FACTS:

This case involves the liquidation of the Pacific Banking Corporation (PaBC), which was placed under receivership and later under liquidation. The Central Bank filed a petition for assistance in the liquidation process. Creditors filed their claims with the court, and the Pacific Banking Corporation Employees Organization (Union) filed a complaint-in-intervention for the payment of benefits. The trial court ordered payment for the Union's claims, but the Liquidator filed a motion for reconsideration, which was denied. The Liquidator's notice of appeal was disallowed as late. Similar claims were filed by Ang Keong Lan and E.J. Ang Int'l, and their claims were granted by the trial court. The Liquidator's separate notice of appeal was again disallowed. The Liquidator filed petitions with the Court of Appeals, which rendered conflicting rulings. The Union and the Liquidator separately filed petitions before the Supreme Court.

The Union argues that the Court of Appeals lacked jurisdiction over the matter and that the petitioner had no legal authority to file a petition for certiorari. The Union also disputes the categorization of the case as a special proceeding and asserts that the notice of appeal was not filed on time. The Liquidator, on the other hand, argues that the liquidation case is a special proceeding with a 30-day period for appeal instead of the usual 15-day period. The Liquidator also disputes the status of the private respondents as creditors and claims that their claim is not clearly established. The main issue in this case is whether the liquidation case is considered a special proceeding or an ordinary action, which determines the period of appeal and the requirement of a record on appeal. The Fourteenth Division of the Court of Appeals classified it as an ordinary action subject to a 15-day period for appeal.

ISSUES:

1. Whether the petition for assistance of the court in the liquidation of an asset of a bank is an ordinary action or a special proceeding.

2. Whether a petition for the liquidation of an insolvent corporation should be classified as a special proceeding or an ordinary action.

3. Whether liquidation proceedings resemble petitions for interpleader or proceedings for the settlement of the estate of deceased persons.

4. Whether multiple appeals are allowed in liquidation proceedings.

5. Whether the failure to file a record on appeal constitutes a failure to perfect an appeal.

6. Whether or not the trial court has authority to set aside the decision of the Monetary Board in liquidation proceedings.

7. Whether or not the Liquidator, as the representative of the insolvent bank, has the authority to appeal from the decisions or final orders of the court.

RULING:

1. The petition for assistance of the court in the liquidation of an asset of a bank is considered a special proceeding, not an ordinary action.

2. A petition for the liquidation of an insolvent corporation should be classified as a special proceeding, not an ordinary action.

3. Liquidation proceedings resemble proceedings for the settlement of the estate of deceased persons, not petitions for interpleader.

4. Yes, multiple appeals are allowed in liquidation proceedings. The liquidation proceeding is a single proceeding consisting of a number of cases properly classified as "claims." The first phase involves the approval and disapproval of claims, and the second phase involves the approval of the distribution plan. An order allowing or disallowing a particular claim is final and may be appealed by the aggrieved party, making multiple appeals possible.

5. No, the failure to file a record on appeal does not necessarily constitute a failure to perfect an appeal. In the case of the Labor Union, the Liquidator filed a notice of appeal and a motion for extension to file a record on appeal within the 30-day period. The Liquidator then filed the record on appeal within the extension sought. Therefore, the Liquidator's appeal was properly perfected.

6. The trial court has authority to set aside the decision of the Monetary Board in liquidation proceedings if there is convincing proof that the action is plainly arbitrary and made in bad faith.

7. The Liquidator, as the representative of the insolvent bank, has the authority to appeal from the decisions or final orders of the court which he believes to be contrary to the interest of the bank.

PRINCIPLES:

• An action is defined as an ordinary suit in a court of justice for the enforcement or protection of a right, or the prevention or redress of a wrong. Every other remedy, including one to establish the status or right of a party or a particular fact, shall be by special proceeding.

• A petition for liquidation of an insolvent corporation seeks a declaration of the corporation's insolvency and the concomitant right of creditors and the order of payment of their claims in the disposition of the corporation's assets. It does not seek the enforcement or protection of a right or the prevention or redress of a wrong against a party.

• Liquidation proceedings resemble proceedings for the settlement of the estate of deceased persons in terms of their purpose of determining all the assets and the payment of all the debts and liabilities. The court's concern is with the declaration of creditors and their rights and the determination of their order of payment.

• Liquidation proceedings do not resemble petitions for interpleader, as an action for interpleader involves claims on a subject matter against a person who has no interest therein. In liquidation proceedings, the Liquidator is charged with ensuring that the assets of the corporation are paid only to rightful claimants and in the order of payment provided by law.

• Multiple appeals are allowed in proceedings for the liquidation of an insolvent corporation, similar to the settlement of estates.

• Liquidation proceedings consist of a two-phased proceeding: approval and disapproval of claims, and approval of the distribution plan.

• An order allowing or disallowing a particular claim in a liquidation proceeding is final and may be appealed.

• Multiple appeals are allowed in liquidation proceedings.

• The failure to file a record on appeal does not necessarily constitute a failure to perfect an appeal if the notice of appeal and motion for extension were filed within the prescribed period and the record on appeal was subsequently filed within the granted extension.

• 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.

• In liquidation proceedings, the trial court has authority to set aside the decision of the Monetary Board if there is convincing proof that the action is plainly arbitrary and made in bad faith.

• The Liquidator, as the representative of the insolvent bank, acts in behalf of the bank in all actions or proceedings for or against the corporation and has authority to do whatever may be necessary for these purposes.

• The Liquidator has the authority to appeal from the decisions or final orders of the court which he believes to be contrary to the interest of the bank.

• The notice of appeal and motion for extension of time to file the record on appeal may be filed by lawyers of the Philippine Deposit Insurance Corporation (PDIC) authorized by the Office of the Solicitor General.