Du vs. Jayoma

A license to operate a cockpit is a mere privilege, not a property right, and its suspension by the municipality gives the holder no cause of action for damages where the Sangguniang Bayan never authorized the operation through the public bidding required by local ordinance.

Danilo Du operated a cockpit in Mabini, Bohol, while the respondents were the municipal mayor and the members of the Sangguniang Bayan that regulated cockpit operations in the municipality. Under the Local Government Code of 1991, the power to authorize and license the establishment, operation, and maintenance of cockpits, and to regulate cockfighting and commercial breeding of gamecocks, is vested in the Sangguniang Bayan, while the municipal mayor as chief executive is charged with enforcing its ordinances and resolutions. The case tests whether a cockpit operator holding a mayor's business permit, but no Sangguniang Bayan authorization, can claim damages when the municipality shuts his operation down.

On July 7, 1988, the Sangguniang Bayan of the Municipality of Mabini, Bohol, enacted Municipal Ordinance No. 1, series of 1988, requiring the conduct of a public bidding for the operation of a cockpit in the municipality every four years. For the period January 1, 1989 to December 31, 1992, the winning bidder was Engr. Edgardo Carabuena. Because Carabuena failed to comply with the legal requirements for operating a cockpit, the Sangguniang Bayan on December 1, 1988 adopted Resolution No. 127, series of 1988, authorizing petitioner Danilo Du to continue his cockpit operation until the winning bidder complied with those legal requirements.

Du carried on operating well beyond that four-year window. On July 9, 1997, upon discovering that he had been operating his cockpit in violation of Municipal Ordinance No. 1, series of 1988, the Sangguniang Bayan passed Municipal Resolution No. 065, series of 1997, suspending his cockpit operation effective upon approval. Two days later, on July 11, 1997, respondent Venancio R. Jayoma, then municipal mayor, sent Du a letter ordering him to desist from holding any cockfighting activity effective immediately.

Feeling aggrieved, Du filed with Branch 51 of the RTC of Bohol a Petition for Prohibition, docketed as Special Civil Action No. 4, against the mayor and nine members of the Sangguniang Bayan of Mabini — Vicente Gulle, Jr., Joveniano Miano, Wilfredo Mendez, Agapito Vallespin, Rene Bucio, Jesus Tutor, Crescencio Bernales, Edgardo Ybanez, and Rey Pagalan — praying that a preliminary injunction and/or a temporary restraining order issue to prevent them from suspending his cockpit operation. He claimed that he had a business permit to operate until December 31, 1997, and that Municipal Resolution No. 065, series of 1997, was unlawfully issued because it deprived him of due process. On October 22, 1997, the RTC issued a Temporary Restraining Order enjoining the respondents from suspending his cockpit operation until further orders of the court, and the petition was subsequently amended to include damages.

In their Answer, respondents interposed that under the Local Government Code of 1991 the power to authorize and license the establishment, operation, and maintenance of a cockpit is lodged in the Sangguniang Bayan; that the mayor, in ordering the suspension, was merely exercising his executive power to regulate the establishment of cockpits in the municipality pursuant to the ordinances and resolutions enacted by the Sangguniang Bayan; and that Municipal Resolution No. 065, series of 1997, did not need the approval of the Sangguniang Panlalawigan because it was not an ordinance but an expression of the sentiments of the Sangguniang Bayan of Mabini.

The RTC found Du's testimony unrebutted that he lost ₱4,000 for each of the fifteen Sundays his cockpit was closed by reason of the suspension ordered by the respondent, and on that factual finding it computed his unearned income at ₱60,000. The CA, on the other hand, found that Du never acquired a vested right to operate a cockpit in the municipality, having been granted only a temporary privilege by the Sangguniang Bayan, and that there being no right in esse he was not entitled to damages.

• Ultra Vires Resolution: Petitioner contended that Municipal Resolution No. 065, series of 1997, is ultra vires, having been maliciously, hastily, and unlawfully enforced by the respondent mayor two days after its passage without the review or approval of the Sangguniang Panlalawigan of Bohol.
• Due Process: Petitioner alleged that respondents suspended the operation of his cockpit without due process and that the suspension was politically motivated.
• Damages: Petitioner claimed that as a result of the incident he is entitled to actual, moral, and exemplary damages as well as attorney's fees.

• No Vested Right: Respondents insisted that petitioner is not entitled to damages because he did not acquire a vested right to operate a cockpit in the municipality.
• Lawful Suspension: Respondents maintained that the suspension of petitioner's cockpit operation was pursuant to law and prevailing ordinance.

• Legal Right to Operate a Cockpit: Whether petitioner had a legal right to operate a cockpit in the Municipality of Mabini, Bohol, for the period January 1, 1997 to December 31, 1997, such that he had a cause of action against respondents.
• Validity of Resolution No. 065: Whether Municipal Resolution No. 065, series of 1997, is invalid for having been enforced without review or approval by the Sangguniang Panlalawigan of Bohol.
• Due Process: Whether petitioner was deprived of due process when his cockpit operation was suspended.
• Damages: Whether the CA erred in finding that petitioner is not entitled to actual, moral, and exemplary damages and attorney's fees.

• Legal Right to Operate a Cockpit: No. Petitioner had no legal right to operate a cockpit in 1997, since Resolution No. 127, series of 1988, authorized him only until December 31, 1992 or until the winning bidder complied with the legal requirements, and no public bidding was conducted for 1993 to 1997.
• Validity of Resolution No. 065: Yes, the resolution stands. It is presumed valid absent evidence that the Sangguniang Panlalawigan declared it invalid on review or that it was issued beyond the powers of the Sangguniang Bayan or the mayor.
• Due Process: No. A license to operate a cockpit is not property of which the holder may not be deprived without due process of law but a mere privilege that may be revoked when public interests so require.
• Damages: No. Without any legal right to operate a cockpit, petitioner has no cause of action, and injury alone does not give him the right to recover damages absent damnum et injuria.

• Legal Right to Operate a Cockpit: A cause of action is "the act or omission by which a party violates a right of another," and its essential elements are (1) a right in favor of the plaintiff; (2) an obligation on the part of the defendant to respect such right; and (3) an act or omission on the part of the defendant in violation of the plaintiff's right with a resulting injury or damage to the plaintiff for which the latter may file an action for the recovery of damages or other appropriate relief. The first element is decisive here. Under Resolution No. 127, series of 1988, the Sangguniang Bayan allowed petitioner to continue operating his cockpit only because the winning bidder for January 1, 1989 to December 31, 1992 failed to comply with the legal requirements for operating a cockpit; his authority would end on December 31, 1992 or upon compliance by the winning bidder, whichever came first. The only reason he was able to continue operating until July 1997 was that the Sangguniang Bayan of Mabini failed to monitor the status of the cockpit in the municipality. Even the business permit he obtained from the respondent mayor for January 1, 1997 to December 31, 1997 did not give him a license to operate a cockpit, because under Section 447(a)(3)(v) of the LGC it is the Sangguniang Bayan which is empowered to "authorize and license the establishment, operation and maintenance of cockpits, and regulate cockfighting and commercial breeding of gamecocks." No public bidding having been conducted for the operation of a cockpit from January 1, 1993 to December 31, 1997, petitioner could not claim that he was duly authorized by the Sangguniang Bayan for that period. The respondent members of the Sangguniang Bayan therefore had every reason to suspend his operation through Municipal Resolution No. 065, series of 1997, and the respondent mayor, as chief executive, was duty-bound to enforce the suspension pursuant to that Resolution.
• Validity of Resolution No. 065: No evidence was presented to show that upon review by the Sangguniang Panlalawigan of Bohol the resolution was declared invalid, or that it was issued beyond the powers of the Sangguniang Bayan or the mayor. Jurisprudence consistently holds that an ordinance, or in this case a resolution, is "presumed valid in the absence of evidence showing that it is not in accordance with the law." On that footing the SC found no reason to invalidate Municipal Resolution No. 065, series of 1997.
• Due Process: It is well enshrined in jurisprudence that "a license authorizing the operation and exploitation of a cockpit is not property of which the holder may not be deprived without due process of law, but a mere privilege that may be revoked when public interests so require." Because petitioner held no more than a privilege, his allegation that he was deprived of due process had no leg to stand on.
• Damages: Without any legal right to operate a cockpit in the municipality, petitioner is not entitled to damages. Injury alone does not give him the right to recover damages; he must also have a right of action for the legal wrong inflicted by the respondents. In order that the law will give redress for an act causing damage, there must be damnum et injuria — that act must be not only hurtful, but wrongful. The CA therefore committed no error in dismissing the case.

• Cause of Action — A cause of action is "the act or omission by which a party violates a right of another." Its essential elements are: (1) a right in favor of the plaintiff; (2) an obligation on the part of the defendant to respect such right; and (3) an act or omission on the part of the defendant in violation of the plaintiff's right with a resulting injury or damage to the plaintiff for which the latter may file an action for the recovery of damages or other appropriate relief. The SC dismissed the claim at the first element: Du had no right to operate a cockpit in 1997, so no cause of action could arise from the suspension.
• Cockpit License as Mere Privilege — A license authorizing the operation and exploitation of a cockpit is not property of which the holder may not be deprived without due process of law, but a mere privilege that may be revoked when public interests so require. Because Du's authority was a privilege, the suspension did not amount to a due process violation.
• Damnum et Injuria — In order that the law will give redress for an act causing damage, there must be damnum et injuria: the act must be not only hurtful, but wrongful. Injury alone does not give a party the right to recover damages; he must also have a right of action for the legal wrong inflicted. Du's proven losses from the fifteen closed Sundays did not suffice because the closure was not wrongful.
• Presumption of Validity of Ordinances and Resolutions — An ordinance, or a resolution, is presumed valid in the absence of evidence showing that it is not in accordance with the law. The SC applied this to Municipal Resolution No. 065, series of 1997, noting that no evidence showed the Sangguniang Panlalawigan had invalidated it on review or that it exceeded the Sangguniang Bayan's or the mayor's powers.
• Vested Right — One who is granted only a temporary privilege by the Sangguniang Bayan acquires no vested right to operate a cockpit, and without a right in esse he is not entitled to damages.

• "In the absence of a legal right in favor of the plaintiff, there can be no cause of action." — The decision's opening statement, which frames the entire ratio: the damages claim fails at the threshold because Du never had a right to operate.
• "a license authorizing the operation and exploitation of a cockpit is not property of which the holder may not be deprived without due process of law, but a mere privilege that may be revoked when public interests so require." — The canonical formulation of the privilege doctrine, quoted by the SC to dispose of the due process argument.
• "Injury alone does not give petitioner the right to recover damages; he must also have a right of action for the legal wrong inflicted by the respondents." — States the damages rule that defeats the RTC's award notwithstanding the proven income loss.
• "in order that the law will give redress for an act causing damage, there must be damnum et injuria – that act must be not only hurtful, but wrongful." — The Latin formulation of the damnum et injuria requirement, quoted in closing.

• Soloil, Inc. vs. Philippine Coconut Authority, G.R. No. 174806, August 11, 2010, 628 SCRA 185, 190 — Controlling precedent for the definition and three essential elements of a cause of action.
• Judge Leynes vs. Commission on Audit, 463 Phil. 557, 580 (2003) — Cited for the rule that an ordinance, or a resolution, is presumed valid in the absence of evidence showing that it is not in accordance with law.
• Pedro vs. Provincial Board of Rizal, 56 Phil. 123, 132 (1931) — Controlling precedent for the doctrine that a cockpit license is a mere privilege, not property protected by due process.
• Tan vs. Pereña, 492 Phil. 200, 210 (2005) — Cited for the damnum et injuria requirement: injury alone does not create a right to damages absent a legal wrong.

• Section 447(a)(3)(v), Local Government Code of 1991 — Vests in the Sangguniang Bayan the power to "authorize and license the establishment, operation and maintenance of cockpits, and regulate cockfighting and commercial breeding of gamecocks." Applied to hold that the mayor's business permit for 1997 did not authorize Du to operate, since only the Sangguniang Bayan could grant that license and no public bidding had been held for 1993-1997.
• Rule 2, Section 2, Rules of Court — Defines a cause of action as "the act or omission by which a party violates a right of another." Used as the starting point for the three-element test applied against Du.
• Rule 45, Rules of Court — The mode of review invoked in the petition for review on certiorari assailing the CA Decision of July 11, 2006 and Resolution of October 4, 2006.