G.R. No. 87001 December 4, 1989
LA UNION ELECTRIC COOPERATIVE, INC. (LUELCO), represented by its President and Chairman of the Board MANUEL L. MANGASER, petitioner, vs. HONORABLE BRAULIO D. YARANON, Presiding Judge of RTC-Branch 30, San Fernando, La Union and NATIONAL ELECTRIFICATION ADMINISTRATION (NEA), respondents. FAR EAST BANK & TRUST CO. (La Union Branch) as Interpleader.
FACTS
Far East Bank & Trust Company (FEBTC) filed an interpleader to resolve conflicting claims over the authorized signatories for LUELCO’s bank accounts. LUELCO’s Board passed Resolution No. 53-03-88, requiring checks to be signed by both the Acting General Manager and the Board President. However, the National Electrification Administration (NEA), which had taken over the direct control and supervision of LUELCO by designating its own Acting General Manager/Project Supervisor, insisted that its amended version of an earlier LUELCO board resolution should govern. This NEA amendment limited the General Manager’s signing authority to P3,000, requiring countersignature by the Coop President or Treasurer for larger amounts. LUELCO argued that NEA’s control, exercised under Presidential Decree No. 269 as amended by P.D. No. 1645, was unconstitutional for violating due process and the cooperative’s autonomy.
ISSUE
The primary issue was whether the Regional Trial Court correctly upheld NEA’s authority to control LUELCO’s financial transactions, thereby validating the NEA-amended signatory resolution over the later board resolution passed by LUELCO’s own directors.
RULING
The Supreme Court dismissed the petition, upholding the RTC’s decision. The Court avoided ruling on the constitutional challenge to P.D. No. 1645, adhering to the doctrine that constitutional questions will not be decided if the case can be resolved on other grounds. The legal logic centered on the statutory powers granted to NEA. The Court found it undisputed that NEA had legitimately taken over the control and supervision of LUELCO pursuant to Section 5(a) of P.D. No. 269, as amended. This provision empowered NEA to designate an Acting General Manager/Project Supervisor and to prescribe his functions, which powers could not be nullified by the cooperative’s board. Given this valid takeover, NEA’s supervisory authority extended to approving or amending board resolutions concerning financial management to protect the cooperative’s and the electrification program’s interests. Consequently, the NEA-amended resolution governing check signatories was the valid and controlling directive for FEBTC. The Court found no grave abuse of discretion in the RTC’s ruling and affirmed the dismissal of LUELCO’s claims, including its plea for damages.