Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 185053               February 15, 2012

EUSTAQUIO CANDARI, Jr., RENE ESPULGAR, EDITHA DACIA, GONZALO

PALMA, Jr., ANDRES DE LEON, ARNOLD BAJAR, PETER BAYBAYAN, EUGENIO
TABURNO, MATEO ALOJADO, ANSELMO LIGTAS, FLORITA BULANGIS,
ADELAIDA PENIG, ATTY. LEVI SALIGUMBA, EDITHA JIMENA, CYNTHIA
BELARMA and ANTONIA BANTING, Petitioners, 

vs.
ROLAND DONASCO, LIDIO VILLA, RENE GAID, PEPITO GUMBAN, OSCAR
ANDRADA, ROMEO CASTONES, ROSEMARY CORDOVA, GLORIA MATULLANO,
PONCIANO ABALOS, RESTITUTO BATIANCILLA, Respondents.

DECISION

SERENO, J.:

Respondents were members of the board of directors of Dolefil Agrarian Reform Beneficiaries
Cooperative, Incorporated (DARBCI). They were elected into office on 12 July 1998 and their
terms should have ended on 12 July 2000. However, they continued to occupy their positions in a
holdover capacity until the controversy in this case arose.

On 23 November 2005, respondents instituted Civil Case No. 471-05 at Branch 39 of the
Regional Trial Court (RTC) of Polomolok, South Cotabato to enjoin petitioners from holding a
special general assembly (GA) and an election of officers. Respondents alleged that the process
by which the GA had been called was not in accordance with Sec. 35 of Republic Act No. 6938,
otherwise known as the Cooperative Code of the Philippines.

On 24 November 2005, the RTC issued a 72-hour Temporary Restraining Order (TRO) to
restrain petitioners from holding the GA.1

Despite the TRO, but without the participation of petitioners, 5,910 members – or 78.68% of the
total membership of the cooperative – went through with the GA on 26 November 2005 and
elected petitioners in absentia as new members of the board.

On 1 December 2005, the TRO was extended to its full term of twenty (20) days from issuance.2

The trial court considered the evidence adduced during the hearing on the application for a writ
of preliminary injunction. In addition, it considered the supervening events that occurred since
the issuance of the TRO. These events were the holding of the GA on 26 November 2005 and the
election of new officers. Thus, on 8 December 2005, the RTC, finding the provisional remedy of
preliminary injunction to be moot, issued a Resolution 3 denying respondents’ prayer for the
issuance of a writ of preliminary injunction and quashing the TRO previously issued.

Thereafter, respondents filed an Amended Complaint 4 seeking to enjoin petitioners from

assuming office and exercising the powers conferred on directors of DARBCI.

On 29 November 2006, the RTC issued an Omnibus Order5 dismissing the Amended Complaint,
ruling as follows:

Gauging from these allegations that plaintiffs were incumbent BOD members of DARBCI and
did not consent or sanctioned (sic) the 26 November 2005 BOD election, which was conducted
despite the existing TRO, do not confer a right unto them that ought to be respected by
defendants (sic); neither the Tripartite Agreement among Board I, II, and III help their cause.
The supervening factors, i.e. the General Assembly Meeting and the Election of Officers by the
overriding majority members of DARBCI then occurring (sic) rendered these averments
insignificant. Resultantly, no delict or wrong can be imputed to the latter owing to said factors
which were duly established during the hearings and found by the Honorable Court.

x x x           x x x          x x x

In sum, the Amended Complaint and the evidence thus far adduced disclose that plaintiffs have
neither legal right nor the requisite personality to file an action for nullification of the assailed
DARBCI General Assembly and Election. Hence, their aforesaid Complaint is doomed for
dismissal for failing to state a cause of action. The Court must hold, as it holds now, that the
present action cannot pass muster on sheer dictates of law and equity. (Emphasis supplied.)

Respondents thereafter filed a Petition for Certiorari 6 with the Court of Appeals (CA) docketed as
CA-G.R. SP No. 01851. They contended that the trial court committed grave abuse of discretion
when it considered the evidence adduced in the hearing for the issuance of a writ of preliminary
injunction. They further alleged that the Amended Complaint clearly stated a cause of action
based on their rights as the then incumbent officers of DARBCI.

The CA rendered the assailed Decision,7 which remanded the case to the RTC for further
proceedings. In allowing the Petition, the appellate court stated that the "lingering organization
and leadership crisis in the DARBCI undermines the cooperative’s viability to pursue its
objectives." It considered the case to be one that might become an impediment to the State’s land
reform program in Polomolok. Thus, it took cognizance of the case in the interest of public
welfare and the advancement of public policy.

The CA found that respondents’ Amended Complaint contained sufficient allegations that
constituted a cause of action against herein petitioners. Thus, it held that the RTC gravely abused
its discretion when the latter dismissed the case for lack of cause of action.

Petitioners moved for reconsideration, but this motion was subsequently denied.8
Petitioners now come before this Court, alleging that the CA erred in allowing respondents’
Petition for Certiorari despite being the wrong remedy. They also insist that the CA erred in
ruling that a cause of action existed despite the fact that the issue had become moot. They allege
that the trial court was not limited to the allegations of the Complaint, but it may also consider
the evidence presented during the hearing for the issuance of the writ of preliminary injunction.
Finally, they contend that the CA misappreciated the facts of the case in stating that the issue was
with regard to the implementation of the agrarian reform program, when it was merely the
legality of the elections of the new board of directors.

Respondents, in their Comment,9 assert that their Amended Complaint stated a cause of action,
and that the trial court should have conducted a trial on the merits instead of dismissing the
Amended Complaint, especially when petitioners failed to present proof that a GA and an
election of officers were held on 26 November 2005. Finally, respondents contend that the
RTC’s act of dismissing the case was in grave abuse of discretion, reviewable via their Petition
for Certiorari.

On 8 July 2009, petitioners filed a Reply to respondents’ Comment. 10 They informed this Court
that two more GA meetings had been held.

During the 20 December 2008 meeting, the GA ratified the Amended Articles of Cooperation
and the Amended By-Laws of the cooperative. A Certificate of Registration to that effect was
issued by Cooperative Development Authority (CDA) on 9 February 2009.11

Article X, Sec. 1 of the Amended By-Laws provides:

The incumbent members of the Board of Directors and various committees who were elected
into office during the November 25, 2005 special elections shall continue to serve the
cooperative until their successors have been elected and qualified into office. They shall be
deemed to have served for one term only;

The Court notes that the 25 November 2005 GA meeting referred to by the by-laws was actually
held on 26 November 2005. However, considering the clear language and intent of the provision,
the Court deems the date contained in the Amended By-laws to be a mere typographical error.

On 29 March 2009, the second meeting was held whereby a new set of officers was elected by
the GA.

In Joya v. Presidential Commission on Good Government,12 we said:

For a court to exercise its power of adjudication, there must be an actual case or controversy —
one which involves a conflict of legal rights, an assertion of opposite legal claims susceptible of
judicial resolution; the case must not be moot or academic or based on extra-legal or other
similar considerations not cognizable by a court of justice. A case becomes moot and academic
when its purpose has become stale, such as the case before us.
Sec. 34 of the Cooperative Code states that the highest policy-making body of the cooperative is
the GA, to wit:

The general assembly shall be the highest policy-making body of the cooperative and shall
exercise such powers as are stated in this Code, in the articles of cooperation and in the by-laws
of the cooperative. The general assembly shall have the following exclusive powers which
cannot be delegated:

(1) To determine and approve amendments to the articles of cooperation and by-laws;

(2) To elect or appoint the members of the board of directors, and to remove them for
cause;

(3) To approve developmental plans of the cooperative; and

(4) Such other matters requiring a two-thirds (2/3) vote of all members of the general
assembly, as provided in this Code.

In the present case, the GA has clearly expressed its intentions through the subsequent
amendment of DARBCI’s Articles of Cooperation and By-Laws and through the election of new
officers.

In Kilusang Bayan sa Paglilingkod ng mga Magtitinda ng Bagong Pamilihang Bayan ng

Muntinlupa, Inc. (KBMBPM) v. Dominguez,13 we denied the Petition on the ground that the
issue had become moot and academic considering that the GA of KBMPM already elected a new
set of officers, even if it was found that the right to due process of petitioners therein were
clearly violated, to wit:

In the instant case, there was no notice of a hearing on the alleged petition of the general
membership of the KBMBPM; there was, as well, not even a semblance of a hearing. The Order
was based solely on an alleged petition by the general membership of the KBMBPM. There was
then a clear denial of due process. It is most unfortunate that it was done after democracy was
restored through the peaceful people revolt at EDSA and the overwhelming ratification of a new
Constitution thereafter, which preserves for the generations to come the gains of that historic
struggle which earned for this Republic universal admiration.

If there were genuine grievances against petitioners, the affected members should have timely
raise (sic) these issues in the annual general assembly or in a special general assembly. Or, if
such a remedy would be futile for some reason or another, judicial recourse was available.

Be that as it may, petitioners cannot, however, be restored to their positions.1âwphi1 Their terms

expired in 1989, thereby rendering their prayer for reinstatement moot and academic. Pursuant to
Section 13 of the by-laws, during the election at the first annual general assembly after
registration, one-half plus one (4) of the directors obtaining the highest number of votes shall
serve for two years, and the remaining directors (3) for one year; thereafter, all shall be elected
for a term of two years. Hence, in 1988, when the board was disbanded, there was a number of
directors whose terms would have expired the next year (1989) and a number whose terms would
have expired two years after (1990). Reversion to the status quo preceding October 1988 would
not be feasible in view of this turn of events. Besides, elections were held in 1990 and 1991. The
affairs of the cooperative are presently being managed by a new board of directors duly elected
in accordance with the cooperative's by-laws.

In the present case, the replacement of respondents with other members of the board was willed
by the GA. It is also important to note that respondents were only occupying their positions in a
holdover capacity when they filed the case with the RTC, as their terms had ended on 12 July
2000. Undoubtedly, it would be a futile attempt and a waste of resources to remand the case to
the trial court. There would be nothing left for the trial court to execute, should respondents be
successful in their Petition.

It is clear from the Omnibus Order of the RTC that it dismissed the Amended Complaint because
the supervening events had rendered the case moot through the voluntary act of the GA – as the
highest policy-making body of the cooperative – to declare the contested positions vacant and to
elect a new set of officers. As a consequence, respondents no longer had the personality or the
cause of action to maintain the case against petitioners herein. Thus, the RTC committed no error
when it dismissed the case.

WHEREFORE, in view of the foregoing, the Petition is hereby GRANTED. The assailed Court
of Appeals Decision in CA-G.R. SP No. 01851 dated 6 August 2008 and the Resolution dated 14
October 2008 are hereby REVERSED and SET ASIDE. The Order dated 21 November 2006
issued by Branch 39 of the Regional Trial Court of Polomolok, South Cotabato is hereby
AFFIRMED and REINSTATED.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

MARTIN S. VILLARAMA, JR.* JOSE PORTUGAL PEREZ

Associate Justice Associate Justice

BIENVENIDO L. REYES
Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s
Attestation, I certify that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice

Footnotes

* Designated as Acting Member of the Second Division vice Associate Justice Arturo D.
Brion per Special Order No. 1195 dated 15 February 2012.
1 
Rollo, pp. 116-121.
2 
Id. at 122-124.
3 
Id. at 125-129.
4 
Id. at 130-139.
5 
Id. at 207-212.
6 
Id. at 93-115.
7 
Penned by Associate Justice Jane Aurora C. Lantion, with Associate Justices Edgardo
A. Camello and Edgardo T. Lloren concurring; id. at 51-61.
8 
Id. at 63-64.
9 
Id. at 607-619.
10 
Id. at 628-635.
11 
Id. at 636.
12 
G.R. No. 96541, 24 August 1993, 225 SCRA 568, 579.
13 
G.R. Nos. 85439 and 91927, 13 January 1992, 205 SCRA 92, 114-115.