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: FACTS: Petitioner Eternal Gardens Memorial Parks Corporation and private respondent MISSION executed a Land Development Agreement 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 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 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 against private respondent MISSION and Maysilo Estate alleging among others, that in view of the conflicting claims of ownership of the defendants (private respondent and Maysilo Estate) over the properties subject matter of the contracts, over which plaintiff corporation (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 An order was issued by the presiding judge 2 requiring defendants to interplead. MISSION filed a motion to dismiss for lack of cause of action - denied. However, earlier, private respondent presented a motion for the placing on judicial deposit the amounts due and unpaid from petitioner. The trial court 3 denied judicial deposit. Another order was issued amending the February 13, 1984 order and setting aside the order for private respondent's deposit of the amounts it had previously received from petitioner. In the case at bar, G.R. No. 73794, MISSION, herein private respondent filed a petition for certiorari with the then Intermediate Appellate Court docketed as AC-G.R. No. 04869 praying that the aforementioned Orders of February 13, 1984 and October 26, 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, plus interest thereon, due the private respondent MISSION under the Land Development Agreement, said amounts deposited to be paid to whomever may be found later to be entitled thereto, with costs. The Intermediate Appelate Court dismissed the petition. In its Resolution , the Court however, reversed its decision. The private respondent is hereby ordered to deposit whatever amounts are due from it under the Land Development Agreement 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. No costs. Eternal Gardens moved for a reconsideration but it was denied for lack of merit. Hence, this petition. ISSUE: Whether or not respondent Court of Appeals abused its discretion amounting to lack of jurisdiction in reconsidering its resolution of February 27, 1985 and in requiring instead in the resolution of September 5, 1985, 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. HELD: In the case at bar, 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; that it claims no interest in such amounts due and is willing to pay whoever is declared entitled to said amounts. Such admissions in the complaint were reaffirmed in open court before the Court of Appeals as stated in the latter court's resolution. Under the circumstances, 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. As correctly observed by the Court of Appeals, the essence of an interpleader, aside from the disavowal of interest in the property in litigation on the part of the petitioner, is the deposit of the property or funds in controversy with the court. 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." The case at bar was elevated to the Court of Appeals on certiorari with prohibitory and mandatory injunction. Said appellate court found that more than twenty million pesos are involved; so that on interest alone for savings or time deposit would be considerable, now accruing in favor of the Eternal Gardens. 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, 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. Petitioner would now compound the issue by its obvious turn-about, 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, 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 ownership now on trial before Branch CXXII RTC-Caloocan City, has finally been resolved. All these notwithstanding, the need for the deposit in question has been established, 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, 1987 to avoid wastage of funds.


Wack Wack vs. Won G.R. No. L-23851 March 26, 1976

Facts: Won claims ownership of a membership fee certificate at Wack Wack Golf & Country Club. By virtue of a civil case, he was issued such certificate. But a certain Tan also claims ownership over such certificate pursuant to an assignment made by the alleged true owner of the same certificate. Thus, Wack Wack filed a complaint to interplead Won and Tan to litigate their conflicting claims. Trial court dismissed the complaint on the ground of res judicata by reason of the previous civil case that issued Won the right to the certificate. In its amended and supplemental complaint of October 23, 1963, the Wack Wack Golf & Country Club, Inc., a non-stock, civic and athletic corporation duly organized under the laws of the Philippines, with principal office in Mandaluyong, Rizal (hereinafter referred to as the Corporation), alleged, for its first cause of action, that the defendant Lee E. Won claims ownership of its membership fee certificate 201, by virtue of the decision rendered in civil case 26044 of the CFI of Manila, entitled "Lee E. Won alias Ramon Lee vs. Wack Wack Golf & Country Club, Inc." and also by virtue of membership fee certificate 201-serial no. 1478 issued on October 17, 1963 by Ponciano B. Jacinto, deputy clerk of court of the said CFI of Manila, 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, pursuant to the order of September 23, 1963 in the said case; that the defendant Bienvenido A. Tan, on the other hand, claims to be lawful owner of its aforesaid membership fee certificate 201 by virtue of membership fee certificate 201-serial no. 1199 issued to him on July 24, 1950 pursuant to an assignment made in his favor by "Swan, Culbertson and Fritz," the original owner and holder of membership fee certificate 201; 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, all of which have been issued as early as December 1939; that it claims no interest whatsoever in the said membership fee certificate 201; that it has no means of determining who of the two defendants is the lawful owner thereof; that it is without power to issue two separate certificates for the same membership fee certificate 201, or to issue another membership fee certificate to the defendant Lee, without violating its articles of incorporation and by-laws; and that the membership fee certificate 201-serial no. 1199 held by the defendant Tan and the membership fee certificate 201-serial No. 1478 issued to the defendant Lee proceed from the same membership fee certificate 201, originally issued in the name of "Swan, Culbertson and Fritz". For its second cause of action. it alleged that the membership fee certificate 201-serial no. 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 by-laws, 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, holder of membership fee certificate 201-serial no. 1199; 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; and that he is made a part so that complete relief may be accorded herein. The Corporation prayed that (a) an order be issued requiring Lee and Tan to interplead and litigate their conflicting claims; and (b) judgment. be rendered, after hearing, declaring who of the two is the lawful owner of membership fee certificate 201, and ordering the surrender and cancellation of membership fee certificate 201-serial no. 1478 issued in the name of Lee. Issue: WON Wack Wack is barred to file an interpleader suit. Held: Yes. As to the subject matter (Membership fee certificate), there is no question that such is proper for an interpleader suit. However, the instant interpleader suit cannot prosper because Wack Wack had already been made independently liable in the previous civil case wherein Won had established his rights to the certificate and, therefore, its present application for interpleader would in effect be a collateral attack upon the final judgment in the civil case. Being so, this interpleader suit, if granted, would compel Won to establish his rights anew, and thereby increase instead of diminish litigations, which is one of the purposes of an interpleader suit. And because Wack Wack allowed itself to be sued to final judgment in the said case, its action of interpleader was filed inexcusably late, for which reason it is barred by laches or unreasonable delay.

PASRICHA V. DON LUIS DISON REALTY G.R. No. 136409; March 14, 2008


FACTS: Respondent Don Luis Dison Realty, Inc. and petitioners executed two Contracts of Lease[3] whereby the former, as lessor, agreed to lease to the latter Units 22, 24, 32, 33, 34, 35, 36, 37 and 38 of the San Luis Building, located at 1006 M.Y. Orosa cor. T.M. Kalaw Streets, Ermita, Manila. Petitioners, in turn, agreed to pay monthly rentals. Petitioners were, likewise, required to pay for the cost of electric consumption, water bills and the use of telephone cables. The lease of Rooms 36, 37 and 38 did not materialize leaving only Rooms 22, 24, 32, 33, 34 and 35 as subjects of the lease contracts.[9] While the contracts were in effect, petitioners dealt with Francis Pacheco (Pacheco), then General Manager of private respondent. Thereafter, Pacheco was replaced by Roswinda Bautista (Ms. Bautista).[10] Petitioners religiously paid the monthly rentals until May 1992.[11] After that, however, despite repeated demands, petitioners continuously refused to pay the stipulated rent. Consequently, respondent was constrained to refer the matter to its lawyer who, in turn, made a final demand on petitioners for the payment of the accrued rentals amounting to P916,585.58.[12] Because petitioners still refused to comply, a complaint for ejectment was filed by private respondent through its representative, Ms. Bautista, before the Metropolitan Trial Court (MeTC) of Manila. Petitioners admitted their failure to pay the stipulated rent for the leased premises starting July until November 1992, but claimed that such refusal was justified because of the internal squabble in respondent company as to the person authorized to receive payment.[14] To further justify their non-payment of rent, petitioners alleged that they were prevented from using the units (rooms) subject matter of the lease contract, except Room 35. Petitioners eventually paid their monthly rent for December 1992 in the amount of P30,000.00, 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, 24, 32, 33, and 34.[15] However, they again withheld payment of rents starting January 1993 because of respondent’s refusal to turn over Rooms 36, 37 and 38.[16] To show good faith and willingness to pay the rents, petitioners alleged that they prepared the check vouchers for their monthly rentals from January 1993 to January 1994. [17] Petitioners further averred in their Amended Answer[18] that the complaint for ejectment was prematurely filed, as the controversy was not referred to the barangay for conciliation. For failure of the parties to reach an amicable settlement, the pre-trial conference was terminated. the MeTC rendered a Decision dismissing the complaint for ejectment. Regional Trial Court reversed and set aside the MeTC Decision. Aggrieved, elevated the case to the CA which affirmed RTC’s decision. ISSUE: Whether or not the filing of an action for interpleader is proper HELD: We uphold the capacity of respondent company to institute the ejectment case. Although the SEC suspended and eventually revoked respondent's certificate of registration on 16 February 1995, records show that it instituted the action for ejectment on 15 December 1993. Accordingly, when the case was commenced, its registration was not yet revoked. Besides, as correctly held by the appellate court, the SEC later set aside its earlier orders of suspension and revocation of respondent's certificate, rendering the issue moot and academic. It is undisputed that petitioners and respondents entered into 2 separate contracts of lease involving 9 rooms. Records likewise show that respondent repeatedly demanded that petitioners vacate the premises, but the latter refused to heed the demand; thus, they remained in possession of the premises. What was clearly established by the evidence was petitioners' non-payment of rentals because ostensibly, they did not know to whom payment should be made. However, this did not justify their failure to pay, because if such were the case, they were not without any remedy. They should have availed of the provisions of the Civil Code on consignation of payment and of the Rules of Court on interpleader. CONSIGNATION shall be made by depositing the things due at the disposal of the judicial authority, before whom the tender of payment shall be proved in a proper case, and the announcement of the consignation on other cases. In the instant case, consignation alone would have produced the effect of payment of the rentals. 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. Tender of payment must be accompanied by consignation on order that the effect of payment may be produced. INTERPLEADER is proper 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, or an interest in whole or in part is not disputed by claimants, he may bring an action against conflicting claimants to compel them to interplead and litigate their several claims among themselves. Otherwise stated, 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 the right to collect). The remedy is afforded not to protect a person against double liability but to protect him against double vexation in respect of one liability. Notably, instead of availing of the above remedies, petitioners opted to refrain from making payments.