G.R. No. 168203 March 9, 2010
NATIONAL ELECTRIFICATION ADMINISTRATION, Petitioner, vs. VAL L. VILLANUEVA, Respondent.

FACTS

Respondent Val L. Villanueva was an elected member of the Board of Directors (BOD) of Agusan del Norte Electric Cooperative (ANECO) for a term extended until 2006. In 2002, while serving as a BOD member, he was elected Barangay Chairman and subsequently elected President of the Liga ng mga Barangay (Liga) of Cabadbaran, making him an ex-officio member of the Sangguniang Bayan of Cabadbaran. The ANECO General Manager sought the opinion of petitioner National Electrification Administration (NEA) on Villanueva’s continued qualification. The NEA Director for Co-Op Operations opined that Villanueva was automatically resigned from the ANECO BOD upon taking his oath as Liga President, citing the Local Government Code, an NEA Memorandum, and Guidelines for Electric Cooperative Elections. Villanueva sought reconsideration from NEA, which was denied. Instead of appealing to the Office of the President, Villanueva filed a petition for certiorari with prayer for preliminary injunction against NEA and ANECO with the Regional Trial Court (RTC) of Cabadbaran. The RTC granted the petition, made the injunction permanent, and awarded attorney’s fees and litigation expenses to Villanueva. NEA’s motion for reconsideration was denied.

ISSUE

1. Whether the RTC committed grave abuse of discretion in nullifying the NEA order via certiorari.
2. Whether the case should be dismissed for failure to exhaust administrative remedies.
3. Whether the law was correctly applied in issuing the Temporary Restraining Order and Writ of Preliminary Injunction.

RULING

The Supreme Court granted the petition, reversed the RTC Decision and Resolution, and dismissed Villanueva’s petition for certiorari.
1. On Exhaustion of Administrative Remedies: The Court held that Villanueva failed to exhaust administrative remedies. Under Section 13 of Presidential Decree No. 269, the NEA is under the supervision of the Office of the President, which has the power to review its orders on appeal. Villanueva’s direct resort to the RTC without appealing the NEA’s decision to the Office of the President barred his judicial suit. The doctrine of exhaustion of administrative remedies requires pursuing available administrative procedures to their conclusion before seeking judicial intervention. Non-observance results in a lack of cause of action.
2. On the Main Issue of Disqualification: The Court ruled that Villanueva was disqualified from continuing as a member of the ANECO BOD. Section 7(8) of the NEA Guidelines in the Conduct of Electric Cooperative District Elections provides that a bona fide member must not “hold elective office in the government nor appointed to an elective position above the level of a Barangay Captain” to be eligible. An NEA Memorandum dated February 13, 1998, states that cooperative officials elected as President of the Municipal Chapter of the Liga ng mga Barangay “shall be considered automatically resigned upon taking his/her oath of office as Liga President.” The Court cited Salomon v. National Electrification Administration, which held that the disqualification applies to both elected and appointed members of a Sanggunian to prevent the exertion of political influence on the cooperative. As an ex-officio member of the Sangguniang Bayan by virtue of being Liga President, Villanueva held an elective position above the level of Barangay Captain.
3. On the Validity of the Temporary Restraining Order: The Court found the Temporary Restraining Order (TRO) issued by the RTC invalid as it was made effective beyond the 20-day period provided under the Rules of Court.