FACTS: On December 7, 1992 Bistro filed before the trial court a petition for mandamus and prohibition, with prayer for temporary restraining order or writ of preliminary injunction, against Lim in his capacity as Mayor of the City of Manila. Bistro filed the case because policemen under Lim’s instructions inspected and investigated Bistro’s license as well as the work permits and health certificates of its staff. This caused the stoppage of work in Bistro’s night club and restaurant operations. Lim also refused to accept Bistro’s application for a business license, as well as the work permit applications of Bistro’s staff, for the year 1993.
In its petition, Bistro argued that Lim’s refusal to issue the business license and work permits violated the doctrine laid down this Court in De la Cruz vs. Paras, to wit: "Municipal corporations cannot prohibit the operation of nightclubs. They may be regulated, but not prevented from carrying on their business."
Acting on Bistro’s application for injunctive relief, the trial court issued the first assailed temporary restraining order on December 29, 1992.
However, despite the trial court’s order, Lim still issued a closure order on Bistro’s operations even sending policemen to carry out his closure order and continued disrupting Bistro's business operations.
Meanwhile, Lim filed a motion to dissolve the injunctive order of January 20, 1993 and to dismiss the case. Lim insisted that the power of a mayor to inspect and investigate commercial establishments and their staff is implicit in the statutory power of the city mayor to issue, suspend or revoke business permits and licenses.
ISSUE: WON Bistro is being denied of their property rights as protected by the due process clause of the Constitution.
HELD: Yes, Lim has no authority to close down Bistro’s business or any business establishment in Manila without due process of law. Lim cannot take refuge under the Revised Charter of the City of Manila and the Local Government Code. There is no provision in these laws expressly or impliedly granting the mayor authority to close down private commercial establishments without notice and hearing, and even if there is, such provision would be void. The due process clause of the Constitution requires that Lim should have given Bistro an opportunity to rebut the allegations that it violated the conditions of its licenses and permits.
The regulatory powers granted to municipal corporations must always be exercised in accordance with law, with utmost observance of the rights of the people to due process and equal protection of the law. Such power cannot be exercised whimsically, arbitrarily or despotically. In the instant case, we find that Lim’s exercise of this power violated Bistro’s property rights that are protected under the due process clause of the Constitution.
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