Professional Documents
Culture Documents
Sec. v. Laigo
Sec. v. Laigo
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* SECOND DIVISION.
634
fund shall at all times remain for the sole benefit of the
planholders. At no time shall any part of the trust fund be used
for or diverted to any purpose other than for the exclusive benefit
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MENDOZA, J.:
In this petition for certiorari1 under Rule 65 of the Rules
of Court, petitioner Securities and Exchange Commission
(SEC), through the Office of the Solicitor General (OSG),
assails the June 26, 2009 Order2 (June 26, 2009 Order)
issued by respondent Judge Reynaldo M. Laigo (Judge
Laigo) of the Regional Trial Court, Branch 56, Makati City
(RTC), in Sp. Proc. No. M6758,3 a petition for involuntary
insolvency of Legacy Consolidated Plans, Incorporated
(Legacy), ordering the inclusion of the trust fund in its
corporate assets to the prejudice of the planholders.
Factual Antecedents
Republic Act (R.A.) No. 8799, otherwise known as the
Securities Regulation Code (SRC), specifically Section 16
thereof, mandated the Securities and Exchange
Commission (SEC) to prescribe rules and regulations
governing the preneed industry. Pursuant thereto, the
SEC issued the corresponding New Rules on the
Registration and Sale of PreNeed Plans (New Rules)4
to govern the preneed industry prior to the
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together with a list of all those to whom, to the best of his knowledge and
belief, said debts or liabilities are due, the place of residence of his
creditors and the sum due each the nature of the indebtedness or liability
and whether founded on written security, obligation, contract or
otherwise, the true cause and consideration thereof, the time and place
when and where such indebtedness or liability accrued, a declaration of
any existing pledge, lien, mortgage, judgment, or other security for the
payment of the debt or liability, and an outline of the facts giving rise or
which might give rise to a cause of action against such insolvent debtor.
Sec. 16. Description of real and personal property.Said inventory must
contain, besides the creditors, an accurate description of all the real and
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The RTC stated that the trust fund could be withdrawn
by the Assignee to be used for the expenses he would incur
in the discharge of his functions and to be distributed
among the creditors who had officially filed their valid
claims with the court.
The Present Petition
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7 Rollo, p. 50.
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the appropriate court which shall have jurisdiction over the assets of the
preneed company, excluding trust fund assets that have been established
exclusively for the benefit of planholders.
(b) Proceedings in court shall proceed independently of proceedings in
the Commission for the liquidation of claims, and creditors of the preneed
company shall have no personality whatsoever in the Commission
proceedings to litigate their claims against the trust funds. x x x
xxx x xx.
645
V.
Whether or not the insolvency court, presided by
respondent Trial Court Judge, has the authority to
enjoin petitioner SEC from further validating the
claims of Legacys planholders and treating them as
if they are ordinary creditors of Legacy.
VI.
Whether or not the provision of the Preneed Code
regarding liquidation is in the nature of a
procedural law that can be retroactively applied to
the case at bar.11
Private Respondents Position
In their Comment/Opposition,12 the private respondents,
Glicera Ayad, Sahlee Delos Reyes and Antonio P. Huerte,
Jr. (private respondents), submit that nothing in the New
Rules expressly provided that the trust fund is excluded
from the inventory of corporate assets which is required to
be submitted to the insolvency court that the SECs
interference in the insolvency proceedings is incongruous to
the legal system and that under the provisions of the
Insolvency Law, all claims, including those against the
trust funds should be filed in the liquidation proceedings.13
Hence, private respondents assert that no grave abuse of
discretion was committed by Judge Laigo in issuing the
June 26, 2009 Order.
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11 Rollo, p. 480.
12 Id., at pp. 142150.
13 Id., at p. 142.
14 Id., at pp. 159185.
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Trust Fund
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To the Assignee, these control mechanisms are
indicative of the interest of Legacy in the enforcement of
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18 Id., at p. 105.
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652
SEC. 16. PreNeed Plans.No person shall sell or offer for sale to the
public any preneed plan except in accordance with rules and regulations
which the Commission shall prescribe. Such rules shall regulate
the sale of preneed plans by, among other things, requiring the
registration of preneed plans, licensing persons involved in the sale of
preneed plans, requiring disclosures to prospective plan holders,
prescribing advertising guidelines, providing for uniform accounting
system, reports and record keeping with respect to such plans, imposing
capital, bonding and other financial responsibility, and establishing trust
funds for the payment of benefits under such plans. [Emphasis supplied]
It is clear from Section 16 that the underlying
congressional intent is to make the planholders the
exclusive beneficiaries. It has been said that what is within
the spirit is within the law even if it is not within the letter
of the law because the spirit prevails over the letter.24
This will by the legislature was fortified with the
enactment of R.A. No. 9829 or the PreNeed Code in 2009.25
The Congress, because of the chaos confounding the
industry at the time, considered it necessary to provide a
stronger legal framework so that no entity could claim that
the mandate and delegated authority of the SEC under the
SRC was nebulous. The PreNeed Code cemented the
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Under the principle of legislative approval of
administrative interpretation by reenactment, the
reenactment of a statute, substantially unchanged (as in
this case), is persuasive indication of the adoption by
Congress of a prior executive construction.26 Accordingly,
where a statute is susceptible of the meaning placed upon
it by a ruling of the government agency charged with its
enforcement and the legislature thereafter reenacts the
provisions without substantial change, such action is to
some extent confirmatory that the ruling carries out the
legislative purpose.27
The Court cannot go against that legislative intent for it
is the duty of this institution to read what the law intends.
It is a cardinal rule that, in seeking the meaning of the law,
the
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trust funds, which have been pending before it, are clearly
within the SECs authority to rule upon.
PreNeed Code is curative and
remedial in character and,
therefore, can be applied ret
roactively
Finally, it must be stressed that the primary protection
accorded by the PreNeed Code to the planholders is
curative and remedial and, therefore, can be applied
retroactively. The rule is that where the provisions of a
statute clarify an existing law and do not contemplate a
change in that law, the statute may be given curative,
remedial and retroactive effect.43 To review, curative
statutes are those enacted to cure
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A reading of the PreNeed Code immediately shows that
its provisions operate merely in furtherance of the remedy
or confirmation of the right of the planholders to
exclusively claim against the trust funds as intended by the
legislature. No new substantive right was created or
bestowed upon the planholders. Section 52 of the PreNeed
Code only echoes and clarifies the SRCs intent to exclude
from the insolvency proceeding trust fund assets that have
been established exclusively for the benefit of
planholders. It was precisely enacted to foil the tactic of
taking undue advantage of any ambiguities in the New
Rules.
Any doubt or reservation in this regard has been
dispelled by the PreNeed Code. Section 57 thereof provides
that [a]ny preneed company who, at the time of the
effectivity of this Code has been registered and
licensed to sell preneed plans and similar contracts,
shall be considered registered and licensed under
the provision of this Code and its implementing rules
and regulations and shall be subject to and governed
by the provisions hereof x x x. Thus, Legacy and all
other existing preneed companies cannot claim that the
provisions of the PreNeed
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http://openscholarship.wustl.edu/cgi/viewcontent.cgi?
article=1050&context=law_urbanlaw (last visited, August 5, 2015).
44 Fernando v. St. Scholasticas College, G.R. No. 161107, March 12,
2013, 693 SCRA 141.
45 356 Phil. 787 295 SCRA 470 (1998).
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46 Frivaldo v. COMELEC, 327 Phil. 521 257 SCRA 727 (1996), citing
73 Am. Jur. 2d, Sec. 354, p. 490 italics supplied.
669
SO ORDERED.
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