G.R. No. L-25332. October 14, 1968
ARTURO T. UBARRA AND ENRIQUE D. JUGOS, PLAINTIFFS-APPELLANTS, VS. BISCOM EMPLOYEES COOPERATIVE ASSOCIATION, INC., RICARDO M. DIARESCO, PIO PIOLA, JOSE SANTOS, RUFING TEJARES, DA…
CONCEPCION, C.J.:
Direct appeal to this Court, from an order of the Court of First
Instance of Negros Occidental, dismissing the
complaint herein, with costs.
Plaintiffs Arturo T. Ubarra and Enrique
D. Jugos, were the manager and rice
section-in-charge, respectively, of the BISCOM Employees Cooperative
Association, Inc. – hereinafter referred to as BECA – a consumer’s cooperative
enterprise organized, pursuant to the provisions of Republic Act No. 2023, as a
non-profit organization, for the benefit of its members, who are employees of
the Binalbagan-Isabela Sugar Co. On April 30, 1964, defendant Ricardo M. Diaresco, President of the BECA, convened a special meeting
of its board of directors – hereinafter referred to as the Board – which passed
resolution No. 273 expressing the Board’s loss of trust and confidence in
plaintiffs herein, for alleged anomalies committed by them, and suspending them
indefinitely, until their case shall have been “determined and decided”
by the Board. Excerpts from the minutes
of said meeting, read:
“After a quorum was certified to by the Secretary, the
President called the SPECIAL MEETING to order at 11:05
A.M.
“The President explained that the meeting was called for the
purpose of requesting the Board to take the necessary steps against the Manager
who has been repeatedly defying existing regulations and Board resolutions as
well as the By-Laws of the Cooperative.
“He went on further to state that due to these open defiance
and repeated violations, the President has completely lost trust and
confidence in the Manager – as aggravated by the fact that in the recent acts
of the Manager with a local bakery wherein he has showed propensities in giving
protection to its owners, one of which is a relative, the Manager has made
several manipulations in order to continue daily sales of bread of said bakery
to the BECA, which is not only improper but immoral.
“Again, the President explained, this was lately shown when
the Rice Section was reported on by Mr. Doronilla of
the Audit & Inventory Committee to have a shortage in the amount of
P1,257.09, when without the request of the Board, the Manager submitted his own
version thru a report prepared by him showing an overage of P28.64.
“In order to strike a true and accurate picture of the rice
situation in the BECA, it therefore appears that the Board is left with no
other alternative but to ask for an indefinite suspension of Messrs. Arturo Ubarra and Enrique Jugos, BECA
Manager and Rice-in-charge, who are also brothers-in-law to each other.
“It is therefore obviously clear that each will come to the
defense of the other in case of fault, anomalies or irregularities committed by
one or the other in order to cover up any wrongdoing. This will always happen whenever relatives
are involved, the President explained.
“Directors Santos
and Galanza then suggested that in the event that the
board decides on the suspension of the two persons, it is but necessary that
the records and books of the Cooperative be denied them, except upon proper
permission from the Board, in order to avoid tampering and undue manipulation
of our records.
“ON MOTION by Director Ludovico H.
Bayotas, duly seconded by Director Jose Santos, the
Board passed and approved the following:
“RESOLUTION
NO. 273
“RESOLVED, That in view of the fact that the Board, has lost
its trust and confidence in both the Manager and the Rice-in-charge, more
particularly on the Manager who has repeatedly and openly defied the Board by
the following acts:
“a. Failure to implement and comply with existing
rules, regulations, resolutions and by the by-laws;
“b. Failure to submit the results of the general
inventory ending March 31, 1964
as requested;
“c. Mismanagement and laxity in the supervision of
employee under him;
“d. Past shortages in the Refreshment &
Textiles sections and now a shortage in the Rice Section in the amount of
P1,257.09.
“e. Connivance with brokers who thrive on the
blood of our members to the detriment of the Cooperative; and other charges to
be preferred by the Board.
“In view of the foregoing, the Board therefore finds that it
has sufficient grounds to suspend both the Manager and the Rice-in-Charge, as
it does hereby SUSPEND INDEFINITELY the said persons until their case shall
have been determined and decided by the Board.
“UNANIMOUSLY
CARRIED.”
“There being no further business to be taken up the Special
Meeting was adjourned at 11:50 A.M.”
After conducting an investigation, at which plaintiffs’ counsel was
not allowed to be present, the Board found them guilty as charged and dismissed
them from their aforementioned positions, effective April 30, 1964.
Soon thereafter, or on July 9,
1964, plaintiffs complained to the Cooperatives Administration
Office – hereinafter referred to as CAO – against the action thus taken against
them. The CAO Administrator referred
plaintiffs’ complaint, for appropriate action, to the Commercial Cooperative
Officer in Bacolod
City, but, on August 21, 1964, the latter advised the former
that his efforts to settle the matter amicably had failed and that the parties
were “bent to make good their individual stand to have the case decided by
the courts of justice.”
On March 18, 1965, plaintiffs commenced the present civil action
in the Court of First Instance of Negros Occidental,
against the BECA and Diaresco, as well as his co-members
in the Board, namely, Pio Piola,
Jose Santos, Rufing Tejares,
David Galanza, and Ludovico
H. Bayotas. In
their complaint, plaintiffs alleged, inter alia,
that the charges preferred against them are “false and libelous”, as
well as “motivated by personal spite, criminal intent, malice x x political rivalry, and business considerations”;
that plaintiffs had, accordingly, filed with the office of the Provincial
Fiscal of Negros Occidental a criminal complaint for
libel against defendants herein; that, in consequence of said acts of the latter,
plaintiffs had suffered mental anguish, besmirched reputation, wounded
feelings and anxiety, and had been “injured in their reputation and good
names x x x causing them
damages in the amount of P10,000.00″; that the aforementioned
investigation by the Board was irregular, summary and “inquisitional”;
that plaintiffs’ counsel had not been allowed to be present at said
investigation; that their aforementioned dismissal was illegal, unjustified
and arbitrary and without due process; and, that, as a consequence, plaintiffs
had suffered mental anguish, besmirched reputation, wounded feelings and
anxiety, which “may be pecuniarily estimated at
P10,000,” apart from loss of income in the sum of P4,320, more or less.
Plaintiffs prayed,
therefore, for judgment in the sums above mentioned, aside from P10,000, as
exemplary damages, P5,000, as attorney’s fees and P5,000, as expenses of
litigation.
Upon being summoned, defendants filed a motion to dismiss said
complaint, upon the ground that the court had no jurisdiction over the nature
of the action and that plaintiffs have no cause of action, because resolution
No. 273 is a privileged communication.
After due hearing, the lower court granted the motion, on both grounds,
and, consequently, dismissed plaintiffs’ complaint. Hence, this appeal.
In holding that it had no jurisdiction over the subject-matter of
the present case, the lower court accepted defendants’ theory to the effect
that, under the provisions of Republic Act No. 2023, governing consumer’s
cooperative enterprises, such as the BECA, plaintiffs should have appealed from
the action of the Board to the general assembly of members or delegates of
members of the association assembled in a general meeting, as provided in
section 34 of said Act, and section 2 of Article III of the BECA By-Laws. Assuming that these sections imposed upon
plaintiffs herein the obligation to
appeal to said assembly, the failure to take such step could, at best, affect
their cause of action against the defendants, but, not the jurisdiction
of the lower court over the subject-matter of this case, which is determined by
law, and does not depend upon the acts or omissions of the parties.
Moreover, said sections read:
“Sec. 34. Final
authority of a co-operative. –
Subject to the provisions of this Act and the regulations, the final
authority in every co-operative shall be vested in the general assembly
of the members or the delegates of such members elected in the prescribed
manner and assembled in a general meeting.”[1]
“Section 2. RIGHTS AND
LIMITATIONS OF GENERAL ASSEMBLY. – The general
assembly has both the right and responsibility to elect directors and members
of committees and to remove them from office for cause, to hear and pass
upon the reports of the directors, officers and committees which are
responsible to the membership and subject to legal restrictions, to make the
final decision regarding any drastic change in the financial policy, to act
as the final arbiter in any dispute or dis-agreement
which may arise between the Board and any committee or officer or individual
member, to determine that amendments shall be made in the by-laws and to exercise
its final authority in all other matters vitally affecting the cooperative.”[2]
We find in these provisions nothing clearly relevant to the
legality or illegality of plaintiffs’ dismissal. Moreover, plaintiffs do not seek reinstatement. They merely demand payment of damages for the
allegedly “false and libelous” charges preferred against them,
motivated, according to the complaint, “by personal spite, criminal
intent, malice x x political rivalry and business
considerations”, on the part of the defendants.
Invoking Article 354 of the Revised Penal Code, defendants
maintain and the lower court held that, having been preferred in the course of
the performance of their duties, the charges against plaintiffs partake of the
nature of a privileged communication, which, as such, is not actionable. The argument overlooks the fact that the
privilege conferred by said article is not absolute, but qualified;
that the presumption of good faith, in effect, contained therein, is rebuttable;[3]
that, in fact, plaintiffs explicitly allege that the charges against them are,
not only false, but, also, malicious; and that the truth of this
allegation is deemed hypothetically admitted in defendants’ motion to dismiss.[4]
WHEREFORE, the order appealed from should be as it is
hereby set aside, and the case remanded to the lower court for further
proceedings, with the costs of this instance against the defendants.
IT IS SO ORDERED.
Reyes, J.B.L., Dizon, Makalintal, Sanchez, Ruiz Castro, Angeles, Fernando, and Capistrano,
JJ., concur.
Zaldivar, J., did not take part.
[1]
Underscoring ours.
[2]
Underscoring ours.
[3]
U.S. v. Cañete, 38
Phil. 253; U.S.
v. Bustos,
37 Phil. 731; Lu Chu Sing v. Lu Tiong Gui, 76 Phil. 669.
[4]
Valencia v. Deudor,
L-21598, May 19, 1966; Republic v. Cuaderno, L-22399, March 30, 1967; Republic v. Patanao,
L-22356, July 21, 1967; Joaquin v. Cujuangco, L-18060, July 25, 1967.