1. Pacific Banking Corporation Employees Organization vs.
Court Same;  Same; Same;  A petition for liquidation of an insolvent
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. NAÑAGAS II, as
Liquidator of Pacific Banking Corporation, respondents.
G.R. No. 112991. March 20, 1995.*
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
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*
 SECOND DIVISION.
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Pacific Banking Corporation Employees Organization vs. Court of
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ANG INT’L., 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.
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 relief for injury arising from a party’s wrongful act or omission nor
state a cause of action that can be enforced against any person.
Same;  Same; Same;  The petition only seeks a declaration of the
corporation’s state of insolvency and the concomitant right of creditors and
the order of payment of their claims in the disposition of the corporation’s
assets.—What it seeks is merely a declaration by the trial court of the
corporation’s insolvency so that its creditors may be able to file their claims in
the settlement of the corporation’s debts and obligations. Put in another way,
the petition only seeks a declaration of the corporation’s state of insolvency
and the concomitant right of creditors and the order of payment of their
claims in the disposition of the corporation’s 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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Pacific Banking Corporation Employees Organization vs. Court of
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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
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is not disputed. The court’s 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 Liquidator’s 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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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 Union’s 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
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months later, it was placed under liquidation 1 and a Liquidator 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.” 3 The petition was approved, after
which creditors filed their claims with the court.
On May 17, 1991, a new Liquidator, Vitaliano N. Nañagas, 4 President of
the Philippine Deposit Insurance 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.5
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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.
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:
Page 2 of 8
 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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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 6 but in effect denied the Liquidator’s motion
for reconsideration. This order was re-
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A. Flores, as attorney’s 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 PaBC’s physician and/or responsible
officers of the PaBC that they are entitled to said claims.
SO ORDERED.
6 the total subscribed capital stock of the PaBC. They alleged that their claim
 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;
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:
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%
attorney’s fees should be deducted from the total claims afforded to
the plaintiffs/intervenors and other employees of the bank (PaBC).
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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 Nañagas.
In his order of February 10, 1992, respondent judge disallowed the
Liquidator’s Notice of Appeal on the ground that it was late, i.e., more than 15
days after receipt of the 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 Union’s Motion for
Issuance of a Writ of Execution.
Ang Keong Lan and E.J. Ang Int’l., 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
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
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 court’s order, dated September 11,
1992, reads:
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 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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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 Division8 held in the case of the
Union that the proceeding before the trial court was a special proceeding
and, therefore, the period for appealing 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 Union’s 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 9 ruled
in CA-G.R. SP No. 29351 (now  G.R. No. 112991) in the case of the
Stockholders/Investors that a liquidation pro-
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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
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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
Liquidator’s 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 Liquidator’s 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 Nañagas 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 Nañagas 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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 Appeals
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
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(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. 10 The
Fourteenth Division stated:
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
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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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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
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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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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 party’s 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 corporation’s
insolvency so that its creditors may be able to file their claims in the
settlement of the corporation’s debts and obligations. Put in another way, the
petition only seeks a declaration of the corporation’s state of insolvency and
the concomitant right of creditors and the order of payment of their claims in
the disposition of the corporation’s 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.12 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. 13 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.
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
court’s 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:
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12
 Alvarez v. Commonwealth, 65 Phil. 302 (1938).
13
 Rep. Act No. 265, §29, as amended.
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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.
Page 6 of 8
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 proceeding—payment 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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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 Liquidator’s
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 Liquidator’s failure to perfect his appeal, the order
granting the claims of the Stockholders/Investors became final.
Consequently, the Fourteenth Division’s decision dismissing the Liquidator’s
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 Liquidator’s 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 Union’s
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 Liquidator’s motion for extension to file a record on appeal.
The Fifth Division of the Court of Appeals correctly granted the
Liquidator’s 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
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Monetary Board had previously admitted PaBC’s liability to the laborers by in WHEREFORE, in G.R. No. 109373 and G.R. No. 112991, the decisions
fact setting aside the amount of P112,234,292.44 for the payment of their appealed from are AFFIRMED.
claims, there was nothing else for the Liquidator to do except to comply with SO ORDERED.
the order of the court. Narvasa (C.J., Chairman),  Bidin, Regalado and Puno, JJ., concur.
The Union’s contention is untenable. In liquidation proceedings, the
function of the trial court is not limited to assisting in the implementation of Judgment affirmed.
the orders of the Monetary Board. Under the same section (§29) of the law Note.—Perfection of an appeal within the time provided by law is
invoked by the Union, the court has authority to set aside the decision of the jurisdictional and failure to observe the period is fatal. (Kabushi Kaisha Isetan
Monetary Board “if there is a convincing proof that the action is plainly vs. Intermediate Appellate Court, 203 SCRA 583 [1991])
arbitrary and made in bad faith.”14 As this Court held in Rural Bank of Buhi,
Inc. v. Court of Appeals:15 ——o0o——
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 Bank’s 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
_______________
14
 Salud v. Central Bank of the Philippines, 143 SCRA 590 (1986).
15
 162 SCRA 288 (1988).
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. 16 Conformably thereto the
Notice of Appeal and the 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
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