ISSUE Whether a petition for liquidation under 29 of Rep Act No 265 otherwise

Issue whether a petition for liquidation under 29 of

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notice of appeal was filed late. ISSUE: 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? RULING: Special proceeding Rule 2 of the Rules of Court provide: §1. Action defined . — Action means an ordinary suit in a court of justice, by which the 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: 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. ***Civil procedure matters: Q1: Does liquidation proceeding resemble petitions for interpleader? NO. A: 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.
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