Pacific Banking Corporation Employees Organization vs. Court of Appeals

A judicial proceeding for the liquidation of an insolvent bank under Section 29 of Rep. Act No. 265 (Central Bank Act) is a special proceeding in which multiple appeals are allowed. Accordingly, the period to appeal from an order therein is thirty (30) days, and the appealing party must file both a notice of appeal and a record on appeal to perfect the appeal.

On July 5, 1985, Pacific Banking Corporation (PaBC) was placed under receivership and subsequently under liquidation by the Central Bank. A petition for assistance in liquidation was filed with the Regional Trial Court of Manila. Creditors, including a labor union and foreign stockholders/investors, filed their claims in this proceeding. The RTC issued orders granting these claims. The Liquidator, representing the Philippine Deposit Insurance Corporation (PDIC), attempted to appeal these orders but was met with conflicting procedural rulings from the RTC and, subsequently, conflicting jurisprudential interpretations from different divisions of the Court of Appeals regarding the applicable appeal period.

• Nature of the Proceeding: On April 7, 1986, the Central Bank, through the Solicitor General, filed a "Petition for Assistance in the Liquidation of Pacific Banking Corporation" with the RTC of Manila. The petition was docketed as a special proceeding (SP Proc. No. 86-35313).
• Claims Filed: Creditors filed claims in the proceeding. The Pacific Banking Corporation Employees Organization filed a complaint-in-intervention for monetary claims (holiday pay, 13th month pay, etc.). Private respondents Ang Keong Lan, et al., filed claims as stockholders/investors alleging their investment constituted a preferred foreign exchange capital investment.
• RTC Orders and Appeals: The RTC issued orders granting both sets of claims. The Liquidator filed motions for reconsideration, which were denied. He then filed Notices of Appeal. The RTC disallowed these appeals, ruling they were filed beyond the 15-day reglementary period for ordinary actions and, in the stockholders' case, without proper authority.
• Conflicting CA Rulings: The Liquidator sought certiorari in the CA. The Fifth Division, treating the liquidation as a special proceeding, found the appeal timely filed within 30 days and granted the petition. The Fourteenth Division, treating it as an ordinary action, found the appeal filed late (on the 23rd day) and dismissed the petition.

• In G.R. No. 109373 (Union): The Union contended the CA acted without jurisdiction, the Liquidator lacked authority to file the certiorari petition, the proceeding is an ordinary action governed by rules on interpleader, and the notice of appeal was filed late.
• In G.R. No. 112991 (Liquidator): The Liquidator argued the petition for assistance in liquidation is a special proceeding allowing multiple appeals (30-day period), the stockholders are not preferred creditors, their claim is not a foreign investment under the law, and the issuance of a writ of execution was erroneous.

• In G.R. No. 109373 (Court of Appeals, et al.): The CA Fifth Division's decision was challenged by the Union, which argued the proceeding was an ordinary action and the appeal period was 15 days.
• In G.R. No. 112991 (Court of Appeals, et al.): The CA Fourteenth Division and the private respondent stockholders defended the ruling that the liquidation proceeding is an ordinary action, making the 15-day appeal period applicable and the Liquidator's appeal late.

• Classification of Proceeding: Whether a petition for assistance in the liquidation of an insolvent bank under Section 29 of Rep. Act No. 265 is a special proceeding or an ordinary civil action.
• Appeal Period and Requirements: Corollarily, whether the period to appeal an order in such a proceeding is 30 days (requiring a record on appeal) or 15 days.
• Liquidator's Authority and Perfecting Appeal: Whether the Liquidator had authority to appeal and, in G.R. No. 112991, whether the failure to file a record on appeal meant the appeal was not perfected.

• Classification of Proceeding: The petition for assistance in liquidation is a special proceeding. It does not seek to enforce a right against another party but to establish a status (insolvency) and facilitate the settlement of claims, analogous to the settlement of a decedent's estate. It allows for multiple appeals as orders on individual claims are final and appealable.
• Appeal Period and Requirements: Because it is a special proceeding where multiple appeals are allowed, the period to appeal is 30 days, and a record on appeal is required pursuant to BP Blg. 129 and its Interim Rules.
• Liquidator's Authority and Perfecting Appeal: The Liquidator, as representative of the insolvent bank, has the authority to appeal orders contrary to the bank's interest. In G.R. No. 109373, the appeal (notice and record on appeal) was timely filed within 30 days. In G.R. No. 112991, while the notice of appeal was filed within 30 days, the failure to file a record on appeal meant the appeal was not perfected, rendering the RTC order final.

• Nature of Bank Liquidation Proceedings — A judicial proceeding for the liquidation of an insolvent bank under Section 29 of the Central Bank Act is a special proceeding, not an ordinary action. Its purpose is to declare the state of insolvency, receive and adjudicate claims, and distribute assets, which is functionally analogous to the settlement of a decedent's estate. This classification triggers the procedural rules for special proceedings, including a 30-day appeal period and the requirement of a record on appeal to allow for multiple appeals from orders on individual claims.

• "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."
• "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.'"

• Rural Bank of Buhi, Inc. v. Court of Appeals, 162 SCRA 288 (1988) — Cited to support the principle that the Monetary Board's actions in bank liquidation are subject to judicial review for arbitrariness or bad faith, affirming the court's supervisory role beyond mere assistance.
• Salud v. Central Bank of the Philippines, 143 SCRA 590 (1986) — Cited for the proposition that the court in liquidation proceedings has authority to set aside the Monetary Board's decision upon proof of arbitrariness or bad faith.

• Section 29, Rep. Act No. 265 (Central Bank Act) — Provides the procedure for the liquidation of a closed banking institution by the Central Bank, including the filing of a petition for assistance with the proper court.
• Section 39, BP Blg. 129 (Judiciary Reorganization Act of 1980) — Establishes the 15-day appeal period for ordinary cases but specifies it does not apply to appeals in special proceedings and other cases allowing multiple appeals.
• Interim Rules and Guidelines Implementing BP Blg. 129, Rule 19 — Provides for a 30-day appeal period and the requirement of a record on appeal in special proceedings and cases allowing multiple appeals.

Chief Justice Narvasa, Justices Bidin, Regalado, and Puno.

N/A — The decision was unanimous.