G.R. No. 185053 ; February 15, 2012
Eustaquio Candari, Jr., et al., Petitioners, vs. Rolan Donasco, et al., Respondents.

FACTS

Respondents were members of the board of directors of Dolefil Agrarian Reform Beneficiaries Cooperative, Inc. (DARBCI), whose terms ended in July 2000 but who continued in a holdover capacity. In November 2005, they filed a civil case to enjoin petitioners from holding a special general assembly and election, alleging violations of the Cooperative Code. The Regional Trial Court (RTC) issued a 72-hour Temporary Restraining Order (TRO). Despite this, a general assembly attended by a majority of the cooperative’s members proceeded on November 26, 2005, and elected petitioners as the new board. The RTC subsequently denied the prayer for a preliminary injunction and quashed the TRO, finding the issue moot. Respondents then filed an Amended Complaint to enjoin petitioners from assuming office.
The RTC dismissed the Amended Complaint, ruling that the supervening events—the conduct of the general assembly and election by the majority—rendered respondents’ claims insignificant. It held that respondents, being holdover officers who did not consent to the election, had no legal right or personality to file the action. The Court of Appeals (CA) reversed, remanding the case for further proceedings. The CA found that the Amended Complaint sufficiently stated a cause of action and took cognizance due to the cooperative’s leadership crisis and its potential impact on agrarian reform.

ISSUE

Whether the Court of Appeals erred in reversing the RTC’s dismissal of the Amended Complaint for lack of cause of action.

RULING

The Supreme Court granted the petition, reversed the CA, and reinstated the RTC’s dismissal order. The legal logic is anchored on the doctrine of mootness and the nature of cooperative governance. The supervening event—the holding of the general assembly and election by an overwhelming majority (78.68%) of the cooperative’s members—rendered the core issue of enjoining the election moot and academic. The general assembly, as the highest policy-making body of the cooperative, voluntarily declared the positions vacant and elected a new set of officers. Consequently, respondents, who were merely in a holdover capacity since 2000, lost any actionable legal right or personality to question the election or to restrain the new board from assuming office. The RTC correctly considered these established facts from the hearings, which demonstrated that no cause of action remained. Remanding the case would be a futile exercise, as there would be no effective relief to grant respondents even if they prevailed. The CA’s invocation of public interest related to agrarian reform was misplaced, as the actual controversy was purely an intra-cooperative leadership dispute resolved by the members’ sovereign act.