EN BANC
[G.R. No. 100152. March 31, 2000]
ACEBEDO
OPTICAL COMPANY, INC., petitioner, vs. THE HONORABLE COURT OF
APPEALS, Hon. MAMINDIARA MANGOTARA, in his capacity as Presiding Judge of the
RTC, 12th Judicial Region, Br. 1, Iligan City; SAMAHANG OPTOMETRIST Sa
PILIPINAS - Iligan City Chapter, LEO T. CAHANAP, City Legal Officer, and Hon.
CAMILO P. CABILI, City Mayor of Iligan, respondents.
D E C I S I O N
PURISIMA, J.:
At bar is a petition for review under Rule
45 of the Rules of Court seeking to nullify the dismissal by the Court of
Appeals of the original petition for certiorari, prohibition and
mandamus filed by the herein petitioner against the City Mayor and City Legal
Officer of Iligan and the Samahang Optometrist sa Pilipinas - Iligan Chapter (SOPI,
for brevity).
The antecedent facts leading to the filing
of the instant petition are as follows:
Petitioner applied with the Office of the
City Mayor of Iligan for a business permit. After consideration of petitioner’s
application and the opposition interposed thereto by local optometrists,
respondent City Mayor issued Business Permit No. 5342 subject to the following
conditions:
1. Since it is a
corporation, Acebedo cannot put up an optical clinic but only a commercial store;
2. Acebedo cannot
examine and/or prescribe reading and similar optical glasses for patients,
because these are functions of optical clinics;
3. Acebedo cannot
sell reading and similar eyeglasses without a prescription having first been
made by an independent optometrist (not its employee) or independent
optical clinic. Acebedo can only sell directly to the public, without need of a
prescription, Ray-Ban and similar eyeglasses;
4. Acebedo cannot
advertise optical lenses and eyeglasses, but can advertise Ray-Ban and similar
glasses and frames;
5. Acebedo is
allowed to grind lenses but only upon the prescription of an independent
optometrist.[1]
On December 5, 1988, private respondent
Samahan ng Optometrist Sa Pilipinas (SOPI), Iligan Chapter, through its Acting
President, Dr. Frances B. Apostol, lodged a complaint against the petitioner
before the Office of the City Mayor, alleging that Acebedo had violated the
conditions set forth in its business permit and requesting the cancellation
and/or revocation of such permit.
Acting on such complaint, then City Mayor
Camilo P. Cabili designated City Legal Officer Leo T. Cahanap to conduct an
investigation on the matter. On July 12, 1989, respondent City Legal Officer
submitted a report to the City Mayor finding the herein petitioner guilty of
violating all the conditions of its business permit and recommending the
disqualification of petitioner from operating its business in Iligan City. The
report further advised that no new permit shall be granted to petitioner for
the year 1989 and should only be given time to wind up its affairs.
On July 19, 1989, the City Mayor sent
petitioner a Notice of Resolution and Cancellation of Business Permit effective
as of said date and giving petitioner three (3) months to wind up its
affairs.
On October 17, 1989, petitioner brought a
petition for certiorari, prohibition and mandamus with prayer for
restraining order/preliminary injunction against the respondents, City Mayor,
City Legal Officer and Samahan ng Optometrists sa Pilipinas-Iligan City Chapter
(SOPI), docketed as Civil Case No. 1497 before the Regional Trial Court
of Iligan City, Branch I. Petitioner alleged that (1) it was denied due
process because it was not given an opportunity to present its evidence during
the investigation conducted by the City Legal Officer; (2) it was denied
equal protection of the laws as the limitations imposed on its business permit
were not imposed on similar businesses in Iligan City; (3) the City
Mayor had no authority to impose the special conditions on its business permit;
and (4) the City Legal Officer had no authority to conduct the
investigation as the matter falls within the exclusive jurisdiction of the
Professional Regulation Commission and the Board of Optometry.
Respondent SOPI interposed a Motion to
Dismiss the Petition on the ground of non-exhaustion of administrative remedies
but on November 24, 1989, Presiding Judge Mamindiara P. Mangotara deferred
resolution of such Motion to Dismiss until after trial of the case on the
merits. However, the prayer for a writ of preliminary injunction was granted.
Thereafter, respondent SOPI filed its answer.
On May 30, 1990, the trial court dismissed
the petition for failure to exhaust administrative remedies, and dissolved the
writ of preliminary injunction it earlier issued. Petitioner’s motion for
reconsideration met the same fate. It was denied by an Order dated June 28,
1990.
On October 3, 1990, instead of taking an
appeal, petitioner filed a petition for certiorari, prohibition and
mandamus with the Court of Appeals seeking to set aside the questioned Order of
Dismissal, branding the same as tainted with grave abuse of discretion on the
part of the trial court.
On January 24, 1991, the Ninth Division[2] of the Court of Appeals dismissed the petition for
lack of merit. Petitioner’s motion reconsideration was also denied in the
Resolution dated May 15, 1991.
Undaunted, petitioner has come before this
court via the present petition, theorizing that:
A.
THE RESPONDENT
COURT, WHILE CORRECTLY HOLDING THAT THE RESPONDENT CITY MAYOR ACTED BEYOND HIS
AUTHORITY IN IMPOSING THE SPECIAL CONDITIONS IN THE PERMIT AS THEY HAD NO BASIS
IN ANY LAW OR ORDINANCE, ERRED IN HOLDING THAT THE SAID SPECIAL CONDITIONS
NEVERTHELESS BECAME BINDING ON PETITIONER UPON ITS ACCEPTANCE THEREOF AS A
PRIVATE AGREEMENT OR CONTRACT.
B.
THE RESPONDENT
COURT OF APPEALS ERRED IN HOLDING THAT THE CONTRACT BETWEEN PETITIONER AND THE
CITY OF ILIGAN WAS ENTERED INTO BY THE LATTER IN THE PERFORMANCE OF ITS
PROPRIETARY FUNCTIONS.
The petition is impressed with merit.
Although petitioner agrees with the finding
of the Court of Appeals that respondent City Mayor acted beyond the scope of
his authority in imposing the assailed conditions in subject business permit,
it has excepted to the ruling of the Court of Appeals that the said conditions
nonetheless became binding on petitioner, once accepted, as a private agreement
or contract. Petitioner maintains that the said special conditions are null and
void for being ultra vires and cannot be given effect; and therefore,
the principle of estoppel cannot apply against it.
On the other hand, the public respondents,
City Mayor and City Legal Officer, private respondent SOPI and the Office of
the Solicitor General contend that as a valid exercise of police power,
respondent City Mayor has the authority to impose, as he did, special
conditions in the grant of business permits.
Police power as an inherent attribute of
sovereignty is the power to prescribe regulations to promote the health,
morals, peace, education, good order or safety and general welfare of the
people.[3] The State, through the legislature, has delegated
the exercise of police power to local government units, as agencies of the
State, in order to effectively accomplish and carry out the declared objects of
their creation.[4] This delegation of police power is embodied in the
general welfare clause of the Local Government Code which provides:
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.
The scope of police power has been held to
be so comprehensive as to encompass almost all matters affecting the health,
safety, peace, order, morals, comfort and convenience of the community. Police
power is essentially regulatory in nature and the power to issue licenses or
grant business permits, if exercised for a regulatory and not revenue-raising
purpose, is within the ambit of this power.[5]
The authority of city mayors to issue or
grant licenses and business permits is beyond cavil. It is provided for by law.
Section 171, paragraph 2 (n) of Batas
Pambansa Bilang 337 otherwise known as the Local Government Code of 1983,
reads:
Sec. 171. The City
Mayor shall:
x
x x
n) Grant or refuse
to grant, pursuant to law, city licenses or permits, and revoke the same for
violation of law or ordinance or the conditions upon which they are granted.
However, the power to grant or issue
licenses or business permits must always be exercised in accordance with law,
with utmost observance of the rights of all concerned to due process and equal
protection of the law.
Succinct and in point is the ruling of this
Court, that:
"x x x
While a business may be regulated, such regulation must, however, be within the
bounds of reason, i. e., the regulatory ordinance must be reasonable, and its
provision cannot be oppressive amounting to an arbitrary interference with the
business or calling subject of regulation. A lawful business or calling may
not, under the guise of regulation, be unreasonably interfered with even by the
exercise of police power. xxx
xxx
xxx xxx
xxx The
exercise of police power by the local government is valid unless it contravenes
the fundamental law of the land or an act of the legislature, or unless it is
against public policy or is unreasonable, oppressive, partial, discriminating
or in derogation of a common right."[6]
In the case under consideration, the
business permit granted by respondent City Mayor to petitioner was burdened
with several conditions. Petitioner agrees with the holding by the Court of
Appeals that respondent City Mayor acted beyond his authority in imposing such
special conditions in its permit as the same have no basis in the law or
ordinance. Public respondents and private respondent SOPI, on the other hand,
are one in saying that the imposition of said special conditions on
petitioner’s business permit is well within the authority of the City Mayor as
a valid exercise of police power.
As aptly discussed by the Solicitor General
in his Comment, the power to issue licenses and permits necessarily includes
the corollary power to revoke, withdraw or cancel the same. And the power to
revoke or cancel, likewise includes the power to restrict through the
imposition of certain conditions. In the case of Austin-Hardware, Inc. vs.
Court of Appeals,[7] it was held that the power to license carries with
it the authority to provide reasonable terms and conditions under which the
licensed business shall be conducted. As the Solicitor General puts it:
"If the
City Mayor is empowered to grant or refuse to grant a license, which is a
broader power, it stands to reason that he can also exercise a lesser power
that is reasonably incidental to his express power, i. e. to restrict a license
through the imposition of certain conditions, especially so that there is no
positive prohibition to the exercise of such prerogative by the City Mayor, nor
is there any particular official or body vested with such authority"[8]
However, the present inquiry does not stop
there, as the Solicitor General believes. The power or authority of the City
Mayor to impose conditions or restrictions in the business permit is
indisputable. What petitioner assails are the conditions imposed in its
particular case which, it complains, amount to a confiscation of the business
in which petitioner is engaged.
Distinction must be made between the grant
of a license or permit to do business and the issuance of a license to engage
in the practice of a particular profession. The first is usually granted by the
local authorities and the second is issued by the Board or Commission tasked to
regulate the particular profession. A business permit authorizes the person,
natural or otherwise, to engage in business or some form of commercial
activity. A professional license, on the other hand, is the grant of authority
to a natural person to engage in the practice or exercise of his or her
profession.
In the case at bar, what is sought by
petitioner from respondent City Mayor is a permit to engage in the business of
running an optical shop. It does not purport to seek a license to engage in the
practice of optometry as a corporate body or entity, although it does have in
its employ, persons who are duly licensed to practice optometry by the Board of
Examiners in Optometry.
The case of Samahan ng Optometrists sa
Pilipinas vs. Acebedo International Corporation, G.R. No. 117097,[9] promulgated by this Court on March 21, 1997, is in
point. The factual antecedents of that case are similar to those of the case
under consideration and the issue ultimately resolved therein is exactly the
same issue posed for resolution by this Court en banc.
In the said case, the Acebedo International
Corporation filed with the Office of the Municipal Mayor an application for a
business permit for the operation of a branch of Acebedo Optical in Candon,
Ilocos Sur. The application was opposed by the Samahan ng Optometrists sa
Pilipinas-Ilocos Sur Chapter, theorizing that Acebedo is a juridical entity not
qualified to practice optometry. A committee was created by the Office of the
Mayor to study private respondent’s application. Upon recommendation of the
said committee, Acebedo’s application for a business permit was denied. Acebedo
filed a petition with the Regional Trial Court but the same was dismissed. On
appeal, however, the Court of Appeals reversed the trial court’s disposition,
prompting the Samahan ng Optometrists to elevate the matter to this Court.
The First Division of this Court, then
composed of Honorable Justice Teodoro Padilla, Josue Bellosillo, Jose Vitug and
Santiago Kapunan, with Honorable Justice Regino Hermosisima, Jr. as ponente,
denied the petition and ruled in favor of respondent Acebedo International
Corporation, holding that "the fact that private respondent hires
optometrists who practice their profession in the course of their employment in
private respondent’s optical shops, does not translate into a practice of
optometry by private respondent itself."[10] The Court further elucidated that in both the old
and new Optometry Law, R.A. No. 1998, superseded by R.A. No. 8050, it is
significant to note that there is no prohibition against the hiring by
corporations of optometrists. The Court concluded thus:
"All told,
there is no law that prohibits the hiring by corporations of optometrists or
considers the hiring by corporations of optometrists as a practice by the
corporation itself of the profession of optometry."
In the present case, the objective of the
imposition of subject conditions on petitioner’s business permit could be attained
by requiring the optometrists in petitioner’s employ to produce a valid
certificate of registration as optometrist, from the Board of Examiners in
Optometry. A business permit is issued primarily to regulate the conduct of
business and the City Mayor cannot, through the issuance of such permit,
regulate the practice of a profession, like that of optometry. Such a function
is within the exclusive domain of the administrative agency specifically
empowered by law to supervise the profession, in this case the Professional
Regulations Commission and the Board of Examiners in Optometry.
It is significant to note that during the
deliberations of the bicameral conference committee of the Senate and the House
of Representatives on R.A. 8050 (Senate Bill No. 1998 and House Bill No.
14100), the committee failed to reach a consensus as to the prohibition on
indirect practice of optometry by corporations. The proponent of the bill,
former Senator Freddie Webb, admitted thus:
"Senator
Webb: xxx xxx xxx
The focus of contention remains to be the
proposal of prohibiting the indirect practice of optometry by corporations. We
took a second look and even a third look at the issue in the bicameral
conference, but a compromise remained elusive."[11]
Former Senator Leticia Ramos-Shahani
likewise voted her reservation in casting her vote:
"Senator
Shahani: Mr. President
The optometry
bills have evoked controversial views from the members of the panel. While we
realize the need to uplift the standards of optometry as a profession, the
consensus of both Houses was to avoid touching sensitive issues which properly
belong to judicial determination. Thus, the bicameral conference committee
decided to leave the issue of indirect practice of optometry and the use of
trade names open to the wisdom of the Courts which are vested with the
prerogative of interpreting the laws."[12]
From the foregoing, it is thus evident that
Congress has not adopted a unanimous position on the matter of prohibition of
indirect practice of optometry by corporations, specifically on the hiring and
employment of licensed optometrists by optical corporations. It is clear that
Congress left the resolution of such issue for judicial determination, and it
is therefore proper for this Court to resolve the issue.
Even in the United States, jurisprudence
varies and there is a conflict of opinions among the federal courts as to the
right of a corporation or individual not himself licensed, to hire and employ
licensed optometrists.[13]
Courts have distinguished between optometry
as a learned profession in the category of law and medicine, and optometry as a
mechanical art. And, insofar as the courts regard optometry as merely a
mechanical art, they have tended to find nothing objectionable in the making
and selling of eyeglasses, spectacles and lenses by corporations so long as the
patient is actually examined and prescribed for by a qualified practitioner.[14]
The primary purpose of the statute
regulating the practice of optometry is to insure that optometrical services
are to be rendered by competent and licensed persons in order to protect the
health and physical welfare of the people from the dangers engendered by
unlicensed practice. Such purpose may be fully accomplished although the person
rendering the service is employed by a corporation.[15]
Furthermore, it was ruled that the
employment of a qualified optometrist by a corporation is not against public
policy.[16] Unless prohibited by statutes, a corporation has all
the contractual rights that an individual has[17] and it does not become the practice of medicine or
optometry because of the presence of a physician or optometrist.[18] The manufacturing, selling, trading and bartering of
eyeglasses and spectacles as articles of merchandise do not constitute the practice
of optometry. [19]
In the case of Dvorine vs. Castelberg
Jewelry Corporation,[20] defendant corporation conducted as part of its
business, a department for the sale of eyeglasses and the furnishing of
optometrical services to its clients. It employed a registered optometrist who
was compensated at a regular salary and commission and who was furnished
instruments and appliances needed for the work, as well as an office. In
holding that the corporation was not engaged in the practice of optometry, the
court ruled that there is no public policy forbidding the commercialization of
optometry, as in law and medicine, and recognized the general practice of
making it a commercial business by advertising and selling eyeglasses.
To accomplish the objective of the regulation,
a state may provide by statute that corporations cannot sell eyeglasses,
spectacles, and lenses unless a duly licensed physician or a duly qualified
optometrist is in charge of, and in personal attendance at the place where such
articles are sold.[21] In such a case, the patient’s primary and essential
safeguard lies in the optometrist’s control of the "treatment" by
means of prescription and preliminary and final examination.[22]
In analogy, it is noteworthy that private
hospitals are maintained by corporations incorporated for the purpose of
furnishing medical and surgical treatment. In the course of providing such
treatments, these corporations employ physicians, surgeons and medical
practitioners, in the same way that in the course of manufacturing and selling
eyeglasses, eye frames and optical lenses, optical shops hire licensed
optometrists to examine, prescribe and dispense ophthalmic lenses. No one has
ever charged that these corporations are engaged in the practice of medicine.
There is indeed no valid basis for treating corporations engaged in the
business of running optical shops differently.
It also bears stressing, as petitioner has
pointed out, that the public and private respondents did not appeal from the
ruling of the Court of Appeals. Consequently, the holding by the Court of
Appeals that the act of respondent City Mayor in imposing the questioned
special conditions on petitioner’s business permit is ultra vires cannot
be put into issue here by the respondents. It is well-settled that:
"A party
who has not appealed from the decision may not obtain any affirmative relief
from the appellate court other than what he had obtain from the lower court, if
any, whose decision is brought up on appeal.[23]
xxx an appellee
who is not an appellant may assign errors in his brief where his purpose is to
maintain the judgment on other grounds, but he cannot seek modification or
reversal of the judgment or affirmative relief unless he has also
appealed."[24]
Thus, respondents’ submission that the
imposition of subject special conditions on petitioner’s business permit is not
ultra vires cannot prevail over the finding and ruling by the Court of
Appeals from which they (respondents) did not appeal.
Anent the second assigned error, petitioner
maintains that its business permit issued by the City Mayor is not a contract
entered into by Iligan City in the exercise of its proprietary functions, such
that although petitioner agreed to such conditions, it cannot be held in
estoppel since ultra vires acts cannot be given effect.
Respondents, on the other hand, agree with
the ruling of the Court of Appeals that the business permit in question is in
the nature of a contract between Iligan City and the herein petitioner, the
terms and conditions of which are binding upon agreement, and that petitioner
is estopped from questioning the same. Moreover, in the Resolution denying
petitioner’s motion for reconsideration, the Court of Appeals held that the
contract between the petitioner and the City of Iligan was entered into by the
latter in the performance of its proprietary functions.
This Court holds otherwise. It had occasion
to rule that a license or permit is not in the nature of a contract but a
special privilege.
"xxx a
license or a permit is not a contract between the sovereignty and the licensee
or permitee, and is not a property in the constitutional sense, as to which the
constitutional proscription against impairment of the obligation of contracts
may extend. A license is rather in the nature of a special privilege, of a permission
or authority to do what is within its terms. It is not in any way vested,
permanent or absolute."[25]
It is therefore decisively clear that
estoppel cannot apply in this case. The fact that petitioner acquiesced in the
special conditions imposed by the City Mayor in subject business permit does
not preclude it from challenging the said imposition, which is ultra vires
or beyond the ambit of authority of respondent City Mayor. Ultra vires
acts or acts which are clearly beyond the scope of one’s authority are null and
void and cannot be given any effect. The doctrine of estoppel cannot operate to
give effect to an act which is otherwise null and void or ultra vires.
The Court of Appeals erred in adjudging
subject business permit as having been issued by respondent City Mayor in the
performance of proprietary functions of Iligan City. As hereinabove elaborated
upon, the issuance of business licenses and permits by a municipality or city
is essentially regulatory in nature. The authority, which devolved upon local
government units to issue or grant such licenses or permits, is essentially in
the exercise of the police power of the State within the contemplation of the
general welfare clause of the Local Government Code.
WHEREFORE, the petition is GRANTED; the Decision of the Court
of Appeals in CA-GR SP No. 22995 REVERSED; and the respondent City Mayor is
hereby ordered to reissue petitioner’s business permit in accordance with law
and with this disposition. No pronouncement as to costs.
SO ORDERED.
Bellosillo, Puno, Mendoza, Quisumbing,
Buena, Gonzaga-Reyes, Ynares-Santiago, and De Leon, Jr., JJ., concur.
Kapunan, J., see concurring opinion.
Vitug, J., please see dissent.
Davide, Jr., C.J., Melo, Panganiban, and Pardo, JJ., joined Mr. Justice Vitug in
his dissent.
[1] Annex A to Memorandum of Respondent City Mayor and
City Legal Officer of Iligan, Rollo, p. 231-232.
[2] Associate Justice Luis Javellana, ponente; Associate
Justice Alfredo Marigomen and Associate Justice Artemon Luna, members.
[3] Binay vs. Domingo, 201 SCRA 508.
[4] Tatel vs. Municipality of Virac, 207 SCRA 157.
[5] Procter and Gamble Phils. vs. The Municipality
of Jagna, 94 SCRA 894.
[6] Balacuit vs. CFI of Agusan del Norte, 163 SCRA
182.
[7] 69 SCRA 564.
[8] Comment by the Solicitor General, p. 8; Rollo,
p. 78.
[9] 270 SCRA 298.
[10] Ibid, p. 306.
[11] Saturday, June 3, 1995, "Approval of the
Conference Committee Report on S. No. 1998 and H. No. 14100, Record of the Senate,
p. 847.
[12] Ibid.
[13] 128 ALR 586.
[14] House of $8.50 Eyeglasses, Inc. vs. State
Board of Optometry, 288 Ala 349, 261 So 2d 27; State ex rel. Board of Optometry
vs. Sears Roebuck and Co., 102 Ariz 175, 427 Pd 126.
[15] Silver v. Lansburgh and Brother, 72 App DC 77,
11 F2d 518, 128 ALR 582; 61 Am Jur 2d 289.
[16] Georgia State Examiners v. Friedman’s Jewelers
(183 Ga 669, 189 SE 238).
[17] State ex rel McKittrick vs. Gate City Optical
Co., 339 Mo 427, 97 SW 2d 89).
[18] Dickson vs. Flynn, 246 App Div 341, 286 NYS
225.
[19] State ex rel. Brother vs. Beck Jewelry
Enterprises, Inc., 220 Ind. 276, 41 NE 2d 622, 141 ALR 876) (61 Am Jur 187);
Kindy Opticians, Inc. vs. State Board of Examiners in Optometry, 1939,
291 Mich 152, 289 NW 112, 113; New Jersey State Bd. of Optometrists vs.
S.S. Kresge Co., 113 NJL 287, 174 A 353).
[20] Dvorine vs. Castelberg Jewelry Corp., 170 Md.
661, 185 A 562.
[21] Roschen vs. Ward, 279 US 337, 73 L Ed 722, 49
S Ct 336.
[22] Small and Maine Board of Registration and examination
in Optometry, 293 A 2d 786.
[23] Policarpio vs. CA, 269 SCRA 344; Pison-Arceo
Agricultural and Development Corporation vs. NLRC, 279 SCRA 312;
Quintanilla vs. CA, 279 SCRA 397.
[24] La Campana Food Products, Inc. vs. Philippine
Commercial and Industrial Bank, 142 SCRA 394, 398.
[25] Gonzalo Sy Trading vs. Central Bank, 70 SCRA
570.