Republic of the Philippines DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT DILG-NAPOLCOM Center, EDSA comer Quezon Avenue, West Triangle, Quezon City http: wwwdilg.com.ph 14 NOV 2019 CILG OPINION NO. 34S. 2014 VICE MAYOR ERWIN DYAN D. JAVALUYAS Municipality of Aliaga Province of Nueva Ecija Dear Vice Mayor Javaluyas: This has reference your letter dated 09 September 2019 requesting for legal opinion relative to the licensing and operation of cockpit in the Municipality of Aliaga, Province of Nueva Ecija. In the letter of Vice Mayor Javaluyas, it is stated that the last Sangguniang Bayan (SB) Resolution granting license in favor of Mr. Severo Ortega was in 1997 in 2017, said cockpit was closed down due to being near school buildings pursuant to Presidential Decree No. 445 (PD 445), otherwise known as the Cockfighting Law of 1974, However, in June 13, 2019, SB Resolution No. 58, series of 2019, entitled FA Resolution Adopting, Approving and Confirming the Transfer of Legislative Franchise from Johann Virgil T. Ortega under SB Resolution Nos. 09 and 14, series of 1992 and SB Resolution No. 09, series of 1997 to Bumanlag Games and Amusement Center, a New Management from prior Cockpit Operator and Owner Pursuant to the Guidelines of its Operation under PD 449 and existing Muncipal Ordinance Relative thereto” was passed, On June 27, 2019, SB Ordinance No. 10, series of 2019, entitled as “An Ordinance providing for the Establishment, Operation and Maintenance of Cockpits, Laying Conditions for the Issuance of Franchise, License thereof, Regulation of Cockfighting and Breeding of Gamecocks in the Municipality of Aliaga, Neuva Ecija” was enacted. On July 23, 2019, said Sangguniang Panlalawigan of Nueva Ecija issued Resolution No, 156-s-2019 voiding and nullifying said SB Ordinance No. 10, series of 2019. The following issues are submitted for our opinion: 1. Whether the legislative franchise granted in 1990 and 1991, and/or 1992 and 1997 to Severo Ortega can be transferred bythe heirs of the former grantee to Bumanlag Games and Amusement Center owned by Luisito Bumanlag; 2. Whether the Sangguniang Bayan, in enacting Resolution No. 58, series of 2019 can extend the period of the original franchise granted in 1992 and 1997 to twenty five years upon approval of Resolution No. 58, series of 2019; 3. Whether the reckoning period of relocation of the cockpit pursuant to PD 449 shalll be from its original existence or from the transfer granting arguendo that transfer is valid, of the franchise from Ortega to Bumanlag Games and Amusement Center; 4. Whether the transfer of franchise, again granting arguendo that such is valid, may be adopted, approved, and confirmed by the Sangguniang Bayan by way of a mere resolution, or should it be by an ordinance given that the franchise transferred under Resolution No. 58, series of 2019 acquires a permanent character for the period of 25 years as therein stated; 5. What would be the best course of action of the Sangguniang Bayan of Aliaga? May it rescind the said SB Resolution No. 58, series of 2019? 6. Does the grant of franchise to Bumaniag Games and Amusement Center gives the grantee vested rights? We deem it apt to answer the foregoing in seriatim. On the first query, we opine in the negative. Legislative franchise is a privilege grant from the local government. The heirs have no authority to transfer said franchise to another entity without undermining the authority of the local government to issue, upon its discretion, said franchise to the private entity found to be qualified to utilize the same. Section 131(m) of Republic Act No. 7160, otherwise known as the Local Government Code of 1991, provides for the definition of *Franchise,” which states: Section 131. Definition of Terms. - When used in this Title, the term: (m) "Franchise" is a right or privilege, affected with public interest which is conferred upon private persons or corporations, under such terms and conditions as the government and its political subdivisions may impose in the interest of public welfare, security, and safety; In addition, a franchise springs from contracts between the sovereign power and private citizens made upon valuable considerations, for purposes of individual advantage as well as public benefit. It is generally considered that theobligation resting upon the grantee to comply with the terms and conditions of the grant constitutes a sufficient consideration. It can also be said that the benefit to the community may constitute the sole consideration for the grant of a franchise by the state. Such being the case, the franchise is the law between the parties and they are bound by the terms thereof.” Considering the foregoing, we are of the view that the heirs cannot merely transfer the legislative franchise to another entity without undermining the authority of the local government in issuing the same and breaching the same as it is a contract between the grantor i.e. the local government and the grantee, the private entity. On the second query, we recognize the presumption of validity of the subject ordinance. Thus, we shall refrain from providing our opinion on the same as we are bound by this Department's Memorandum Order No. 2010-02, which states: “xxx all concerned are hereby advised that the Department shall not act on queries of the following kinds, to wits 1 Those containing facts that are justiciable in nature. Justiciable issues are those that require adjudication by the courts of law as to who between the opposing parties have the better right over a given controversy; 2. Those presumptively valid acts, e.g. enacted ordinances, consummated acts that already enjoy the presumption of regularity on the part of the public officer concerned, and similar instances; 3. Those that are litis pendencia, or pending litigation, except when the court itself requests for the opinion. In the event that an opinion has been rendered by the Department and its field officers without knowledge or information that a case involving the issues raised in the query is pending in court, such opinion shall automatically be deemed ineffective; and 4. Those that are cognizable by other agencies of the government.” (Emphasis supplied). Notwithstanding, for the mere purpose of academic discussion, may we note our view that the said Sangguniang Bayan resolution is, in effect, a new grant of license since it is in favor of a new grantee. Thus, it may be considered not as an extension of the old franchise but a new one. 2 GiR, No. -44007, March 20, 1991, THE COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. COURT OF TAX APPEALS, EASTERN EXTENSION AUSTRALASIA and CHINA TELEGRAPH COMPANY, LTD,, respondentsOn the third query, we respectfully submit that PD 449 is silent as to the relocation of cockpit, let alone the period within which to accomplish the same. We cite herein Section 5(c) of PD 449, which states: Section 5. Cockpits and Cockfighting: In General: Xxx (c) Cockpits Site and Construction. Cockpits shall be constructed and operated within the appropriate areas as prescribed in Zoning Law or Ordinance. In the absence of such law or ordinance, the local executives shall see to it that no cockpits are constructed within or near existing residential or commercial areas, hospitals, school buildings, churches or other public buildings. Owners, lessees, or operators of cockpits which are now in existence and do not conform to this requirement are given three years from the date of effectivity of this Decree to comply herewith. Approval or issuance of building permits for the construction of cockpits shall be made by the city or provincial engineer in accordance with their respective building codes, ordinances or engineering laws and practice. It is reiterated that the owners, lessees, or operators of cockpits already in existence and did not conform to the requirements as aforecited at the time of the passage of PD 449 were given three (3) years from the effectivity of the said law to comply. We do not find relevance of this period to the subject cockpit since the latter was established with PD 449 already been in long existence. PD 449 does not provide for the relocation nor the period within to accomplish the same in case of eventual non-conformance to the requirements laid down in the law. ‘Thus, we are of the view that the same is within the legislative discretion. On the fourth query, we, again, refrain from commenting on the matter on the ground of presumption of validity. Nevertheless, for academic discussion, we submit our previous legal opinion on the matter. In DILG Legal Opinion No. 053- 05, we opined as follows: Please take note that insofar as the granting of franchises is concerned, the afore-cited provisions do not specifically provide the particular action (whether ordinance or resolution) that the sanggunian should enact. The requirement to enact ordinances mentioned in the said provision has particular reference to the issuance of permits or licenses, among others. Now, of significance is the rule on the enactment of ordinances and resolutions. Paragraph (a) of Article 107 of the Rules and Regulations Implementing the Local Government Code provides that legislative actions of a general and permanent character shall be enacted in the form of ordinances while those which are temporary in character shallbe passed in the form of resolutions. The latter includes matter relating to proprietary functions and to private concerns. Note that franchises by its nature are special privileges intended to private persons or corporations. Being a privilege, it neither confers proprietary rights nor preclude the grantor to withdraw the same for cause. Therefore, the granting is merely temporary in character. As such, the enactment of a resolution by the sangguniang bayan in granting NMCC a franchise to operate cockpit or maintain cockpit activities is proper. On the fifth query, we respectfully recommend for the Sanggunian to just revoke the license issued in favor of Mr. Ortega and to issue a new one in favor of Bumanlag Game and Amusement Center to avoid confusion. On the sixth query, we opine in the affirmative. Said franchise is a grant of rights and privilege, as discussed. Thus, it follows that the grantee acquires vested rights. We hope to have enlightened you on the matter. Thank you. Very truly yours, By the authority of the Secretary MARIVEL C. SACENDONCILLO, CESO IT Undersecretafy for Local ae Copy furnished: JULIE J DAQUIOAG, PH. D., CESO TIT Regional Director DILG Region Iit wage