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Police Power; General Welfare ClauseWelfare G.R. L-3087-88 -- Rimando v. Naguilian Emission Testing Center Concepcion, J. Naguilian Emissions was running a business on land owned by the government. It sought to renew its business license in 2008. However, the mayor of Naguilian town refused to issue the license without the execution of a contract of lease between the business and the municipality. They could not agree on the terms hence a petition for mandamus was filed against the mayor by the business. This was granted by the lower court, whose decision was then overturned by the CA, which found that a tax declaration is not sufficient proof of ownership of the property by the municipality.

DOCTRINE A mayor cannot be compelled by mandamus to issue a business permit since the exercise of the same is a delegated police power, hence discretionary in nature.

FACTS 1. Naguilian Emission Testing Center, Inc. was operating an emission testing center inoperating Naguilian, La Union (surprise!) on land owned by the government, but was subsequently declared alienable and disposable by the DENR. 2. From 2005 to 2007, the business operated without any problem. In 2008, theoperated business applied for a renewal of its business license and paid the fees therefor. 3. Abraham Rimando, mayor of Naguilian, La Union, refused to issue the licenseRimando,Naguilian,issuelicense until the business executes a contract of lease with the Municipality of Naguilian. 4. The business was amenable to this condition, subject to some proposed revisions. (What these revisions were was not mentioned in the case.) However, these revisions were not acceptable to the Mayor. 5. A petition for mandamus was filed by the business with the RTC against themandamusbusinessRTC Mayor. 6. The RTC denied the petition, based on the following findings:petition, a. That the Municipality of Naguilian was the declared owner of the subject property as evidenced by the tax d eclaration over the property;property; b. Under Sec. 6A.01 of the Revenue Code, the municipality has the right to require petitioner to sign a contract of lease; and c. A mayor’s duty to issue business permits is discretionary in nature.businessdiscretionary 7. The Court of Appeals, while declaring the issue moot and aca demic since the periodAppeals, for which the business permit was sought (year 2008) had already lapsed, and Mayor Rimando’s term had already ended. Nonetheless, it proceeded to rule on the meritsended. and found that the issuance of a write of mandamus was justified. It reversed and set aside the ruling of the RTC. a. The CA held that the tax declaration was insufficient basis to requireheldrequire the execution of a contract of lease as a si ne qua non condition for the issuance of a business permit. b. Also, the resolution of the S angg uniang Panlalawig an (2007-81), uponPanlalawig which the mayor anchored his imposition of rental fees, was void for its failure to comply with the requirements of the Local Government Code. (the case fails to mention which requirements) c. The mayor, however, may not be held liable for damages as his refusalhowever,damages was done in the performance of official duties.

ISSUE with HOLDING 1. W/N a writ of mandamus to compel Mayor Rimando to issue a business licensemandamuscompelbusiness to Naguilian Emission Testing Center should have been issued by the court. a. No. A mayor cannot be compelled by mandamus to issue a businessNo. permit since the exercise of the same is a delegated police power, hence discretionary in nature. i. This was the pronouncement of the Court in Roble Arrastre, Inc. v. Hon. Villaflor, where a determination was made on the nature of the power of a mayor to grant business permits under the Local Government Code. ii. The Court in that case held that suc h power to grant permits is a manifestation of delegated police power. Necessarily, the exercise thereof cannot be deemed ministerial. iii. The proper remedy is a writ of certiorari, not mandamus. iv. The grant of such power under the Local Government Code is found in Sec. 444. Such section states that the municipal mayor’s power to issue licen ses is pursuant to Sec. 16 of the same law. Section 16 of the LGC is the general welfare clause , which encapsulates the delegated police power to local governments. This is exercised through their respective legislative bodies.

DISPOSITIVE PORTION Wherefore, premises considered, the Decision of the Court of Appeals is hereby SET ASIDE. The Decision of the Regional Trial Court of Bauang, La Union is REINSTATED.DecisionUnion REINSTATED.

DIGESTER: Horace SEC. 444. The Chief Executive: Powers, Duties, Functions and Compensation. (b) For efficient, effective and economical governance the purpose of which is the general welfare of the municipality and its inhabitants pursuant to Section 16 of this Code , theCode, municipal mayor shall: 3) Initiate and maximize the generation of resources and revenues, and apply the same to the implementation of development plans, program objectives and priorities as provided for under Section 18 of this Code, particularly those resources and revenues programmed for agro- industrial development and country-wide growth and progress, and relative thereto, shall: (iv) Issue licenses and permits and suspend or revoke the same for any violation of the conditions upon which said licenses or permits had been issued, pursuant to law or ordinance.

SEC. 16. General Welfare. – Every local government unit shall exercise the powers expressly – granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.

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