frustrate rather than promote substantial justice, this Court
has the duty to suspend their operation.
Ruling on Substantive Issue:
NO. A historical study of the creation, growth and development
of PAGCOR will really show that it was never given a legislative
franchise to operate jai-alai.
