Normandy v. Cabailo
REITERATIONFacts
1. The Antecedents: Respondent Mary Ann Cabailo engaged petitioner Chris Art L. Normandy, owner of Valkyrie Construction, for a PHP 1.2 million contract to construct the second floor of her house. Construction began in May 2016, but Normandy ceased work in November 2017, claiming completion. Cabailo alleged defective and incomplete work, refusing full payment until defects were rectified. An inspection by Engineer William S. Ibardo II revealed substandard materials, poor workmanship, and incomplete construction. Cabailo also discovered Normandy lacked a license from the Philippine Construction Accreditation Board (PCAB) at the time of engagement, contrary to his alleged representation that his DTI business registration sufficed. Normandy claimed Cabailo was aware of his pending PCAB license application. Despite a Certificate of Completion issued in June 2018 and a Certificate of Occupancy in January 2017, Cabailo withheld the balance of PHP 581,500.00. Normandy had previously filed a complaint for recovery of sum of money against Cabailo, which was dismissed after a compromise agreement, unaware Cabailo had already filed a complaint with the DTI. 2. Procedural History: The Department of Trade and Industry (DTI) Regional Office VI, through its Adjudication Officer, ruled that while Normandy was not guilty of violating the Consumer Act, he was guilty of violating Republic Act No. 4566 for engaging in contracting without a PCAB license. Normandy was ordered to cease operations until licensed, his business registration cancelled, future registrations withheld, and fined PHP 50,000.00 plus daily penalties. Normandy's motion for reconsideration was denied. He appealed to the Office of the Secretary of Trade and Industry, arguing DTI lacked jurisdiction and the action had prescribed. The Secretary affirmed DTI's jurisdiction, citing DTI Department Administrative Order No. 07-06, and found the complaint filed within the prescriptive period. Normandy's subsequent motion for reconsideration was denied. He then filed a Petition for Review under Rule 43 with the Court of Appeals (CA). Initially, the CA granted the petition, ruling DTI had no jurisdiction. However, upon Cabailo's motion for reconsideration, the CA issued an Amended Decision, reversing its initial ruling and affirming the DTI's decision, thus finding Normandy liable. 3. The Petition: Normandy filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the CA's Amended Decision. The core issue presented is whether the CA erred in affirming that the DTI possesses jurisdiction over the complaint filed against Normandy. Normandy contends that the Contractors' License Law vests jurisdiction over such matters with the PCAB, not the DTI. He argues that the CA's reliance on DTI DAO No. 07-06 is misplaced, as administrative rules cannot supersede statutory provisions. The petition seeks the reversal of the CA's Amended Decision and the dismissal of the complaint against him on the ground of lack of jurisdiction.
Issue(s)
Whether the Court of Appeals erred in affirming that the Department of Trade and Industry (DTI) has jurisdiction over the complaint filed against Normandy. Whether the Philippine Contractors Accreditation Board (PCAB) has jurisdiction over individuals or entities engaging in construction without a license.
Ruling
The Supreme Court granted the Petition for Review on Certiorari. The Amended Decision of the Court of Appeals dated August 24, 2022, was reversed. The complaint filed against Chris Art L. Normandy was dismissed on the ground of lack of jurisdiction on the part of the Department of Trade and Industry.
Ratio Decidendi
On the issue of DTI's jurisdiction: The Court held that the Contractors' License Law (Republic Act No. 4566) vests jurisdiction upon the Philippine Contractors Accreditation Board (PCAB) to investigate the actions of any contractor, including those operating without a license. The law defines a "contractor" broadly as "any person" who undertakes construction activities, irrespective of whether they possess a license or not. Section 35 of the same law explicitly penalizes "Any contractor who... submits or attempts to submit a bid to construct... without first securing a license." This phrasing indicates that the law anticipates and covers unlicensed contractors, thus granting PCAB jurisdiction over such cases. The Court emphasized that administrative regulations, such as DTI DAO No. 07-06, must conform to and be consistent with the enabling statute. In this case, DTI DAO No. 07-06, which purported to grant DTI jurisdiction over unlicensed contractors, conflicted with the express provisions of Republic Act No. 4566. Therefore, the statute prevails over the administrative issuance, rendering the DTI's exercise of jurisdiction improper. On the jurisdiction of the PCAB: The Court clarified that the PCAB has jurisdiction over cases involving individuals or entities engaging in construction without a license. Section 29 of Republic Act No. 4566 grants the PCAB the power to "investigate the action of any contractor." The definition of "contractor" in Section 9(b) of the same law is broad, encompassing "any person" engaged in construction. Furthermore, Section 11.3(bb) of the Implementing Rules and Regulations (IRR) of the Contractors' License Law explicitly states that the PCAB has jurisdiction over "[s]ubmitting or attempting to submit a bid to construct, or entering into contract or undertaking to construct... without first securing a license." The Court rejected the argument that the person complained of must be a licensee for PCAB to exercise jurisdiction, citing the principle that where the law does not distinguish, the courts should not distinguish. The phrase "any contractor" and "without first securing a license" clearly indicate that the PCAB's jurisdiction extends to unlicensed individuals operating in the construction business. Consequently, the complaint filed with the DTI should have been dismissed for lack of subject matter jurisdiction, as it falls within the purview of the PCAB's authority.
Main Doctrine
The Philippine Contractors Accreditation Board (PCAB) has jurisdiction over cases involving individuals or entities engaging in construction activities without a license, as defined under Section 35 of Republic Act No. 4566, notwithstanding administrative issuances that may assign such jurisdiction to the Department of Trade and Industry (DTI). In cases of conflict between a statute and an administrative order, the statute prevails.