Candari Jr. v. Donasco

G.R. No. 185053 (February 15, 2012)

Supreme Court upheld dismissal of Dolefil Coop dispute over unauthorized election, citing assembly authority.

Facts:

The case involves a dispute between the petitioners, who were newly elected members of the board of directors of the Dolefil Agrarian Reform Beneficiaries Cooperative, Incorporated (DARBCI), and the respondents, who were the incumbent members of the board. The respondents were elected on July 12, 1998, and their terms were supposed to end on July 12, 2000. However, they continued to hold their positions in a holdover capacity until the controversy arose.

On November 23, 2005, the respondents filed Civil Case No. 471-05 in the Regional Trial Court (RTC) of Polomolok, South Cotabato, seeking to prevent the petitioners from holding a special general assembly (GA) and an election of officers. They claimed that the GA was not called in accordance with Section 35 of Republic Act No. 6938, known as the Cooperative Code of the Philippines. The RTC issued a 72-hour Temporary Restraining Order (TRO) on November 24, 2005, to restrain the petitioners from proceeding with the GA.

Despite the TRO, a significant majority of the cooperative's members (5,910 members or 78.68%) held the GA on November 26, 2005, and elected the petitioners as new board members in absentia. The TRO was subsequently extended for 20 days, but on December 8, 2005, the RTC found the request for a preliminary injunction moot due to the GA and election having already occurred, leading to the dismissal of the respondents' Amended Complaint.

The respondents then filed a Petition for Certiorari with the Court of Appeals (CA), arguing that the RTC had committed grave abuse of discretion by dismissing their case without a trial on the merits. The CA agreed and remanded the case back to the RTC for further proceedings, stating that the ongoing leadership crisis undermined the cooperative's viability and could impede the State's land reform program.

The petitioners contested the CA's decision, asserting that the case had become moot and that the RTC had properly considered the evidence presented during the hearing for the preliminary injunction. They also argued that the CA misapprehended the facts regarding the legality of the elections.

Legal Issues:

  1. Whether the RTC erred in dismissing the respondents' Amended Complaint for lack of cause of action.
  2. Whether the CA correctly found that the case was not moot and remanded it for further proceedings.
  3. Whether the actions of the GA in electing new officers rendered the respondents' claims moot.

Arguments:

  • Petitioners' Arguments:

    • The CA erred in allowing the respondents' Petition for Certiorari as it was the wrong remedy.
    • The CA misapprehended the facts, particularly regarding the mootness of the case due to the GA's actions.
    • The RTC was justified in considering evidence beyond the allegations in the complaint, which supported the dismissal of the case.

  • Respondents' Arguments:

    • The Amended Complaint sufficiently stated a cause of action based on their rights as incumbent officers.
    • The RTC should have conducted a trial on the merits instead of dismissing the case outright.
    • The dismissal by the RTC constituted grave abuse of discretion, warranting review via certiorari.

Court's Decision and Legal Reasoning:

The Supreme Court granted the petitioners' appeal, reversing the CA's decision and reinstating the RTC's order dismissing the Amended Complaint. The Court reasoned that the GA's actions, which included the election of new officers and the amendment of the cooperative's Articles of Cooperation and By-Laws, rendered the case moot. The respondents, who were only in a holdover capacity, no longer had the legal standing or cause of action to challenge the election results.

The Court emphasized that the GA is the highest policy-making body of the cooperative, and its decisions, including the election of new officers, must be respected. The Court also noted that the supervening events, particularly the GA's actions, made it futile to remand the case for further proceedings, as there was nothing left for the RTC to adjudicate.

Significant Legal Principles Established:

  1. The General Assembly (GA) is the highest policy-making body of a cooperative and has exclusive powers, including the election of board members.
  2. A case becomes moot when the issues presented have been resolved or rendered irrelevant by subsequent events, such as the actions of the GA.
  3. The court's jurisdiction requires an actual case or controversy; if the purpose of the case has become stale, the court will not entertain it.