Pacific Banking Corporation Employees Organization vs Court of Appeals

Facts:

Pacific Banking Corporation (PaBC) was placed under receivership and later was placed
under liquidation.

A Petition for Assistance in the Liquidation of Pacific Banking Corporation was filed by
Central bank and was approved.

Pacific Banking Corporation Employees Organization (Union for short), filed a complaint-in-
intervention seeking payment due its members as employees of PaBC. In its order, the 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 but in effect was denied
by the Court. 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.

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.

Ang Keong Lan and E.J. Ang Int'l., likewise filed claims for the payment of investment in the
PaBC allegedly in the form of shares of stocks.

In his order, respondent judge of the RTC directed the Liquidator to pay private respondents
and such order was received by the Liquidator 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.

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.

The Fifth Division  held in the case of the Union that the proceeding before the trial court was
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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.

On the other hand, the Fourteenth Division  ruled in the case of the Stockholders/Investors
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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.

Thus, the Union and the Liquidator then separately filed petitions before this Court.

Ruling:
The petitions in these cases must be dismissed.

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.

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.

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.

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.