Students get preliminary injunction vs PSBA closure

MANILA, Philippines - A local court has ordered the issuance of a preliminary injunction stopping the implementation of a notice announcing the closure of the Philippine School of Business Administration in Quezon City (PSBA-QC).

In a 12-page order dated Nov. 6 and was released to the media on Wednesday, QC Regional Trial Court Branch 104 Judge Catherine Manodon said that there is an urgent necessity to restrain the implementation of the school’s closure last Oct. 18.

“The petitioners, as students of PSBA-QC, have the right to enroll until graduation, in recognition of the Constitutional guarantee of institutional academic freedom, as provided under Section 83 of the MORPHE (Manual of Regulations for Private Higher Education)” said the judge.

“Closure will adversely affect scholars and employees who will lose their jobs,” she added.

Manodon explained that while the closure of a program or a school is an exception to the right of the students to enroll until graduation, the MORPHE “still requires that the termination or closure of a higher education institution should be effected at the end of the academic year.”

The judge added that the PSBA-QC has not proven its claim that it suffered serious business losses, which is among the grounds for the closure as stated in the notice released on the school’s website on Sept. 23, and was published in The STAR in the following week.

The notice – signed by stockholders Juan Lim as chairman and Ramon Peralta as president – said that the school’s board of directors and stockholders representing at least 98.99 percent of the outstanding capital stock of PSBA-QC has unanimously approved the closure of the school effective Oct. 18.

It also notified the termination of all academic personnel effective Nov. 8, and all non-academic personnel effective Nov. 29.

Students Mary Plet Paguio, Charlene Zape, and Patrick Lloret – represented by former QC councilor and PSBA-QC alumnus Antonio Inton, as well as lawyers VJ Topacio and Daniel Adeva III – filed a petition seeking to stop the school’s closure.

“The closure of the school and the non-acceptance of students for enrollment will certainly be to the damage and prejudice of respondents who have the proprietary right to continue their course up to graduation,” read the petition.

Named respondents in the petition were Lim, Peralta, listed stockholder Antonio Magtalas, Commission on Higher Education (CHED) chairperson Patricia Licuanan, and CHED National Capital Region Director Catherine Castañeda.

It noted that the legal personality of Magtalas to sit in the school’s board of directors is currently being questioned by sitting president Benjamin Paulino.

Manodon said what is clear from the evidence presented was that the closure is primarily due to the intra-corporate dispute between Paulino and the other respondents.

“The Court believes that the students should not be made to suffer due to the said intra-corporate dispute among the stockholders and officers of the school,” read the order.

“The dispute which is related to this case, being the primary reason for the closure, should be resolved first, pending which there is a need to preserve the status quo through a writ of injunction to avoid unnecessary damage to the students as well as the faculty, staff, and other employees of the school,” it added.

In a notice published in The STAR on Oct. 11, Lim and Peralta accused Paulino of running the school without authority from PSBA Inc. – QC and certification from CHED.

“He alone is responsible for any and all acts, contracts, transactions and/or liabilities of whatever kind, nature or purpose, that had arisen or may yet arise as a consequence of his acts,” read the notice.

“PSBA Inc. – QC hereby asserts its rights to the land, building, facilities and equipment situated at 1029 Aurora Boulevard, Quezon City 1109,” it added.

Paulino, meanwhile, wrote a letter to Licuanan and asked CHED not to give due course on the application for the voluntary closure of the school. He identified himself as president of PSBA-QC, and said that he was belatedly informed of the meeting where the closure was decided upon by the other stockholders.

In a manifestation and motion on Nov. 8, the PSBA-QC asked the court to dismiss the application for preliminary injunction on the ground that the “act sought to be enjoined is completed.”

It noted that the earlier 20-day temporary restraining order (TRO) issued by the court in Oct 17 was not served on the day of the closure, and that the P200,000-bond required by the court was not posted as of Oct. 24.

But Manodon said the respondents were already aware that the TRO was already issued and that the issuance of a notice of the stoppage of operation of PSBA-QC “indicates bad faith.”

The judge noted that the petitioners were able to post the cash bond on Oct. 24.

Manodon ordered the petitioners to post another P200,000-bond “to answer for damages that may be suffered by the respondents as a result of the issuance” of the preliminary injunction.