GR 235894; (Febuary, 2024) (Digest)
G.R. No. 235894 , February 05, 2024
KAREN BALDOVINO CHUA, PETITIONER, VS. JOSE NOEL B. DE CASTRO, RESPONDENT.
FACTS
Petitioner Karen Baldovino Chua and her husband engaged the services of respondent Jose Noel B. De Castro, a first cousin of petitioner’s mother, for the construction of a two-storey residential building. No written contract was executed. Respondent prepared the building plans and specifications, and petitioner provided all requested funding, amounting to PHP 2,241,600.00. After moving in, petitioner noticed structural and architectural defects (e.g., leaking ceilings, flooding, cracks). Respondent failed to resolve these, prompting petitioner to hire another foreman for repairs. Inspections revealed respondent had compromised on work and materials and deviated from the agreed structural plan. The barangay lupong tagapamayapa failed to settle the dispute, leading to a Certificate to File Action. Petitioner filed a Complaint for rescission, breach of contract, and damages before the Regional Trial Court (RTC) of Bayombong, Nueva Vizcaya. Respondent failed to file a responsive pleading. The RTC, citing OCA Circular No. 103-2015, dismissed the case motu proprio, holding that the Construction Industry Arbitration Committee (CIAC) had exclusive jurisdiction over the construction dispute. Petitioner’s motion for reconsideration was denied.
ISSUE
Whether the Regional Trial Court erred in dismissing petitioner’s complaint for lack of jurisdiction.
RULING
Yes, the RTC erred. The Supreme Court GRANTED the Petition, SET ASIDE the RTC Orders, and REMANDED the case to the RTC for adjudication on the merits. Jurisdiction over subject matter is conferred by law. Under Section 4 of Executive Order No. 1008 (The Construction Industry Arbitration Law), the CIAC has original and exclusive jurisdiction over construction disputes provided the parties agree to submit the same to voluntary arbitration. Here, there was no written construction contract containing an arbitration clause, and the parties did not agree to submit their dispute to arbitration. Petitioner repeatedly rejected arbitration, and nothing on record indicates respondent’s consent. Therefore, the basic requirement for CIAC jurisdiction was absent. The RTC’s overzealous application of OCA Circular No. 103-2015 could not ignore the letter of the law. The RTC has jurisdiction over the case.