Title
Philippine Contractors Accreditation Board vs. Central Mindanao Construction Multi-Purpose Cooperative
Case
G.R. No. 242296
Decision Date
Jul 31, 2024
PCAB's Board Resolution 915 mandating cooperatives convert to corporations for contractor's licenses was invalidated by the Court for lacking presidential approval, affirming the lower court's decision.

Case Digest (G.R. No. 152500)
Expanded Legal Reasoning Model

Facts:

  • Parties and Nature of the Case
    • Petitioner: Philippine Contractors Accreditation Board (PCAB), an agency under the Department of Trade and Industry tasked with issuing contractor licenses.
    • Respondents: Central Mindanao Construction Multi-Purpose Cooperative (CMCM Cooperative), represented by its Chairman Noel O. Gascon and Authorized Managing Officer Dr. Harry M. Lusterio.
    • CMCM Cooperative is a duly registered service cooperative under RA 9520, engaging in construction contracting primarily for low-cost housing.
  • Background and Complaint
    • CMCM Cooperative alleged compliance with legal requirements for issuance and renewal of Contractor’s License since 1997 pursuant to RA 4566 and its Implementing Rules.
    • PCAB, through its Board Resolution No. 915, Series of 2011, required cooperatives holding contractor’s licenses to incorporate as business corporations as a condition for license renewal for 2013-2014.
    • The resolution imposed a deadline allowing cooperatives to renew licenses up to 2012-2013 but mandated incorporation before renewal beyond that period.
    • CMCM Cooperative claimed the resolution contradicted state policy protecting cooperatives under the Constitution and the Cooperative Code (RA 9520).
  • Procedural History
    • On November 24, 2012, CMCM Cooperative filed a complaint for nullification of Resolution No. 915 before the Regional Trial Court (RTC).
    • PCAB responded, arguing that RA 9520 does not authorize cooperatives to undertake general construction contracting except limited agrarian reform cooperatives and similar specialized service cooperatives.
    • The Cooperation Development Authority (CDA) has not recognized a "construction cooperative" category; thus, cooperatives cannot validly continue construction contracting under RA 9520.
    • RTC issued a Decision enjoining PCAB from implementing Resolution No. 915 for lack of approval by the President per Section 5 of RA 4566.
    • PCAB’s motion for reconsideration was denied; PCAB then appealed to the Court of Appeals (CA).
    • The CA dismissed PCAB’s appeal on procedural grounds, holding that only pure legal questions should be elevated directly to the Supreme Court by petition for review, not by ordinary appeal.
    • PCAB filed a Petition for Review on Certiorari before the Supreme Court.

Issues:

  • Whether the Court of Appeals erred in dismissing PCAB's appeal on procedural grounds.
  • Whether PCAB’s Board Resolution No. 915 requires the approval of the President of the Philippines and/or confirmation by the Construction Industry Authority of the Philippines (CIAP) before implementation.
  • Whether Resolution No. 915, which conditions the renewal of contractor’s licenses for cooperatives on incorporation, is valid under law and consistent with state policy protecting cooperatives.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)

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