Case Summary (G.R. No. 242296)
Factual Background
The Central Mindanao Construction Multi-Purpose Cooperative (CMCM Cooperative), duly registered under the Cooperative Development Authority, initiated a complaint against PCAB on November 24, 2012. CMCM Cooperative claimed that PCAB's Board Resolution No. 915, Series of 2011, which mandated cooperatives to convert into corporations as a prerequisite for the renewal of contractors’ licenses, defied the cooperative-friendly policies enshrined in the Philippine Constitution and the Cooperative Code.
Legal Proceedings
In response, PCAB contended that the Philippine Cooperative Code does not allow cooperatives to engage in construction contracting as defined under Republic Act No. 4566. CMCM Cooperative filled an action under Rule 63 seeking the nullification of Board Resolution No. 915, arguing it contravened the constitutional and statutory provisions favoring cooperatives.
Ruling of the Regional Trial Court (RTC)
The RTC sided with CMCM Cooperative, declaring Resolution No. 915 premature due to lack of presidential approval, which is mandated by Section 5 of Republic Act No. 4566 for any regulations issued by PCAB. The RTC consequently enjoined the implementation of the said resolution.
Court of Appeals (CA) Ruling
PCAB appealed to the CA, but the appeal was dismissed on procedural grounds, citing that PCAB raised a purely legal question regarding the validity of Resolution No. 915's implementation without presidential approval. The CA concluded that PCAB should have filed directly with the Supreme Court since the only issues at hand were questions of law.
Issues Presented
PCAB posited that the CA erred in its dismissal and questioned whether the resolution necessitated presidential approval to be implemented.
Supreme Court's Determination
The Supreme Court upheld the CA's dismissal, affirming that PCAB's appeal merely raised legal questions suited for direct review by the Supreme Court. Consequently, the court found that Resolution No. 915 was indeed null and void.
Rationale Behind the Court's Decision
The Supreme Court emphasized that administrative issuances must not conflict with or modify existing laws. It reiterated that PCAB's authority to issue regulations is contingent upon presidential approval as stated in Section 5
...continue readingCase Syllabus (G.R. No. 242296)
Case Background and Parties
- Petitioner: Philippine Contractors Accreditation Board (PCAB), an agency under the Department of Trade and Industries
- Respondent: Central Mindanao Construction Multi-Purpose Cooperative (CMCM Cooperative), a duly organized service cooperative registered with the Cooperative Development Authority
- Action arose from PCAB's Board Resolution No. 915, series of 2011, which required cooperatives to convert into corporations for contractor's license renewal
- CMCM Cooperative challenged the resolution as contradictory to cooperative promotion policies and lacking presidential approval
Allegations by CMCM Cooperative
- CMCM Cooperative claimed it was properly registered and complied with cooperative law (R.A. 9520)
- It was engaged in construction of low-cost housing and other projects, holding a valid contractor's license under R.A. 4566
- Contended that Resolution No. 915 unilaterally mandated conversion into a business corporation for license renewal, violating state policies protecting cooperatives in the Constitution and Cooperative Code
- Argued PCAB's directive was a clear defiance of cooperative protection and social justice principles
PCAB’s Defense and Position
- Asserted that under R.A. 9520, cooperatives do not have authority to engage in construction contracting except limited types like agrarian reform cooperatives
- Emphasized that CMCM was not an agrarian reform cooperative nor any special cooperative authorized to contract construction works
- Argued contractor's license is a mere privilege, not a vested property right
- Maintained Resolution No. 915 was a lawful exercise within the PCAB's mandate under R.A. 4566
Substance of Board Resolution No. 915, Series of 2011
- Stated that R.A. 9520 contains no provision authorizing cooperatives as regular construction contractors
- Imposed moratorium on new applications by cooperatives for contractor’s licenses
- Allowed a grace period for renewal until 2012-2013 licenses
- Required cooperatives to convert into corporations as a sine qua non for license renewal starting 2013-2014
- Pending clear determination of legal basis, regulated cooperatives’ role in construction licensing
Procedural History and RTC Ruling
- CMCM Cooperative filed a complaint seeking nullification of Resolution No. 915 for lack of Presidential ap