Case Digest (G.R. No. 127249)
Facts:
The case involves the Camarines Norte Electric Cooperative, Inc. (CANORECO) and several petitioners, including Ruben N. Barrameda, Elvis L. Espiritu, Merardo G. Enero, Jr., Marcelito B. Abas, and Reynaldo V. Abundo, who filed a petition against various respondents, including Hon. Ruben D. Torres, in his capacity as Executive Secretary, and others. The events leading to the case began with a struggle for control over CANORECO, which was organized under Presidential Decree No. 269, later amended by Presidential Decree No. 1645. Following the enactment of Republic Act No. 6938 (the Cooperative Code) and Republic Act No. 6939 (which established the Cooperative Development Authority), CANORECO registered with the CDA and underwent changes in its Articles of Cooperation.
On March 11, 1995, the Board of Directors appointed Reynaldo V. Abundo as the permanent General Manager. However, on May 28, 1995, a faction of the Board, led by Norberto Ochoa, held a special meeting and declar...
Case Digest (G.R. No. 127249)
Facts:
Background of CANORECO
- Camarines Norte Electric Cooperative, Inc. (CANORECO) is an electric cooperative organized under Presidential Decree (P.D.) No. 269, as amended by P.D. No. 1645, known as the National Electrification Administration Decree.
- On 10 March 1990, President Corazon C. Aquino signed into law Republic Act (R.A.) No. 6938 (Cooperative Code of the Philippines) and R.A. No. 6939 (creating the Cooperative Development Authority or CDA).
- Article 122 of the Cooperative Code provides that electric cooperatives are covered by the Code. Article 128 and Section 17 of R.A. No. 6939 require cooperatives created under P.D. No. 269 to register with the CDA within three years, after which the provisions of Sections 3 and 5 of P.D. No. 1645 would no longer apply.
Registration with CDA
- CANORECO registered with the CDA under R.A. No. 6938 and R.A. No. 6939.
- On 8 March 1993, the CDA issued a Certificate of Provisional Registration (T-003-93) to CANORECO, effective for two years. This was extended until 4 May 1997.
- On 10 July 1996, CANORECO filed amendments to its Articles of Cooperation, converting itself from a non-stock to a stock cooperative. The CDA issued a Certificate of Registration on the same date.
Internal Dispute in CANORECO
- On 11 March 1995, the CANORECO Board of Directors appointed Reynaldo V. Abundo as permanent General Manager.
- On 28 May 1995, a faction of the Board, led by Norberto Ochoa, held a special meeting, declared all positions vacant, and elected new officers. They also passed resolutions recalling Abundo’s appointment and designating an Officer-in-Charge.
- The petitioners challenged these actions by filing a Petition for Declaration of Nullity of Board Resolutions and Election of Officers with the CDA, which ruled in their favor on 15 February 1996, declaring the resolutions and elections null and void.
Forcible Takeover and Memorandum Order No. 409
- On 28 June 1996, the Ochoa group, with the help of the National Electrification Administration (NEA), forcibly took over CANORECO’s offices.
- On 26 September 1996, the petitioners regained control after the CDA issued a writ of execution.
- On 3 December 1996, President Fidel V. Ramos issued Memorandum Order No. 409, creating an Ad Hoc Committee to take over and manage CANORECO’s affairs until a general membership meeting could resolve the issues.
Issue:
- Does the President have the power to take over and manage an electric cooperative like CANORECO?
- Is the creation of the Ad Hoc Committee under Memorandum Order No. 409 lawful?
- Does the relegation of the petitioners to advisory roles amount to removal from office, violating their right to due process?
- Does the President have the authority to designate an Acting General Manager and consider the incumbent General Manager on leave?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Conclusion:
The Supreme Court granted the petition, declaring Memorandum Order No. 409 invalid and upholding the autonomy of cooperatives under the Cooperative Code. The Court emphasized that the internal affairs of cooperatives must be managed by their duly elected or appointed officials, free from undue government interference.