Laygo vs. Municipal Mayor of Solano, Nueva Vizcaya

Mandamus does not lie to compel a municipal mayor to cancel a public market stall lease contract where the applicable resolution and contract provision merely authorize (using the permissive "may") rather than mandate such cancellation, and where the petitioner, as an illegal sublessee who is neither a stall applicant nor a representative of any aggrieved stallholder, lacks legal standing to institute the action.

The Municipality of Solano, Nueva Vizcaya operated a public market whose stalls were leased to stallholders under contracts containing, among others, an absolute prohibition against subleasing (Item No. 9) and a termination clause allowing the lessor to declare the lease terminated upon violation of any stipulation (Item No. 11). After a fire razed the public market, a Build-Operate-Transfer (BOT) scheme was implemented, permitting stallholders to reconstruct their stalls using their own funds, with lease rentals suspended until construction costs were recovered. The Sangguniang Bayan subsequently enacted Resolution No. 183-2004, authorizing the municipal mayor to enforce the anti-subleasing and termination provisions against stallholders who violated their lease contracts. Clarita Laygo, the mother of petitioners Rodolfo and Willie Laygo, was among the stallholders who reconstructed stalls under the BOT arrangement and later reoccupied them under a lease contract with the Municipal Government.

In July 2005, Aniza Bandrang sent two letter-complaints to then Municipal Mayor Santiago O. Dickson and the Sangguniang Bayan of Solano, Nueva Vizcaya, informing them of an illegal sublease she had entered into with Rodolfo Laygo and Willie Laygo over Public Market Stalls Nos. 77-A, 77-B, 78-A, and 78-B, which the Laygos leased from the Municipal Government. Bandrang claimed that the Laygos told her to vacate the stalls and subsequently subleased them to another person. She expressed willingness to testify against the Laygos and requested that she be given priority to lease the stalls she vacated in the future.

In August 2005, the Sangguniang Bayan endorsed Bandrang's letter and a copy of Resolution No. 183-2004 to Mayor Dickson for appropriate action, informing him that the matter fell under his jurisdiction since the Sanggunian had already passed the resolution authorizing him to enforce the provision against subleasing. Mayor Dickson responded that the stalls were constructed under a BOT scheme, meaning the Laygos had the right to keep their stalls until the BOT agreement was satisfied, and he asked the Sanggunian whether provisions had been made to sanction lessees under the BOT scheme similar to the anti-subleasing provision in the contract of lease. Bandrang thereafter wrote another letter to the Sanggunian, praying for the cancellation of the lease contract between the Municipality and the Laygos for violating the subleasing prohibition, suggesting that the stalls be bidded upon anew. The Sanggunian again referred the letter to Mayor Dickson, opining that Resolution No. 183-2004 already empowered him to cancel the lease contracts. Mayor Dickson, however, did not act on the referrals.

Bandrang then filed a Petition for Mandamus before the RTC of Bayombong, Nueva Vizcaya, against Mayor Dickson, later amending the petition to implead the Laygo brothers. She alleged that despite being aware of the Laygos' violations, Mayor Dickson refused to enforce the anti-subleasing provisions, constituting unlawful neglect of his public duty. She sought an order directing the mayor to cancel the lease and re-lease the vacated stalls to interested persons. In his Answer, Mayor Dickson invoked the principle of pari delicto, arguing that Bandrang herself was guilty of subleasing and therefore had no right to seek judicial relief. He also contended that Bandrang had no cause of action, was not a real party in interest, and that the act sought to be compelled was purely discretionary.

The Laygo brothers denied that they were the lessees of the stalls, clarifying that their mother, Clarita Laygo, was the lessee under a BOT scheme with the Municipality. They asserted that the contract of lease with Bandrang was subject to the consent of Clarita's other heirs, which was never given, so there was no sublease to speak of. Even assuming a sublease existed, they maintained that the prohibition would not apply because their contract with the Municipality was a BOT agreement, not a lease contract, and Resolution No. 183-2004 covered only stallholders who violated their lease contracts. They further argued that even if the prohibition applied, there was no ground for revocation because the subleasing had ended and the Municipality's subsequent acceptance of rental payments ratified the contract.

On January 8, 2008, Bandrang filed a Motion for Summary Judgment, arguing that no genuine factual issues existed. She reiterated the violation of the subleasing prohibition and pointed out that the Sanggunian had passed two additional resolutions, Resolution No. 017-2006 and Resolution No. 135-2007, reiterating the implementation of Resolution No. 183-2004. She also alleged for the first time that the Laygos had failed to pay stall rental fees for over 17 months, citing Section 7B.06(a) of Municipal Ordinance No. 164, Series of 1994, which provided that failure to pay rental for three consecutive months shall cause automatic cancellation of the lease. The RTC granted the petition on January 28, 2008, finding that the contract was one of lease and that the Laygos had violated its terms. The CA affirmed on December 16, 2008, holding that mandamus was available to compel the mayor to exercise his discretion on the matter. The Laygos then elevated the case to the Supreme Court via a Petition for Review on Certiorari.

• No Lease Contract Existed: Petitioners argued that Resolution No. 183-2004 cannot be enforced against them because there was no contract of lease between them and the Municipal Government; their mother Clarita's contract was a BOT agreement, and Resolution No. 183-2004 only covered stallholders who violated their lease contracts.
• Resolution Limited to Mayor Dickson: Petitioners maintained that Resolution No. 183-2004 specified Mayor Dickson and no other person to enforce its provisions; consequently, since Mayor Dickson was no longer in office, the resolution could no longer be enforced.
• No Sublease Consummated: Petitioners contended that the contract with Bandrang was subject to the consent of Clarita's other heirs, which was never given, so no sublease was perfected.
• Estoppel by Acceptance of Payments: Petitioners argued that even assuming the contract was one of lease, the Municipality was estopped from canceling it because it subsequently accepted payment of rentals until the time the case was filed, thereby ratifying the contract.

• Pari Delicto: Mayor Dickson countered that under the principle of pari delicto, Bandrang had no right to seek judicial remedy because she was herself guilty of participating in the illegal sublease.
• No Cause of Action and Not a Real Party in Interest: Mayor Dickson argued that Bandrang had no cause of action against him and was not a real party in interest.
• Discretionary Act: Mayor Dickson asserted that the subject of the mandamus was improper because it entailed an act purely discretionary on his part.
• BOT Scheme Coverage: Mayor Dickson maintained that the stalls were under a BOT scheme covered by an ordinance, as evidenced by a Sanggunian resolution directing stall owners to build their own stalls after the public market fire.
• Subsequent Resolution Authorizing Incumbent Mayor: The Municipal Government, through the Provincial Legal Officer, stated that Resolution No. 135-2007 was enacted with the same purpose as Resolution No. 183-2004 but authorizing then incumbent Mayor Dacayo to implement the lease contract provisions.

• Nature of the Contract: Whether Sangguniang Bayan Resolution No. 183-2004 may be applied against petitioners despite the alleged absence of a contract of lease between them and the Municipal Government of Solano, Nueva Vizcaya.
• Proper Party to Enforce: Whether Sangguniang Bayan Resolution No. 183-2004 may be enforced by anybody else except Mayor Dickson.
• Propriety of Mandamus: Whether mandamus is the proper remedy to compel the municipal mayor to cancel the lease contracts of petitioners.
• Legal Standing: Whether Bandrang has legal standing to institute the petition for mandamus.

• Nature of the Contract: Yes. Preponderant evidence established that the contract between petitioners and the Municipal Government was one of lease, not a BOT agreement, as shown by certifications of the former mayor and the MPDO, and the assessment of delinquent stall rentals by the Municipal Treasurer.
• Proper Party to Enforce: Yes, in part. Resolution No. 135-2007 was subsequently enacted authorizing then incumbent Mayor Dacayo to implement the lease contract provisions, addressing the issue of Mayor Dickson's departure from office.
• Propriety of Mandamus: No. The mayor's authority to cancel lease contracts under the relevant resolutions and Item No. 11 of the lease contract was discretionary, not ministerial, as indicated by the permissive word "may" in the termination clause.
• Legal Standing: No. Bandrang, as an illegal sublessee who was neither an applicant for any market stall nor a representative of any aggrieved stallholder or association, lacked legal standing to institute the petition for mandamus.

• Nature of the Contract: Both parties failed to present the written contracts they purported to have, and it was uncertain whether the contract fell under the Statute of Frauds. Nevertheless, the Municipal Government proved its claim through secondary evidence. Certifications from former Mayor Galima and the MPDO — presented and offered in evidence by petitioners themselves — showed that Clarita's contract was converted into a BOT agreement in 1992 due to the fire that razed the public market, but that she thereafter reoccupied the stalls under a lease contract with the Municipal Government after the construction was completed and the cost recovered. The Municipal Treasurer's Notice dated August 21, 2007, reminding petitioners of delinquent stall rentals from May 2006 to July 2007, further confirmed the lease nature of the contract, since under a BOT scheme no rental delinquency could have been assessed. Additionally, Resolution No. 183-2004, which quoted Items No. 9 and 11 of the lease contract, was presumed to have been regularly issued and deserved weight absent a showing of grave abuse of discretion by the Sanggunian.

• Proper Party to Enforce: While Resolution No. 183-2004 specifically named Mayor Dickson, the Sanggunian subsequently enacted Resolution No. 135-2007 with the same purpose but authorizing then incumbent Mayor Dacayo to implement the lease contract provisions. This subsequent resolution addressed the concern that the enforcement authority lapsed with Mayor Dickson's departure from office. The Court thus found that the enforcement authority could be exercised by the incumbent mayor through the subsequent resolution.

• Propriety of Mandamus: Mandamus is a command requiring the performance of a particular duty resulting from official station or operation of law. It will not lie absent unlawful neglect in the performance of an act which the law specifically enjoins as a duty, nor to compel the performance of discretionary duties. The distinction between ministerial and discretionary acts is that a ministerial act is one performed in a given state of facts in a prescribed manner in obedience to the mandate of legal authority without regard to the exercise of judgment, while a discretionary act involves the official's right to decide how or when the duty shall be performed. The privilege of operating a market stall under license is subject to the police power of the local government and may be refused or granted for reasons of public policy and sound public administration, falling under the general welfare clause of Section 16 of the Local Government Code. Moreover, Item No. 11 of the lease contract uses the permissive word "may," indicating that the lessor is not mandated to automatically terminate the lease upon violation but may choose to do so. Resolution No. 183-2004 merely authorizes the mayor to enforce the provision; it does not specifically enjoin cancellation as a duty. While exceptions exist — such as gross abuse of discretion, manifest injustice, or palpable excess of authority — none applied here. Mayor Dickson did act on the matter by exercising his discretion not to cancel the contract on the ground of pari delicto, and the complaint did not allege grave abuse of discretion, manifest injustice, or palpable excess of authority, nor did Bandrang present proof that the mayor acted arbitrarily or fraudulently.

• Legal Standing: Aside from the imperative duty of the respondent to perform what is demanded, it is essential that the petitioner has a clear legal right to the claim sought. The petitioner must be an aggrieved party with a personal and substantial interest in the case, having sustained or likely to sustain direct injury as a result of the government act challenged. Following the ruling in Almario vs. City Mayor, where a petitioner seeking to compel the city mayor to eject occupants of public market stalls was found to have no locus standi, Bandrang was likewise not an applicant for any stall in the public market, nor a representative of any applicant, stallholder, or association of persons deprived of their right to occupy a stall. Her interest was only that of a citizen at large, which was insufficient to confer legal standing for a petition for mandamus.

• Ministerial vs. Discretionary Duty in Mandamus — A purely ministerial act is one which an officer performs in a given state of facts, in a prescribed manner, in obedience to the mandate of a legal authority, without regard to the exercise of his own judgment. A discretionary act is one where the law imposes a duty upon a public officer and gives him the right to decide how or when the duty shall be performed. Mandamus lies only to compel the performance of ministerial duties, not discretionary ones. The Court applied this distinction by examining the permissive language of Item No. 11 of the lease contract ("the LESSOR may declare this lease terminated") and the authorizing language of Resolution No. 183-2004, concluding that the mayor's power to cancel was discretionary. While mandamus may compel an official to act on a matter involving discretion, it cannot direct the exercise of that discretion in a particular way. Exceptions exist where there is gross abuse of discretion, manifest injustice, or palpable excess of authority, but none were proven in this case.

• Legal Standing in Mandamus — A petitioner for mandamus must have a clear legal right to the claim sought and a direct interest in the duty or act to be performed. Legal standing requires a personal and substantial interest in the case such that the party has sustained or will sustain direct injury as a result of the government act challenged. An illegal sublessee who is neither an applicant for a market stall nor a representative of any aggrieved stallholder or association lacks locus standi. The Court applied this doctrine by analogy to Almario vs. City Mayor, finding that Bandrang's interest was merely that of a citizen at large.

• Presumption of Regularity of Sangguniang Resolutions — A resolution enacted by the Sangguniang Bayan is presumed to have been regularly issued and deserves weight and respect absent a showing of grave abuse of discretion on the part of its members. The Court relied on this presumption in giving weight to Resolution No. 183-2004, which quoted the anti-subleasing and termination provisions of the lease contract.

• "Clearly, Item No. 11 does not give the mayor a mandate to motu propio or automatically terminate or cancel the lease with a lessee who is delinquent in the payment of rentals or who is in violation of any of the provisions of the contract. This is apparent from the permissive word 'may' used in the provision. It does not specifically enjoin the mayor to cancel the lease as a matter of 'duty.'" — This passage articulates the ratio decidendi on why mandamus was improper: the permissive language of the contract provision rendered the mayor's authority discretionary rather than ministerial.

• "Discretion, when applied to public functionaries, means a power or right conferred upon them by law or acting officially, under certain circumstances, uncontrolled by the judgment or conscience of others. A purely ministerial act or duty in contradiction to a discretional act is one which an officer or tribunal performs in a given state of facts, in a prescribed manner, in obedience to the mandate of a legal authority, without regard to or the exercise of his own judgment upon the propriety or impropriety of the act done." — This is the canonical formulation of the ministerial-discretionary distinction adopted by the Court, drawn from Roble Arrastre, Inc. vs. Villaflor, and is frequently cited in mandamus jurisprudence.

• "Verily, he is not the real party in interest who has the capacity, right or personality to institute the present action. As this Court has well said in an analogous case, 'the petitioner does not have any special or individual interest in the subject matter of the action which would enable us to say that he is entitled to the writ as a matter of right.'" — This passage, quoted from Almario vs. City Mayor, defines the standing requirement in mandamus cases involving public market stalls and was applied by analogy to deny Bandrang's petition.

• Roble Arrastre, Inc. vs. Villaflor, G.R. No. 128509, August 22, 2006 — Followed. The Court adopted its formulation of the distinction between ministerial and discretionary acts as the controlling framework for determining the propriety of mandamus.
• Aprueba vs. Ganzon, G.R. No. L-20867, September 3, 1966 — Followed. The Court relied on its ruling that the privilege of operating a market stall under license is subject to the police power of the city government and may be refused or granted for reasons of public policy and sound public administration, establishing the discretionary nature of the mayor's authority.
• Republic vs. Capulong, G.R. No. 93359, July 12, 1991 — Followed. The Court cited its holding that mandamus will not issue to control or review the exercise of discretion of a public officer, and that courts will not interfere unless there is abuse or excess of authority.
• Angchango, Jr. vs. Ombudsman, G.R. No. 122728, February 13, 1997 — Followed. The Court cited its ruling that in the performance of an official duty involving discretion, the official can only be directed by mandamus to act, but not to act one way or the other, subject to exceptions for gross abuse of discretion, manifest injustice, or palpable excess of authority.
• Almario vs. City Mayor, G.R. No. L-21565, January 31, 1966 — Followed. The Court applied its ruling by analogy that a petitioner seeking to compel a city mayor to eject occupants of public market stalls had no locus standi, establishing the precedent for denying legal standing to Bandrang.

• Section 16, Local Government Code (General Welfare Clause) — Cited as the statutory basis for the delegated police power of local government units, under which the grant or revocation of market stall privileges falls, rendering such authority discretionary in nature.
• Rule 65, Revised Rules of Court (Mandamus) — The procedural rule governing the extraordinary remedy of mandamus, requiring unlawful neglect of a duty specifically enjoined by law or unlawful exclusion from a right or office, and confining the writ to ministerial duties except in recognized exceptional circumstances.
• Section 7B.06(a), Municipal Ordinance No. 164, Series of 1994 — Cited by Bandrang for the proposition that failure to pay rental fee for three consecutive months shall cause automatic cancellation of the contract of lease of space or stall; the Court did not rule on this provision directly but noted the allegation in the context of the summary judgment motion.
• Items No. 9 and No. 11, Contract of Lease of Market Stalls — Item No. 9 absolutely prohibits subleasing of the leased premises; Item No. 11 provides that the lessor "may declare" the lease terminated upon violation of any stipulation. The permissive language of Item No. 11 was central to the Court's holding that the mayor's authority was discretionary.

Presbitero J. Velasco, Jr. (Chairperson), Lucas P. Bersamin, Bienvenido L. Reyes, and Alfredo Benjamin S. Caguioa concurred in the decision. No separate concurring opinions were written.