[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.]
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. ANG INT'L. LTD., represented by their Attorney-infact, GONZALO C. SY, respondents.
SYLLABUS
1. REMEDIAL LAW; ACTIONS; 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.
2. ID.; ID.; ID.; PETITION FOR LIQUIDATION OF AN INSOLVENT CORPORATION UNDER
Republic Act No. 265 (CENTRAL BANK ACT), A SPECIAL PROCEEDING. 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. 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.
3. ID.; ID.; ID.; ID.; DOES NOT RESEMBLE PETITION FOR INTERPLEADER. Contrary to the
rulings of the Court of Appeals' 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 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.
4. ID.; ID.; ID.; ID.; RESEMBLES A PROCEEDING FOR SETTLEMENT OF ESTATE OF
DECEASED PERSONS. 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 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. 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.
5. ID.; ID.; ID.; ID.; APPEALS; RECORD OF APPEAL, JURISDICTIONAL. In G.R. No. 112991,
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.
6. ID.; ID.; ID.; ID.; ID.; FAILURE TO PERFECT APPEAL RENDERS ORDER GRANTING CLAIMS
OF STOCKHOLDERS/INVESTORS FINAL. Because of the Liquidator's failure to perfect his appeal, the
order granting the claims of the Stockholders/Investors became final.
7. ID.; ID.; ID.; ID.; ID.; FILING OF RECORD ON APPEAL WITHIN EXTENSION SOUGHT,
WITHIN PERIOD. On the other hand, in G.R. No. 109373, 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.
8. ID.; ID.; ID.; ID.; FUNCTION OF THE TRIAL COURT. 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 (S29) 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."
9. MERCANTILE LAW; Republic Act No. 265 (CENTRAL BANK ACT); LIQUIDATION OF
INSOLVENT BANK; LIQUIDATOR; NOT ONLY THE REPRESENTATIVE OF CENTRAL BANK BUT ALSO
OF THE INSOLVENT BANK. In truth, the Liquidator is the representative not only of the Central Bank
but also of the insolvent bank. Under Sections 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.
10. REMEDIAL LAW; SPECIAL PROCEEDINGS; LIQUIDATION OF INSOLVENT BANK; APPEAL;
NOTICE OF APPEAL AND MOTION FOR ADDITIONAL TIME TO SUBMIT RECORD ON APPEAL, FILED
JOINTLY BY THE OFFICE OF THE SOLICITOR GENERAL AND LAWYERS OF PDIC. Finally the
Union contends that the notice of appeal and motion for extension of time to file the record on appeal filed
in 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 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.

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
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 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. Naagas, 4 President of the Philippine Deposit
Insurance Corporation (PDIC), was appointed by the Central Bank. prcd
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
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 received 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 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 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. cdll
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 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 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 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. 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 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. 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
Naagas 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
Naagas 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 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. 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.
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.
4. The claim of private respondents has not been clearly established and proved.
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. cdphil
BP Blg. 129 provides:
39. Appeals. The period for 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.
(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
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. LLphil
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. 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. 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 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 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.
LexLib
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:
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 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.
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 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. Cdpr
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 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 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 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
WHEREFORE, in G.R. No. 109373 and G.R. No. 112991, the decisions appealed from are
AFFIRMED. SO ORDERED.