Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

I. Proceedings in the CB and the RTC On 0ul. *, 1'2*, the Pacific ,an+in- Corporation 3Pa,C4 $as placed under receivership b. the Central ,an+ of the Philippines pursuant to Resolution No. )'' of its Monetar. ,oard. ( fe$ "onths later, it $as placed under li!uidation 1 and a 5i!uidator $as appointed. 2 On (pril 6, 1'2), the Central ,an+ filed $ith the Re-ional rial Court of Manila ,ranch 71, a petition entitled 8Petition for (ssistance in the 5i!uidation of Pacific ,an+in- Corporation.8 3 he petition $as approved, after $hich creditors filed their clai"s $ith the court. On Ma. 16, 1''1, a ne$ 5i!uidator, Vitaliano N. Na9a-as, : President of the Philippine Deposit Insurance Corporation 3PDIC4, $as appointed b. the Central ,an+. On March 17, 1'2' the Pacific ,an+in- Corporation E"plo.ees Or-ani:ation 3;nion for short4, petitioner in <.R. No. 1='767, filed a co"plaint>in> intervention see+in- pa."ent of holida. pa., 17th "onth pa. differential, salar. increase differential, Christ"as bonus, and cash e!uivalent of Sic+ 5eave ,enefit due its "e"bers as e"plo.ees of Pa,C. In its order dated Septe"ber 17, 1''1, the trial court ordered pa."ent of the principal clai"s of the ;nion. 5 he 5i!uidator received a cop. of the order on Septe"ber 1), 1''1. On October 1), 1''1, he filed a Motion for Reconsideration and Clarification of the order. In his order of Dece"ber ), 1''1, the ?ud-e "odified his Septe"ber 17, 1''1 ; but in effect denied the 5i!uidator@s "otion for reconsideration. his order $as received b. the 5i!uidator on Dece"ber ', 1''1. he follo$in- da., Dece"ber 1=, 1''1, he filed a Notice of (ppeal and a Motion for (dditional i"e to Sub"it Record on (ppeal. On Dece"ber &7, 1''1, another Notice of (ppeal $as filed b. the Office of the Solicitor <eneral in behalf of Na9a-as. In his order of /ebruar. 1=, 1''&, respondent ?ud-e disallo$ed the 5i!uidator@s Notice of (ppeal on the -round that it $as late, i.e., "ore than 1* da.s after receipt of the decision. he ?ud-e declared his Septe"ber 17, 1''1 order and subse!uent orders to be final and eAecutor. and denied

G.R. No. 109373 March 20, 1995 PACIFIC BANKING CORPORATION EMP O!EES ORGANI"ATION, PAU A S. PAUG, a#$ %&' o((%c)r' a#$ *)*+)r', petitioners, vs. T,E ,ONORAB E COURT OF APPEA S a#$ -ITA IANO N. NA.AGAS II, a' %/0%$a&or o( Pac%(%c Ba#1%#2 Cor3ora&%o#, respondents. G.R. No. 112991 March 20, 1995 T,E PRESI4ENT OF T,E P,I IPPINE 4EPOSIT INSURANCE CORPORATION, a' %/0%$a&or o( &h) Pac%(%c Ba#1%#2 Cor3ora&%o# , petitioner, vs. COURT OF APPEA S, ,ON. 5U4GE REGINO T. -ERI4IANO II, 4EPUT! S,ERIFF RAMON ENRI6UE" a#$ ANG ENG 5OO, ANG KEONG AN a#$ E.5 ANG INT7 . T4., r)3r)')#&)$ +8 &h)%r A&&or#)89%#9(ac&, GON"A O C. S!, respondents.

MEN4O"A, J.: hese cases have been consolidated because the principal !uestion involved is the sa"e# $hether a petition for li!uidation under %&' of Rep. (ct No. &)*, other$ise +no$n as the Central ,an+ (ct, is a special proceedin- or an ordinar. civil action. he /ifth and the /ourteenth Divisions of the Court of (ppeals reached opposite results on this !uestion and conse!uentl. applied different periods for appealin-. he facts are as follo$s#

reconsideration. On March &6, 1''&, he -ranted the ;nion@s Motion for issuance of a $rit of EAecution. (n- Beon- 5an and E.0. (n- Int@l., private respondents in <.R. No. 11&''1, li+e$ise filed clai"s for the pa."ent of invest"ent in the Pa,C alle-edl. in the for" of shares of stoc+s a"ountin- to ;SC&,*71,)7&.12. he shares of stoc+s, consistin- of 1*D,D)& co""on shares, constituted 11E of the total subscribed capital stoc+ of the Pa,C. he. alle-ed that their clai" constituted forei-n eAchan-e capital invest"ent entitled to preference in pa."ent under the /orei-n Invest"ents 5a$. In his order dated Septe"ber 11, 1''&, respondent ?ud-e of the R C directed the 5i!uidator to pa. private respondents the total a"ount of their clai" as preferred creditors. 7 he 5i!uidator received the order on Septe"ber 1), 1''&. On Septe"ber 7=, 1''& he "oved for reconsideration, but his "otion $as denied b. the court on October &, 1''&. Fe received the order den.in- his Motion for Reconsideration on October *, 1''&. On October 1D, 1''& he filed a Notice of (ppeal fro" the orders of Septe"ber 1), 1''& and October &, 1''&. (s in the case of the ;nion, ho$ever, the ?ud-e ordered the Notice of (ppeal stric+en off the record on the -round that it had been filed $ithout authorit. of the Central ,an+ and be.ond 1* da.s. In his order of October &2, 1''&, the ?ud-e directed the eAecution of his Septe"ber 11, 1''& order -rantin- the Stoc+holdersG Investors@ clai". II. Proceedings in the Court of Appeals he 5i!uidator filed separate Petitions for Certiorari, Prohibition and Mandamus in the Court of (ppeals to set aside the orders of the trial court den.in- his appeal fro" the orders -rantin- the clai"s of ;nion and of the Stoc+holdersGInvestors. he t$o Divisions of the Court of (ppeals, to $hich the cases $ere separatel. raffled, rendered conflictin- rulin-s. In its decision of Nove"ber 16, 1''& in C(><.R. SP No. &66*1 3no$ <.R. No. ='7674 the /ifth Division < held in the case of the ;nion that the proceedinbefore the trial court $as a special proceedin- and, therefore, the period for appealin- fro" an. decision or final order rendered therein is 7= da.s. Since

the notice of appeal of the 5i!uidator $as filed on the 7=th da. of his receipt of the decision -rantin- the ;nion@s clai"s, the appeal $as brou-ht on ti"e. he /ifth Division, therefore, set aside the orders of the lo$er court and directed the latter to -ive due course to the appeal of the 5i!uidator and set the Record on (ppeal he had filed for hearin-. On the other hand, on Dece"ber 1), 1''7, the /ourteenth Division 9 ruled in C(><.R. SP No. &'7*1 3no$ <.R. No. 11&''14 in the case of the Stoc+holdersGInvestors that a li!uidation proceedin- is an ordinar. action. herefore, the period for appealin- fro" an. decision or final order rendered therein is 1* da.s and that since the 5i!uidator@s appeal notice $as filed on the &7rd da. of his receipt of the order appealed fro", deductin- the period durin- $hich his "otion for reconsideration $as pendin-, the notice of appeal $as filed late. (ccordin-l., the /ourteenth Division dis"issed the 5i!uidator@s petition. III. Present Proceedings he ;nion and the 5i!uidator then separatel. filed petitions before this Court. In <.R. No. 1='767 the ;nion contends that# 1. he Court of (ppeals acted $ithout ?urisdiction over the sub?ect "atter or nature of the suit. &. he Court of (ppeals -ravel. erred in ta+in- co-ni:ance of the petition for certiorari filed b. Na9a-as $ho $as $ithout an. le-al authorit. to file it. 7. he Court of (ppeals erred in concludin- that the case is a special proceedin- -overned b. Rules 6& to 1=' of the Revised Rules of Court. D. he Court of (ppeals erred seriousl. in concludin- that the notice of appeal filed b. Na9a-as $as filed on ti"e.

&

*. he Court of (ppeals erred seriousl. in declarin- that the second notice of appeal filed on Dece"ber &7, 1''1 b. the Solicitor <eneral is a superfluit.. On the other hand, in <.R. No. 11&''1 the 5i!uidator contends that# 1. he Petition for (ssistance in the 5i!uidation of the Pacific ,an+in- Corporation s a Special Proceedin- case andGor one $hich allo$s "ultiple appeals, in $hich case the period of appeal is 7= da.s and not 1* da.s fro" receipt of the orderG?ud-"ent appealed fro". &. Private respondents are not creditors of Pa,C but are plain stoc+holders $hose ri-ht to receive pa."ent as such $ould accrue onl. after all the creditors of the insolvent ban+ have been paid. 7. he clai" of private respondents in the a"ount of ;SC&&,*71,)7&.12 is not in the nature of forei-n invest"ent as it is understood in la$. D. he clai" of private respondents has not been clearl. established and proved. *. he issuance of a $rit of eAecution a-ainst the assets of Pa,C $as "ade $ith -rave abuse of discretion. he petitions in these cases "ust be dis"issed. First. (s stated in the be-innin-, the principal !uestion in these cases is $hether a petition for li!uidation under %&' of Rep. (ct No. &)* is in the nature of a special proceedin-. If it is, then the period of appeal is 7= da.s and the part. appealin- "ust, in addition to a notice of appeal, file $ith the trial court a record on appeal in order to perfect his appeal. Other$ise, if a li!uidation proceedin- is an ordinar. action, the period of appeal is 1* da.s fro" notice of the decision or final order appealed fro". ,P ,l-. 1&' provides#

%7'. Appeals. H he period for appeal fro" final orders, resolutions, a$ards, ?ud-"ents, or decisions of an. court in all cases shall be fifteen 31*4 da.s counted fro" the notice of the final order, resolution, a$ard, ?ud-"ent or decision appealed fro"# Provided, ho$ever, that in habeas corpuscases the period for appeal shall be fort.>ei-ht 3D24 hours fro" the notice of the ?ud-"ent appealed fro". No record on appeal shall be re!uired to ta+e an appeal. In lieu thereof, the entire record shall be trans"itted $ith all the pa-es pro"inentl. nu"bered consecutivel., to-ether $ith an indeA of the contents thereof. his section shall not appl. in appeals in special proceedin-s and in other cases $herein "ultiple appeals are allo$ed under applicable provisions of the Rules of Court. he Interi" Rules and <uidelines to i"ple"ent ,P ,l-. 1&' provides# 1'. Period of Appeals. H 3a4 (ll appeals, eAcept in habeas corpus cases and in the cases referred to in para-raph 3b4 hereof, "ust be ta+en $ithin fifteen 31*4 da.s fro" notice of the ?ud-"ent, order, resolution or a$ard appealed fro". 3b4 In appeals in special proceedin-s in accordance $ith Rule 1=' of the Rules of Court and other cases $herein "ultiple appeals are allo$ed, the period of appeals shall be thirt. 37=4 da.s, a record on appeal bein- re!uired. he /ourteenth Division of the Court of (ppeals held that the proceedin- is an ordinar. action si"ilar to an action for interpleader under Rule )7. 10 he /ourteenth Division stated# he petition filed is a+in to an interpleader under Rule )7 of the Rules of Court $here there are conflictin- clai"ants or several clai"s upon the sa"e sub?ect "atter, a person $ho clai"s no

interest thereon "a. file an action for interpleader to co"pel the clai"ants to 8interplead8 and liti-ate their several clai"s a"on- the"selves. 3Section I Rule )74. (n interpleader is in the cate-or. of a special civil action under Rule )& $hich, li+e an ordinar. action, "a. be appealed onl. $ithin fifteen 31*4 da.s fro" notice of the ?ud-"ent or order appealed fro". ;nder Rule )&, the precedin- rules coverinordinar. civil actions $hich are not inconsistent $ith or "a. serve to supple"ent the provisions of the rule relatin- to such civil actions are applicable to special civil actions. his e"braces Rule D1 coverin- appeals fro" the re-ional trial court to the Court of (ppeals. AAA AAA AAA hus, under Section 1 Rule & of the Rules of Court, an action is defined as 8an ordinar. suit in a court of ?ustice b. $hich one part. prosecutes another for the enforce"ent or protection of a ri-ht or the prevention or redress of a $ron-.8 On the other hand, Section & of the sa"e Rule states that 8ever. other re"ed. includin- one to establish the status or ri-ht of a part. or a particular fact shall be b. special proceedin-.8 o our "ind, fro" the afore!uoted definitions of an action and a special proceedin-, the petition for assistance of the court in the li!uidation of an asset of a ban+ is not 8one to establish the status or ri-ht of a part. or a particular fact.8 Contrar. to the sub"ission of the petitioner, the petition is not intended to establish the fact of insolvenc. of the ban+. he insolvenc. of the ban+ had alread. been previousl. deter"ined b. the Central ,an+ in accordance $ith Section ' of the C, (ct before the petition $as filed. (ll that needs to be done is to li!uidate the assets of the ban+ and thus the assistance of the respondent court is sou-ht for that purpose. It should be pointed out that this petition filed is not a"on- the cases cate-ori:ed as a special proceedin- under Section 1, Rule 6& of the Rules of Court, nor a"on- the special proceedin-s that "a. be appealed under Section 1, Rule 1=' of the Rules.

Ie disa-ree $ith the fore-oin- vie$ of the /ourteenth Division. Rule & of the Rules of Court provide# %1. Action defined. H (ction "eans an ordinar. suit in a court of ?ustice, b. $hich the part. prosecutes another for the enforce"ent or protection of a ri-ht, or the prevention or redress of a $ron-. %&. Special Proceeding Distinguished. H Ever. other re"ed., includin- one to establish the status or ri-ht of a part. or a particular fact, shall be b. special proceedin-. Elucidatin- the crucial distinction bet$een an ordinar. action and a special proceedin-, Chief 0ustice Moran states#8 11 (ction is the act b. $hich one sues another in a court of ?ustice for the enforce"ent or protection of a ri-ht, or the prevention or redress of a $ron- $hile special proceedin- is the act b. $hich one see+s to establish the status or ri-ht of a part., or a particular fact. Fence, action is distin-uished fro" special proceedin- in that the for"er is a for"al de"and of a ri-ht b. one a-ainst another, $hile the latter is but a petition for a declaration of a status, ri-ht or fact. Ihere a part. liti-ant see+s to recover propert. fro" another, his re"ed. is to file an action. Ihere his purpose is to see+ the appoint"ent of a -uardian for an insane, his re"ed. is a special proceedin- to establish the fact or status of insanit. callin- for an appoint"ent of -uardianship. Considerin- this distinction, a petition for li!uidation of an insolvent corporation should be classified a special proceedin- and not an ordinar. action. Such petition does not see+ the enforce"ent or protection of a ri-ht nor the prevention or redress of a $ron- a-ainst a part.. It does not pra. for affir"ative relief for in?ur. arisin- fro" a part.@s $ron-ful act or o"ission nor state a cause of action that can be enforced a-ainst an. person. Ihat it see+s is "erel. a declaration b. the trial court of the corporation@s insolvenc. so that its creditors "a. be able to file their clai"s in the settle"ent of the corporation@s debts and obli-ations. Put in another $a., the petition onl. see+s a declaration of the corporation@s debts and obli-ations. Put in another $a., the petition onl. see+s a declaration of the corporation@s

state of insolvenc. and the conco"itant ri-ht of creditors and the order of pa."ent of their clai"s in the disposition of the corporation@s assets. Contrar. to the rulin-s of the /ourteenth Division, li!uidation proceedin-s do not rese"ble petitions for interpleader. /or one, an action for interpleader involves clai"s on a sub?ect "atter a-ainst a person $ho has no interest therein. 12 his is not the case in a li!uidation proceedin- $here the 5i!uidator, as representative of the corporation, ta+es char-e of its assets and liabilities for the benefit of the creditors. 13 Fe is thus char-ed $ith insurin- that the assets of the corporation are paid onl. to ri-htful clai"ants and in the order of pa."ent provided b. la$. Rather, a li!uidation proceedin- rese"bles the proceedin- for the settle"ent of state of deceased persons under Rules 67 to '1 of the Rules of Court. he t$o have a co""on purpose# the deter"ination of all the assets and the pa."ent of all the debts and liabilities of the insolvent corporation or the estate. he 5i!uidator and the ad"inistrator or eAecutor are both char-ed $ith the assets for the benefit of the clai"ants. In both instances, the liabilit. of the corporation and the estate is not disputed. he court@s concern is $ith the declaration of creditors and their ri-hts and the deter"ination of their order of pa."ent. /urther"ore, as in the settle"ent of estates, "ultiple appeals are allo$ed in proceedin-s for li!uidation of an insolvent corporation. (s the /ifth Division of the Court of (ppeals, !uotin- the 5i!uidator, correctl. noted# ( li!uidation proceedin- is a sin-le proceedin- $hich consists of a nu"ber of cases properl. classified as 8clai"s.8 It is basicall. a t$o>phased proceedin-. he first phase is concerned $ith the approval and disapproval of clai"s. ;pon the approval of the petition see+in- the assistance of the proper court in the li!uidation of a close entit., all "one. clai"s a-ainst the ban+ are re!uired to be filed $ith the li!uidation court. his phase "a. end $ith the declaration b. the li!uidation court that the clai" is not proper or $ithout basis. On the other hand, it "a. also end $ith the li!uidation court allo$in- the clai". In the latter case, the clai" shall be classified $hether it is ordinar. or preferred, and thereafter included 5i!uidator. In either case, the order allo$in- or disallo$in- a particular clai" is final order, and "a. be appealed b. the part. a--rieved thereb..

he second phase involves the approval b. the Court of the distribution plan prepared b. the dul. appointed li!uidator. he distribution plan specifies in detail the total a"ount available for distribution to creditors $hose clai" $ere earlier allo$ed. he Order finall. disposes of the issue of ho$ "uch propert. is available for disposal. Moreover, it ushers in the final phase of the li!uidation proceedin- H pa."ent of all allo$ed clai"s in accordance $ith the order of le-al priorit. and the approved distribution plan. Veril., the i"port of the final character of an Order of allo$ance or disallo$ance of a particular clai" cannot be overe"phasi:ed. It is the operative fact that constitutes a li!uidation proceedin- a 8case $here "ultiple appeals are allo$ed b. la$.8 he issuance of an Order $hich, b. its nature, affects onl. the particular clai"s involved, and $hich "a. assu"e finalit. if no appeal is "ade therefro", ipso facto creates a situation $here "ultiple appeals are allo$ed. ( li!uidation proceedin- is co""enced b. the filin- of a sin-le petition b. the Solicitor <eneral $ith a court of co"petent ?urisdiction entitled, 8Petition for (ssistance in the 5i!uidation of e.g., Pacific ,an+in- Corporation. (ll clai"s a-ainst the insolvent are re!uired to be filed $ith the li!uidation court. (lthou-h the clai"s are liti-ated in the sa"e proceedin-, the treat"ent is individual. Each clai" is heard separatel.. (nd the Order issued relative to a particular clai" applies onl. to said clai", leavin- the other clai"s unaffected, as each clai" is considered separate and distinct fro" the others. Obviousl., in the event that an appeal fro" an Order allo$in- or disallo$ina particular clai" is "ade, onl. said clai" is affected, leavinthe others to proceed $ith their ordinar. course. In such case, the ori-inal records of the proceedin- are not elevated to the appellate court. he. re"ain $ith the li!uidation court. In lieu of the ori-inal record, a record of appeal is instead re!uired to be prepared and trans"itted to the appellate court. Inevitabl., "ultiple appeals are allo$ed in li!uidation proceedin-s. Conse!uentl., a record on appeal is necessar. in each and ever. appeal "ade. Fence, the period to appeal

therefro" should be thirt. 37=4 da.s, a record on appeal beinre!uired. 3Record pp. 1)&>1)D4. In <.R. No. 11&''1 3the case of the Stoc+holdersGInvestors4, the 5i!uidator@s notice of appeal $as filed on ti"e, havin- been filed on the &7rd da. of receipt of the order -rantin- the clai"s of the Stoc+holdersGInvestors. Fo$ever, the 5i!uidator did not file a record on appeal $ith the result that he failed to perfect his appeal. (s alread. stated a record on appeal is re!uired under the Interi" Rules and <uidelines in special proceedin-s and for cases $here "ultiple appeals are allo$ed. he reason for this is that the several clai"s are actuall. separate ones and a decision or final order $ith respect to an. clai" can be appealed. Necessaril. the ori-inal record on appeal "ust re"ain in the trial court $here other clai"s "a. still be pendin-. ,ecause of the 5i!uidator@s failure to perfect his appeal, the order -rantinthe clai"s of the Stoc+holdersGInvestors beca"e final. Conse!uentl.. the /ourteenth Division@s decision dis"issin- the 5i!uidator@s Petition for Certiorari, Prohibition and Mandamus "ust be affir"ed albeit for a different reason. On the other hand, in <.R. No. 1='767 3case of the 5abor ;nion4, $e find that the /ifth Division correctl. -ranted the 5i!uidator@s Petition for Certiorari. Prohibition and Mandamus. (s alread. noted, the 5i!uidator filed a notice of appeal and a "otion for eAtension to file a record on appeal on Dece"ber 1=, 1''1, i.e., $ithin 7= da.s of his receipt of the order -rantin- the ;nion@s clai". Iithout $aitin- for the resolution of his "otion for eAtension, he filed on Dece"ber &=, 1''1 $ithin the eAtension sou-ht a record on appeal. Respondent ?ud-e thus erred in disallo$in- the notice on appeal and den.inthe 5i!uidator@s "otion for eAtension to file a record on appeal. he /ifth Division of the Court of (ppeals correctl. -ranted the 5i!uidator@s Petition for Certiorari, Prohibition andMandamus and its decision should, therefore, be affir"ed. Second. In <.R. No. 1='767, he ;nion clai"s that under %&' of Rep. (ct No. &)*, the court "erel. assists in ad?udicatinthe clai"s of creditors, preserves the assets of the institution, and implements the li!uidation plan approved b. the Monetar. ,oard and that, therefore, as representative of the Monetar. ,oard, the 5i!uidator cannot !uestion the order of the court or appeal fro" it. It contends that since the Monetar. ,oard had previousl. ad"itted Pa,C@s liabilit. to the laborers b. in fact

settin- aside the a"ount of P11&,&7D,&'&.DD for the pa."ent of their clai"s, there $as nothin- else for the 5i!uidator to do eAcept to co"pl. $ith the order of the court. he ;nion@s contention is untenable. In li!uidation proceedin-s, the function of the trial court is not li"ited to assistin- in the i"ple"entation of the orders of the Monetar. ,oard. ;nder the sa"e section 3%&'4 of the la$ invo+ed b. the ;nion, the court has authorit. to set aside the decision of the Monetar. ,oard 8if there is a convincin- proof that the action is plainl. arbitrar. and "ade in bad faith.8 1: (s this Court held in Rural Ban of Buhi, !nc. v. Court of Appeals# 15 here is no !uestion, that the action of the "onetar. ,oard in this re-ard "a. be sub?ect to ?udicial revie$. hus, it has been held that the Court@s "a. interfere $ith the Central ,an+@s eAercise of discretion in deter"inin- $hether or not a distressed ban+ shall be supported or li!uidated. Discretion has its li"its and has never been held to include arbitrariness, discri"ination or bad faith 3Ra"os v. Central ,an+ of the Philippines, D1 SCR( *)6 J1'61K4. In truth, the 5i!uidator is the representative not onl. of the Central ,an+ but also of the insolvent ban+. ;nder %%&2(>&' of Rep. (ct No. &)* he acts in behalf of the ban+ 8personall. or throu-h counsel as he "a. retain, in all actions or proceedin-s or a-ainst the corporation8 and he has authorit. 8to do $hatever "a. be necessar. for these purposes.8 his authorit. includes the po$er to appeal fro" the decisions or final orders of the court $hich he believes to be contrar. to the interest of the ban+. /inall. the ;nion contends that the notice of appeal and "otion for eAtension of ti"e to file the record on appeal filed in behalf of the Central ,an+ $as not filed b. the office of the Solicitor <eneral as counsel for the Central ,an+. his contention has no "erit. On October &&, 1''&, as (ssistant Solicitor <eneral Cecilio O. Estoesta infor"ed the trial court in March &6, 1''&, the OS< had previousl. authori:ed la$.ers of the PDIC to prepare and si-n pleadin-s in the case. 1; Confor"abl. thereto the Notice of (ppeal and the Motion for (dditional i"e to sub"it Record on (ppeal filed $ere ?ointl. si-ned b. Solicitor Re.naldo I. Saludares in behalf of the OS< and b. la$.ers of the PDIC. 17

IFERE/ORE, in <.R. No. 1='767 and <.R. No 11&''1, the decisions appealed fro" are (//IRMED. SO ORDERED.