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G.R. No. 100152 – 314 SCRA 315 – Political Law – Municipal Corporations – Proprietary Functions – Police Power
Acebedo Optical Company, Inc. applied for a business permit to operate in Iligan City. After hearing the sides of local optometrists, Mayor Camilo Cabili of Iligan granted the permit but he attached various special conditions which basically made Acebedo dependent upon prescriptions or limitations to be issued by local optometrists. Acebedo basically is not allowed to practice optometry within the city (but may sell glasses only). Acebedo however acquiesced to the said conditions and operated under the permit. Later, Acebedo was charged for violating the said conditions and was subsequently suspended from operating within Iligan. Acebedo then assailed the validity of the attached conditions. The local optometrists argued that Acebedo is estopped in assailing the said conditions because it acquiesced to the same and that the imposition of the special conditions is a valid exercise of police power; that such conditions were entered upon by the city in its proprietary function hence the permit is actually a contract.
ISSUE: Whether or not the special conditions attached by the mayor is a valid exercise of police power.
HELD: NO. Acebedo was applying for a business permit to operate its business and not to practice optometry (the latter being within the jurisdiction Professional Regulation Commission Board of Optometry). The conditions attached by the mayor is ultra vires hence cannot be given any legal application therefore estoppel does not apply. It is neither a valid exercise of police power. Though the mayor can definitely impose conditions in the granting of permits, he must base such conditions on law or ordinances otherwise the conditions are ultra vires. Lastly, the granting of the license is not a contract, it is a special privilege – estoppel does not apply.