The Court of Appeals has disallowed the transfer by the Parents Enabling Parents (PEP) Coalition to another regional trial court branch of the hearings on the corporate rehabilitation being sought by Pacific Plans Inc. (PPI), the failed pre-need company they are suing.
The CA’s Fifth Division also struck down the PEP Coalition’s opposition to a modified rehabilitation plan presented by the rehabilitation receiver appointed by Makati City Regional Trial Court (RTC) Branch 61.
“[The rules of court] authorize the immediate execution of orders and resolutions in rehabilitation proceedings, [so the RTC] is justified in calling for the execution of its order, especially since no temporary restraining order had been issued to stop its implementation,” said the 15-page decision penned by Justice Ricardo Rosario and issued on Sept. 7.
The decision was concurred in by division members Justices Rosmari Carandang and Leoncia Real-Dimagiba.
The CA also backed the RTC’s refusal to let go of the case as sought by PEP. Aside from the annulment of the modified rehabilitation plan, the coalition had sought the transfer of the case to another branch in accordance with a Supreme Court administrative order dated June 27, 2006.
“As correctly held by the [RTC], the petitioner (PEP) had indeed lost its prerogative to question its jurisdiction after previously recognizing or submitting to the authority of said court. Since estoppel has effectively set in, it took away petitioner’s right to so challenge said jurisdiction,” the CA held.
It will be recalled that in July 2008, the RTC approved the modified plan presented by the rehabilitation officer, Mamerto Marcelo, which sought, among other things, the suspension of tuition support for PPI’s education plan holders.
PEP, however, opposed Marcelo’s proposal, saying the coalition still had a pending case in the Supreme Court regarding its appeal of the original rehabilitation plan.
In 2006, the RTC, while hearing the case on the original plan, approved an “alternative” plan also presented by Marcelo. This was opposed by PEP which appealed to the CA.
The CA returned the case to the RTC for reception of evidence and further proceedings, prompting both PEP and Pacific Plans to elevate the matter to the Supreme Court in 2007.
The CA said the RTC was justified in approving the Marcelo plan in 2008 since no TRO or preliminary injunction was issued by the Supreme Court.
PEP had also charged Marcelo with forum shopping because he was also a party to the Supreme Court case and he had sought the high court’s reinstatement of the alternative plan.
The CA, however, said Marcelo could not be guilty of forum shopping because he was merely doing his job as the RTC-appointed rehabilitation receiver.
“[B]eing an officer of the court working for the benefit of all the parties in interest, [Marcelo] cannot be said to share the same interests as those of [PEP or PPI],” the CA ruled.
Pacific Plans Inc. sought rehabilitation in 2005 to stop having to make payments to its beneficiaries, citing the deregulation of the education sector which triggered tuition increases beyond the company’s projections and ability to cover. Most of PPI’s clients were education plan holders.