G.R. No. 264268, July 22, 2024
CHRIS ART L. NORMANDY, OWNER, VALKYRIE CONSTRUCTION, PETITIONER, VS. MARY ANN CABAILO, RESPONDENT.

FACTS

Respondent Mary Ann Cabailo hired petitioner Chris Art L. Normandy, owner of Valkyrie Construction, to construct the second floor of her house for PHP 1.2 million. Construction began on May 3, 2016. In November 2017, Normandy stopped the work, claiming completion, but Cabailo refused full payment, alleging defective and incomplete construction. An engineer’s assessment revealed substandard materials and poor workmanship. Cabailo discovered Normandy was not a licensed contractor under the Philippine Construction Accreditation Board (PCAB) at the time of engagement. Normandy claimed Cabailo was aware he was still applying for a license. The Bacolod City Office of the Building Official issued a Certificate of Completion and a Certificate of Occupancy, but Cabailo refused to pay the balance. Normandy filed a civil case for sum of money, which was dismissed via compromise agreement. Unbeknownst to Normandy, Cabailo had already filed a complaint before the DTI for violation of Section 35 of the Contractors’ License Law (R.A. No. 4566) for engaging in contracting without a PCAB license. The DTI Adjudication Officer found Normandy not guilty of deceptive practices under the Consumer Act but guilty of violating R.A. No. 4566, ordering him to cease operations, cancel his business registration, and pay fines. The Office of the Secretary of Trade and Industry affirmed, holding the DTI had jurisdiction under its administrative orders and that the complaint was filed within the two-year prescriptive period. The Court of Appeals initially reversed, dismissing the complaint for lack of DTI jurisdiction, but upon reconsideration, issued an Amended Decision affirming the DTI’s jurisdiction and findings. Normandy filed this Petition for Review.

ISSUE

Whether the Department of Trade and Industry (DTI) has jurisdiction over a complaint for engaging in the business of contracting without a PCAB license in violation of Section 35 of Republic Act No. 4566 (the Contractors’ License Law).

RULING

Yes. The Supreme Court affirmed the Court of Appeals’ Amended Decision, upholding the DTI’s jurisdiction. The Court ruled that the DTI, through its adjudication officers, has the authority to hear and decide cases involving violations of trade and industry laws, which include R.A. No. 4566. This jurisdiction is conferred by DTI Department Administrative Order No. 07-06, Series of 2006, specifically Rule III, Section 3, which provides that complaints against persons or entities engaging in construction without a valid PCAB license shall be adjudicated by the DTI as a violation of a trade and industry law subject to its implementation and enforcement. The Court held that such administrative regulations, enacted to implement the law, have the force and effect of law. Since the offense is a violation of a trade and industry law (R.A. No. 4566) and the DTI is the implementing agency, it possesses jurisdiction over the complaint. The Court also found no merit in Normandy’s claim of prescription, noting the complaint was filed within the two-year period from the transaction’s consummation.