ETERNAL GARDENS MEMORIAL PARKS CORPORATION, petitioner, vs.
FIRST SPECIAL CASES DIVISION INTERMEDIATE APPELLATE COURT and NORTH PHILIPPINE UNION MISSION OF THE SEVENTH-DAY ADVENTISTS, respondents.
the conflicting claims of ownership of the defendants (herein private respondent and Maysilo Estate) over the properties subject matter of the contracts, over which plaintiff corporation (herein petitioner) has no claim of ownership except as a purchaser thereof, and to protect the interests of plaintiff corporation which has no interest in the subject matter of the dispute and is willing to pay whoever is entitled or declared to be the owners of said properties, the defendants should be required to interplead and litigate their several claims between themselves (Rollo, p. 177). An order was issued by the presiding judge 2 requiring defendants to interplead on October 22, 1981. MISSION filed a motion to dismiss dated November 10, 1981 for lack of cause of action but also presented an answer dated November 12, 1981. The motion to dismiss was denied in an Order dated January 12, 1982. The heirs of Maysilo Estate filed their own answer dated November 11, 1981 and an amended answer dated October 20, 1983 thru the estate's special receiver. The heirs of Pedro Banon filed an "Answer in Intervention with Special and Affirmative Defenses" dated October 24, 1983, while Lilia B. Sevilla and husband Jose Seelin filed their "Answer in Cross-claim" dated October 31, 1983 (Rollo, p. 30). The heirs of Sofia O'Farrel y Patino, et al. filed their Answer in Intervention dated November 10, 1983. However, earlier on November 21, 1982, private respondent presented a motion for the placing on judicial deposit the amounts due and unpaid from petitioner. Acting on such motion, the trial court 3 denied judicial deposit in its order dated February 13, 1984, the decretal portion of which reads: PREMISES CONSIDERED, all or the full amount the plaintiff, Eternal Gardens Memorial Parks Corporation have already paid the North Philippine Union Mission Corporation of the Seventh Day Adventist is hereby ordered to deposit the same to this Court within thirty (30) days from receipt of this order considering that real or true owner of the subject properties in question, due hearing of this court has yet to be undergone in order to decide as to who is the true owner which is a prejudicial question. Hence the motion dated November 21, 1983 of the NPUM for the Eternal Gardens Corporation to deposit the balance due and unpaid is hereby ordered denied and the opposition thereto dated December 19, 1983 is hereby ordered granted. The contract between the Eternal Gardens Corporation and the North Philippine Union Mission dated October 16, 1976 is ordered and declared ineffective as of today, February 13, 1984 because the subject matter of the sale is not existing between the contracting parties until after the question of ownership is resolved by this court. The court will order the
PARAS, J.: This is a special civil action for certiorari, prohibition and mandamus seeking to set aside the two resolutions of public respondent First Special Cases Division of the then Intermediate Appellate Court in AC-G.R. No. 04869 entitled "North Philippine Union Mission of the Seventh Day Adventists versus Hon. Antonia Corpus-Macandog, Presiding Judge, Branch CXX, Regional Trial Court, Caloocan City and Eternal Gardens Memorial Park Corporation, (a) dated September 5, 1985 (Rollo, pp. 21-25) reconsidering its Decision 1 of February 27, 1985 (Rollo, pp. 38-48) and ordering petitioner to deposit whatever amounts due from it under the Land Development Agreement, and (b) dated February 13, 1986 (Rollo, p. 27) denying for lack of merit petitioner's motion for reconsideration. Petitioner Eternal Gardens Memorial Parks Corporation and private respondent North Philippine Union Mission Corporation of the Seventh Day Adventists (MISSION for short) are corporations duly organized and existing under and by virtue of the laws of the Republic of the Philippines. They executed a Land Development Agreement (Rollo, pp. 179-182) on October 6, 1976 whereby the former undertook to introduce and construct at its own expense and responsibility necessary improvements on the property owned by private respondent into a memorial park to be subdivided into and sold as memorial plot lots, at a stipulated area and price per lot. Out of the proceeds from the sale, private respondent is entitled to receive 40% of the net gross collection from the project to be remitted monthly by petitioner to private respondent through a designated depositary trustee bank. On the same date private respondent executed in petitioner's favor a Deed of Absolute Sale with Mortgage (Rollo, pp. 183-186) on the lots with titles involved in the land development project. The deed was supplemented by a Sale of Real Property with Mortgage and Special Conditions dated October 28, 1978 (Rollo, pp. 189-194 The amounts totalling about P984,110.82 paid by petitioner were to be considered as part of the 40% due private respondent under the Land Development Agreement. All went well until Maysilo Estate asserted its claim of ownership over the parcel of land in question. Confronted with such conflicting claims, petitioner as plaintiff filed a complaint for interpleader (Rollo, pp. 169-179) against private respondent MISSION and Maysilo Estate, docketed as Special Court Case No. C-9556 of the then CFI of Rizal, Branch XII, Caloocan, alleging among others, that in view of
docketed as AC-G. 06696 "North Philippine Union Mission of the Seventh Day Adventists. is hereby ordered set aside for the reason that the titles to ownership. MISSION filed on March 6. heirs of O'Farrel. and the interventions filed by the intervenors. Antonia Corpus-Macandog Presiding Judge. a hearing on the merits shall be held. This was denied on June 25. and Heirs of Vicente Singson Encarnacion It was raffled to the Second Special Division. 1985. premises considered. (Rollo. the Court resolves that the same be GRANTED and instead of a hearing of the said motions on February 20. careful judicious study and perusal of all the stand of each and everyone of all the parties participating in this case. the trial judge. and Lilia Sevilla Seeling This Court likewise orders the plaintiff. Eternal Gardens. 1985. thus: WHEREFORE IN VIEW OF ALL THE FOREGOING CONSIDERATIONS the order of February 13. 1985. 73569 it appeared that on January 11. is hereby ordered amended.revival of the contract if the North Philippine Union Mission will win. 1984 and on December 6. 66). 39) Said Orders were assailed twice in the Intermediate Appellate Court (Court of Appeals) and in the Supreme Court as follows:
In G. it entered into with the North Philippine Union Mission Corporation of the Seventh-Day Adventists. after a lengthy. 1985 orders as violative of due process and attended by grave abuse of discretion amounting to lack of jurisdiction. consolidated with the Maysilo Estate as represented by receiver Arturo Salientes the heirs of Vicente Singson Encarnacion. p. Another order dated October 26. 1984 was issued amending the February 13. 1984 at 8:30 in the morning per order of this Court dated October 4. On January 28. 1984. 1985 issued the following orders: Considering Motions for Reconsideration filed. Branch CXX. MISSION assailed the February 14. (Rollo. the dispositive portion of which reads: WHEREFORE. MISSION filed a motion to dismiss the Interpleader and the claims of the Maysilo Estate and the Intervenors and to order the Eternal Gardens to comply with its Land Management with MISSION. vs. heirs of Pedro Banon. heirs of Rivera. reconsidered and modified by this same Court as follows: (a) The order directing the NORTH PHILIPPINE UNION MISSION CORPORATION OF SEVENTH-DAY ADVENTISTS to deposit the amounts it received under the implementation of the LAND DEVELOPMENT AGREEMENT which is not questioned by the plaintiff. 1985 and June 25.R. It was elevated on certiorari and mandamus to the Intermediate Appellate Court (Court of Appeals). Regional Trial Court. 1985 order. However. p. the North Philippine Union Mission Corporation of Seventh Day Adventists on the lots subject matter of the aforesaid agreement is not established invalid. 1985. 28. 1978. this Court. (b) The motion to require Eternal Gardens to deposit the balance under the Land Development Agreement is likewise hereby ordered denied considering the fact the aforesaid plaintiff had not denied its obligations under the aforesaid contract. p. The said court further set the case for pre-trial and trial on July 18. heirs of Maria del Concepcion Vidal. No. 1985. Sp No. the hearing of which was requested to be set on February. p.R. 1985. Hon. at 8:30 a. and the alleged titles of intervenors are not proven yet by competent evidence. the declared winner among the intervenors will be the party to enter into a contract of sale with the plaintiff as aforementioned. 1985 a motion for Writ of Execution of the resolution of January 28. Eternal Gardens Memorial Parks Corporation. and (c) The trial or hearing is hereby ordered as scheduled to proceed on November 29. 68) The heirs of the Maysilo Estate moved for reconsideration of the aforementioned order of dismissal. The petition was
. (Rollo.. 1984 in order to determine the alleged claims of ownership by the intervenors and all claims and allegations of each party to the instant" case will be considered and decided carefully by this court on just and meritorious grounds. 1985. the trial court passed a resolution. (Rollo. Caloocan City. Eternal Gardens Memorial Parks Corporation to comply with the Land Development Agreement dated October 6. 1984 order and setting aside the order for private respondent's deposit of the amounts it had previously received from petitioner. If not.m. hereby orders the dismissal of the interpleader. 68) In spite of the February 14. on February 14.
(Rollo. the heirs of the late spouses Vicente Singson Encarnacion and Lucila Conde filed Civil Case No. said amounts deposited to be paid to whomever may be found later to be entitled thereto. this petition. the dispositive portion of which reads: WHEREFORE. et al. acting through its First Special Cases Division 4 dismissed the petition in its decision on February 27. G.. (Rollo. DISMISSED. p. The restraining order embodied in Our Resolution of July 31. 73794 p. G. No. to avoid possible wastage of funds. in the resolution of July 29. (Ibid p. Said case is still pending in the lower Court. Caloocan City. 218-236) was filed on July 14. plus interest thereon. 1986. MISSION. p. 1987. 1987 (Rollo. without any pronouncement. 263) Said resolution has become final and executory on July 16. reversed its decision. 1985. the Court Resolved to DENY the same for lack of merit. and arguments adduced in the petition for review on certiorari." which was strongly opposed by the petitioner North Philippine Union Mission of the Seventh Day Adventists. Regional Trial Court. 1986. the very same issues and arguments that were passed upon and considered by the Court in the very same resolution sought to be reconsidered. (Rollo.1987. p. the Court however.R. No. 162) Petitioner's Memorandum With Prayer for the Deferment of Time to Make Deposit (Rollo. Private respondent filed its Opposition to Deferment of Time to Make
. p.. thus:
WHEREFORE. 1985 (Rollo. for want of merit the petition for certiorari and mandamus under consideration cannot be given due course and is accordingly. In its Resolution 5 promulgated on September 5. No. such deposits not to be withdrawn without authority from this Court. the Third Division of this Court issued the following resolution: .R. No. pp. No. Intermediate Appellate Court. the Court RESOLVED to require the private respondent 6to DEPOSIT its accruing installments within ten (10) days from notice with a reputable commercial bank in a savings deposit account. due the private respondent MISSION under the Land Development Agreement. 25) Eternal Gardens moved for a reconsideration of the above decision but it was denied for lack of merit in a resolution promulgated on February 13. Its prayer was granted for a period of ten (10) days for the purpose. 04869 praying that the aforementioned Orders of February 13. in the name of the Supreme Court of the Philippines. 38-48). 1985. with the details to be reported or manifested to this Court within ten (10) days from the time the deposit/deposits are made. 38) The Intermediate Appelate Court. 1984 and October 26. 1985 requiring it "to deposit whatever amounts are due from it under the Land Development Agreement of October 6. (Ibid p. 1986. In the meantime.R. 1984 of the Regional Trial Court be set aside and that an order be issued to deposit in court or in a depositor trustee bank of any and all payments. p. as to costs. where petitioner and private respondent were named as defendants.however dismissed in the decision of said Appellate Court. issues. which states: The private respondent Eternal Gardens Memorial Park Corporation's Motion for Reconsideration of the Court's resolution promulgated September 5. 73569 p.) considering the allegations. the Court reconsiders its decision of February 27. with costs.R. The private respondent is hereby ordered to deposit whatever amounts are due from it under the Land Development Agreement of October 6. 1986. promulgated on December 4. is hereby denied for lack of merit. 238). 1985. and sets aside the questioned portions of the respondent Court's orders of February 13 and October 26. 27) Hence. C-11836 for quieting of title with Branch CXXII. 232) The private respondent challenged the above decision in the Supreme Court in G. 1984. 73794. is hereby lifted. 269) Earlier in 1983. (Rollo. the Supreme Court denied the petition for review on certiorari for lack of merit. herein private respondent filed a petition for certiorari with the then Intermediate Appellate Court docketed as ACG. (Rollo. as follows: G. No costs.. the court RESOLVED to give due course to this petition and require the parties to file memoranda. No. 1976 with a reputable bank to be designated by the respondent court to be the depository trustee of the said amounts to be paid to whoever shall be found entitled thereto. reiterating as it does. In the case at bar. 73569 (North Philippine Union Mission Corporation of the Seventh Day Adventists vs.R..R. On July 8. G. 73569. In its resolution dated June 11. 1976 ..
No. private respondent filed its Rejoinder to Petitioner's Reply to Opposition (Rollo. II Whether or not the dismissal of AC-G.R. pp.R. motions for reconsideration are allowed to convince the courts that their rulings are erroneous and improper Siy v.. pp.. the essence of an interpleader.. v. Hon. Guerra Enterprises Co. Inc. there appears to be no plausible reason for petitioner's objections to the deposit of the amounts in litigation after having asked for the assistance of the lower court by filing a complaint for interpleader where the deposit of aforesaid amounts is not only required by the nature of the action but is a contractual obligation of the petitioner under the Land Development Program (Rollo. G. p. Court of Appeals. that it claims no interest in such
amounts due and is willing to pay whoever is declared entitled to said amounts. 227). presently claiming in its memorandum that there is a novation of contract so that the amounts due under the Land Development Agreement were allegedly extinguished. a careful analysis of the records will show that petitioner admitted among others in its complaint in Interpleader that it is still obligated to pay certain amounts to private respondent. Under the circumstances. In the light of the willingness. affirming the complaint filed below. pp. Pinamalayan Branch II. that the private respondent (MEMORIAL) will pay whatever is due on the Land Development Agreement to the rightful owner/owners. it is a rule founded on justice and equity: "that the plaintiff may not continue to benefit from the property or funds in litigation during the pendency of the suit at the expense of whoever will ultimately be decided as entitled thereto.) by the Second Special Cases Division of the IAC which was affirmed by the Supreme Court in G. pp.Deposit (Rollo. 04869 which states: The private respondent (MEMORIAL) then reaffirms before the Court its original position that it is a disinterested party with respect to the property now the subject of the interpleader case . In fact. 252). 138 SCRA 543-544 . expressly made before the court. p. No. 256-267). Finding that such is violative of the very essence of the complaint for interpleader as it clearly runs against the interest of justice in this case. p. aside from the disavowal of interest in the property in litigation on the part of the petitioner.C. and the requirement to make a deposit of said amounts in a depositary bank should be held in abeyance until after the conflicting claims of
. Petitioner filed its Supplemental Memorandum with Reply to Opposition (To Deferment of time to Make Deposit) on August 31. The main issues in this case are: I Whether or not respondent Court of Appeals abused its discretion amounting to lack of jurisdiction in reconsidering its resolution of February 27. Macandog. On August 25. to make them conformable to the law applicable provided that said judgments have not yet attained finality (Villanueva v. 1987. said courts are given sufficient opportunity to correct their errors. CFI of Lanao del Sur (32 SCRA 317 ) and in so doing. 271-292).R. now accruing in favor of the Eternal Gardens." (Rollo. Court of First Instance of Oriental Mindoro. that petitioner Eternal Gardens deposit whatever amounts are due from it under the Land Development Agreement with a reputable bank to be designated by the respondent court. so that on interest alone for savings or time deposit would be considerable. 1987 to which petitioner filed its Reply to Opposition on August 4. p. 1987 (Rollo. (Rollo. Both were noted by the Court in its resolution dated September 7. 1987 (Rollo. is the deposit of the property or funds in controversy with the court. 304-315). 73569 constitutes a basis for the dismissal of the case at bar on the ground of res adjudicata. 06696 (North Philippine Union Mission of the Seventh Day Adventists vs. p. 1985 in A. I There is no question that courts have inherent power to amend their judgments. 1985 and in requiring instead in the resolution of September 5. 294-313) and a Sur-rejoinder on September 1. 1985. et al. 1987 (Rollo. In the case at bar. 1987 (Rollo. the Court of Appeals cannot be faulted for finding that the lower court committed a grave abuse of discretion which requires correction by the requirement that a deposit of said amounts should be made to a bank approved by the Court. 270). As correctly observed by the Court of Appeals.-25) Petitioner would now compound the issue by its obvious turn-about. (Rollo. Said appellate court found that more than twenty million pesos are involved. SP No. Such admissions in the complaint were reaffirmed in open court before the Court of Appeals as stated in the latter court's resolution dated September 5. 239-253) on July 24. pp. 24). The case at bar was elevated to the Court of Appeals on certiorari with prohibitory and mandatory injunction. 119 SCRA 288 ). there is no reason why the amount due on subject agreement has not been placed in the custody of the Court.
Sarmiento and Regalado. the issue raised is the propriety of the grant of the motion for reconsideration without a hearing thereon and the denial of the motion for execution. (a) the petition is DISMISSED for lack of merit. II The claim that this case should be barred by res judicata is even more untenable. But a careful review of the records shows that there is no judgment on the merits in G. JJ. No. Venturanza. both of which deal on mere incidents arising therefrom. No 73569. SO ORDERED.R.ownership now on trial before Branch CXXII RTC-Caloocan City.
. and of causes of action Arguson v. In fact. there is a pending trial on the merits in the trial court which the petitioner insists is a prejudicial question which should first be resolved. while there may be Identity of parties and of subject matter. Carandang v. 132 SCRA 302 ). so long as it remains unreversed. 1987 to avoid wastage of funds. riot only in the lower courts and in the Court of Appeals but also in the Supreme Court where such deposit was required in "the resolution of July 8. the need for the deposit in question has been established. the Land Development Contract. Padilla. concur. of subject matter. there is no Identity of issues as clearly shown by the petitions filed. 73569 and in the case at bar. what is assailed is the propriety of the order of respondent appellant court that petitioner Eternal Gardens should deposit whatever amounts are due from it under the Land Development Agreement with a reputable bank to be designated by the Court. while in the case at bar. PREMISES CONSIDERED. Miclat 135 SCRA 678 . 133 SCRA 344 ). 6) of the amounts contested in a depositary bank
STANDS (the Motion for Reconsideration thereof being hereby DENIED for reasons already discussed) until after the decision on the merits shall have become final and executory. and (4) there is between the first and the second action identity of parties. Court of Appeals.. (3) the former judgment is a judgment on the merits. 1987 requiring the deposit by the petitioner (see footnote No. All these notwithstanding. it should be conclusive upon the parties and those in privity with them in law or estate (Sy Kao v. Moreover.R. (b) this case (together with all the claims of the intervenors on the merits) is REMANDED to the lower court for further proceedings.R. 73794. has finally been resolved. In G. (2) the former judgment was rendered by a court having jurisdiction over the subject matter and the parties. Melencio-Herrera (Chairperson). No. There is no argument against the rule that parties should not be permitted to litigate the same issue more than once and when a right or fact has been judicially tried and determined by a court of competent jurisdiction. G. The requisite of res judicata are: (1) the presence of a final former judgment. and (c) the resolution of the Third Division of this Court of July 8.
dismissing the plaintiff-appellant's complaint of interpleader upon the grounds of failure to state a cause of action and res judicata. the complaint should not have been dismissed upon the ground of res judicata. deputy clerk of court of the said CFI of Manila." the original owner and holder of membership fee certificate 201. In this appeal. pursuant to the order of September 23. that it has no means of determining who of the two defendants is the lawful owner thereof. between civil case 26044 of the CFI of Manila and the present action. TAN. In separate motions the defendants moved to dismiss the complaint upon the grounds of res judicata. that the defendant Bienvenido A. Jacinto. 1478 issued by the deputy clerk of court of court of the CFI of Manila in behalf of the Corporation is null and void because issued in violation of its bylaws. entitled "Lee E. Inc. which require the surrender and cancellation of the outstanding membership fee certificate 201 before issuance may be made to the transferee of a new certificate duly signed by its president and secretary. aside from the fact that the decision of the CFI of Manila in civil case 26044 is not binding upon the defendant Tan. with costs against the Corporation.: This is an appeal from the order of the Court of First Instance of Rizal. vs. Barcelona for appellee Lee E. the Wack Wack Golf & Country Club. by virtue of the decision rendered in civil case 26044 of the CFI of Manila. and that he is made a part so that complete relief may be accorded herein. in civil case 7656. alleged. and (3) in dismissing its action instead of compelling the appellees to interplead and litigate between themselves their respective claims.WACK WACK GOLF & COUNTRY CLUB. that Tan is made a party because of his refusal to join it in this action or bring a separate action to protect his rights despite the fact that he has a legal and beneficial interest in the subject matter of this litigation. that the defendant Lee E. In its amended and supplemental complaint of October 23. Won. and ordering the surrender and cancellation of membership fee certificate 201-serial no. the trial court dismissed the complaint. and (b) judgment. Culbertson and Fritz". 1478 issued to
. with principal office in Mandaluyong. (2) in finding that the decision in civil case 26044 of the CFI of Manila constitutes res judicata and bars its present action. Finding the grounds of bar by prior judgment and failure to state a cause of action well taken. Won alias Ramon Lee vs. Wack Wack Golf & Country Club.. originally issued in the name of "Swan. 1199 issued to him on July 24. it alleged that the membership fee certificate 201serial no. that it claims no interest whatsoever in the said membership fee certificate 201.J. of subject-matter. 1950 pursuant to an assignment made in his favor by "Swan. C. Culbertson and Fritz. Agcaoli & Ramon A. civic and athletic corporation duly organized under the laws of the Philippines. The Corporation prayed that (a) an order be issued requiring Lee and Tan to interplead and litigate their conflicting claims. for its first cause of action. Won claims ownership of its membership fee certificate 201. Inc. LEE E. defendantsappellees. all of which have been issued as early as December 1939. 1478 issued in the name of Lee. and bar by prescription. failure of the complaint to state a cause of action. Alfonso V. without violating its articles of incorporation and by-laws. 1963 by Ponciano B. claims to be lawful owner of its aforesaid membership fee certificate 201 by virtue of membership fee certificate 201-serial no. and of cause of action. INC. holder of membership fee certificate 201-serial no. WON alias RAMON LEE and BIENVENIDO A. and in holding that "the principal motive for the present action is to reopen the Manila Case and collaterally attack the decision of the said Court". Tan. and. For its second cause of action. 1963.. that it is without power to issue two separate certificates for the same membership fee certificate 201." and also by virtue of membership fee certificate 201-serial no. after hearing. Tan in his own behalf. declaring who of the two is the lawful owner of membership fee certificate 201. for and in behalf of the president and the secretary of the Corporation and of the People's Bank & Trust Company as transfer agent of the said Corporation.
the defendant Lee proceed from the same membership fee certificate 201. The Corporations position may be stated elsewise as follows: The trial court erred in dismissing the complaint. 1478 issued on October 17. be rendered. 1199. instead of compelling the appellees to interplead because there actually are conflicting claims between the latter with respect to the ownership of membership fee certificate 201. 1 These motions were duly opposed by the Corporation. as there is not Identity of parties. or to issue another membership fee certificate to the defendant Lee. that under its articles of incorporation and by-laws the Corporation is authorized to issue a maximum of 400 membership fee certificates to persons duly elected or admitted to proprietary membership. Leonardo Abola for appellant.
CASTRO. Bienvenido A. Rizal (hereinafter referred to as the Corporation). 1963 in the said case. 1199 held by the defendant Tan and the membership fee certificate 201-serial No. plaintiff-appellant. the Corporation contends that the court a quo erred (1) in finding that the allegations in its amended and supplemental complaint do not constitute a valid ground for an action of interpleader. and that the membership fee certificate 201-serial no. on the other hand. a non-stock.
that he has not become independently liable to any of the claimants. such that it may properly invoke the remedy of interpleader? We do not think so. as can be gleaned from the pleadings of the parties. be required to litigate among themselves in order to determine finally who is entitled to tone or the one thing. the present action is barred by res judicata. Yet it did not interplead Tan. among other prerequisites. because to he entitled to this remedy the applicant must be able to show that lie has not been made independently liable to any of the claimants. the remedy is not barred. the appellees argue that the trial court properly dismissed the complaint. It is not therefore too late for it to invoke the remedy of interpleader. It is also the general rule that a bill of interpleader comes too late when it is filed after judgment has been rendered in favor of one of the claimants of the fund. 30 Am. The Company thereby became independently liable to relators. 7 He need not await actual institution of independent suits against him before filing a bill of interpleader. 12 Has the Corporation in this case acted with diligence. 25 Tex. Sec. i. p. 218. Jur. There is no question that the subject matter of the present controversy. whereas under the latter an interpleader suit is proper only if the subject-matter of the controversy is personal property or relates to the performance of an obligation. the membership fee certificate 201. It was only after adverse final judgment was rendered against it that the remedy of interpleader was invoked by it. 8 He should file an action of interpleader within a reasonable time after a dispute has arisen without waiting to be sued by either of the contending claimants. this being especially true when the holder of the funds had notice of the conflicting claims prior to the rendition of the judgment and had an opportunity to implead the adverse claimants in the suit in which the judgment was rendered. 3 The procedure under the Rules of Court 4 is the same as that under the Code of Civil Procedure. 52. the present interpleader suit is clearly improper and unavailing. It is the general rule that before a person will be deemed to be in a position to ask for an order of intrepleader. is proper for an interpleader suit. comes to court and asks that the persons who claim the said personal property or who consider themselves entitled to demand compliance with the obligation. By then it was too late. This must be so. It had been recognizing Tan as the lawful owner thereof. As a matter of fact. It preferred to proceed with the litigation (civil case 26044) and to defend itself therein. Section 8. because once judgment is obtained against him by one claimant he becomes liable to the latter. p. he may be barred by laches 10 or undue delay. relates to the propriety and timeliness of the remedy of interpleader. 13 especially where he had notice of the conflicting claims prior to the rendition of the judgment and neglected the opportunity to implead the adverse claimants in the suit where judgment was entered. A stakeholder 6 should use reasonable diligence to hale the contending claimants to court. What is here disputed is the propriety and timeliness of the remedy in the light of the facts and circumstances obtaining.e. 11 But where he acts with reasonable diligence in view of the environmental circumstances. Jur. 14 In once case.. The Insurance Company elected not to do so and that suit proceeded to a final judgment in favor of relators. the determinative issue. It was sued by Lee who also claimed the same membership fee certificate. 15 it was declared: The record here discloses that long before the rendition of the judgment in favor of relators against the Hanover Fire Insurance Company the latter had notice of the adverse claim of South to the proceeds of the policy.On the other hand. 3. United Procedures Pipe
. No reason is shown why the Insurance Company did not implead South in the former suit and have the conflicting claims there determined. It was then too late for such company to invoke the remedy of interpleader The Corporation has not shown any justifiable reason why it did not file an application for interpleader in civil case 26044 to compel the appellees herein to litigate between themselves their conflicting claims of ownership. And since the Corporation is already liable to Lee under a final judgment. under section 120 of the Code of Civil Procedure. 9 Otherwise. Although res judicata or bar by a prior judgment was the principal ground availed of by the appellees in moving for the dismissal of the complaint and upon which the trial court actually dismissed the complaint. It was aware of the conflicting claims of the appellees with respect to the membership fee certificate 201 long before it filed the present interpleader suit. because. The action of interpleader. he must be prepared to show. without claiming any right to either. The remedy is afforded to protect a person not against double liability but against double vexation in respect of one liability. in view of all the circumstances. having the effect of reopening civil case 26044. final judgment was rendered against it
and said judgment has already been executed. or an obligation to render wholly or partially. 5 except that under the former the remedy of interpleader is available regardless of the nature of the subject-matter of the controversy. It has been held that a stakeholder's action of interpleader is too late when filed after judgment has been rendered against him in favor of one of the contending claimants. 2 is a remedy whereby a person who has personal property in his possession.
W. 291 (41 Am. Sec. and hence that it simply took its chances of meeting with success by its own construction of the bond and the law. 21 A/450. The reason why. with knowledge of all the facts. 223 Mass. p. 4 Pomeroy's Eq. Jur. 18 To now permit the Corporation to bring Lee to court after the latter's successful establishment of his rights in civil case 26044 to the membership fee certificate
201. 38 A.. from which the substance of the act was apparently taken. 385. 264 S. No. 333. which is one of the purposes of an action of interpleader. In this factual situation. The remedy by interpleader is afforded to protect the party from the annoyance and hazard of two or more actions touching the same property or demand. 17 It is the general rule that a bill of interpleader comes too late when application therefore is delayed until after judgment has been rendered in favor of one of the claimants of the fund. 275. Thompson. 901. however. it then becomes too late for him to do so. O'Brien. Sec. If a stakeholder defends a suit by one claimant and allows it to proceed so far as a judgment against him without filing a bill of interpleader. Nash v. It is one o the main offices of a bill of interpleader to restrain a separate proceeding at law by claimant so as to avoid the resulting partial judgment. ought to submit to the consequences of defeat. The act providing for the proceeding has nothing to say touching the right of one. neglects to avail himself of the relief. Union Bank v.E. it is clear that this interpleader suit cannot prosper because it was filed much too late. Sec. Haseltine v. Am. Brickery. 1 You. to put upon the shoulders of others the burden which he asks may be taken from his own. 86 Md. 598. he cannot then have that part of the litigation repeated in an interpleader suit. 223. Home Life Ins. it urges. Civ. claiming property in his hands. & Jer. but. that one who asks the interposition of a court of equity to compel others. 5. Britton. 2d 1046. 30 Am.. Jur. or elects to take the chances for success in the actions at law. in other jurisdictions. p. Juris.) 147 and 236. 626). the Corporation must submit to the consequences of defeat.. 3 Smedes & M. it was not in such position until then is that had it succeeded before this court in sustaining its construction of the bond and the law governing the bond. since there would have been sufficient funds in its hands to have satisfied all lawful claimants. This cannot be done because having elected to take its chances of success in said civil case 26044. to interplead. with the possibility that the latter would lose the benefits of the favorable judgment.L.R. Rep. 460. 162. 41. with full knowledge of all the fact. Gornish v. Langdell's Summary of Eq. Tanner. 390. 430. Dec. St. p. 56. Pleading (Tyler's Ed. 703. . To permit an unsuccessful defendant to compel the successful plaintiffs to interplead. and if the stakeholder acquiesces in one claimant's trying out his claim and establishing it at law. after contesting a claim of one of the claimants to final judgment unsuccessfully.. 2 Md. note 5. 177.W. must do so before putting them to the test of trials at law. Dec. Co. that the surety company was acquainted with all of the facts. 176. that the American Surety Company of New York was not in position to file an interpleader until it had tested the claim of relatrix to final judgment. Gonia v. both by reasons and authority. it would not have been called upon to file an interpleader.' It is urged. however. Gaulk. it promptly filed the interpleader. also 5 Pomeroy's Eq. and that. Garrizon. 16 Indeed. In the case at hand. App. McCullum. to involve the successful litigant in litigation anew by bringing an interpleader action. Pabb) and no excuse is shown why he did not implead them in the suit. Kerr.Line Co. v. (See notes and cases cited 36 Am. the rule prevails that the action cannot be resorted to after an unsuccessful trial against one of the claimants. is to increase instead of to diminish the number of suits. 787. the Corporation allowed civil case 26044 to proceed to final judgment. 111 N. Yarborough v. Civ. 140 Pa. 25 Tex. Ch. if a stakeholder defends a suit filed by one of the adverse claimants and allows said suit to proceed to final judgment against him. failing to meet with success. Tex. It is well settled. 16 Grat. v.) 116. The question seems to be one of first impression here. Tex. Having failed
. but one who. and that this is especially true where the holder of the fund had notice of the conflicting claims prior to the rendition of such judgment and an opportunity to implead the adverse claimants in the suit in which such judgment was rendered. Mitfor's Eq.) The evidence in the opinion of the majority shows beyond dispute that the appellant permitted the Parker county suit to proceed to judgment in favor of Britton with full notice of the adverse claims of the defendants in the present suit other than the assignees of the judgment (the bank and Mrs. (Va. he cannot later on have that part of the litigation repeated in an interpleader suit. 74 S. No. 11. 162' De Zouche v. Pleading. And it offered no satisfactory explanation for its failure to implead Tan in the same litigation. It may be observed. is to increase instead of to diminish the number of suits. Juris. 108 A.
Muñoz Palma. No. 383.I. 322. also. Phillips v. 144 So. See. 1964. There can be no doubt that relator's claim has been finally and definitely established. the instant interpleader suit cannot prosper because the Corporation had already been made independently liable in civil case 26044 and. also 5 Pomeroy's Equity Jurisprudence No. Gonia v. and thereby increase instead of diminish litigations. 572. ACCORDINGLY.S. JJ. because that matter was passed upon by three courts in definitive judgments. Hancock Mutual Life Ins. 447. Brim (In Re Lyong Lumber Company). 22 R. concur.. 33 Corpus Juris.Y. Casualty Co. 21 In fine. the appellee Lee had already established his rights to membership fee certificate 201 in the aforesaid civil case and. Civ. 578. 30. and this is especially true where the holder of the fund had notice of the conflicting claims prior to the rendition of such judgment and an opportunity to implead the adverse claimants in the suit in which such judgment was rendered. App. App. Dugas v. dismissing the complaint. the interpleading of the judgment creditor is in effect a collateral attack upon the judgment. 703. W... Graves. with the possiblity that the benefits of the final judgment in the said civil case might eventually be taken away from him.E. 140 Pa. is affirmed. 760. O'Brien. 129 A. Royal Neighbors of America v. Co. at appellant's cost. its present application for interpleader would in effect be a collateral attack upon the final judgment in the said civil case. Div. 81 S. Esguerra. 18. 147 So. 20 It is generally held by the cases it is the office of interpleader to protect a party. therefore. involving most likely a repetition of what has been decided. 181 La. 228. The only remaining item is the value of the use of the land during the time that relator occupied it. its action of interpleader was filed inexcusably late. Nash v. 477. 416.P. In all other aspects the judgment is final. 162. Barredo and Martin. 451. 51 N. a successful litigant cannot later be impleaded by his defeated adversary in an interpleader suit and compelled to prove his claim anew against other adverse claimants. Garrison. 1023. 430. or force her to accept a pro rata part of a fund.. this interpleader suit would compel him to establish his rights anew. 33 C. is on leave. and because the Corporation allowed itself to be sued to final judgment in the said case.) 291. Antonio. O'Brien. And so it is said that it is too late for the remedy of interpleader if the party seeking this relef has contested the claim of one of the parties and suffered judgment to be taken.' The principle thus stated has been recognized in many cases in other jurisdictions. 84 A. Hill.I. In United P.) 74 S. 59 Ga. 159 So. which is far from benefits of the judgment. 4 Pomeroy's Jurisprudence. McCullum.
. 148 Md. 867. v.E. Fernando. and has establish his claim. 18.) 264 S. which is one of the purposes of an interpleader suit. v.J. Dec. 576. Brim.W. The case was remanded solely and only for the purpose of determining the amount of that credit. Jones Co. Makasiar. 15 Ruling Case Law. Yearborough v. 450. not against double liability. JJ. Jr. Thompson. It would seem that this rule should logically follow since. it cannot now force relatrix into litigation anew with others. 1047. Taylor. 3 Smedes & M. Civ. (Tex.C. 177.. Lowary (D. 223 Mass. 1033. 959. 787. after the recovery of judgment. 19 Besides. Teehankee. 176 La. 2d 1042.to sustain it.Manufacturer's Finance Co. 177. American Surety Company of New York v. 519. 41. Co. Britton (Tex. Rep. it was said: 'It is the general rule that a bill of interpleader comes too late when application therefor is delayed until after
judgment has been rendered in favor of one of the claimants of the fund. 157. may not be impleaded later by the surety in an interpleader suit. 175 La. 761. 111 N.W. therefore. De Zouche v. 727.Y. and compelled to prove his claim again with other adverse claimants. 141 Ga. Dec. Brackett v. but against double vexation on account of one liability. the order of May 28. v. as that would in effect be a collateral attack upon the judgment. N. Aquino and Concepcion. The jurisprudence of this state and the common law states is well-settled that a claimant who has been put to test of a trial by a surety. 111 N. 223 Mass.. 91 An. 626. Lawder.I. (11 Miss. among which may be cited American Surety Co. J. took no part. v. 41 Am. 787. 598.American Surety Company of New York v. See notes and cases cited 35 Am. p. 30 App. Moore v.E. St. 895. for which reason it is barred by laches or unreasonable delay.) 46 F2d 565. 21 A.
Upon motion for respondent Jose Go dated October 31. Mesina against the trial court in Civil Case No. However. The latter advised Jose Go to go to the bank to accomplish a "STOP PAYMENT" order. 011302 for P800. 1984 bearing the number C-11139. the same was again returned to Associated Bank on January 4. HON. Petitioner filed his motion for reconsideration which was denied by the trial court on September 26. thru representative Albert Uy. denying the motion to dismiss of petitioner Mesina and ruling that respondent bank's complaint sufficiently pleaded a cause of action for itnerpleader. Petitioner instead of filing his answer to the complaint in the interpleader filed on May 17. police sent a letter to the Manager of the Prudential Bank. he said it was paid to him by Alexander Lim in a "certain transaction" but refused to elucidate further. Unsure of what to do on the matter.000. which was being held by his client.000. respondent bank received summons and copy of the complaint for damages of a certain Marcelo A. the check was not in his folder and nowhere to be found. 1983. respondent judge issued an order on November 6. declaring petitioner in default since his period to answer has already expirecd and set the ex-parte presentation of respondent bank's evidence on November 7. The trial court in the interpleader case issued an order dated July 13.00.
. 1984. 1984 in the Interpleader Case and moved to participate as intervenor in the complain for damages. Albert Uy filed a motion of intervention and answer in the complaint for Interpleader. from a certain Atty. 22. in his capacity as Judge of Regional Trial Court — Manila (Branch VIII). JOSE GO. Mesina from the Regional Trial Court (RTC) of Caloocan City filed on January 23. which suggestion Jose Go immediately followed. Petitioner Mesina filed a petition for certioari with preliminary injunction with IAC to set aside 1) order of respondent court denying his omnibus Motion to Dismiss 2) order of 3) the order of default against him. Escolta Branch. 1984. Respondent bank in the other civil case (CC-11139) for damages moved to dismiss suit in view of the existence already of the Interpleader case. He however refused to reveal the name of his client and threatened to sue. On the Scheduled date of pretrial conference inthe interpleader case. which dismissed the petition for certiorari and prohibition filed by Marcelo A. Meanwhile. dated December 29. pointing to the person of Alexander Lim as the one who could shed light on it. a certain Albert Uy. petitioner. An information for theft (Annex J) was instituted against Alexander Lim and the corresponding warrant for his arrest was issued (Annex 6-A) which up to the date of the filing of this instant petition remains unserved because of Alexander Lim's successful evation thereof. Several days later.R. on December 29. purchased from Associated Bank Cashier's Check No. 1984. 1984 an Omnibus Motion to Dismiss Ex Abudante Cautela alleging lack of jurisdiction in view of the absence of an order to litigate. respondent Associated Bank on February 2. Mesina. 04710. MESINA. ARSENIO M. 1984 filed an action for Interpleader naming as respondent. 011302 for P800. Albert Uy went to the police to report the loss of the check. now the Court of Appeals (CA) in AC-G. Gimao went to Marcelo Mesina to ask how he came to possess the check. Navarro's then unnamed client. Escolta Branch. Jose Go filed his answer on February 24. the facts and statement of the case are as follows: Respondent Jose Go. Briefly. When he returned to his desk. and ALBERT UY. The bank manager entrusted the check for safekeeping to a bank official. 1984 and for the second time it was dishonored. J. his visitor Lim was already gone. He also executed an affidavit of loss. Atty. Navarro's client and substituted Marcelo A.: This is an appeal by certiorari from the decision of the then Intermediate Appellate Court (IAC for short). Simultaneously.MARCELO A. Mesina for John Doe. 1985. The records of the police show that Associated Bank received the lost check for clearing on December 31. Respondent bank moved to amend its complaint. When Jose Go inquired for his cashier's check from Albert Uy. who had then a visitor in the person of Alexander Lim. respondent Associated Bank received a letter. 8422515. 1984. informed Cpl. dated January 9. Said case (an Interpleader) was filed by Associated Bank against Jose Go and Marcelo A. Mesina regarding their conflicting claims over Associated Bank Cashier's Check No. Uy had to answer a phone call on a nearby telephone after which he proceeded to the men's room.P. 1983. Jose Go and one John Doe. respondents. 1984. dated Jan. failure to state a cause of action and lack of personality to sue. 1983. Unfortunately. 1984. respondent bank. herein petitioner. dated January 20. vs. THE HONORABLE INTERMEDIATE APPELLATE COURT.
On February 1.
PARAS. it was disclosed that the "John Doe" impleaded as one of the defendants is actually petitioner Marcelo A. having been notified for the first time of the name of Atty. requesting assistance in Identifying the person who tried to encash the check but said bank refused saying that it had to protect its client's interest and the Identity could only be revealed with the client's conformity. GONONG. with the words "Payment Stopped" stamped on it. S. Lorenzo Navarro demanding payment on the cashier's check in question. 1984. The check was immediately dishonored by Associated Bank by sending it back to Prudential Bank. coming from Prudential Bank. Respondent bank. On even date. When Cpl. 1984. Gimao of the Western Police District that the lost check of Jose Go is in the possession of Marcelo Mesina. in its letter. replied saying the check belonged to Jose Go who lost it in the bank and is laying claim to it. Jose Go left said check on the top of the desk of the bank manager when he left the bank.00. if payment is not made.
dated January 22. 1985). the dispositive portion reading as follows: WHEREFORE. The check was Jose Go's property when it was misplaced or stolen. 3. On March 29. He had therefore notice of the defect of his title over the check from the start. Petitioner now interposes the following prayer: 1. 1984. respondent bank was not the one who did it but Jose Go. IAC erred in ruling that a cashier's check can be countermanded even in the hands of a holder in due course. IAC erred in upholding the trial court's order declaring petitioner as in default when there was no proper order for him to plead in the interpleader complaint. SO ORDERED. The bank had no intention to issue it to petitioner but only to buyer Jose Go. or if there is some other reason why the payee is not entitled to collect the check. At the outset. in view of the foregoing. the motion sholud be as it is hereby granted and this case is ordered dismissed. 1984 as well as the Motion For Reconsideration dated September 10. 1985 resolution denying the Motion for Reconsideration. and with costs of suit against the latter. really this instant case has become moot and academic. 1985. Jose Go owns the money it represents and he is therefore the drawer
. IAC erred in countenancing the filing and maintenance of an interpleader suit by a party who had earlier been sued on the same claim. IAC went beyond the scope of its certiorari jurisdiction by making findings of facts in advance of trial. on same date (February 18. judgment is hereby rendered ordering plaintiff Associate Bank to replace Cashier's Check No. for damages. 84-22515 and in this instant case are the same which is: who between Marcelo Mesina and Jose Go is entitled to payment of Associated Bank's Cashier's Check No. Respondent bank could not be drawer and drawee for clearly. Jose Go bought it from respondent bank for purposes of transferring his funds from respondent bank to another bank near his establishment realizing that carrying money in this form is safer than if it were in cash. In view of the foregoing ruling no more action should be taken on the "Motion For Reconsideration (of the order admitting the Intervention)" dated June 21. He refused to say how and why it was passed to him. Reverse the decision of the IAC. Petitioner's allegations hold no water. When payment on it was therefore stopped. C-11139. the pertinent portion of which states: The records of this case show that on August 20. the trial court in Civil Case No. in view of the foregoing. Petitioner failed to substantiate his claim that he is a holder in due course and for consideration or value as shown by the established facts of the case. respondent bank knew it was Jose Go's check and no one else since Go had not paid or indorsed it to anyone. If a payee of a cashier's check obtained it from the issuing bank by fraud. alleging that: 1. 1985. WHEREFORE. Admittedly. Petitioner now comes to Us. of course.On January 22. Annul the orders of respondent Judge of RTC Manila giving due course to the interpleader suit and declaring petitioner in default. 011302 in favor of Jose Go or its cas equivalent with legal rate of itnerest from date of complaint. SO ORDERED. there is no similarity in the cases cited by petitioner since respondent bank did not issue the cashier's check in payment of its obligation. The bank was therefore liable to nobody on the check but Jose Go. Moreover. 2. the owner of the check. 84-22515. 1984 proceedings in this case was (were) ordered suspended because the main issue in Civil Case No. the trial court in Civil Case #8422515 (Interpleader) rendered a decisio. since respondent bank was aware of the facts surrounding the loss of the check in question. Petitioner Mesina filed his Motion for Reconsideration which was also denied by the same court in its resolution dated February 18. Theories and examples advanced by petitioner on causes and effects of a cashier's check such as 1) it cannot be countermanded in the hands of a holder in due course and 2) a cashier's check is a bill of exchange drawn by the bank against itself-are general principles which cannot be aptly applied to the case at bar. 1985 and set aside the February 18. have the right to refuse payment of the check when presented by the payee. without considering other things. hence he stopped its payment. Meanwhile. IAC rendered its decision dimissing the petition for certiorari. CC-011302? Said issue having been resolved already in Civil casde No. petitioner became the holder of the cashier's check as endorsed by Alexander Lim who stole the check. issued an order. the respondent bank would. The holder of a cashier's check who is not a holder in due course cannot enforce such check against the issuing bank which dishonors the same. 4. 1985.
but later on changed to Marcelo A. Mesina for John Doe when his name became known to respondent bank. The allegation of petitioner that respondent bank had effectively relieved itself of its primary liability under the check by simply filing a complaint for interpleader is belied by the willingness of respondent bank to issue a certificate of time deposit in the amount of P800. The check in question suffers from the infirmity of not having been properly negotiated and for value by respondent Jose Go who as already been said is the real owner of said instrument. finding that the instant petition is merely dilatory. the Order of the trial court requiring the parties to file their answers is to all intents and purposes an order to interplead. petitioner stubbornly insists that there is no showing of conflicting claims and interpleader is out of the question." Respondent IAC cannot rule on whether respondent RTC committed an abuse of discretion or not. Considering the aforementioned facts and circumstances. Petitioner chose to withhold substantial facts.000 representing the cashier's check in question in the name of the Clerk of Court of Manila to be awarded to whoever wig be found by the court as validly entitled to it. the same is hereby denied and the assailed orders of the respondent court are hereby AFFIRMED in toto. On the very day that the bank instituted the case in interpleader. Feria (Chairman). In his third assignment of error. petitioner charges it with "gratuitous excursions into these non-issues. In his second assignment of error. Jose Go and John Doe. Furthermore. how can he be compelled to litigate against Jose Go who is not even a party to the check? Such argument is trite and ridiculous if we have to consider that neither his name or Jose Go's name appears on the check. Said validity will depend on the strength of the parties' respective rights and titles thereto.and the drawee in the same manner as if he has a current account and he issued a check against it. petitioner concealed the circumstances known to him and now that private respondent bank brought these circumstances out in court (which eventually rendered its decision in the light of these facts). Fe
. Subsequently. Again. petitioner assails the then respondent IAC in upholding the trial court's order declaring petitioner in default when there was no proper order for him to plead in the interpleader case. WHEREFORE. a Pre-Trial Conference was set with notice to parties to submit position papers. IAC decided the question by considering both the facts submitted by petitioner and those given by respondents. IAC did not act therefore beyond the scope of the remedy sought in the petition. The trial court issued an order. Bank filed the interpleader suit not because petitioner sued it but because petitioner is laying claim to the same check that Go is claiming. and from the moment said cashier's check was lost and/or stolen no one outside of Jose Go can be termed a holder in due course because Jose Go had not indorsed it in due course. Following such line of argument. SO ORDERED. Respondents were not forbidden to present their side-this is the purpose of the Comment of respondent to the petition. It has been shown that the interpleader suit was filed by respondent bank because petitioner and Jose Go were both laying their claims on the check. What else is the purpose of a law suit but to litigate?
The records of the case show that respondent bank had to resort to details in support of its action for Interpleader. Petitioner argues in his memorandum that this order requiring petitioner to file his answer was issued without jurisdiction alleging that since he is presumably a holder in due course and for value. petitioner is not a party to the check either and therefore has no valid claim to the Check. compelling petitioner and respondent Jose Go to file their Answers setting forth their respective claims. On the other hand. without being apprised of the facts and reasons why respondent Associated Bank instituted the Interpleader case. Before it resorted to Interpleader. respondent bank took an precautionary and necessary measures to bring out the truth. substantially and essentially and therefore in compliance with the provisions of Rule 63 of the Rules of Court. it was not aware of any suit for damages filed by petitioner against it as supported by the fact that the interpleader case was first entitled Associated Bank vs. There is enough evidence to establish the contrary. Both parties were given an opportunity to present their sides. such contention is untenable. petitioner asking payment thereon and Jose Go as the purchaser or owner. respondent bank merely took the necessary precaution not to make a mistake as to whom to pay and therefore interpleader was its proper remedy.
SUBHASH C.000. 1994 to February 28. before the Metropolitan Trial Court (MeTC) of Manila.487.50/P14. 37739 dismissing the petition filed by petitioners Josephine and Subhash Pasricha.00 From March 1.00/P11. 1998 in CA-G. 1996 to February 29.15 However. petitioners alleged that they were prevented from using the units (rooms) subject matter of the lease contract. and 34.310.10 From March 1. respondent was constrained to refer the matter to its lawyer who. then General Manager of private respondent.000.58. SP No. required to pay for the cost of electric consumption.00 From September 1. Inc. DON LUIS DISON REALTY. 35.10 Petitioners religiously paid the monthly rentals until May 1992. are as follows: Respondent Don Luis Dison Realty. 33.000. and petitioners executed two Contracts of Lease3 whereby the former. as follows: For Rooms 32/35: From March 1. Pacheco was replaced by Roswinda Bautista (Ms.435.12 Because petitioners still refused to comply. Respondent.641.052.585..00/P12.00 with an increment of 10% every two years. T.000.00 From March 1. 34 and 35 as subjects of the lease contracts. Petitioners. they again withheld payment of rents starting January 1993 because of respondent’s refusal to turn over Rooms 36. 1997 to February 28.8 The lease of Rooms 36. 1996 – P8. petitioners dealt with Francis Pacheco (Pacheco). 37 and 38. 1998 to February 28. petitioners alleged that they prepared the check vouchers for their monthly rentals from January 1993 to
. Manila. 1993 – P6. 143058-CV. 34.579. Ermita.55/P16.M. 36.81/P17.00 with an increment of 10% every two years. J.16 To show good faith and willingness to pay the rents. as culled from the records. made a final demand on petitioners for the payment of the accrued rentals amounting to P916. except Room 35. Ms. agreed to pay monthly rentals. 1991 to February 29.000.00/P10.59/P19.9 While the contracts were in effect. a complaint for ejectment was filed by private respondent through its representative.105.655. Orosa cor.715. 1992 – P5. INC. 2000 – P11. and claimed that respondent waived its right to collect the rents for the months of July to November 1992 since petitioners were prevented from using Rooms 22. Petitioners admitted their failure to pay the stipulated rent for the leased premises starting July until November 1992. agreed to lease to the latter Units 22. 1995 to February 28. Bautista). Thereafter. 1995 – P7. 33. The facts of the case.857. 37 and 38 of the San Luis Building. water bills and the use of telephone cables.14 To further justify their non-payment of rent. Petitioners eventually paid their monthly rent for December 1992 in the amount of P30. 1998 – P9. 1993 to February 28. however. Bautista.050. located at 1006 M. PASRICHA. 32.: This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking the reversal of the Decision1of the Court of Appeals (CA) dated May 26. Kalaw Streets. 33.717. 24.00/P13. 1992 – P5. 1998 and its Resolution2 dated December 10. as lessor.7 Petitioners were. 24. DECISION
For Rooms 22 and 24: Effective July 1.320. 32.100. 1992 to February 28. Petitioners. 32.95/P21. 1992 – P10.11 After that. 1994 – P6. likewise. but claimed that such refusal was justified because of the internal squabble in respondent company as to the person authorized to receive payment. 1991 – P5. 1991 to August 31.00.6 For Rooms 36. vs.17 From March 1. in turn.789. 1997 – P8. 24.61 From March 1.500.743.R. Consequently.484 Effective April 1. petitioners continuously refused to pay the stipulated rent.00 From March 1. PASRICHA and JOSEPHINE A.5 For Rooms 33 and 34:
NACHURA.00 with an increment of 10% every two years.89 From March 1. 37 and 38 did not materialize leaving only Rooms 22. despite repeated demands. 37 and 38: Effective when tenants vacate said premises – P10.75/P23.000.000.Y. 1999 – P10.13 The case was raffled to Branch XIX and was docketed as Civil Case No. in turn.00 From March 1. 1999 to February 28.
reversed and set aside the MeTC Decision in this wise: WHEREFORE. however. with the exception of the award of attorney’s fees which the CA deleted. Bautista for contempt. irrelevant and obviously dilatory. and to conduct hearings and ocular inspections or delegate the reception of evidence. they filed several motions asking the Honorable Justice Ruben T. Instead. the CA affirmed24 the RTC Decision but deleted the award of attorney’s fees. The court held that mere willingness to pay the rent did not amount to payment of the obligation. The court. it being clear that [Roswinda] – whether as general manager or by virtue of her subsequent designation by the Board of Directors as the corporation’s attorney-in-fact – had no legal capacity to institute the ejectment suit. II. Whether the RTC’s and the Honorable Court of Appeals’ failure and refusal to resolve the most fundamental factual issues in the instant ejectment case render said decisions void on their face by reason of the complete abdication by the RTC and the Honorable Justice Ruben Reyes of their constitutional duty not only to clearly and distinctly state the facts and the law on which a decision is based but also to resolve the decisive factual issues in any given case. Without resolving the aforesaid motion. and (3) to pay an additional sum equivalent to 25% of the rent accounts as and for attorney’s fees plus the costs of this suit. which is a valid ground for ejectment. petitioners should have deposited their payment in the name of respondent company. (2) to pay plaintiff-appellant the sum of P967. since her authority was implied from her power as a general manager/treasurer of the company.30 Lastly. dismissed the complaint because of Ms. the MeTC rendered a Decision dismissing the complaint for ejectment.27 In a Resolution28 dated December 10. independently of whether Director Pacana’s Order setting aside the SEC revocation Order is a mere scrap of paper. faulted the MeTC in dismissing the case on the ground of lack of capacity to sue.31 Petitioners now come before this Court in this petition for review on certiorari raising the following issues: I. however. 1994. Branch 1. The appellate court considered said motions as repetitive of their previous arguments. petitioners filed an Omnibus Motion23 to cite Ms. Reyes to inhibit from further proceeding with the case allegedly because of his close association with Ms. and the rents on the leased premises for the succeeding months in the amounts stated in paragraph 5 of the complaint until fully paid. on May 26. On November 24. Whether this ejectment suit should be dismissed and whether petitioners are entitled to damages for the unauthorized and malicious filing by Rosario (sic) Bautista of this ejectment case. On the matter of possession of the subject premises. the Regional Trial Court (RTC) of Manila. Bautista’s alleged lack of authority to sue on behalf of the corporation.29 As to the motion for inhibition of the Honorable Justice Reyes.19 It considered petitioners’ non-payment of rentals as unjustified. the CA denied the motions for lack of merit.
.January 1994. the court did not give credence to petitioners’ claim that private respondent failed to turn over possession of the premises.21
Aggrieved. 1998. as follows: (1) to vacate the leased premised (sic) and restore possession thereof to plaintiff-appellant. in Civil Case No. 94-72515.26 Thereafter. For failure of the parties to reach an amicable settlement. petitioners elevated the matter to the Court of Appeals in a petition for review on certiorari. Deciding the case on appeal. It.22 On March 18. 1998. 1998. SO ORDERED. the pre-trial conference was terminated.17 Petitioners further averred in their Amended Answer18 that the complaint for ejectment was prematurely filed. the same was denied. it upheld Ms.20 The court adopted the MeTC’s finding on petitioners’ unjustified refusal to pay the rent. the appealed decision is hereby reversed and set aside and another one is rendered ordering defendants-appellees and all persons claiming rights under them.915. Bautista’s authority to represent respondent notwithstanding the absence of a board resolution to that effect. Thereafter. as the appellate court justice stressed that the decision and the resolution were not affected by extraneous matters. Bautista’s uncle-in-law. they submitted their respective position papers. the appellate court granted respondent’s motion for execution and directed the RTC to issue a new writ of execution of its decision. as the controversy was not referred to the barangay for conciliation.80 representing the accrued rents in arrears as of November 1993. to strike down the MeTC and RTC Decisions as legal nullities.25 Petitioners moved for the reconsideration of the aforesaid decision.
. the rationale being that "a litigant cannot be permitted to speculate on the action of the court x x x (only to) raise an objection of this sort after the decision has been rendered. his act of ruling against the petitioners and in favor of the respondent "corporation" constitute an unconstitutional deprivation of petitioners’ property without due process of law. In turn. Mondragon International Philippines.46 We would like to reiterate. and a deviation from the rigid enforcement of the rules may be allowed to attain that prime objective. they fault the appellate court for not finding that: 1) their non-payment of rentals was justified. we brushed aside technicalities in the interest of justice. We uphold the capacity of respondent company to institute the ejectment case.33 They likewise question the factual findings of the court on the bases of their ejectment from the subject premises. Specifically. Inc. as correctly held by the appellate court. after all.
. In all of the above cases. the dispensation of justice is the core reason for the existence of courts.00 scholarship grant courtesy of the uncle-in-law of respondent "corporation’s" purported general manager and (2). Inc. the policy of the Court not to tolerate acts of litigants who. and while the swift unclogging of court dockets is a laudable objective. Bautista’s capacity to sue on behalf of the company despite lack of proof of authority to so represent it. the cause of justice. we find the same to be in order. v. prejudice or prejudgment. and when there is substantial compliance. in a Resolution34 dated January 18. Inc. Although Ms."45 Second.III. the SEC later set aside its earlier orders of suspension and revocation of respondent’s certificate.32 In addition to Ms.39 In Novelty Phils.36 We likewise affirm Ms. 2) they were deprived of possession of all the units subject of the lease contract except Room 35. not suppress. Although the Securities and Exchange Commission (SEC) suspended and eventually revoked respondent’s certificate of registration on February 16.43 Technical and procedural rules are intended to help secure. While it is true that rules of procedure are intended to promote rather than frustrate the ends of justice. A corporation has no powers except those expressly conferred on it by the Corporation Code and those that are implied from or are incidental to its existence. its registration was not yet revoked.35 Besides. 37 and 38. there should be evidence to substantiate the suspicion. like the signing of documents. Physical acts. The relaxation of the rules applies only to highly meritorious cases. v. records show that it instituted the action for ejectment on December 15. at this point. hostility. despite his admission – by reason of his silence – of petitioners’ accusation that the said Justice enjoyed a $7. 1993. Petitioners further prayed that a Temporary Restraining Order (TRO) be issued enjoining the CA from enforcing its Resolution directing the issuance of a Writ of Execution. The petition lacks merit. especially when weighed against a judge’s sacred pledge under his oath of office to administer justice without regard for any person and to do right equally to the poor and the rich. that is. rendering the issue moot and academic. There must be a showing of bias and prejudice stemming from an extrajudicial source.000. when the case was commenced. seek to disqualify a judge (or justice) for their own purpose. It is settled that a motion to inhibit shall be denied if filed after a member of the court had already given an opinion on the merits of the case. Bias and prejudice cannot be presumed. she immediately presented the Secretary’s Certificate38 confirming her authority to represent the company. after Justice Reyes had already rendered his opinion on the merits of the case.44 As to the denial of the motion to inhibit Justice Reyes. 1999. in China Banking Corporation v. Bautista’s lack of capacity to sue. Galan. Lastly. worse. the motion to inhibit came after the appellate court rendered the assailed decision. There is ample jurisprudence holding that subsequent and substantial compliance may call for the relaxation of the rules of procedure in the interest of justice. Bautista initially failed to show that she had the capacity to sign the verification and institute the
ejectment case on behalf of the company. petitioners insist that respondent company has no standing to sue as a juridical person in view of the suspension and eventual revocation of its certificate of registration.40 the Court faulted the appellate court for dismissing a petition solely on petitioner’s failure to timely submit proof of authority to sue on behalf of the corporation. can be performed only by natural persons duly authorized for the purpose by corporate by-laws or by a specific act of the board of directors.37 Thus. Accordingly. it is settled that mere suspicion that a judge is partial to one of the parties is not enough. Court of Appeals. for just about any conceivable reason. and 3) respondent violated the terms of the contract by its continued refusal to turn over possession of Rooms 36. First.41 we upheld the sufficiency of a petition verified by an employment specialist despite the total absence of a board resolution authorizing her to act for and on behalf of the corporation. resulting in an opinion on the merits based on something other than what the judge learned from his participation in the case.42 we relaxed the rules of procedure because the corporation ratified the manager’s status as an authorized signatory. 1995. we should not insist on strict adherence to the rules at the expense of substantial justice. any person suing on behalf of the corporation should present proof of such authority. This is not to say that we disregard the requirement of prior authority to act in the name of a corporation. Thus. Whether the (1) failure and refusal of Honorable Justice Ruben Reyes to inhibit himself.47 We now come to the more substantive issue of whether or not the petitioners may be validly ejected from the leased premises. a corporation exercises said powers through its board of directors and/or its duly authorized officers and agents. when confronted with such question. this Court directed the parties to maintain the status quo effective immediately until further orders. for. under a plea of bias. In Pfizer.
we deem it proper to assess the array of factual findings supporting the court’s conclusion. and cannot be reviewed on appeal by the Supreme Court.51 To settle this issue once and for all.48 Specifically. likewise. the debtor shall be released from responsibility by the consignation of the thing or sum due.50 Albeit the rule admits of exceptions. petitioners’ communications to respondent prior to the filing of the complaint never mentioned their alleged inability to use the rooms. are final and conclusive. As correctly held by the CA. indeed. claim that such non-payment is justified by the following: 1) the refusal of respondent to allow petitioners to use the leased properties. express or implied. the resolution of which requires the evaluation of the evidence presented. x x x x. Thus. Article 1256 of the Civil Code provides: Article 1256. instead. Yet. the RTC and the CA all found that petitioners failed to perform their obligation to pay the stipulated rent. 1993 letters. Records. while on the part of respondent. petitioners only questioned the method of computing their electric billings without. show that respondent repeatedly demanded that petitioners vacate the premises. If we believe petitioners’ contention that they had been prevented from using the rooms for more than a year before the complaint for ejectment was filed. in fact.53 In their July 26 and October 30. even as against the lessor itself. However. however.56 As borne out by the records. they were placed in possession of the premises and they had the right to the use and enjoyment of the same. but the latter refused to heed the demand. 2) the expiration or termination of the possessor’s right to hold possession. especially when affirmed by the Court of Appeals. With the execution of the contract. because if such were the case. likewise. Consignation shall be made by depositing the things due at the disposal of a judicial authority. If it were true that they were allowed to use only one of the nine (9) rooms subject of the contract of lease. 37 and 38. the fact is that respondent turned over to petitioners the keys to the leased premises and petitioners. and 3) respondent’s refusal to accept payment tendered by petitioners. What was. and considering that the rooms were intended for a business purpose. The only contentious issue is whether there was indeed a violation of the terms of the contract: on the part of petitioners. they remained in possession of the premises. They. 4) letter of demand upon lessee to pay the rental or comply with the terms of the lease and vacate the premises. and the announcement of the consignation in other cases. the elements to be proved and resolved are the fact of lease and the expiration or violation of its terms. If the creditor to whom tender of payment has been made refuses without just cause to accept it.54 Although petitioners stated in their December 30. renovated the rooms.49 It is undisputed that petitioners and respondent entered into two separate contracts of lease involving nine (9) rooms of the San Luis Building. The evidence of petitioners’ non-payment of the stipulated rent is overwhelming. had the right to resist any act of intrusion into their peaceful possession of the property. whether to Ms. This issue involves questions of fact. the conclusions of fact of the trial court. thus.52 What they pointed out in their letters is that they did not know to whom payment should be made. they were already in default on their rentals for more than a year. before whom the tender of payment shall be proved in a proper case. they were not without any remedy. there was a violation of the contract by the lessor. except room 35. Consignation alone shall produce the same effect in the following cases: xxxx (4) When two or more persons claim the same right to collect. Petitioners. Bautista or to Pacheco. 1993 letter that respondent failed to fulfill its part of the contract. clearly established by the evidence was petitioners’ nonpayment of rentals because ostensibly they did not know to whom payment should be made. raising a complaint about their failure to use the rooms. they did not lift a finger to protect their right if. In such cases. petitioners were already in a position to exercise their right to the use and enjoyment of the property according to the terms of the lease contract. It is settled doctrine that in a civil case. and 5) the filing of the action within one year from the date of the last demand received by the defendant. the essential requisites of unlawful detainer are: 1) the fact of lease by virtue of a contract. They should have availed of the provisions of the Civil Code of the Philippines on the consignation of payment and of the Rules of Court on interpleader.55 nowhere did they specifically
refer to their inability to use the leased rooms.Unlawful detainer cases are summary in nature. at that time. Besides. 2) respondent’s refusal to turn over Rooms 36. we cannot understand why they did not specifically assert their right. 3) withholding by the lessee of possession of the land or building after the expiration or termination of the right to possess. Petitioners’ justifications are belied by the evidence on record. however. not one of them obtains in this case.57
. whether they failed to pay the stipulated rent without justifiable cause. this did not justify their failure to pay. they should have demanded specific performance from the lessor and commenced an action in court. The MeTC. whether it prevented petitioners from occupying the leased premises except Room 35.
respondent has every right to exercise his right to eject the erring lessees. instead of availing of the above remedies. The rationale for consignation is to avoid the performance of an obligation becoming more onerous to the debtor by reason of causes not imputable to him.59 Moreover. A contract of lease is a consensual. Notably. the use of each room by the lessee gave rise to the corresponding obligation to pay the monthly rental for the same. Otherwise stated. the terms of the contracts . 1998 and its Resolution dated December 10. petitioners. Accordingly. Neither can petitioners validly invoke the non-delivery of Rooms 36. 37 and 38 as an excuse for their failure to pay the rentals due on the other rooms they occupied. Section 1. enter the premises. without prejudice to the right of the LESSOR to terminate his contract. 37 and 38 was to take effect only when the tenants thereof would vacate the premises. – Whenever conflicting claims upon the same subject matter are or may be made against a person who claims no interest whatever in the subject matter. petitioners opted to refrain from making payments. SP No. premises considered. The Decision of the Court of Appeals dated May 26. WHEREFORE. Thus.60 The remedy is afforded not to protect a person against double liability but to protect him against double vexation in respect of one liability. and/or eject the LESSEE as hereinafter set forth. the amount owing shall as penalty bear interest at the rate of FOUR percent (4%) per month. NACHURA Associate Justice WE CONCUR:
. It may also be mentioned that the contract specifically provides that the lease of Rooms 36.R. to be paid.easily raise the inference that the parties intended the lease of each room separate from that of the others. ANTONIO EDUARDO B. 1998 in CAG. The parties’ contracts of lease contain identical provisions. or an interest which in whole or in part is not disputed by the claimants. Wellsettled is the rule that tender of payment must be accompanied by consignation in order that the effects of payment may be produced. still. When interpleader proper.64 For failure to pay the rent. petitioners have no right to remain in the leased premises.In the instant case. to wit: In case of default by the LESSEE in the payment of rental on the fifth (5th) day of each month. bilateral. it would not constitute payment for want of consignation of the amount. and used by. Article 167363 of the Civil Code gives the lessor the right to judicially eject the lessees in case of non-payment of the monthly rentals.61 Notably.62 Moreover.58 Petitioners claim that they made a written tender of payment and actually prepared vouchers for their monthly rentals. Rule 62 of the Rules of Court provides: Section 1. 37 and 38 as a justification for non-payment of rentals. Absent a clear showing that the previous tenants had vacated the premises.1avvphil In light of the foregoing disquisition. he may bring an action against the conflicting claimants to compel them to interplead and litigate their several claims among themselves. SO ORDERED. consignation alone would have produced the effect of payment of the rentals. 1999 is hereby LIFTED. But that was insufficient to constitute a valid tender of payment. Although the two contracts embraced the lease of nine (9) rooms. Even assuming that it was valid tender. respondent had no obligation to deliver possession of the subject rooms to petitioners.lavvphil There is nothing in the contract which would lead to the conclusion that the lease of one or more rooms was to be made dependent upon the lease of all the nine (9) rooms. the petition is DENIED and the Status Quo Order dated January 18. who undertakes to pay the rent therefor.with their particular reference to specific rooms and the monthly rental for each . petitioners cannot use the non-delivery of
Rooms 36. 37739 are AFFIRMED. respondent demanded payment of rentals only for the rooms actually delivered to. an action for interpleader is proper when the lessee does not know to whom payment of rentals should be made due to conflicting claims on the property (or on the right to collect). onerous and commutative contract by which the owner temporarily grants the use of his property to another.