FACTS:

Respondent Phuture processed, completed and submitted its Application for Permit to Engage in Business, Trade or Occupation to operate bingo games at SM Bacolod and paid the fees therefor to the Permits and Licensing Division of the City Mayor of Bacolod City. It was then issued a claim slip for its permit.

Phuture commenced bingo operations at SM Bacolod prior to the issuance of the actual hard copy of the mayor’s permit. 

Later, respondent learned that its bingo outlet was padlocked by agents of the Office of the City Legal Officer and a copy of a Closure Order was posted at the entrance of the bingo outlet.

Phuture claimed that such closure was tainted with malice and bad faith and that petitioners did not have the legal authority to shut down said bingo operations.

Phuture’s filed an Application for the issuance of a temporary mandatory order and/or preliminary mandatory injunction to remove the padlock installed at respondent’s place of business at SM Bacolod and allow it to conduct unhampered bingo operations.

The RTC denied the Application and dismissed the case for lack of merit.

On appeal,  the CA concluded that the respondent was denied its proprietary right without due process of law. 

Accordingly, the appellate court ordered the case to be reinstated and remanded to the RTC to determine if damages should be awarded.

Petitioner’s Motion for Reconsideration was denied.

Hence, the present recourse.

ISSUE:

Whether the petitioners may be held liable for damages in favor of respondent.

RULING:

The Petition is meritorious. 

Petitioners have not given their consent to be sued.

No consent to be sued and be liable for damages can thus be implied from the mere conferment and exercise of the power to issue business permits and licences. Accordingly, there is merit in petitioners’ argument that they cannot be sued by respondent since the City’s consent had not been secured for this purpose. This is notwithstanding petitioners’ failure to raise this exculpatory defense at the first instance before the trial court or even before the appellate court.

As this Court has repeatedly held, waiver of immunity from suit, being in derogation of sovereignty, will not be lightly inferred.

Moreover, it deserves mentioning that the City of Bacolod as a government agency or instrumentality cannot be estopped by the omission, mistake or error of its officials or agents. Estoppel does not also lie against the government or any of its agencies arising from unauthorized or illegal acts of public officers. Hence, we cannot hold petitioners estopped from invoking their immunity from suit on account of having raised it only for the first time on appeal. 

Petitioners, in ordering the closure of respondent’s bingo operations, were exercising their duty to implement laws and ordinances which include the local government’s authority to issue licenses and permits for business operations in the city. This authority is granted to them as a delegated exercise of the police power of the State. It must be emphasized that the nature of bingo operations is a form of gambling; thus, its operation is a mere privilege which could not only be regulated, but may also very well be revoked or closed down when public interests so require.

Considering that respondent had no legal right to operate the bingo operations at the outset, then it is not entitled to the damages which it is demanding from petitioners.