462 Phil. 632
VITUG, J.:
"From the evidence and arguments presented by the parties, this Court hold[s] that petitioners have shown a clear legal right to the injunctive relief prayed for, which includes continuing to enjoin the private respondents and other individuals appointed by them or acting in their behalf from discharging their duties and functions as cooperative directors and/or officials. Without prejudging the main issue of the validity of the election of private respondents as directors of the cooperative, this Court holds that they must be restrained in the meantime from sitting as members of the Board of Directors, if only to maintain the status quo, prevent any irreparable injury on the part of the petitioners and the cooperative itself and not render ineffectual whatever judgment may be rendered by this Court on the merits.The defendants forthwith moved to have the order of 17 November 1999 reconsidered and additionally sought the inhibition of respondent judge.
"At the outset, it must be emphasized that respondents failed to present evidence, testimonial or documentary, other than the bare allegations contained in their pleadings, to rebut petitioners' claim that it is the very participation of private respondents as cooperative directors in the management of the affairs of the cooperative that brings about the irreparable injury sought to be avoided by this application for injunctive relief. In other words, petitioners have provided the required `sampling' of their evidence to buttress their allegations of mismanagement whereas on the other hand, respondents failed to prove otherwise but instead relied on the lame excuse that such matters should be referred instead to the CDA. This Court cannot ignore the pleas of the petitioners because respondents have not given it any reason to believe otherwise.
"This Court holds that petitioners [who] represent the members of the cooperative in this class suit is concerned, their legal rights as members will be injured if the private respondents are allowed to resume discharging their duties and functions as Directors or officials thereof. The undisputed acts of mismanagement which they have undertaken present a real danger of jeopardizing the continued viability of the cooperative. As part owners of the cooperative, petitioners and its other members have every right to ensure that their hard-earned savings are not dissipated and its assets not squandered unnecessarily. To hold otherwise may bring about a situation where there is no longer any cooperative to speak of after the main issue regarding the election of its Board of Directors is finally resolved. The equitable remedy of injunction is available to prevent the violation of a legally-guaranteed right.
"Petitioners having established the requisites necessary for the issuance of [a writ of] preliminary injunction, namely: the existence of the rights to be protected and the facts against which the injunction are to be directed are violative of said right (Ortigas and Co. Limited Partnership vs. Ruiz, 148 SCRA 226), they are therefore entitled to the issuance of the writ of preliminary injunction.
"The issuance of the injunctive relief is intended to ensure that the cooperative remains operational and viable while the leadership issue has not yet been resolved. It is for this reason that this Court hereby designates Mrs. Lorna Gayatin (being the officer of the cooperative next-in-line to those who were appointed by the private respondents), as officer-in-charge duly authorized to transact as signatory of the cooperative with its depository banks and perform all other related functions necessary to ensure the smooth day-to-day operations of the cooperative. Atty. John V. Aquino in his capacity as Clerk of Court of the Regional Trial Court, Olongapo City is designated as Court representative to oversee and otherwise assist Mrs. Gayatin to ensure that she regularly informs this Court regarding all the official acts she may have entered into as officer-in-charge and bring to its attention any urgent problems that may be encountered.
"WHEREFORE, upon filing of a bond of P500,000.00 by the petitioners in favor of the respondents to answer for any damages should it turn out that petitioners are not entitled thereto, let a writ of preliminary injunction issue enjoining private respondents or any individuals appointed by them or acting in their behalf from performing or discharging any duties and functions either as members of the Board of Directors or officers of the cooperative, until otherwise directed by this Court."[3]
Resolving the issues, Judge Asdala, in her order, dated 26 June 2000, rejected the plea for injunction and held:
"1) Petitioners' action [is] not in behalf of the majority members of the cooperative as they have no authority from the said majority to file the petition, in short, they are not the real parties in interest;"2) Petitioners are in bad faith because the petition was filed pending the resolution of a similar complaint involving the same parties and cause of action, before the Cooperative Development Authority, docketed as CDA-DO No. 99-003;"3) Petitioners' remedy should be [one for] quo warranto and not [for] injunction;"4) Petitioners' claim that the private respondents have dissipated, squandered and wasted cooperative funds by allocating loans and honorarium to themselves are not sufficient grounds for the issuance of a writ of injunction. Assuming that they are, the Cooperative Act and the By Law[s] of the cooperative provide for the procedure and remedies against erring members of the Board of Director or officers of the cooperative;"5) Under the same law, the general membership of the cooperative and not the 13 petitioners [have] the right to question the perceived improper acts of the officers of the cooperative;"6) Even assuming that private respondents' acts are improper, the acts will not cause irreparable damage and injury to the petitioners, as they can be adequately compensated by way of damages, if so found. Moreover, petitioners have not stated in their application any specific injury to themselves which are irreparable and having been caused by the acts of the private respondents;"7) Intra-cooperative disputes, as well as questions about the election of the Board of Directors are within the exclusive jurisdiction of the Cooperative Development Authority as provided for under Sec. 3, Rule 2, Rules of Procedure of the Cooperative Act;"8) The majority members of the cooperative are not even impleaded as co-petitioners, hence, petitioners cannot ask injunctive relief in behalf of the majority;"9) Petitioners are in estoppel, having previously recognized by their prior acts and representations, the election of the Board of Directors on June 26, 1999;"10) Issuance of preliminary injunction is a virtual removal of the private respondents from the office to which they have been duly elected by the majority of the general membership;"11) The validity and legality of the election of the private respondents has been previously upheld by the Office of the Ombudsman in its Resolution dated December 8, 1999 in OMB-ADM-1-99-0526 and by the Cooperative Development Authority;"12) The issuance of a preliminary injunction in effect would dispose of the main case and is equivalent to their virtual removal from office."[5]
"x x x After a closer look at the allegations in the herein petition, however, it appears that injunction is not reasonably necessary under the given circumstances, as petitioners failed to establish any existing legal right on their part, which must be protected, pending the determination of the main case.In his comment of 18 January 2000, respondent judge made reference to the order he issued on 17 November 1999, insisting that the same had been made in accordance with applicable rules. As regards the appointment of Lorna M. Gayatin as Officer-in-Charge of the cooperative, respondent judge explained that Gayatin was the officer next in line from among the list submitted by complainant himself and his co- defendants in Civil Case No. 427-0-99, and that they had never informed him about the pending criminal cases filed against Gayatin. He added that Atty. John V. Aquino, the RTC Branch Clerk of Court of Olongapo City, was appointed the court representative to oversee and assist Gayatin in all her official acts and urgent other concerns. Respondent judge said that if any of the parties had felt aggrieved, they could have elevated the case to the appellate court for appropriate review. He pointed out that, upon motion of the defendants, he had inhibited himself from hearing the case and that the case had since been re- raffled and assigned to Judge Asdala of RTC Branch 74.
"There is also no doubt that the 13 applicants herein do not represent the interest of the cooperative. The phrase in the caption of the petition `and other members of the OSCSMTSMPC, Inc.' as petitioners, does not make the unnamed members of the cooperative parties-in-interest in the herein application. The general membership of the cooperative consists of, on the basis of Estelita Trapsi's testimony, one thousand seven hundred eight (1,708) members. The thirteen (13) petitioners herein, barely make up even a quorum, if not the majority, to represent the interest of the cooperative. Even if such number constitutes a majority for purposes of representation, the absence of any special authority to institute this suit in behalf of the unnamed members, makes petitioners' claim of representation questionable and illegal. This suit cannot therefore, be deemed as a suit in behalf of the general membership's interest, neither the cooperative's interest against the private respondents. Not representative of the cooperative's interest, then, petitioners have no personality to seek for injunctive relief for the cooperative."x x x x x x x x x
"Moreover, petitioners have not specifically established any legal right on their part to be protected by injunction pending litigation. While petitioners pinpoint several alleged acts of abuses and mismanagement committed by the private respondents, the applicant has not sufficiently shown hard and convincing evidence to establish that these acts are in violation of any existing right. Instead of proving that petitioners have their legal rights to be protected from the perceived acts the private respondents are doing or is procuring or suffering to be done, petitioners allude to the interest of the cooperative.
"What is required to be established in an application for preliminary injunction is the applicant's right to be protected and not that of a third [person] or a neighbor or a group, or one who has never been impleaded as a party-in-interest. In alluding to the interest of the cooperative, instead of establishing what pertains to them, convinces this Court that there is no particular right on their part that must be protected. Petitioners' belief that their own personal interest is the interest of the entity called the cooperative and this cooperative is them, will not earn them any injunctive relief.
"During the summary hearing, petitioners referred to several instances and documents to prove their claims of dissipation of funds by the private respondents, abuses and excessive acts of management and fraud. However, petitioners have not been able to show the legal right, clear and positive that is required for the writ to issue.
"That the services of Yusi, Atienza and De los Santos were terminated, was admitted by the private respondent, claiming management prerogative. Petitioners consider their termination greatly prejudicial and damaging to the cooperative, but no proof of such prejudice or damage was presented. Again assuming that there was [damage], for argument's [sake], was the damage suffered by the cooperative caused by the alleged acts of the private respondents violative of their personal legal, clear and positive right? What rights are those? Unfortunately, petitioners miserably failed to specify the specific rights they have requiring protection by way of an injunctive relief.
"There is no doubt that petitioners are unable to establish that they suffered any personal irreparable injury caused by the perceived acts of abuses of the private respondents. Nevertheless, assuming that they did, an action for damages would adequately compensate the injuries caused.
"The Cooperative Code (R.A. 6939) provides for the procedure and remedy against erring officers of the cooperative. Surprisingly, petitioners opted not to avail of those fully, or if availed, were abandoned when they came to seek relief from this Court.
"Private respondents were elected as Board of Directors of the cooperative in an election participated by the majority of the membership held on June 26, 1999. While duly elected, hence, must correspondingly perform their duties as officers of the cooperative, petitioners want them to be stopped by an injunctive writ from this Court."x x x x x x x x x
"While the herein petitioners have categorically prayed for the declaration of the nullity of private respondents' election to the Board of the cooperative on June 26, 1999, they want the latter at the same time enjoined from performing the functions, to which they have been called by the mandate of the majority in that exercise. To enjoin the private respondents from further performing their duties as members of the Board of Directors and officers of the cooperative until the main case is disposed of, is virtually removing them from office."x x x x x x x x x
"There is no doubt that issuance of a preliminary injunction herein will in effect dispose of the main case without trial, and this Court is not inclined to do that. The issue of whether or not private respondents in this case should continue as members of the Board of Directors and officers of the cooperative or stop functioning as such, is to be resolved in the main action.
"WHEREFORE, finding no sufficient basis to grant the herein application for preliminary injunction, the application is hereby denied. Pending the resolution of the merits of the main case, this Court finds no legal impediment for the private respondents to sit and function as elected members of the Board of Directors and officers of the cooperative."[6]
"SEC. 4. Verified application and bond for preliminary injunction or temporary restraining order. – A preliminary injunction or temporary restraining order may be granted only when:In fine, Section 5 of Rule 58 proscribes the grant of preliminary injunction without hearing and prior notice to the party or person sought to be enjoined. (The original provision under Section 5 of Rule 58 where the term "ex parte" described the nature of a judge's issuance of the twenty-day temporary restraining order had been deleted pursuant to an amendment made by the Court en banc in its resolution in Bar Matter No. 803 of 17 February 1998.) The rules, however, authorize the court to which an application for preliminary injunction is made to issue a temporary restraining order if it should appear from facts shown by affidavits or by the verified petition that "great or irreparable injury would result to the applicant before the matter can be heard on notice." The temporary restraining order shall be effective for a period of twenty days from notice to the party or person sought to be enjoined. Within the twenty-day period, the judge must conduct a hearing to consider the propriety for the issuance of an injunction or a preliminary injunction. The twenty-day period for the efficacy of a temporary restraining order is non-extendible; the order automatically terminates at the end of such period without the need of any judicial declaration to that effect and the courts have no discretion to extend the same.[7]"x x x x x x x x x
"(c) When an application for a writ of preliminary injunction or a temporary restraining order is included in a complaint or any initiatory pleading, the case, if filed in a multiple-sala court, shall be raffled only after notice to and in the presence of the adverse party or the person to be enjoined. In any event, such notice shall be preceded, or contemporaneously accompanied by service of summons, together with a copy of the complaint or initiatory pleading and the applicant's affidavit and bond, upon the adverse party in the Philippines.
"However, where the summons could not be served personally or by substituted service despite diligent efforts, or the adverse party is a resident of the Philippines temporarily absent therefrom or is a nonresident thereof, the requirement of prior or contemporaneous service of summons shall not apply.
"(d) The application for a temporary restraining order shall thereafter be acted upon only after all parties are heard in a summary hearing which shall be conducted within twenty-four (24) hours after the sheriff's return of service and/or the records are received by the branch selected by raffle and to which the records shall be transmitted immediately.
"SEC. 5. Preliminary injunction not granted without notice; exception. — No preliminary injunction shall be granted without hearing and prior notice to the party or person sought to be enjoined. If it shall appear from facts shown by affidavits or by the verified application that great or irreparable injury would result to the applicant before the matter can be heard on notice, the court to which the application for preliminary injunction was made, may issue a temporary restraining order to be effective only for a period of twenty (20) days from service on the party or person sought to be enjoined, except as herein provided. Within the said twenty-day period, the court must order said party or person to show cause, at a specified time and place, why the injunction should not be granted, determine within the same period whether or not the preliminary injunction shall be granted, and accordingly issue the corresponding order (as amended by En Banc Resolution of the Supreme Court, Bar Matter No. 803, dated February 17, 1998).
"However, and subject to the provisions of the preceding sections, if the matter is of extreme urgency and the applicant will suffer grave injustice and irreparable injury, the executive judge of a multiple-sala court or the presiding judge of a single-sala court may issue ex parte a temporary restraining order effective only for seventy-two (72) hours from issuance but he shall immediately comply with the provisions of the next preceding section as to service of summons and the documents to be served therewith. Thereafter, within the aforesaid seventy-two (72) hours, the judge before whom the case is pending shall conduct a summary hearing to determine whether the temporary restraining order shall be extended until the application for preliminary injunction can be heard. In no case shall the total period of the effectivity of the temporary restraining order exceed twenty (20) days, including the original seventy-two (72) hours provided herein.
"In the event that the application for preliminary injunction is denied or not resolved within the said period, the temporary restraining order is deemed automatically vacated. The effectivity of a temporary restraining order is not extendible without need of any judicial declaration to that effect and no court shall have authority to extend or renew the same on the same ground for which it was issued."