G.R. No. 172980, July 22, 2015
CELSO F. PASCUAL, SR. AND SERAFIN TERENCIO, PETITIONERS, VS. CANIOGAN CREDIT AND DEVELOPMENT COOPERATIVE, REPRESENTED BY ITS CHAIRMAN OF THE BOARD, JOSE ANTONIO R. LEE, ATTY. VENANCIO C. REYES, JR., AND NESTOR P. TINIO, RESPONDENTS.

FACTS

Petitioners Celso F. Pascual, Sr. and Serafin Terencio were appointed by the former Board of Directors of Caniogan Credit and Development Cooperative (CCDC) as General Manager and Collection Manager, respectively. They continued to serve beyond their compulsory retirement ages. On August 13, 2005, the CCDC Board passed resolutions terminating their services. Petitioners refused to vacate their positions. Respondents CCDC, et al., filed a Complaint for Injunction with prayer for a writ of preliminary injunction/temporary restraining order (TRO) before the Regional Trial Court (RTC) of Malolos, Bulacan. The RTC issued a 20-day TRO. Petitioners filed a Motion to Dismiss, questioning the RTC’s jurisdiction, alleging the case involved a labor dispute. The RTC initially referred the case for re-raffle as an intra-corporate dispute but it was returned, with Branch 79 holding it was an intra-cooperative dispute. Branch 12 then issued an Order dated March 3, 2006, denying the Motion to Dismiss, ruling the case involved an intra-cooperative dispute. Petitioners filed a Petition for Certiorari before the Court of Appeals challenging this Order without first filing a motion for reconsideration. The Court of Appeals dismissed the petition outright for being premature, citing failure to file a motion for reconsideration and failure to show prior recourse to required cooperative dispute settlement mechanisms. Petitioners’ motion for reconsideration was denied. During the pendency of the appeal to the Supreme Court, the RTC rendered a judgment by default on July 20, 2006, which became final and executory, permanently enjoining petitioners from their positions.

ISSUE

1. Whether the Court of Appeals gravely erred in dismissing outright the Petition for Certiorari on the ground of prematurity.
2. Whether the case involves an illegal dismissal subject to the exclusive jurisdiction of the Labor Arbiter or an intra-cooperative dispute within the jurisdiction of the regular courts.

RULING

The Supreme Court DENIED the Petition.
1. On the procedural issue, the Court held the Court of Appeals correctly dismissed the Petition for Certiorari for being premature. The general rule requires the filing of a motion for reconsideration before resorting to certiorari to allow the lower court to correct its error. No exceptional circumstances justified petitioners’ omission. The alleged delay by the trial court (over one month from submission to resolution) did not constitute undue delay, and there was no “extreme necessity and urgency” shown.
2. On the substantive issue, the Court held the case involved an intra-cooperative dispute within the jurisdiction of the regular courts, not a labor dispute under the jurisdiction of the Labor Arbiter. Petitioners were corporate officers of the cooperative, appointed directly by the Board of Directors according to the by-laws, with salaries set by the Board. Their termination was a corporate act and an intra-cooperative controversy between officers and the Board. The nature of the dispute is not altered by the reasons for their removal. Jurisdiction is vested in the regular courts pursuant to Article 121 of Republic Act No. 6938 (Cooperative Code) and Section 8 of Republic Act No. 6939 (Cooperative Development Authority Act). The Court noted the dispute had been referred for mediation/arbitration as required, and a certificate of non-resolution was issued.
The appeal was also rendered moot and academic by the finality of the RTC’s judgment on the merits in the main case.