G.R. No. 137489 - Cooperative Development Authority vs. Dolefil Agrarian Reform Beneficiaries Cooperative, Inc.

Case Summary (G.R. No. 137489)

Key Dates and Procedural Posture

Late 1997: Complaints filed with CDA (CDA‑CO Case No. 97‑011) alleging mismanagement of DARBCI.
December 1997–May 1998: CDA issued orders including freezing funds, creating a management committee, and placing certain directors under preventive suspension; ordered special general assembly for June 14, 1998.
March–June 1998: Multiple temporary restraining orders issued by RTC and Court of Appeals in various related actions; CA enjoined RTC’s TRO and ordered proceedings in SP Civil Case No. 25 held in abeyance.
June–July 1998: CA (13th Division) issued TRO restraining CDA from conducting June 14 election; a separate RTC TRO enjoined the special general assembly; on July 12, 1998 the majority of DARBCI members independently convened and elected new officers.
September 9, 1998 and February 9, 1999: Court of Appeals (13th Division) decision and resolution invalidated CDA orders and later declared the July 12 elections void ab initio and threatened contempt proceedings.
Supreme Court: Petition for review on certiorari filed by CDA; the Supreme Court addressed both procedural defects (lack of OSG imprimatur) and the substantive question of CDA’s jurisdiction under R.A. No. 6939.

Applicable Law and Constitutional Basis

Primary statutory framework: Republic Act No. 6939 (Cooperative Development Authority Act), particularly Section 3 (enumerating CDA powers and functions) and Section 8 (providing for mediation/conciliation and issuance of certificate of non‑resolution after three months).
Administrative Code reference: Section 35(1) and 35(8) (powers, duties, and deputation authority of the Office of the Solicitor General).
Constitutional basis: 1987 Constitution, Article XII, Section 15 — mandate directing Congress to create a centralized agency to promote cooperatives (cited in legislative background and CDA’s enabling statute).

Parties’ Principal Contentions

CDA (petitioner): Claims quasi‑judicial authority based on its expressed powers (e.g., cancelling certificates after notice and hearing, mediatory and conciliatory functions, contempt power, and general grant of necessary functions in Section 3) and relies on DOJ and Office of the President opinions holding CDA functions to be quasi‑judicial or admitting adjudicatory capacity as a necessary corollary to its registration and visitorial functions; alleges forum‑shopping by respondents who filed related actions in multiple fora.
Private respondents: Assert CDA’s powers are regulatory/supervisory and limited to mediation/conciliation; deny forum‑shopping (distinguishing causes and remedies in each filed case); challenge CDA’s authority to bring the petition to the Supreme Court on grounds that it lacked the Office of the Solicitor General’s authority or proper approval to do so.

Procedural Defect: Legal Representation Before the Supreme Court

The Supreme Court observed a basic defect: the general rule requires the Office of the Solicitor General (OSG) to appear for and represent government agencies in Supreme Court litigation, and deputation by OSG must precede such representation for the agency to be properly before the Court. The petition as filed lacked an appropriate OSG imprimatur at the time of filing (the alleged deputation letter dated after the petition and restricted in scope to lower court appearances), and one deputation condition required prior OSG review and signature on important pleadings—a condition not complied with for subsequent filings. Notwithstanding this infirmity, the Court proceeded to resolve the substantive issue because of the novelty and public importance of the question.

Statutory Construction: Scope of CDA Powers Under R.A. No. 6939

The Court applied fundamental rules of statutory construction: an administrative agency possesses only powers expressly granted by law and those necessarily implied. Section 3 of R.A. No. 6939 was analyzed and construed as establishing primarily administrative, policy‑making, registration, fiscal, technical‑assistance and implementational functions. Section 8 expressly provides for mediation and conciliation upon request, and requires issuance of a certificate of non‑resolution after three months before resort to courts. The Court found no express grant in R.A. No. 6939 conferring general adjudicatory or quasi‑judicial authority to decide intra‑cooperative disputes.

Legislative Intent and Deliberative History

The Court reviewed congressional and senatorial debates during enactment of R.A. No. 6939 and its predecessor bills. Parliamentary exchanges show explicit rejection of conferring quasi‑judicial powers on the CDA and an intent to leave adjudication of disputes to the courts. Sponsors and members repeatedly stated that enforcement actions affecting the legal existence or dissolution of cooperatives and criminal prosecutions would be left to courts or prosecutors; proposed amendments to give broader adjudicatory powers were declined. The legislative history thus reinforces the interpretation that CDA’s powers are administrative and supervisory, and that the policy of non‑interference in cooperative management was to be maintained.

Central Holding on Quasi‑Judicial Authority

The Court held that the CDA is deprived of quasi‑judicial authority to adjudicate intra‑cooperative disputes, particularly those concerning elections of board members and officers. The authority to conduct hearings/inquiries and to summarily punish for direct contempt under Section 3 paragraphs (g) and (o) is limited to the exercise of administrative functions under R.A. No. 6939 and does not amount to a grant of power to adjudicate internal cooperative controversies. The Court rejected CDA’s reliance on prior administrative opinions and certain executive branch views to the extent they asserted adjudicatory jurisdiction, and clarified that prior Supreme Court authority cited by the CDA (CANORECO) did not confer such jurisdiction on the CDA.

Forum‑Shopping and Litis Pendentia Analysis

The Court found no forum‑shopping by private respondents. It applied the litis pendentia test requiring (1) identity of parties, (2) identity of rights asserted, and (3) that judgment in one case would be res judicata of the other. Although some identity of parties existed between SP Civil Case No. 25 (RTC) and CA‑G.R. SP No. 47933 (Court of Appeals), the reliefs and procedural character of the actions differed (certiorari vs. prohibition), and the RTC action predated and did not render the appellate remedy unavailable. SP Civil Case No. 28 (RTC) was filed by Investa, a distinct juridical entity with distinct interests; counsel differences were clarified. Thus the requisites for forum‑shopping were not met.

Due Process Finding Regarding Intervenors and the July 12 Election

The Court addressed the petition‑in‑intervention by persons claiming to be newly elected DARBCI officers on July 12, 1998. The Court concluded that the Court of Appeals violated intervenors’ due process rights when, in denying CDA’s motion for reconsideration, it nullified the July 12 election and threatened contempt without first giving intervenors notice and opportunity to be heard. The element of due process requires a tribunal with jurisdiction, lawful acquisition of personal jurisdiction, opportunity to be heard, and judgment af

Case Syllabus (G.R. No. 137489)

Procedural History

Petition for review on certiorari filed by the Cooperative Development Authority (CDA) assailing the Decision of the Court of Appeals, 13th Division, in CA-G.R. SP No. 47933 promulgated on September 9, 1998 and its Resolution dated February 9, 1999.
Underlying administrative docket: CDA-CO Case No. 97-011 initiated in late 1997 by complaints from certain members of Dolefil Agrarian Reform Beneficiaries Cooperative, Inc. (DARBCI) alleging mismanagement and misappropriation by incumbent officers and directors.
CDA Executive Director Candelario L. Verzosa, Jr. issued an order on December 8, 1997 directing private respondents to answer within ten days; CDA Administrator Alberto P. Zingapan issued a freeze order and created a management committee on December 15, 1997.
Private respondents filed a petition for certiorari with prayer for preliminary injunction before the Regional Trial Court (RTC) of Polomolok, South Cotabato, Branch 39, docketed as SP Civil Case No. 25 (filed December 18, 1997).
CDA Chairman Jose C. Medina, Jr. issued preventive suspension order on February 24, 1998; management committee assumed office March 10, 1998 after supplemental order changing composition on March 3, 1998.
RTC issued a temporary restraining order (TRO) March 27, 1998 (extended to 20 days on March 31, 1998) directing restoration of status quo ante; CDA petitioned Court of Appeals (CA) 12th Division in CA-G.R. SP No. 47318.
Court of Appeals, 12th Division, on April 21, 1998 issued TRO enjoining enforcement of RTC TRO and ordered proceedings in SP Civil Case No. 25 held in abeyance; CDA continued CDA-CO proceedings.
CDA Administrator Arcadio S. Lozada issued a resolution dated May 26, 1998 directing a special general assembly and creating an ad hoc election committee for elections scheduled June 14, 1998.
Private respondents filed Petition for Prohibition (with prayer for preliminary mandatory injunction and TRO) in Court of Appeals, 13th Division, docketed CA-G.R. SP No. 47933 (filed June 8, 1998); CA issued a resolution on June 10, 1998 restraining CDA and others from proceeding with the June 14 election.
Investa Land Corporation filed SP Civil Case No. 28 with RTC on June 10, 1998 seeking annulment of CDA orders with prayer for TRO; RTC issued a TRO June 11, 1998 enjoining special general assembly and elections scheduled June 14, 1998 and later a writ of preliminary injunction.
Despite injunctions, on July 12, 1998 a majority of DARBCI members (7,511) convened their own general assembly and elected a new board; private respondents filed Twin Motions for Contempt and to Nullify Proceedings with CA in CA-G.R. SP No. 47933.
Court of Appeals, 13th Division promulgated Decision on September 9, 1998 granting the petition in CA-G.R. SP No. 47933, declaring CDA orders and resolutions in CDA-CO Case No. 97-011 null and void, ordering CDA to cease proceedings and reinstate ousted board.
CDA filed motion for reconsideration in CA which was denied by CA Resolution dated February 9, 1999; CA resolution additionally declared July 12, 1998 election null and void ab initio and directed respondents to explain why they should not be held in contempt.
CDA filed petition for review on certiorari with the Supreme Court, raising three assignments of error; case docketed and considered despite initial questions on Solicitor General deputation.

Facts and Background

DARBCI: agrarian reform cooperative owning 8,860 hectares in Polomolok, South Cotabato, with a large membership (reference to 7,511 members who held July 12, 1998 assembly).
Late 1997: multiple complaints by members alleging mismanagement and misappropriation by incumbent officers/directors (some private respondents).
CDA initiated administrative proceedings (CDA-CO Case No. 97-011) and took administrative steps including directing answers, freezing funds, creating a management committee, and placing certain officers under preventive suspension.
Competing judicial and administrative processes ensued: RTC TROs and CA TROs, parallel petitions (certiorari, prohibition), and an independent assembly/election by DARBCI members on July 12, 1998 that replaced incumbent officers.
Parties and key officials named in record: CDA officers (Candelario L. Verzosa, Jr.; Alberto P. Zingapan; Jose C. Medina, Jr.; Arcadio S. Lozada), private respondents (unnamed in summary but include Esmeraldo A. Dublin, Alicia Savarez, Edna Ureta, et al.), intervenors (persons claiming to be incumbent officers and directors who later filed petition-in-intervention), and Investa Land Corporation (asserting lease agreement/joint venture with DARBCI).

Orders and Proceedings by the CDA

December 8, 1997: CDA Executive Director Verzosa issued an order directing private respondents to file answers in CDA-CO Case No. 97-011.
December 15, 1997: CDA Administrator Zingapan issued an order freezing DARBCI funds and creating a management committee upon complainants’ motion.
March 3, 1998: CDA Administrator Zingapan issued a supplemental order changing composition of management committee.
February 24, 1998: CDA Chairman Medina issued order placing private respondents under preventive suspension.
March 10, 1998: Newly-created management committee assumed office.
May 26, 1998: CDA Administrator Arcadio S. Lozada issued a resolution directing a special general assembly and creation of an ad hoc election committee for June 14, 1998 election.
CDA relied on powers in R.A. No. 6939, including sections on registration, cancellation, conciliation/mediation, contempt power, and “other functions” as authority for its actions.

Actions in RTC and Court of Appeals

RTC Polomolok, Branch 39:
- SP Civil Case No. 25 (private respondents’ petition for certiorari, filed Dec. 18, 1997): TRO issued March 27, 1998 (later extended) restoring status quo ante.
- SP Civil Case No. 28 (Investa’s petition seeking annulment of CDA orders, filed June 10, 1998): RTC issued TRO June 11, 1998 and later writ of preliminary injunction enjoining special assembly and elections scheduled June 14, 1998.
Court of Appeals:
- CA-G.R. SP No. 47318 (CDA vs. RTC TRO): CA 12th Division issued TRO April 21, 1998 enjoining RTC from enforcing its TRO and holding SP Civil Case No. 25 in abeyance.
- CA-G.R. SP No. 47933 (private respondents’ petition for prohibition, filed June 8, 1998): CA 13th Division issued resolution June 10, 1998 temporarily restraining CDA and others from proceeding with June 14 election; later Decision Sept. 9, 1998 declared CDA orders in CDA-CO Case No. 97-011 null and void and ordered reinstatement of ousted board; CA denied CDA’s motion for reconsideration on Feb. 9, 1999 and further declared July 12, 1998 election null ab initio and contemplated contempt proceedings.

Issues Presented

Whether the Cooperative Development Authority (CDA) is vested with quasi-judicial authority to adjudicate intra-cooperative disputes, specifically including authority to issue freeze orders, create management committees, suspend officers, and order special assemblies and elections affecting a cooperative’s internal governance.
Whether private respondents engaged in forum-shopping by filing actions in multiple fora seeking similar reliefs.
Whether the Court of Appeals erred in nullifying CDA orders and in rendering decision based on conjecture or departing from supervisory norms.
Whether the petition for review filed by CDA before the Supreme Court lacked the requisite authority/imprimatur from the Office of the Solicitor General (OSG) and whether that defect affects the justiciability of the Supreme Court’s review.
Whether the Court of Appeals violated due process rights of intervenors by declaring null and void the July 12, 1998 election in its Resolution without affording intervenors an opportunity to be heard.

Arguments of Petitioner (CDA)

CDA asserts it possess