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1995-Pacific Banking Corp. Employees Organization20181105-5466-1gv41h9
1995-Pacific Banking Corp. Employees Organization20181105-5466-1gv41h9
Puruganan Chato Tan & Geronimo for petitioner in G.R. No. 112991.
Potenciano A. Flores for petitioners in G.R. No. 109373.
Marbibi Law Office for private respondent.
The Solicitor General for public respondent.
SYLLABUS
DECISION
MENDOZA , J : p
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. cdphil
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 October 14,1992 he led 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 led 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 led 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 ra ed, 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 8 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
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decision or nal order rendered therein is 30 days. Since the notice of appeal of the
Liquidator was led 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. llcd
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 proceeding is an ordinary action. Therefore, the period for appealing
from any decision or nal order rendered therein is 15 days and that since the
Liquidator's appeal notice was led 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 led 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. The Court of Appeals acted without jurisdiction over the subject matter or
nature of the suit.
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. 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. The Court of Appeals erred seriously in concluding that the notice of
appeal filed by Nañagas was filed on time.
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. The Petition for Assistance in the Liquidation of the Paci c 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. 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.
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 led is akin to an interpleader under Rule 63 of the Rules of
Court where there are con icting claimants or several claims upon the same
subject matter, a person who claims no interest thereon may le 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 fteen (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 de ned as
"an ordinary suit in a court of justice by which one party prosecutes another for
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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 de nitions 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 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 led. 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. LLphil
It should be pointed out that this petition led 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. Action de ned . — 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. 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.
The second phase involves the approval by the Court of the distribution
plan prepared by the duly appointed liquidator. The distribution plan speci es in
detail the total amount available for distribution to creditors whose claim were
earlier allowed. The Order nally disposes of the issue of how much property is
available for disposal. Moreover, it ushers in the nal 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 nal 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 nality if no appeal is made
therefrom, ipso facto creates a situation where multiple appeals are allowed.
A liquidation proceeding is commenced by the ling of a single petition by
the Solicitor General with a court of competent jurisdiction entitled, "Petition for
Assistance in the Liquidation" of e.g., Paci c Banking Corporation. All claims
against the insolvent are required to be led with the liquidation court. Although
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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.
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).
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 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 PaBC's 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 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
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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." 14 As this
Court held 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 Court's 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 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 nal
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 le the record on appeal led in behalf of the Central Bank was not led by the
O ce 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 led 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., Bidin, Regalado and Puno, JJ., concur.
Footnotes
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.
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
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.
10. §1. Interpleader when proper. — Whenever conflicting claims upon the same subject
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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.
11. 1 MORAN, COMMENTS ON THE RULE OF COURT 119-120 (1979), citing Hagans v.
Wislizenus, 42 Phil. 880, 882, (1922).
12. Alvarez v. Commonwealth, 65 Phil. 302 (1938).
13. Rep. Act No. 265, 29, as amended.
14. Salud v. Central Bank of the Philippines, 143 SCRA 590 (1986).
15. 162 SCRA 288 (1988).
16. Rollo, p. 41, G.R. No. 112991.
17. Annexes "H" and "I", Rollo, CA-G.R. S.P. No. 27751.