492 SUPREME COURT REPORTS ANNOTATED
Pacific Banking Corporation Employees Organization vs.
Court of Appeals
G.R. No. 109373. March 20, 1995. *
PACIFIC BANKING CORPORATION EMPLOYEES
ORGANIZATION, PAULA S. PAUG, and its officers and
members, petitioners, vs. THE HONORABLE COURT OF
APPEALS and VITALIANO N. NAAGAS II, as Liquidator of
Pacific Banking Corporation, respondents.
G.R. No. 112991. March 20, 1995. * relief for injury arising from a partys wrongful act or omission nor
THE PRESIDENT OF THE PHILIPPINE DEPOSIT
INSURANCE CORPORATION, as Liquidator of the Pacific
Banking Corporation, petitioner, vs. COURT OF APPEALS,
HON. JUDGE REGINO T. VERIDIANO II, DEPUTY
SHERIFF RAMON ENRIQUEZ and ANG ENG JOO, ANG
KEONG LAN and E.J
_______________
*SECOND DIVISION.
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VOL. 242, MARCH 20, 1995 493
Pacific Banking Corporation Employees Organization vs.
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ANG INTL., LTD. represented by their Attorney-in-fact,
GONZALO C. SY, respondents.
Remedial Law; Actions; Special Proceedings; Distinction
Between an Ordinary Action and a Special Proceeding.Elucidating
the crucial distinction between an ordinary action and a special
proceeding, Chief Justice Moran states: Action is the act by which
one sues another in a court of justice for the enforcement or
protection of a right, or the prevention or redress of a wrong while
special proceeding is the act by which one seeks to establish the
status or right of a party, or a particular fact. Hence, action is
distinguished from special proceeding in that the former is a formal
demand of a right by one against another, while the latter is but a
petition for a declaration of a status, right or fact. Where a party
litigant seeks to recover property from another, his remedy is to file
an action. Where his purpose is to seek the appointment of a
guardian for an insane, his remedy is a special proceeding to
establish the fact or status of insanity calling for an appointment of
guardianship.
Same; Same; Same; A petition for liquidation of an insolvent
corporation should be classified a special proceeding and not an
ordinary action.Considering this distinction, a petition for
liquidation of an insolvent corporation should be classified a special
proceeding and not an ordinary action. Such petition does not seek
the enforcement or protection of a right nor the prevention or
redress of a wrong against a party. It does not pray for affirmative
state a cause of action that can be enforced against any person.
Same; Same; Same; The petition only seeks a declaration of the
corporations state of insolvency and the concomitant right of
creditors and the order of payment of their claims in the disposition
of the corporations assets.What it seeks is merely a declaration by
the trial court of the corporations insolvency so that its creditors
may be able to file their claims in the settlement of the corporations
debts and obligations. Put in another way, the petition only seeks a
declaration of the corporations state of insolvency and the
concomitant right of creditors and the order of payment of their
claims in the disposition of the corporations assets.
Same; Same; Same; Liquidation proceedings do not resemble
petitions for interpleader.Contrary to the rulings of the
Fourteenth Division, liquidation proceedings do not resemble
petitions for inter-
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494 SUPREME COURT REPORTS ANNOTATED
Pacific Banking Corporation Employees Organization vs.
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pleader. For one, an action for interpleader involves claims on a
subject matter against a person who has no interest therein. This is
not the case in a liquidation proceeding where the Liquidator, as
representative of the corporation, takes charge of its assets and
liabilities for the benefit of the creditors. He is thus charged with
insuring that the assets of the corporation are paid only to rightful
claimants and in the order of payment provided by law.
Same; Same; Same; A liquidation proceeding resembles the
proceeding for the settlement of estate of deceased persons under
Rules 73 to 91 of the Rules of Court.Rather, a liquidation
proceeding resembles the proceeding for the settlement of estate of
deceased persons under Rules 73 to 91 of the Rules of Court. The
two have a common purpose: the determination of all the assets and
the payment of all the debts and liabilities of the insolvent
corporation or the estate. The Liquidator and the administrator or
executor are both charged with the assets for the benefit of the
claimants. In both instances, the liability of the corporation and the
estate is not disputed. The courts concern is with the declaration of
creditors and their rights and the determination of their order of
payment.
Same; Same; Same; As in the settlement of estates, multiple
appeals are allowed in proceedings for liquidation of an insolvent
corporation.Furthermore, as in the settlement of estates, multiple
appeals are allowed in proceedings for liquidation of an insolvent
corporation.
Same; Same; Same; Appeals; A record on appeal is required
under the Interim Rules and Guidelines in special proceedings and
for cases where multiple appeals are allowed.In G.R. No. 112991
(the case of the Stockholders/Investors), the Liquidators notice of
appeal was filed on time, having been filed on the 23rd day of receipt
of the order granting the claims of the Stockholders/Investors.
However, the Liquidator did not file a record on appeal with the
result that he failed to perfect his appeal. As already stated, a record
on appeal is required under the Interim Rules and Guidelines in
special proceedings and for cases where multiple appeals are
allowed. The reason for this is that the several claims are actually
separate ones and a decision or final order with respect to any claim
can be appealed. Necessarily the original record on appeal must
remain in the trial court where other claims may still be pending.
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Pacific Banking Corporation Employees Organization vs.
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Same; Same; Same; Same; In liquidation proceedings, the
function of the trial court is not limited to assisting in the
implementation of the orders of the Monetary Board.The Unions
contention is untenable. In liquidation proceedings, the function of
the trial court is not limited to assisting in the implementation of
the orders of the Monetary Board. Under the same section (29) of
the law invoked by the Union, the court has authority to set aside
the decision of the Monetary Board if there is a convincing proof
that the action is plainly arbitrary and made in bad faith.
PETITIONS for review the decisions of the Court of Appeals.
The facts are stated in the opinion of the Court.
Potenciano A. Flores for petitioners in G.R. No. 109373.
Puruganan, Chato, Tan & Geronimo for petitioner
in G.R. No. 112991.
Marbibi Law Office for private respondent in G.R. No.
112991.
MENDOZA, J.:
These cases have been consolidated because the principal
question involved is the same: whether a petition for
liquidation under 29 of Rep. Act No. 265, otherwise known as
the Central Bank Act, is a special proceeding or an ordinary
civil action. The Fifth and the Fourteenth Divisions of the
Court of Appeals reached opposite results on this question and
consequently applied different periods for appealing.
The facts are as follows:
I. Proceedings in the CB and the RTC
On July 5, 1985, the Pacific Banking Corporation (PaBC) was
placed under receivership by the Central Bank of the
Philippines pursuant to Resolution No. 699 of its Monetary
Board. A few
496
496 SUPREME COURT REPORTS ANNOTATED
Pacific Banking Corporation Employees Organization vs.
Court of Appeals
months later, it was placed under liquidation and a Liquidator
1
was appointed. 2
On April 7, 1986, the Central Bank filed with the Regional
Trial Court of Manila, Branch 31, a petition entitled Petition
for Assistance in the Liquidation of Pacific Banking
Corporation. The petition was approved, after which
3
creditors filed their claims with the court.
 On May 17, 1991, a new Liquidator, Vitaliano N.
Naagas, President of the Philippine Deposit Insurance
4
Corporation (PDIC), was appointed by the Central Bank.
On March 13, 1989 the Pacific Banking Corporation
Employees Organization (Union for short), petitioner in G.R.
No. 109373, filed a complaint-in-intervention seeking
payment of holiday pay, 13th month pay differential, salary
increase differential, Christmas bonus, and cash equivalent of
Sick Leave Benefits due its members as employees of PaBC.
In its order dated September 13, 1991, the trial court ordered
payment of the principal claims of the Union.
_______________
1 MB Resolution No. 1233 issued on November 22, 1985.
2 Renan V. Santos, Special Assistant to the Governor of the Central Bank
of the Philippines.
3 Docketed as SP. Proc. No. 86-35313.
4 MB Resolution No. 537.
A. Flores, as attorneys fees through the Branch Clerk of Court.
The Monetary Claims of the plaintiffs/intervenors for the Emergency Leave
credits, Hospital Assistance Funds, and Anniversary Increase are DENIED unless
supporting documents are presented by claimants/intervenors as attested by PaBCs
physician and/or responsible officers of the PaBC that they are entitled to said claims.
SO ORDERED.
6 The dispositive portion of the order, dated December 6, 1991, reads:
WHEREFORE, the Order of this Court dated September 13, 1991 is hereby modified
and the Liquidator is ordered to immediately compute and pay the following monetary
claims of the plaintiffs/intervenors:
1. a)The claim for holiday pay covering the period from November 1, 1974 to
October 31, 1985;
2. b)The claim for 28% salary differential pursuant to the CBA increase;
5 3. c)The claim for Christmas Bonus which should be pro rated based on the
employees length of service rendered up to 1985 when the Pacific Banking
Corporation was placed under liquidation; and
4. d)The claim for unused sick leave benefits which should be computed and paid
accordingly.
Furthermore, this Court orders:

5 The dispositive portion of the order, dated September 13, 1991, reads:
WHEREFORE, the Court hereby directs the Liquidator to immediately compute and
pay the following monetary claims of the plaintiffs/intervenors:
1. a)Holiday pay covering the period from November 1, 1974 to October 31, 1985;
2. b)13th month pay in 1985 and salary differential pay to employees with
permanent appointments as of January 1982 including the 28% salary
increase under the 1982 CBA; and
3. c)1985 Christmas bonus;
4. d)Commutation and payment of all unused sick leave credits; and
5. e)The payment of 10% of the total claims as computed, due and paid to the
plaintiffs/intervenors counsel, Atty. Potenciano
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Pacific Banking Corporation Employees Organization vs.
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The Liquidator received a copy of the order on September 16,
1991. On October 16, 1991, he filed a Motion for
Reconsideration and Clarification of the order. In his order of
December 6, 1991, the judge modified his September 13,
1991 but in effect denied the Liquidators motion for
6 that it was late, i.e., more than 15 days after receipt of the
reconsideration. This order was re-
_______________
1. a)The prorata payment of 13th month pay in accordance with the
position taken by the Liquidator provided in the Implementing Rules
of the Department of Labor; and
2. b)Consistent with the previous orders of this Court payment of 10%
attorneys fees should be deducted from the total claims afforded to
the plaintiffs/intervenors and other employees of the bank (PaBC).
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498 SUPREME COURT REPORTS ANNOTATED
Pacific Banking Corporation Employees Organization vs.
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ceived by the Liquidator on December 9, 1991. The following
day, December 10, 1991, he filed a Notice of Appeal and a
Motion for Additional Time to Submit Record on Appeal.
On December 20, 1991, he filed the Record on Appeal. On
December 23, 1991, another Notice of Appeal was filed by the
Office of the Solicitor General in behalf of Naagas.
In his order of February 10, 1992, respondent judge
disallowed the Liquidators Notice of Appeal on the ground
decision. The judge declared his September 13, 1991 order and
subsequent orders to be final and executory and denied
reconsideration. On March 27, 1992 he granted the Unions
Motion for Issuance of a Writ of Execution.
Ang Keong Lan and E.J. Ang Intl., private respondents
in G.R. No. 112991, likewise filed claims for the payment of
investment in the PaBC allegedly in the form of shares of
stocks amounting to US$2,531,632.18. The shares of stocks,
consisting of 154,462 common shares, constituted 11% of the
total subscribed capital stock of the PaBC. They alleged that
their claim constituted foreign exchange capital investment
entitled to preference in payment under the Foreign
Investments Law.
In his order dated September 11, 1992, respondent judge of
the RTC directed the Liquidator to pay private respondents
the total amount of their claim as preferred creditors. 7 a special proceeding and, therefore, the period for appealing
The Liquidator received the order on September 16,
1992. On September 30, 1992 he moved for reconsideration,
but his motion was denied by the court on October 2, 1992. He
received the order denying his Motion for Reconsideration
on October 5, 1992. On
_______________
7 The dispositive portion of the trial courts order, dated September 11,
1992, reads:
WHEREFORE, premises considered, the Liquidator of PaBC is ordered to
pay claimants, through their Attorney-in-Fact Gonzalo C. Sy, their total
investment of US$2,531,632.18 as preferred creditors. Dividends and/or
interest that accrued in favor of claimants is hereby deferred pending study by
the Liquidator who is hereby ordered to submit his report and recommendation
within thirty (30) days from receipt of this Order.
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Pacific Banking Corporation Employees Organization vs.
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October 14, 1992 he filed a Notice of Appeal from the orders of
September 16, 1992 and October 2, 1992. As in the case of the
Union, however, the judge ordered the Notice of Appeal
stricken off the record on the ground that it had been filed
without authority of the Central Bank and beyond 15 days. In
his order of October 28, 1992, the judge directed the execution
of his September 11, 1992 order granting the
Stockholders/Investors claim.
II. Proceedings in the Court of Appeals
The Liquidator filed separate Petitions for Certiorari,
Prohibition and Mandamus in the Court of Appeals to set
aside the orders of the trial court denying his appeal from the
orders granting the claims of Union and of the
Stockholders/Investors. The two Divisions of the Court of
Appeals, to which the cases were separately raffled, rendered
conflicting rulings.
In its decision of November 17, 1992 in CA-G.R. SP No.
27751 (now G.R. No. 109373) the Fifth Division held in the 8
case of the Union that the proceeding before the trial court was
from any decision or final order rendered therein is 30 days.
Since the notice of appeal of the Liquidator was filed on the
30th day of his receipt of the decision granting the Unions
claims, the appeal was brought on time. The Fifth Division,
therefore, set aside the orders of the lower court and directed
the latter to give due course to the appeal of the Liquidator
and set the Record on Appeal he had filed for hearing.
On the other hand, on December 16, 1993, the Fourteenth
Division ruled in CA-G.R. SP No. 29351 (now G.R. No.
9
112991) in the case of the Stockholders/Investors that a
liquidation pro-
_______________
8 Justice Serafin E. Camilon, Chairman and ponente; Justices Serafin V.C.
Guingona and Cancio C. Garcia, Members, concurring.
9 Justice Antonio M. Martinez, Chairman and ponente; Justices Artemon D.
Luna and Ma. Alicia Austria-Martinez, Members, concurring.
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500 SUPREME COURT REPORTS ANNOTATED
Pacific Banking Corporation Employees Organization vs.
Court of Appeals
ceeding is an ordinary action. Therefore, the period for
appealing from any decision or final order rendered therein is
15 days and that since the Liquidators appeal notice was filed
on the 23rd day of his receipt of the order appealed from,
deducting the period during which his motion for
reconsideration was pending, the notice of appeal was filed
late. Accordingly, the Fourteenth Division dismissed the
Liquidators petition.
III. Present Proceedings
The Union and the Liquidator then separately filed petitions
before this Court.
In G.R. No. 109373 the Union contends that:
1. 1.The Court of Appeals acted without jurisdiction over
the subject matter or nature of the suit.
2. 2.The Court of Appeals gravely erred in taking
cognizance of the petition for certiorari filed by
Naagas who was without any legal authority to file
it.
3. 3.The Court of Appeals erred in concluding that the case
is a special proceeding governed by Rules 72 to 109 of
the Revised Rules of Court.
4. 4.The Court of Appeals erred seriously in concluding
that the notice of appeal filed by Naagas was filed on
time.
5. 5.The Court of Appeals erred seriously in declaring that
the second notice of appeal filed on December 23, 1991
by the Solicitor General is a superfluity.
On the other hand, in G.R. No. 112991 the Liquidator contends
that:
1. 1.The Petition for Assistance in the Liquidation of the
Pacific Banking Corporation is a Special Proceeding
case and/or one which allows multiple appeals, in
which case the period of appeal is 30 days and not 15
days from receipt of the order/judgment appealed from.
2. 2.Private respondents are not creditors of PaBC but are
plain stockholders whose right to receive payment as
such would accrue only after all the creditors of the
insolvent bank have been paid.
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Pacific Banking Corporation Employees Organization vs.
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1. 3.The claim of private respondents in the amount of
US$22,531,632.18 is not in the nature of foreign
investment as it is understood in law.
2. 4.The claim of private respondents has not been clearly
established and proved.
3. 5.The issuance of a writ of execution against the assets
of PaBC was made with grave abuse of discretion.
The petitions in these cases must be dismissed. First. As
stated in the beginning, the principal question in these cases
is whether a petition for liquidation under 29 of Rep. Act No.
265 is in the nature of a special proceeding. If it is, then the
period of appeal is 30 days and the party appealing must, in
addition to a notice of appeal, file with the trial court a record
on appeal in order to perfect his appeal. Otherwise, if a
liquidation proceeding is an ordinary action, the period of
appeal is 15 days from notice of the decision or final order
appealed from.
BP Blg. 129 provides:
39. Appeals.The period of appeal from final orders, resolutions,
awards, judgments, or decisions of any court in all cases shall be
fifteen (15) days counted from the notice of the final order,
resolution, award, judgment, or decision appealed from: Provided,
however, that in habeas corpus cases the period for appeal shall be
forty-eight (48) hours from the notice of the judgment appealed
from.
No record on appeal shall be required to take an appeal. In lieu
thereof, the entire record shall be transmitted with all the pages
prominently numbered consecutively, together with an index of the
contents thereof.
 This section shall not apply in appeals in special proceedings and
in other cases wherein multiple appeals are allowed under
applicable provisions of the Rules of Court.
The Interim Rules and Guidelines to implement BP Blg. 129
provides:
19. Period of Appeals.
(a) All appeals, except in habeas corpus cases and in the cases
referred to in paragraph (b) hereof, must be taken within fifteen (15)
days from notice of the judgment, order, resolution or award
appealed from.
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502 SUPREME COURT REPORTS ANNOTATED
Pacific Banking Corporation Employees Organization vs.
Court of Appeals
(b) In appeals in special proceedings in accordance with Rule 109 of
the Rules of Court and other cases wherein multiple appeals are
allowed, the period of appeals shall be thirty (30) days, a record on
appeal being required.
The Fourteenth Division of the Court of Appeals held that the
proceeding is an ordinary action similar to an action for
interpleader under Rule 63. The Fourteenth Division stated:
10
The petition filed is akin to an interpleader under Rule 63 of the
Rules of Court where there are conflicting claimants or several
claims upon the same subject matter, a person who claims no
interest thereon may file an action for interpleader to compel the
claimants to interplead and litigate their several claims among
themselves. (Section 1, Rule 63).
An interpleader is in the category of a special civil action under
Rule 62 which, like an ordinary action, may be appealed only within
fifteen (15) days from notice of the judgment or order appealed from.
Under Rule 62, the preceding rules covering ordinary civil actions
which are not inconsistent with or may serve to supplement the
provisions of the rule relating to such civil actions are applicable to
special civil actions. This embraces Rule 41 covering appeals from
the regional trial court to the Court of Appeals.
....
Thus, under Section 1 Rule 2 of the Rules of Court, an action is
defined as an ordinary suit in a court of justice by which one party
prosecutes another for the enforcement or protection of a right or
the prevention or redress of a wrong. On the other hand, Section 2
of the same Rule states that every other remedy including one to
establish the status or right of a party or a particular fact shall be
by special proceeding.
To our mind, from the aforequoted definitions of an action and a
special proceeding, the petition for assistance of the court in the
liquidation of an asset of a bank is not one to establish the status
or right of a party or a particular fact. Contrary to the submission
of the
_______________
10 1. Interpleader when proper.Whenever conflicting claims upon the same
subject matter are or may be made against a person, who claims no interest
whatever in the subject matter, or an interest which in whole or in part is not
disputed by the claimants, he may bring an action against the conflicting claimants
to compel them to interplead and litigate their several claims among themselves.
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VOL. 242, MARCH 20, 1995 503
Pacific Banking Corporation Employees Organization vs.
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petitioner, the petition is not intended to establish the fact of
insolvency of the bank. The insolvency of the bank had already been
previously determined by the Central Bank in accordance with
Section 9 of the CB Act before the petition was filed. All that needs
to be done is to liquidate the assets of the bank and thus the
assistance of the respondent court is sought for that purpose.
It should be pointed out that this petition filed is not among the
cases categorized as a special proceeding under Section 1, Rule 72
of the Rules of Court, nor among the special proceedings that may
be appealed under Section 1, Rule 109 of the Rules.
We disagree with the foregoing view of the Fourteenth
Division. Rule 2 of the Rules of Court provide:
1. 1.Action defined.Action means an ordinary suit in a
court of justice, by which one party prosecutes another
for the enforcement or protection of a right, or the
prevention or redress of a wrong.
2. 2.Special proceeding distinguished.Every other
remedy, including one to establish the status or right
of a party or a particular fact, shall be by special
proceeding.
Elucidating the crucial distinction between an ordinary action
and a special proceeding, Chief Justice Moran states: 11
Action is the act by which one sues another in a court of justice for
the enforcement or protection of a right, or the prevention or redress
of a wrong while special proceeding is the act by which one seeks to
establish the status or right of a party, or a particular fact. Hence,
action is distinguished from special proceeding in that the former is
a formal demand of a right by one against another, while the latter
is but a petition for a declaration of a status, right or fact. Where a
party litigant seeks to recover property from another, his remedy is
to file an action. Where his purpose is to seek the appointment of a
guardian for an insane, his remedy is a special proceeding to
establish the fact or status of insanity calling for an appointment of
guardianship.
Considering this distinction, a petition for liquidation of an
insolvent corporation should be classified a special proceeding
_______________
11 1 MORAN, COMMENTS ON THE RULES OF COURT 119-120 (1979),
citing Hagans v. Wislizenus, 42 Phil. 880, 882 (1922).
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504 SUPREME COURT REPORTS ANNOTATED
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and not an ordinary action. Such petition does not seek the
enforcement or protection of a right nor the prevention or
redress of a wrong against a party. It does not pray for
affirmative relief for injury arising from a partys wrongful act
or omission nor state a cause of action that can be enforced
against any person.
What it seeks is merely a declaration by the trial court of
the corporations insolvency so that its creditors may be able
to file their claims in the settlement of the corporations debts
and obligations. Put in another way, the petition only seeks a
declaration of the corporations state of insolvency and the
concomitant right of creditors and the order of payment of
their claims in the disposition of the corporations assets.
Contrary to the rulings of the Fourteenth Division,
liquidation proceedings do not resemble petitions for
interpleader. For one, an action for interpleader involves
claims on a subject matter against a person who has no
interest therein. This is not the case in a liquidation
12
proceeding where the Liquidator, as representative of the
corporation, takes charge of its assets and liabilities for the
benefit of the creditors. He is thus charged with insuring that
13
the assets of the corporation are paid only to rightful claimants
and in the order of payment provided by law.
Rather, a liquidation proceeding resembles the proceeding
for the settlement of estate of deceased persons under Rules
73 to 91 of the Rules of Court. The two have a common
purpose: the determination of all the assets and the payment
of all the debts and liabilities of the insolvent corporation or
the estate. The Liquidator and the administrator or executor
are both charged with the assets for the benefit of the
claimants. In both instances, the liability of the corporation
and the estate is not disputed. The courts concern is with the
declaration of creditors and their rights and the determination
of their order of payment.
Furthermore, as in the settlement of estates, multiple
appeals are allowed in proceedings for liquidation of an
insolvent corporation. As the Fifth Division of the Court of
Appeals, quoting the Liquidator, correctly noted:
_______________
Alvarez v. Commonwealth, 65 Phil. 302 (1938).
12
Rep. Act No. 265, 29, as amended.
13
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Pacific Banking Corporation Employees Organization vs.
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A liquidation proceeding is a single proceeding which consists of a
number of cases properly classified as claims. It is basically a two-
phased proceeding. The first phase is concerned with the approval
and disapproval of claims. Upon the approval of the petition seeking
the assistance of the proper court in the liquidation of a closed
entity, all money claims against the bank are required to be filed
with the liquidation court. This phase may end with the declaration
by the liquidation court that the claim is not proper or without basis.
On the other hand, it may also end with the liquidation court
allowing the claim. In the latter case, the claim shall be classified
whether it is ordinary or preferred, and thereafter included
Liquidator. In either case, the order allowing or disallowing a
particular claim is final order, and may be appealed by the party
aggrieved thereby.
The second phase involves the approval by the Court of the
distribution plan prepared by the duly appointed liquidator. The
distribution plan specifies in detail the total amount available for
distribution to creditors whose claim were earlier allowed. The
Order finally disposes of the issue of how much property is available
for disposal. Moreover, it ushers in the final phase of the liquidation
proceedingpayment of all allowed claims in accordance with the
order of legal priority and the approved distribution plan.
Verily, the import of the final character of an Order of allowance
or disallowance of a particular claim cannot be overemphasized. It
is the operative fact that constitutes a liquidation proceeding a case
where multiple appeals are allowed by law. The issuance of an
Order which, by its nature, affects only the particular claims
involved, and which may assume finality if no appeal is made
therefrom, ipso facto creates a situation where multiple appeals are
allowed.
A liquidation proceeding is commenced by the filing of a single
petition by the Solicitor General with a court of competent
jurisdiction entitled, Petition for Assistance in the Liquidation
of e.g., Pacific Banking Corporation. All claims against the insolvent
are required to be filed with the liquidation court. Although the
claims are litigated in the same proceeding, the treatment is
individual. Each claim is heard separately. And the Order issued
relative to a particular claim applies only to said claim, leaving the
other claims unaffected, as each claim is considered separate and
distinct from the others. Obviously, in the event that an appeal from
an Order allowing or disallowing a particular claim is made, only
said claim is affected, leaving the others to proceed with their
ordinary course. In such case, the original records of the proceeding
are not elevated to the appellate court. They remain with the
liquidation court. In lieu of the original record, a record of appeal is
instead required to be prepared and transmitted to the appellate
court.
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506 SUPREME COURT REPORTS ANNOTATED
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Inevitably, multiple appeals are allowed in liquidation proceedings.
Consequently, a record on appeal is necessary in each and every
appeal made. Hence, the period to appeal therefrom should be thirty
(30) days, a record on appeal being required. (Record, pp. 162-164).
In G.R. No. 112991 (the case of the Stockholders/Investors),
the Liquidators notice of appeal was filed on time, having been
filed on the 23rd day of receipt of the order granting the claims
of the Stockholders/Investors. However, the Liquidator did not
file a record on appeal with the result that he failed to perfect
his appeal. As already stated, a record on appeal is required
under the Interim Rules and Guidelines in special proceedings
and for cases where multiple appeals are allowed. The reason
for this is that the several claims are actually separate ones
and a decision or final order with respect to any claim can be
appealed. Necessarily the original record on appeal must
remain in the trial court where other claims may still be
pending.
Because of the Liquidators failure to perfect his appeal, the
order granting the claims of the Stockholders/Investors
became final. Consequently, the Fourteenth Divisions
decision dismissing the Liquidators Petition for Certiorari,
Prohibition and Mandamus must be affirmed albeit for a
different reason.
On the other hand, in G.R. No. 109373 (case of the Labor
Union), we find that the Fifth Division correctly granted the
Liquidators Petition for Certiorari, Prohibition and
Mandamus. As already noted, the Liquidator filed a notice of
appeal and a motion for extension to file a record on appeal on
December 10, 1991, i.e., within 30 days of his receipt of the
order granting the Unions claim. Without waiting for the
resolution of his motion for extension, he filed on December 20,
1991 within the extension sought a record on appeal.
Respondent judge thus erred in disallowing the notice on
appeal and denying the Liquidators motion for extension to
file a record on appeal.
The Fifth Division of the Court of Appeals correctly granted
the Liquidators Petition for Certiorari, Prohibition and
Mandamus and its decision should, therefore, be affirmed.
Second. In G.R. No. 109373, The Union claims that under
29 of Rep. Act No. 265, the court merely assists in
adjudicating the claims of creditors, preserves the assets of the
institution, and
507
VOL. 242, MARCH 20, 1995 507
Pacific Banking Corporation Employees Organization vs.
Court of Appeals
implements the liquidation plan approved by the Monetary
Board and that, therefore, as representative of the Monetary
Board, the Liquidator cannot question the order of the court
or appeal from it. It contends that since the Monetary Board
had previously admitted PaBCs liability to the laborers by in
fact setting aside the amount of P112,234,292.44 for the
payment of their claims, there was nothing else for the
Liquidator to do except to comply with the order of the court.
The Unions contention is untenable. In liquidation
proceedings, the function of the trial court is not limited to
assisting in the implementation of the orders of the Monetary
Board. Under the same section (29) of the law invoked by the
Union, the court has authority to set aside the decision of the
Monetary Board if there is a convincing proof that the action
is plainly arbitrary and made in bad faith. As this Court held
14
in Rural Bank of Buhi, Inc. v. Court of Appeals: 15
There is no question that the action of the Monetary Board in this
regard may be subject to judicial review. Thus, it has been held that
the courts may interfere with the Central Banks exercise of
discretion in determining whether or not a distressed bank shall be
supported or liquidated. Discretion has its limits and has never been
held to include arbitrariness, discrimination or bad faith (Ramos v.
Central Bank of the Philippines, 41 SCRA 567 [1971]).
In truth, the Liquidator is the representative not only of the
Central Bank but also of the insolvent bank. Under 28A-29
of Rep. Act No. 265 he acts in behalf of the bank personally or
through counsel as he may retain, in all actions or proceedings
for or against the corporation and he has authority to do
whatever may be necessary for these purposes. This authority
includes the power to appeal from the decisions or final orders
of the court which he believes to be contrary to the interest of
the bank.
Finally the Union contends that the notice of appeal and
motion for extension of time to file the record on appeal filed
in
_______________
Salud v. Central Bank of the Philippines, 143 SCRA 590 (1986).
14
162 SCRA 288 (1988).
15
508
508 SUPREME COURT REPORTS ANNOTATED
Pacific Banking Corporation Employees Organization vs.
Court of Appeals
behalf of the Central Bank was not filed by the Office of the
Solicitor General as counsel for the Central Bank. This
contention has no merit. On October 22, 1992, as Assistant
Solicitor General Cecilio O. Estoesta informed the trial court
on March 27, 1992, the OSG had previously authorized
lawyers of the PDIC to prepare and sign pleadings in the
case. Conformably thereto the Notice of Appeal and the
16
Motion for Additional Time to Submit Record on Appeal filed
were jointly signed by Solicitor Reynaldo I. Saludares in behalf
of the OSG and by lawyers of the PDIC. 17
WHEREFORE, in G.R. No. 109373 and G.R. No. 112991,
the decisions appealed from are AFFIRMED.
SO ORDERED.
Narvasa (C.J., Chairman), Bidin, Regalado and Puno,
JJ., concur.
Judgment affirmed.
Note.Perfection of an appeal within the time provided by
law is jurisdictional and failure to observe the period is fatal.
(Kabushi Kaisha Isetan vs. Intermediate Appellate Court, 203
SCRA 583 [1991])
 o0o
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Rollo, p. 41, G.R. No. 112991.

16

Annexes H and I, Rollo, CA-G.R. SP No. 27751.

17

509
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