G.R. No. 127249 . February 27, 1998.
CAMARINES NORTE ELECTRIC COOPERATIVE, INC. (CANORECO); RUBEN N. BARRAMEDA; ELVIS L. ESPIRITU; MERARDO G. ENERO, JR.; MARCELITO B. ABAS; and REYNALDO V. ABUNDO, petitioners,

vs.
HON. RUBEN D. TORRES, in his capacity as Executive Secretary; REX TANTIONGCO; HONESTO DE JESUS; ANDRES IBASCO; TEODULO M. MEA; and VICENTE LUKBAN, respondents.

FACTS

Petitioner Camarines Norte Electric Cooperative, Inc. (CANORECO) is an electric cooperative organized under P.D. No. 269, as amended. It registered with the Cooperative Development Authority (CDA) under R.A. No. 6938 (Cooperative Code) and R.A. No. 6939 . On March 11, 1995, its Board of Directors appointed petitioner Reynaldo V. Abundo as permanent General Manager. On May 28, 1995, a rival group within the cooperative held a special board meeting, elected new officers, and passed resolutions recalling Abundo’s appointment and designating a new Officer-in-Charge. The petitioners challenged these actions before the CDA. In a Resolution dated February 15, 1996, the CDA declared the May 28, 1995 board meeting and all resolutions issued therein null and void ab initio, and likewise declared the election of the rival officers null and void. It ordered a status quo regarding the position of General Manager held by Abundo. Despite this CDA resolution, the rival group, with the participation of some NEA officials, forcibly took over CANORECO’s offices on June 28, 1996. The petitioners reassumed control on September 26, 1996, after the CDA issued a writ of execution. On December 3, 1996, the President of the Philippines issued Memorandum Order No. 409, constituting an Ad Hoc Committee to take over and manage the affairs of CANORECO until a general membership meeting could decide on the serious issues affecting the cooperative and normalcy was restored. The petitioners filed this original action for certiorari and prohibition seeking to annul Memorandum Order No. 409 and to prohibit respondents from acting under it.

ISSUE

May the Office of the President validly constitute an ad hoc committee to take over and manage the affairs of an electric cooperative?

RULING

No. The Supreme Court GRANTED the petition and declared Memorandum Order No. 409 INVALID. The Court held that the President has no constitutional or statutory power to take over and manage the affairs of CANORECO. The power of control and supervision over electric cooperatives registered with the CDA is vested by law in the CDA, not in the President or the NEA. Upon CANORECO’s registration with the CDA, the provisions of P.D. No. 1645 (particularly Sections 3 and 5, which granted NEA supervisory and enforcement powers) ceased to apply to it. The Cooperative Code ( R.A. No. 6938 ) and the CDA law ( R.A. No. 6939 ) establish a policy of non-interference in the management and operation of cooperatives, and provide that their affairs shall be administered by persons elected or appointed in a manner agreed upon by the members. Memorandum Order No. 409 violated this basic principle and statutory policy. The Court further ruled that the President’s general power of control over the executive branch does not extend to entities like CANORECO, which are private, autonomous cooperatives governed by their own bylaws and the Cooperative Code. The takeover was not justified under the President’s emergency powers, as there was no law passed by Congress authorizing such an exercise of power for the situation at hand.