Acebedo Optical Company, Inc.

vs Court of Appeals
314 SCRA 315 Political Law Municipal Corporation Proprietary Functions Police
Power
Acebedo Optical Company, Inc. applied for a business permit to operate in Iligan
City. After hearing the sides of local optometrists, Mayor Camilo Cabili of Iligan
granted the permit but he attached various special conditions which basically made
Acebedo dependent upon prescriptions or limitations to be issued by local
optometrists. Acebedo basically is not allowed to practice optometry within the city
(but may sell glasses only). Acebedo however acquiesced to the said conditions and
operated under the permit. Later, Acebedo was charged for violating the said
conditions and was subsequently suspended from operating within Iligan. Acebedo
then assailed the validity of the attached conditions. The local optometrists argued
that Acebedo is estopped in assailing the said conditions because it acquiesced to
the same and that the imposition of the special conditions is a valid exercise of
police power; that such conditions were entered upon by the city in its proprietary
function hence the permit is actually a contract.
ISSUE: Whether or not the special conditions attached by the mayor is a valid
exercise of police power.
HELD: NO. Acebedo was applying for a business permit to operate its business and
not to practice optometry (the latter being within the jurisdiction PRC Board of
Optometry). The conditions attached by the mayor is ultra vires hence cannot be
given any legal application therefore estoppel does not apply. It is neither a valid
exercise of police power. Though the mayor can definitely impose conditions in the
granting of permits, he must base such conditions on law or ordinances otherwise
the conditions are ultra vires. Lastly, the granting of the license is not a contract, it
is a special privilege estoppel does not apply.