Expiration of the Franchise of the Metro Manila Turf Club, Inc.

DOJ OPINION NO. 023, s. 2019 September 17, 2019 Dr. Andrew Rovie M. Buencamino Executive Director III Philippine Racing Commission 4th Floor, Electra House Building Esteban Street, Legaspi Village, Makati City Dear Dr. Buencamino : We write in connection with the letter from your agency, the Philippine Racing Commission (PHILRACOM), bearing the subject line "Urgent Request for a Legal Opinion to [sic] the Expiration of the Franchise of the Metro Manila Turf Club, Inc. (MMTCI)." Front and center in this request is the legislative franchise of MMTCI as embodied in Republic Act (RA) No. 7978, 1 Section 1 of which provides for the 25-year term of the franchise and was originally worded as follows: "Any provision of law to the contrary notwithstanding, there is hereby granted to the Metro Manila Turf Club, Inc., a corporation duly organized and existing under the laws of the Philippines, hereinafter called the grantee, its successors or assigns, for a period of twenty-five (25) years from the effectivity of this Act, the right, privilege and authority to construct, operate and maintain one race track in the City of Kalookan , establish branches thereof for booking purposes, and hold or conduct horse races with betting, whether on the results of the races or other forms of gaming derived therefrom, and either directly or by means of any mechanical, electrical, and/or computerized totalizator, and to do and carry out all such acts, deeds and things as may be necessary to give effect to the foregoing." (Emphasis supplied) According to the PHILRACOM, RA No. 7978 was enacted into law by the Congress on 17 April 1995. A little more than two (2) years afterwards, specifically on 6 June 1997, RA No. 8298 2 was passed. It amended Section 1, among others, of the MMTCI franchise to read as follows: "Any provision of law to the contrary notwithstanding, there is hereby granted to the Metro Manila Turf Club, Inc., a corporation duly organized and existing under the laws of the Republic of the Philippines, hereinafter called the grantee, its successors or assigns, for a period of twenty-five (25) years from the effectivity of this Act, the right, privilege and authority to construct, operate and maintain one racetrack in the City of Kalookan, or anywhere within the provinces of Batangas, Cavite, Laguna and Rizal , establish branches thereof for booking purposes, and hold or conduct horse races with betting, on the results of the races either directly or by means of any mechanical, electrical, and/or computerized totalizator, and to do and carry out all such acts, deeds and things as may be necessary to give effect to the foregoing." (Amendment emphasized) The question of the expiration of the MMTCI franchise came about when its Chairman wrote PHILRACOM claiming that the franchise expires on April 2022 reckoned from the date of the amendatory law, RA No. 8298. On the other hand, the PHILRACOM points out that the term of the franchise, if RA No. 7978 should prevail, expires on 22 April 2020. In light of these conflicting interpretations, the PHILRACOM wrote this department to request for an official position. It is our opinion that the franchise period should be reckoned from the date of the original franchise and that it shall expire on 22 April 2020, and not from the amendatory law, RA No. 8298. First, there is no textual basis to apply the twenty-five (25)-year franchise period to the amendatory law when it is clear that the sole reason why RA No. 8298 amended Section 1 of RA No. 7978 was to allow MMTCI to expand its operations outside of Caloocan to anywhere within the provinces of Batangas, Cavite, Laguna, and Rizal. There is nothing in RA No. 8298 indicating that Congress intended to extend the franchise of MMTCI by two (2) more years reckoned from the passage of RA No. 8298, otherwise, the law would have made it absolutely clear. A deeper scrutiny of both laws would show that the twenty-five (25)-year period starts running "from the effectivity of this Act." The phrase "this Act" in both laws indubitably refers to RA No. 7978, even in RA No. 8298, where the phrase appears in the quoted version of Section 1 of RA No. 7978, as amended by Section 1 of RA No. 8298. Clearly then, the franchise period commences from the effectivity of RA No. 7978, and not the amending law. It should always be borne in mind that a legislative franchise allowing MTCI to establish and operate a racetrack in certain locations, is a mere privilege bestowed by the State upon the grantee. Because it is a privilege and not a right, a franchise should always be construed strictly against the franchisee. 3 It follows that the contention that MMTCI's franchise extends beyond 22 April 2020, the period set by RA No. 7989, should be grounded on clear and convincing evidence and legal arguments. In this instance, we see no basis whether in the letter of the law or in jurisprudential doctrine to concur with the said argument. Please be guided accordingly. Very truly yours, (SGD.) MENARDO I. GUEVARRA Secretary Footnotes 1. An Act Granting the Metro Manila Turf Club, Inc. a Franchise to Construct, Operate and Maintain a Race Track for Horse Racing in the City of Kalookan. 2. An Act Amending Republic Act Numbered Seventy-Nine Hundred Seventy-Eight, Entitled, "An Act Granting the Metro Manila Turf Club, Inc., a Franchise to Construct, Operate and Maintain a Racetrack for Horse Racing in the City of Kalookan." 3. Philippine Long Distance Telephone Co. v. The National Telecommunications Commission, et al. , G.R. No. 88404, 18 October 1990.