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Republic of the Philippines For its second cause of action.

it alleged that the


SUPREME COURT membership fee certificate 201-serial no. 1478 issued by
Manila the deputy clerk of court of court of the CFI of Manila in
EN BANC behalf of the Corporation is null and void because issued
G.R. No. L-23851 March 26, 1976 in violation of its by-laws, which require the surrender
WACK WACK GOLF & COUNTRY CLUB, and cancellation of the outstanding membership fee
INC., plaintiff-appellant, vs. LEE E. WON alias RAMON certificate 201 before issuance may be made to the
LEE and BIENVENIDO A. TAN, defendants-appellees. transferee of a new certificate duly signed by its
Leonardo Abola for appellant. president and secretary, aside from the fact that the
Alfonso V. Agcaoli & Ramon A. Barcelona for appellee decision of the CFI of Manila in civil case 26044 is not
Lee E. Won. binding upon the defendant Tan, holder of membership
Bienvenido A. Tan in his own behalf. fee certificate 201-serial no. 1199; that Tan is made a
party because of his refusal to join it in this action or
CASTRO, C.J.: bring a separate action to protect his rights despite the
This is an appeal from the order of the Court of First fact that he has a legal and beneficial interest in the
Instance of Rizal, in civil case 7656, dismissing the subject matter of this litigation; and that he is made a
plaintiff-appellant's complaint of interpleader upon the part so that complete relief may be accorded herein.
grounds of failure to state a cause of action and res The Corporation prayed that (a) an order be issued
judicata. requiring Lee and Tan to interplead and litigate their
In its amended and supplemental complaint of October conflicting claims; and (b) judgment. be rendered, after
23, 1963, the Wack Wack Golf & Country Club, Inc., a hearing, declaring who of the two is the lawful owner of
non-stock, civic and athletic corporation duly organized membership fee certificate 201, and ordering the
under the laws of the Philippines, with principal office in surrender and cancellation of membership fee certificate
Mandaluyong, Rizal (hereinafter referred to as the 201-serial no. 1478 issued in the name of Lee.
Corporation), alleged, for its first cause of action, that the
defendant Lee E. Won claims ownership of its In separate motions the defendants moved to dismiss
membership fee certificate 201, by virtue of the decision the complaint upon the grounds of res judicata, failure of
rendered in civil case 26044 of the CFI of Manila, the complaint to state a cause of action, and bar by
entitled "Lee E. Won alias Ramon Lee vs. Wack Wack prescription. 1 These motions were duly opposed by the
Golf & Country Club, Inc." and also by virtue of Corporation. Finding the grounds of bar by prior
membership fee certificate 201-serial no. 1478 issued on judgment and failure to state a cause of action well
October 17, 1963 by Ponciano B. Jacinto, deputy clerk taken, the trial court dismissed the complaint, with costs
of court of the said CFI of Manila, for and in behalf of the against the Corporation.
president and the secretary of the Corporation and of the In this appeal, the Corporation contends that the court a
People's Bank & Trust Company as transfer agent of the quo erred (1) in finding that the allegations in its
said Corporation, pursuant to the order of September 23, amended and supplemental complaint do not constitute
1963 in the said case; that the defendant Bienvenido A. a valid ground for an action of interpleader, and in
Tan, on the other hand, claims to be lawful owner of its holding that "the principal motive for the present action is
aforesaid membership fee certificate 201 by virtue of to reopen the Manila Case and collaterally attack the
membership fee certificate 201-serial no. 1199 issued to decision of the said Court"; (2) in finding that the
him on July 24, 1950 pursuant to an assignment made in decision in civil case 26044 of the CFI of Manila
his favor by "Swan, Culbertson and Fritz," the original constitutes res judicata and bars its present action; and
owner and holder of membership fee certificate 201; that (3) in dismissing its action instead of compelling the
under its articles of incorporation and by-laws the appellees to interplead and litigate between themselves
Corporation is authorized to issue a maximum of 400 their respective claims.
membership fee certificates to persons duly elected or
admitted to proprietary membership, all of which have The Corporations position may be stated elsewise as
been issued as early as December 1939; that it claims follows: The trial court erred in dismissing the complaint,
no interest whatsoever in the said membership fee instead of compelling the appellees to interplead
certificate 201; that it has no means of determining who because there actually are conflicting claims between
of the two defendants is the lawful owner thereof; that it the latter with respect to the ownership of membership
is without power to issue two separate certificates for the fee certificate 201, and, as there is not Identity of parties,
same membership fee certificate 201, or to issue of subject-matter, and of cause of action, between civil
another membership fee certificate to the defendant Lee, case 26044 of the CFI of Manila and the present action,
without violating its articles of incorporation and by-laws; the complaint should not have been dismissed upon the
and that the membership fee certificate 201-serial no. ground of res judicata.
1199 held by the defendant Tan and the membership fee
certificate 201-serial No. 1478 issued to the defendant On the other hand, the appellees argue that the trial
Lee proceed from the same membership fee certificate court properly dismissed the complaint, because, having
201, originally issued in the name of "Swan, Culbertson the effect of reopening civil case 26044, the present
and Fritz". action is barred by res judicata.
Although res judicata or bar by a prior judgment was the of the conflicting claims prior to the rendition of the
principal ground availed of by the appellees in moving judgment and neglected the opportunity to implead the
for the dismissal of the complaint and upon which the adverse claimants in the suit where judgment was
trial court actually dismissed the complaint, the entered. This must be so, because once judgment is
determinative issue, as can be gleaned from the obtained against him by one claimant he becomes liable
pleadings of the parties, relates to the propriety and to the latter. 14 In once case, 15 it was declared:
timeliness of the remedy of interpleader. The record here discloses that long before the rendition
The action of interpleader, under section 120 of the of the judgment in favor of relators against the Hanover
Code of Civil Procedure, 2 is a remedy whereby a person Fire Insurance Company the latter had notice of the
who has personal property in his possession, or an adverse claim of South to the proceeds of the policy. No
obligation to render wholly or partially, without claiming reason is shown why the Insurance Company did not
any right to either, comes to court and asks that the implead South in the former suit and have the conflicting
persons who claim the said personal property or who claims there determined. The Insurance Company
consider themselves entitled to demand compliance with elected not to do so and that suit proceeded to a final
the obligation, be required to litigate among themselves judgment in favor of relators. The Company thereby
in order to determine finally who is entitled to tone or the became independently liable to relators. It was then too
one thing. The remedy is afforded to protect a person late for such company to invoke the remedy of
not against double liability but against double vexation in interpleader
respect of one liability. 3 The procedure under the Rules
of Court 4 is the same as that under the Code of Civil The Corporation has not shown any justifiable reason
Procedure, 5 except that under the former the remedy of why it did not file an application for interpleader in civil
interpleader is available regardless of the nature of the case 26044 to compel the appellees herein to litigate
subject-matter of the controversy, whereas under the between themselves their conflicting claims of
latter an interpleader suit is proper only if the subject- ownership. It was only after adverse final judgment was
matter of the controversy is personal property or relates rendered against it that the remedy of interpleader was
to the performance of an obligation. invoked by it. By then it was too late, because to he
There is no question that the subject matter of the entitled to this remedy the applicant must be able to
present controversy, i.e., the membership fee certificate show that lie has not been made independently liable to
201, is proper for an interpleader suit. What is here any of the claimants. And since the Corporation is
disputed is the propriety and timeliness of the remedy in already liable to Lee under a final judgment, the present
the light of the facts and circumstances obtaining. interpleader suit is clearly improper and unavailing.

A stakeholder 6 should use reasonable diligence to hale It is the general rule that before a person will be deemed
the contending claimants to court. 7 He need not await to be in a position to ask for an order of intrepleader, he
actual institution of independent suits against him before must be prepared to show, among other prerequisites,
filing a bill of interpleader. 8 He should file an action of that he has not become independently liable to any of
interpleader within a reasonable time after a dispute has the claimants. 25 Tex. Jur. p. 52, Sec. 3; 30 Am. Jur. p.
arisen without waiting to be sued by either of the 218, Section 8.
contending claimants. 9 Otherwise, he may be barred by
laches 10 or undue delay. 11 But where he acts with It is also the general rule that a bill of interpleader comes
reasonable diligence in view of the environmental too late when it is filed after judgment has been rendered
circumstances, the remedy is not barred. 12 in favor of one of the claimants of the fund, this being
especially true when the holder of the funds had notice
Has the Corporation in this case acted with diligence, in of the conflicting claims prior to the rendition of the
view of all the circumstances, such that it may properly judgment and had an opportunity to implead the adverse
invoke the remedy of interpleader? We do not think so. It claimants in the suit in which the judgment was
was aware of the conflicting claims of the appellees with rendered. United Procedures Pipe Line Co. v. Britton,
respect to the membership fee certificate 201 long Tex. Civ. App. 264 S.W. 176; Nash v. McCullum, Tex.
before it filed the present interpleader suit. It had been Civ. 74 S.W. 2d 1046; 30 Am. Jur. p. 223, Sec. 11; 25
recognizing Tan as the lawful owner thereof. It was sued Tex. Jur. p. 56, Sec. 5; 108 A.L.R., note 5, p. 275. 16
by Lee who also claimed the same membership fee Indeed, if a stakeholder defends a suit filed by one of the
certificate. Yet it did not interplead Tan. It preferred to adverse claimants and allows said suit to proceed to
proceed with the litigation (civil case 26044) and to final judgment against him, he cannot later on have that
defend itself therein. As a matter of fact, final judgment part of the litigation repeated in an interpleader suit. In
was rendered against it and said judgment has already the case at hand, the Corporation allowed civil case
been executed. It is not therefore too late for it to invoke 26044 to proceed to final judgment. And it offered no
the remedy of interpleader. satisfactory explanation for its failure to implead Tan in
the same litigation. In this factual situation, it is clear that
It has been held that a stakeholder's action of this interpleader suit cannot prosper because it was filed
interpleader is too late when filed after judgment has much too late.
been rendered against him in favor of one of the
contending claimants, 13 especially where he had notice
If a stakeholder defends a suit by one claimant and remedy by interpleader is afforded to protect the party
allows it to proceed so far as a judgment against him from the annoyance and hazard of two or more actions
without filing a bill of interpleader, it then becomes too touching the same property or demand; but one who,
late for him to do so. Union Bank v. Kerr, 2 Md. Ch. with knowledge of all the facts, neglects to avail himself
460; Home Life Ins. Co. v. Gaulk, 86 Md. 385, 390, 38 A. of the relief, or elects to take the chances for success in
901; Gonia v. O'Brien, 223 Mass. 177, 111 N.E. 787. It is the actions at law, ought to submit to the consequences
one o the main offices of a bill of interpleader to restrain of defeat. To permit an unsuccessful defendant to
a separate proceeding at law by claimant so as to avoid compel the successful plaintiffs to interplead, is to
the resulting partial judgment; and if the stakeholder increase instead of to diminish the number of suits; to
acquiesces in one claimant's trying out his claim and put upon the shoulders of others the burden which he
establishing it at law, he cannot then have that part of asks may be taken from his own. ....'
the litigation repeated in an interpleader suit. 4 It is urged, however, that the American Surety Company
Pomeroy's Eq. Juris. No. 162; Mitfor's Eq. Pleading of New York was not in position to file an interpleader
(Tyler's Ed.) 147 and 236; Langdell's Summary of Eq. until it had tested the claim of relatrix to final judgment,
Pleading, No. 162' De Zouche v. Garrizon, 140 Pa. 430, and that, failing to meet with success, it promptly filed
21 A/450. 17 the interpleader. The reason why, it urges, it was not in
It is the general rule that a bill of interpleader comes too such position until then is that had it succeeded before
late when application therefore is delayed until after this court in sustaining its construction of the bond and
judgment has been rendered in favor of one of the the law governing the bond, it would not have been
claimants of the fund, and that this is especially true called upon to file an interpleader, since there would
where the holder of the fund had notice of the conflicting have been sufficient funds in its hands to have satisfied
claims prior to the rendition of such judgment and an all lawful claimants. It may be observed, however, that
opportunity to implead the adverse claimants in the suit the surety company was acquainted with all of the facts,
in which such judgment was rendered. (See notes and and hence that it simply took its chances of meeting with
cases cited 36 Am. Dec. 703, Am. St. Rep. 598, also 5 success by its own construction of the bond and the law.
Pomeroy's Eq. Juris. Sec. 41.) Having failed to sustain it, it cannot now force relatrix
into litigation anew with others, involving most likely a
The evidence in the opinion of the majority shows repetition of what has been decided, or force her to
beyond dispute that the appellant permitted the Parker accept a pro rata part of a fund, which is far from
county suit to proceed to judgment in favor of Britton with benefits of the judgment. 19
full notice of the adverse claims of the defendants in the Besides, a successful litigant cannot later be impleaded
present suit other than the assignees of the judgment by his defeated adversary in an interpleader suit and
(the bank and Mrs. Pabb) and no excuse is shown why compelled to prove his claim anew against other adverse
he did not implead them in the suit. 18 claimants, as that would in effect be a collateral attack
upon the judgment.
To now permit the Corporation to bring Lee to court after
the latter's successful establishment of his rights in civil The jurisprudence of this state and the common law
case 26044 to the membership fee certificate 201, is to states is well-settled that a claimant who has been put to
increase instead of to diminish the number of suits, test of a trial by a surety, and has establish his claim,
which is one of the purposes of an action of interpleader, may not be impleaded later by the surety in an
with the possibility that the latter would lose the benefits interpleader suit, and compelled to prove his claim again
of the favorable judgment. This cannot be done because with other adverse claimants. American Surety Company
having elected to take its chances of success in said civil of New York v. Brim, 175 La. 959, 144 So.
case 26044, with full knowledge of all the fact, the 727; American Surety Company of New York v. Brim (In
Corporation must submit to the consequences of defeat. Re Lyong Lumber Company), 176 La. 867, 147 So.
The act providing for the proceeding has nothing to say 18; Dugas v. N.Y. Casualty Co., 181 La. 322, 159 So.
touching the right of one, after contesting a claim of one 572; 15 Ruling Case Law, 228; 33 Corpus Juris, 477; 4
of the claimants to final judgment unsuccessfully, to Pomeroy's Jurisprudence, 1023; Royal Neighbors of
involve the successful litigant in litigation anew by America v. Lowary (D.C.) 46 F2d 565; Brackett v.
bringing an interpleader action. The question seems to Graves, 30 App. Div. 162, 51 N.Y.S. 895; De Zouche v.
be one of first impression here, but, in other jurisdictions, Garrison, 140 Pa. 430, 21 A. 450, 451; Manufacturer's
from which the substance of the act was apparently Finance Co. v. W.I. Jones Co. 141 Ga., 519, 81 S.E.
taken, the rule prevails that the action cannot be 1033; Hancock Mutual Life Ins. Co. v. Lawder, 22 R.I.
resorted to after an unsuccessful trial against one of the 416, 84 A. 383.
claimants. There can be no doubt that relator's claim has been
It is well settled, both by reasons and authority, that one finally and definitely established, because that matter
who asks the interposition of a court of equity to compel was passed upon by three courts in definitive judgments.
others, claiming property in his hands, to interplead, The only remaining item is the value of the use of the
must do so before putting them to the test of trials at land during the time that relator occupied it. The case
law. Yarborough v. Thompson, 3 Smedes & M. 291 (41 was remanded solely and only for the purpose of
Am. Dec. 626); Gornish v. Tanner, 1 You. & Jer. determining the amount of that credit. In all other
333; Haseltine v. Brickery, 16 Grat. (Va.) 116. The aspects the judgment is final. 20
RIZAL COMMERCIAL BANKING
It is generally held by the cases it is the office of CORPORATION, petitioner, vs. METRO CONTAINER
interpleader to protect a party, not against double CORPORATION, respondent.
liability, but against double vexation on account of one DECISION
liability. Gonia v. O'Brien, 223 Mass. 177, 111 N.E. 787. KAPUNAN, J.:
And so it is said that it is too late for the remedy of Assailed in this petition for review on certiorari are the
interpleader if the party seeking this relef has contested Decision, promulgated on 18 October 1996 and the
the claim of one of the parties and suffered judgment to Resolution, promulgated on 08 January 1997, of the
be taken. Court of Appeals in CA-G.R. SP No. 41294.
The facts of the case are as follows:
In United P.P.I. Co. v. Britton (Tex. Civ. App.) 264 S.W. On 26 September 1990, Ley Construction Corporation
576. 578, it was said: 'It is the general rule that a bill of (LEYCON) contracted a loan from Rizal Commercial
interpleader comes too late when application therefor is Banking Corporation (RCBC) in the amount of Thirty
delayed until after judgment has been rendered in favor Million Pesos (P30,000,000.00). The loan was secured
of one of the claimants of the fund, and this is especially by a real estate mortgage over a property, located in
true where the holder of the fund had notice of the Barrio Ugong, Valenzuela, Metro Manila (now
conflicting claims prior to the rendition of such judgment Valenzuela City) and covered by TCT No. V-
and an opportunity to implead the adverse claimants in 17223. LEYCON failed to settle its obligations prompting
the suit in which such judgment was rendered. See RCBC to institute an extrajudicial foreclosure
notes and cases cited 35 Am. Dec. 703; 91 An. St. Rep. proceedings against it. After LEYCONs legal attempts to
598; also 5 Pomeroy's Equity Jurisprudence No. 41.' forestall the action of RBCB failed, the foreclosure took
place on 28 December 1992 with RCBC as the highest
The principle thus stated has been recognized in many bidder.
cases in other jurisdictions, among which may be LEYCON promptly filed an action for Nullification of
cited American Surety Co. v. O'Brien, 223 Mass. 177, Extrajudicial Foreclosure Sale and Damages against
111 N.E. 787; Phillips v. Taylor, 148 Md. 157, 129 A. RCBC. The case, docketed as Civil Case No. 4037-V-
18; Moore v. Hill, 59 Ga. 760, 761; Yearborough v. 93, was raffled to the Regional Trial Court (RTC) of
Thompson, 3 Smedes & M. (11 Miss.) 291, 41 Am. Dec. Valenzuela, Branch 172. Meanwhile, RCBC
626. See, also, 33 C.J. p. 447, No. 30; Nash v. consolidated its ownership over the property due to
McCullum, (Tex. Civ. App.) 74 S.W. 2d 1042, 1047. LEYCONs failure to redeem it within the 12-month
It would seem that this rule should logically follow since, redemption period and TCT No. V-332432 was issued if
after the recovery of judgment, the interpleading of the favor of the bank. By virtue thereof, RCBC demanded
judgment creditor is in effect a collateral attack upon the rental payments from Metro Container Corporation
judgment. 21 (METROCAN) which was leasing the property from
In fine, the instant interpleader suit cannot prosper LEYCON.
because the Corporation had already been made On 26 May 1994, LEYCON filed an action for Unlawful
independently liable in civil case 26044 and, therefore, Detainer, docketed as Civil Case No. 6202, against
its present application for interpleader would in effect be METROCAN before the Metropolitan Trial Court (MeTC)
a collateral attack upon the final judgment in the said of Valenzuela, Branch 82.
civil case; the appellee Lee had already established his On 27 May 1994, METROCAN filed a complaint for
rights to membership fee certificate 201 in the aforesaid Interpleader, docketed as Civil Case No. 4398-V-94
civil case and, therefore, this interpleader suit would before the Regional Trial Court of Valenzuela, Metro
compel him to establish his rights anew, and thereby Manila, Branch 75 against LEYCON and RCBC to
increase instead of diminish litigations, which is one of compel them to interplead and litigate their several
the purposes of an interpleader suit, with the possiblity claims among themselves and to determine which
that the benefits of the final judgment in the said civil among them shall rightfully receive the payment of
case might eventually be taken away from him; and monthly rentals on the subject property. On 04 July
because the Corporation allowed itself to be sued to final 1995, during the pre-trial conference in Civil Case No.
judgment in the said case, its action of interpleader was 4398-V-94, the trial court ordered the dismissal of the
filed inexcusably late, for which reason it is barred by case insofar as METROCAN and LEYCON were
laches or unreasonable delay. concerned in view of an amicable settlement they
ACCORDINGLY, the order of May 28, 1964, dismissing entered by virtue of which METROCAN paid back
the complaint, is affirmed, at appellant's cost. rentals to LEYCON.
Teehankee, Makasiar, Antonio, Esguerra, Muñoz Palma, On 31 October 1995, judgment was rendered in Civil
Aquino and Concepcion, Jr., JJ., concur. Case No. 6202, which among other things, ordered
Barredo and Martin, JJ., took no part. METROCAN to pay LEYCON whatever rentals due on
Fernando, J., is on leave. the subject premises. The MeTC decision became final
and executory.
FIRST DIVISION On 01 February 1996, METROCAN moved for the
[G.R. No. 127913. September 13, 2001] dismissal of Civil Case No. 4398-V-94 for having
become moot and academic due to the amicable
settlement it entered with LEYCON on 04 July 1995 and
the decision in Civil Case No. 6202 on 31 October way affect conflicting claims of ownership, in this case
1995. LEYCON, likewise, moved for the dismissal of the between RCBC and LEYCON. This was made clear
case citing the same grounds cited by METROCAN. when the trial court, in denying RCBC's "Motion for
On 12 March 1996, the two motions were dismissed for Inclusion x x x as an Indispensable Party" declared that
lack of merit. The motions for reconsideration filed by "the final determination of the issue of physical
METROCAN and LEYCON were also denied prompting possession over the subject premises between the
METROCAN to seek relief from the Court of plaintiff and the defendant shall not in any way affect
Appeals via a petition for certiorari and prohibition with RCBC's claims of ownership over the said premises,
prayer for the issuance of a temporary restraining order since RCBC is neither a co-lessor or co-lessee of the
and a writ of preliminary injunction. LEYCON, as private same, hence he has no legal personality to join the
respondent, also sought for the nullification of the RTC parties herein with respect to the issue of physical
orders. possession vis--vis the contract of lease between the
In its Decision, promulgated on 18 October 1996, the parties."[5] As aptly pointed by the MeTC, the issue in
Court of Appeals granted the petition and set aside the Civil Case No. 6202 is limited to the defendant
12 March 1996 and 24 June 1996 orders of the LEYCON's breach of the provisions of the Contract of
RTC. The appellate court also ordered the dismissal of Lease Rentals.[6]
Civil Case No. 4398-V-94. RCBCs motion for Hence, the reason for the interpleader action ceased
reconsideration was denied for lack of merit in the when the MeTC rendered judgment in Civil Case No.
resolution of 08 January 1997. 6202 whereby the court directed METROCAN to pay
Hence, the present recourse. LEYCON whatever rentals due on the subject premises
RCBC alleged, that: x x x. While RCBC, not being a party to Civil Case No.
(1) THE DECISION OF THE METROPOLITAN TRIAL 6202, could not be bound by the judgment therein,
COURT IN THE EJECTMENT CASE BETWEEN METROCAN is bound by the MeTC decision. When the
METROCAN AND LEYCON DOES NOT AND CANNOT decision in Civil Case No. 6202 became final and
RENDER THE INTERPLEADER ACTION MOOT AND executory, METROCAN has no other alternative left but
ACADEMIC. to pay the rentals to LEYCON. Precisely because there
(2) WHILE A PARTY WHO INITIATES AN was already a judicial fiat to METROCAN, there was no
INTERPLEADER ACTION MAY NOT BE COMPELLED more reason to continue with Civil Case No. 4398-V-
TO LITIGATE IF HE IS NO LONGER INTERESTED TO 94. Thus, METROCAN moved for the dismissal of the
PURSUE SUCH CAUSE OF ACTION, SAID PARTY interpleader action not because it is no longer interested
MAY NOT UNILATERALLY CAUSE THE DISMISSAL but because there is no more need for it to pursue such
OF THE CASE AFTER THE ANSWER HAVE BEEN cause of action.
FILED. FURTHER, THE DEFENDANTS IN AN It should be remembered that an action of interpleader is
INTERPLEADER SUIT SHOULD BE GIVEN FULL afforded to protect a person not against double liability
OPPORTUNITY TO LITIGATE THEIR RESPECTIVE but against double vexation in respect of one liability.[7] It
CLAIMS.[1] requires, as an indespensable requisite, that conflicting
We sustain the Court of Appeals. claims upon the same subject matter are or may be
Section 1, Rule 63 of the Revised Rules of made against the plaintiff-in-interpleader who claims no
Court[2] provides: interest whatever in the subject matter or an interest
Section 1. Interpleader when proper. - Whenever which in whole or in part is not disputed by the
conflicting claims upon the same subject matter are or claimants.[8] The decision in Civil Case No. 6202
may be made against a person, who claims no interest resolved the conflicting claims insofar as payment of
whatever in the subject matter, or an interest which in rentals was concerned.
whole or in part is not disputed by the claimants, he may Petitioner is correct in saying that it is not bound by the
bring an action against the conflicting claimants to decision in Civil Case No. 6202. It is not a party
compel them to interplead and litigate their several thereto. However, it could not compel METROCAN to
claims among themselves. pursue Civil Case No. 4398-V-94. RCBC has other
In the case before us, it is undisputed that METROCAN avenues to prove its claim. Is not bereft of other legal
filed the interpleader action (Civil Case No. 4398-V-94) remedies. In fact, he issue of ownership can very well be
because it was unsure which between LEYCON and threshed out in Civil Case No. 4037-V-93, the case for
RCBC was entitled to receive the payment of monthly Nullification of Extrajudicial Foreclosure Sale and
rentals on the subject property. LEYCON was claiming Damages filed by LEYCON against RCBC.
payment of the rentals as lessor of the property while WHEREFORE, the petition for review is DENIED and
RCBC was making a demand by virtue of the the Decision of the Court of Appeals, promulgated on 18
consolidation of the title of the property in its name. October 1996, as well as its Resolution promulgated on
It is also undisputed that LEYCON, as lessor of the 08 January 1997, are AFFIRMED.
subject property filed an action for unlawful detainer SO ORDERED
(Civil Case No. 6202) against its lessee METROCAN.
The issue in Civil Case No. 6202 is limited to the
question of physical or material possession of the
premises.[3] The issue of ownership is immaterial
therein[4] and the outcome of the case could not in any
SUPREME COURT his action in suspending the sale pending the
Manila determination of the action of interpleader seems
EN BANC justified.
G.R. No. L-22807 October 10, 1924 We may say further that in cases such as the present,
GREGORIO R. SY-QUIA, petitioner, vs. THE SHERIFF the petition for mandamus should be addressed to the
OF ILOCOS SUR and FILADELFO DE Courts of First Instance rather than to this court.
LEON, respondents. The petition is denied with the costs against the
Antonio M. Jimenez for petitioner. petitioner. So ordered.
F. Villanueva, for respondents. Johnson, Street, Malcolm, Avanceña, Villamor and
OSTRAND, J.: Romualdez, JJ., concur.
This is a petition for a writ of mandamus to compel the
Sheriff of the Province of Ilocos Sur to proceed with a FIRST DIVISION
chattel mortgage foreclosure sale. [G.R. No.147812. April 6, 2005]
It appears from the record that on February 3, 1915, LEONARDO R. OCAMPO, petitioner, vs. LEONORA
Miguel Aglipay Cheng-Laco and Feliciano Reyes Cheng- TIRONA, respondent.
Kiangco executed a chattel mortgage in favor of the DECISION
petitioner, Gregorio R. Sy-Quia on their mercantile, CARPIO, J.:
establishment, with all the merchandise therein The Case
contained, as security for a debt of P6,000. The chattel This is a petition for review[1] to annul the
mortgage was duly recorded on the date of its execution Decision[2] dated 29 November 2000 of the Court of
and fell due on February 3, 1917. From its terms it may Appeals (appellate court) in CA-G.R. SP No. 41686, and
be inferred that it was the intention of the parties that the its Resolution dated 16 April 2001 denying the motion for
mortgagors were to be permitted to sell the merchandise reconsideration. The appellate court set aside the
replenishing their stock from time to time and that the Decision[3] dated 27 June 1996 of Branch 110 of the
new stock brought in should also be subject to the Regional Trial Court of Pasay City (RTC) in Civil Case
mortgage. No. 96-0209. The RTC affirmed the Decision[4] dated 29
On May 5, 1924, Miguel Aglipay Cheng-Laco executed December 1995 of Branch 47 of the Metropolitan Trial
another chattel mortgage on the same establishment Court of Pasay City (MTC) in Civil Case No. 754-95
and all its contents in favor of the respondent Filadelfo ordering respondent Leonora Tirona (Tirona) to vacate
de Leon as security for the sum of P4,900, which and surrender possession of the property under litigation
mortgage was recorded on May 4, 1924. to petitioner Leonardo R. Ocampo (Ocampo). The MTC
On the latter date of the petitioner, in writing, requested also ordered Tirona to pay Ocampo rentals in arrears,
the sheriff to take possession of the mortgaged property attorneys fees, and costs of suit.
and to sell it at public auction under the provisions of Antecedent Facts
section 14 of the Chattel Mortgage Law (Act No. 1508). Ocampo alleged that he is the owner of a parcel of land
The sheriff seized the establishment in question as well (subject land) described in Transfer Certificate of Title
as its contents and fixed the date of the sale at June 2, (TCT) No. 134359, with an approximate area of 500
1924. In the meantime Filadelfo de Leon presented an square meters, located at Alvarez Street, Pasay City.
adverse claim to the property by virtue of his chattel Ocampo bought the subject land from Rosauro Breton,
mortgage, alleging that all the goods on which the heir of the subject lands registered owner Alipio Breton
chattel mortgage of Gregorio R. Sy-Quia was given had Cruz. Possession and administration of the subject land
been sold long before the chattel mortgage in favor of are claimed to be already in Ocampos management
De Leon was executed and that, therefore, the earlier even though the TCT is not yet in his name. Tirona, on
chattel mortgage was of no effect. the other hand, is a lessee occupying a portion of the
The sheriff being in doubt as to the priority of the subject land.[5] The MTC established the following facts:
conflicting claims, suspended the foreclosure According to [Ocampo], upon acquisition of ownership of
proceedings and brought an action under section 120 of the subject premises, a formal written notice was given
the Code of Civil Procedure requiring the two claimants to [Tirona] which was received by the latter on 9 March
to interplead. Thereupon, the present proceeding that 1995, copy of the said formal written agreement marked
the duty of the sheriff to proceed with the sale was a as Annex A and likewise copy of the registry return
ministerial one and praying that the sheriff be receipt showing that [Tirona] received Annex A was
commanded to proceed.1awph!l.net marked as Annex A-1. In recognition of [Ocampos] right
Though it, perhaps, would have been better practice for of ownership over the subject premises, [Tirona] paid
the sheriff to sell the property and hold the proceeds of some monthly rentals due, however, on July 5, 1995,
the sale subject to the outcome of the action of [Ocampo] received a letter from Callejo Law Office of
interpleader, we, nevertheless, are of the opinion that Room 513 Borja Bldg., 645 Sta. Cruz, Manila stating
the facts shown do not justify our interference by among others, that, in view of the fact that the subject
mandamus. The sheriff might lay himself open to an premises was declared under area for priority
action for damages if he sold the goods without the development, [Tirona] is invoking her right of first refusal
consent of the holder of the last mortgage, and it does and in connection thereto [Tirona] will temporarily stop
not appear that the petitioner offered to give bond to hold paying her monthly rentals until and unless the National
him harmless in such an event. In these circumstances, Housing Authority have processed the pertinent papers
as regards the amount due to [Ocampo] by reason of the (PD) Nos. 1517,[9] 1893[10] and 1968.[11] The area where
implementation of the above law, a copy of the said the subject land is located was certified as an area under
letter marked as Annex B of the Complaint. In reply to priority development.[12] Tirona asked for attorneys fees
Annex B, [Ocampo] sent a letter dated 17 July 1995 and moral and exemplary damages.
addressed to the said Callejo Law Office, copy furnished In the spirit of substantial justice, the MTC granted
[Tirona]. A copy of the said reply of [Ocampo] marked as Tironas motion to amend her answer on 20 October
Annex C of the Complaint, a copy of the Registry Return 1995. On 15 November 1995, the MTC directed Ocampo
Receipt showing that [Tirona] received said Annex C on and Tirona to submit their respective position papers and
20 July 1995 marked as Annex C-1 of the Complaint, other evidence after the termination of the pre-trial
while as the original copy which was sent to Callejo Law conference.
Office was also received by said office. On 7 August The issue considered by the MTC for resolution was
1995, [Ocampo] wrote a letter to [Tirona] demanding whether Ocampo may eject Tirona because of non-
upon [Tirona] to pay the rentals in arrears for the months payment of rent and because of the termination of
of April, May, June, July and August at the rate Tironas right to possess and occupy the subject land.
of P1,200 a month and to vacate the premises, copy of The MTCs Ruling
the said letter dated 7 August 1995 marked as Annex D The MTC ruled that Tirona does not have any reason to
of the Complaint and the signature at the bottom portion suspend payment of rents until after PD No. 1517, in
of Annex D clearly shows that the same was received by relation to PD Nos. 1893 and 1968, is implemented in
[Tirona] on 8 August 1995. Despite receipt of said letter, her favor. Tironas non-payment of rents rendered her
[Tirona] failed and refused and still fails and refuses to occupation of the subject land illegal. As owner of the
heed [Ocampos] demands.[6] subject land, Ocampo is entitled to its use and
On 11 September 1995, Ocampo filed a complaint enjoyment, as well as to recover its possession from any
docketed as Civil Case No. 754-95 for unlawful detainer person unlawfully withholding it.
and damages against Tirona before the MTC. The dispositive part of the MTCs decision reads:
Tirona filed her answer on 27 September 1995. Tirona WHEREFORE, judgment is hereby rendered in favor of
asserted that Doa Lourdes Rodriguez Yaneza actually [Ocampo] and against [Tirona]:
owns the subject land. The allegations in the answer 1. Ordering [Tirona] and all other persons claiming
state thus: possession under her to vacate and surrender
1. That the Assignor [one Edison A. Hindap, Sr.] is the possession to [Ocampo] the premises known as, parcel
General Overseer and Attorney-in-Fact of DOA of land located at 2132 Alvarez St., Pasay City, covered
LOURDES RODRIGUEZ YANEZA, Heir/Owner of by Transfer Certificate of Title No. 134359 of the
TITULO DE PROPRIEDAD DE TERENOS of 1891, Register of Deeds of Pasay City;
Royal Degree 01-4 Protocol, the real owner of a parcel 2. Ordering [Tirona] to pay the rentals in arrears covering
of land allegedly claimed by [Ocampo]. the period from April 1995 until such time [Tirona] shall
2. That the Title of [Ocampo] was overlapped [sic] the have finally vacated the subject premises at the rate
Original Land Title of the Assignor. of P1,200 a month, with interest at a legal rate;
3. That [Tirona], hereby recognized by the Assignor as 3. Ordering [Tirona] to pay the sum of P5,000 for and as
co-owner by possession and hereby cede, transfer and attorneys fees; and
assign the said parcel of land in [Tironas] favor. 4. Ordering [Tirona] to pay the cost of the suit.
4. That [Tirona] hereby denied [sic] and discontinued SO ORDERED.[13]
[sic] all the obligations imposed by [Ocampo], for the Ocampo filed a motion for execution pending appeal on
simple reason, the property in question is not owned by 24 January 1996, while Tirona filed a notice of appeal on
[Ocampo], but rather owned by the Assignor, as proof of 25 January 1996. The MTC directed its clerk of court to
evidence herein Assignor issued a Certification for transmit the records of the case, as well as the motion
Occupancy and Assignment in favor of [Tirona] herein for execution pending appeal, through an order issued
attached with [sic], and the other evidence shall be on 29 January 1996. The RTC issued an order on 26
presented upon the proper hearing on the merits of this February 1996 ordering both parties to file their
case.[7] respective memoranda.
Ocampo filed a motion to strike out the answer filed and On 4 March 1996, Maria Lourdes Breton-Mendiola, who
a motion for judgment on 10 October 1995. Ocampo claimed to be the owner of the subject land, filed a
claimed that the answer was not verified; therefore, it motion with leave to file intervention before the RTC.
was as if no answer was filed. The RTCs Ruling
On 12 October 1995, Tirona filed a motion with leave to In an order dated 11 March 1996, the RTC issued a writ
amend defendants answer.[8] She alleged that she filed of execution pending appeal for the enforcement of the
her answer without the assistance of a lawyer due to MTCs decision. The RTC stated that although Tirona
fear that she might be unable to file the required perfected her appeal on time, the record showed that
pleading on time. In her amended answer, Tirona she failed to pay the required supersedeas bond as well
maintained that Ocampo is not the owner of the subject as deposit the current rentals as mandated by Section 8,
land. She stated that the certificate of title to the subject Rule 70 of the 1964 Rules of Court. In a separate order
land is not even registered under Ocampos name. issued on the same date, the RTC denied Maria Lourdes
Tirona also alleged that she has a right of first refusal in Breton-Mendiolas motion with leave to file intervention.
case of sale of the land, pursuant to Presidential Decree
The RTC stated that granting the motion to intervene OF THE ADMINISTRATION OF ONE-HALF PORTION
would violate the 1964 Rules of Court and jurisprudence. BY EJECTING HER LESSEE, [TIRONA].[18]
Ocampo filed his memorandum on 21 March 1996.[14] He The appellate court stated that the principal issue for its
emphasized that Tironas assertion of a preferential right resolution is whether Ocampo, being the buyer of the
of first refusal is a recognition of the sale by Rosauro subject land which is not yet partitioned among the heirs,
Breton of the subject land to him. Moreover, Tirona is not can validly evict Tirona.[19]
qualified to claim this preferential right because she is no The Appellate Courts Ruling
longer a legitimate tenant. The payment of Tironas The appellate court considered partition of the estate of
monthly rent was already in arrears at the time Ocampo Alipio Breton as a prerequisite to Ocampos action. The
filed the complaint against Tirona. appellate court ruled that [u]ntil the partition of the estate
On 25 March 1996, Tirona filed a manifestation which is ordered by the Regional Trial Court of Pasay City in
stated that she paid both the supersedeas bond and rent the pending partition proceedings and the share of each
on the subject land. The RTC considered Tironas co-heir is determined by metes and bounds, [Ocampo]
manifestation as a motion for reconsideration of its cannot rightfully claim that what he bought is part of the
previous order issuing a writ of execution pending property occupied by [Tirona].[20] The dispositive part of
appeal. In its order dated 15 April 1996, the RTC the appellate courts decision reads thus:
recalled its 11 March 1996 order and cancelled the writ WHEREFORE, the decision of the respondent court is
of execution. hereby SET ASIDE and judgment is hereby rendered
Tirona filed her memorandum also on 25 March 1996. dismissing the complaint of the private respondent in the
For the first time, Tirona disclosed that Alipio Breton is court below.
the registered owner of the subject land and that he is SO ORDERED.[21]
her landlord since 1962. When Alipio Breton died in Hence, the instant petition.
1975, his children, Rosauro Breton and Maria Lourdes The Issues
Breton-Mendiola, inherited the subject land. Tirona Ocampo assigned three errors to the appellate court.
claims she has never stopped paying her rent to Maria Ocampo stated that the appellate court erred in:
Lourdes Breton-Mendiola. Tirona also stated that 1. ENTERTAINING AND NOT DISMISSING THE
Rosauro Breton could not transfer ownership to the PETITION FOR REVIEW (with prayer for its issuance of
subject land to Ocampo. On 14 July 1978, Rosauro Writ of Preliminary Injunction and immediate issuance of
Breton executed a deed of conveyance and waiver in TRO), THE SAME HAVING BEEN FILED BEYOND THE
favor of his sister, Maria Lourdes Breton-Mendiola. REGLAMENTARY PERIOD.
Rosauro Breton executed another deed of conveyance 2. CONSIDERING AND RESOLVING AN ISSUE
and waiver in favor of Maria Lourdes Breton-Mendiola on RAISED IN THE PETITION FOR REVIEW FOR THE
9 March 1995. Thus, Tirona claims, Ocampo cannot FIRST TIME ON APPEAL.
legally acquire title from Rosauro Breton in view of the 3. DECLARING THAT LEONARDO R. OCAMPO HAS
waivers. Maria Lourdes Breton-Mendiola is Tironas NO RIGHT TO EJECT LEONORA TIRONA, NOR
lessor, and is the only person who can validly file an DEMAND PAYMENT OF RENTALS FROM HER FOR
ejectment suit against Tirona.[15] THE USE AND OCCUPANCY OF THE LOT INVOLVED
After quoting the findings of the MTC, the RTC held thus: IN THE PRESENT CASE.[22]
This Court after a careful review of the complete record The Ruling of the Court
of this case particularly the evidences, applicable laws The petition has merit.
and jurisprudence relied upon by the [MTC] in finding for We agree with Ocampos observation that Tirona
[Ocampo] and declaring that [Tirona] can be lawfully changes her theory of the case each time she
ejected from the subject premises, concurs with the appeals.[23] For this reason, we shall limit our ruling to
findings thereof. There is therefore nothing in the record the propriety of Ocampos unlawful detainer case against
which would warrant the Court to disturb the findings of Tirona.
fact and law and the conclusions reached by the [MTC]. Moreover, we have assessed the evidence on record
This Court finds the decision of the lower court fully and found that the appellate court did not contradict the
justified in granting the reliefs to [Ocampo]. findings of facts of the MTC and RTC. Thus, we see no
WHEREFORE, judgment is hereby reason to deviate from their findings of facts.
rendered AFFIRMING IN TOTO the decision of the Unlawful Detainer
[MTC] with costs against [Tirona]. Elements to be Proved
SO ORDERED.[16] Unlawful detainer cases are summary in nature. The
In its petition before the appellate court, Tirona stated elements to be proved and resolved in unlawful detainer
that the RTC erred in the following grounds: cases are the fact of lease and expiration or violation of
1. ORDERING THE EJECTMENT OF [TIRONA] IN its terms.[24] To support their conclusion that there was
VIOLATION OF SECTION 2 OF PD [NO.] 2016.[17] an existing lease, the MTC and RTC found that:
2. NOT RULING THAT [TIRONA] HAS A BETTER (1) Ocampo informed Tirona through a letter dated 1
RIGHT OF POSSESSION OVER THE PROPERTY IN March 1995 that he bought the subject land, upon which
QUESTION. Tironas house stands, from the previous owner and
3. RULING THAT THE SUCCESSOR-IN-INTEREST OF lessor Rosauro Breton;[25]
AN UNDIVIDED IDEAL ONE-HALF PORTION,
[OCAMPO] MAY DEPRIVE THE OTHER CO-OWNER
(2) Tironas continued occupancy of the subject land claim of ownership or possession de jure that either
signifies Tironas acceptance of Ocampos conditions of party may set forth in his pleadings, and an appeal does
lease stated in the 1 March 1995 letter;[26] and not operate to change the nature of the original action.
(3) In asserting her right to possess the subject land, On appeal, in an ejectment case, it is within the
Tirona admitted that Ocampo is her lessor. In the 5 July discretion of the court to look into the evidence
1995 letter, Tirona was referred to as the supporting the assigned errors relating to the alleged
hereinmentioned tenant of yours.[27] ownership of appellant insofar as said evidence would
In Mirasol v. Magsuci, et al.,[28] we ruled that the sale of indicate or determine the nature of appellants
a leased property places the vendee into the shoes of possession of the controverted premises. Said court
the original lessor to whom the lessee bound himself to should not however resolve the issue raised by such
pay. The vendee acquires the right to evict the lessee assigned errors. The resolution of said issues would
from the premises and to recover the unpaid rentals after effect an adjudication on ownership which is not
the vendee had notified the lessee that he had bought sanctioned in the summary action for unlawful
the leased property and that the rentals on it should be detainer.[35]
paid to him, and the lessee refused to comply with the Unlawful detainer being a summary proceeding, it was
demand. error for the appellate court to include the issue of
The following facts support the conclusion that there was ownership. Had the appellate court limited its ruling to
a violation of the lease agreement: the elements to be proved in a case of unlawful detainer,
(1) Tirona, through Callejo Law Office, sent a letter dated Ocampo need not even prove his ownership. When the
5 July 1995 which stated that Tirona will temporarily stop appellate court ruled that the case of unlawful detainer
paying her monthly obligation until the National Housing had to wait for the results of the partition proceedings, it
Authority has processed the pertinent papers regarding effectively put ownership as the main issue in the case.
the amount due to Ocampo in view of PD 1517;[29] The issue of ownership opens a virtual Pandoras Box for
(2) As of August 1995, Tirona has not paid her rent to Tirona and her supposed intervenor, Maria Lourdes
Ocampo corresponding to April to August 1995;[30] and Breton-Mendiola.[36]
(3) In a letter dated 7 August 1995, Ocampo demanded Interpleader
from Tirona unpaid rent payments.[31] The good faith of Tirona is put in question in her
In view of these facts, we hold that Tirona is estopped preference for Maria Lourdes Breton-Mendiola. As a
from denying her possession under a lease[32] and that stakeholder, Tirona should have used reasonable
there was a violation of the lease agreement. Thus, the diligence in hailing the contending claimants to court.
MTC and RTC correctly ruled against Tirona. Tirona need not have awaited actual institution of a suit
Ownership as an Issue by Ocampo against her before filing a bill of
When Tirona filed her answer before the MTC, she interpleader.[37] An action for interpleader is proper when
raised the issue of ownership and ascribed ownership of the lessee does not know the person to whom to pay
the subject lot to one Doa Lourdes Rodriguez Yaneza. rentals due to conflicting claims on the property.[38]
Tirona later changed her strategy and filed an amended The action of interpleader is a remedy whereby a person
answer that ascribed ownership of the subject lot to who has property whether personal or real, in his
Maria Lourdes Breton-Mendiola. Tirona justified the possession, or an obligation to render wholly or partially,
amendment by stating that she did not ask for the without claiming any right in both, or claims an interest
assistance of a lawyer for fear of not being able to file which in whole or in part is not disputed by the conflicting
her answer on time. This excuse is flimsy considering claimants, comes to court and asks that the persons who
that Tirona first communicated to Ocampo through claim the said property or who consider themselves
Callejo Law Office. However, the MTC still allowed entitled to demand compliance with the obligation, be
Tirona to amend her answer. Tirona stated that there required to litigate among themselves, in order to
was no violation of the lease agreement because she determine finally who is entitled to one or the other thing.
paid her rent to the real owner, Maria Lourdes Breton- The remedy is afforded not to protect a person against a
Mendiola. double liability but to protect him against a double
Contrary to Tironas position, the issue of ownership is vexation in respect of one liability. When the court orders
not essential to an action for unlawful detainer. The fact that the claimants litigate among themselves, there
of the lease and the expiration of its term are the only arises in reality a new action and the former are styled
elements of the action. The defense of ownership does interpleaders, and in such a case the pleading which
not change the summary nature of the action. The initiates the action is called a complaint of interpleader
affected party should raise the issue of ownership in an and not a cross-complaint.[39]
appropriate action, because a certificate of title cannot Ocampo has the right to eject Tirona from the subject
be the subject of a collateral attack.[33] Although a land. All the elements required for an unlawful detainer
wrongful possessor may at times be upheld by the case to prosper are present. Ocampo notified Tirona that
courts, this is merely temporary and solely for the he purchased the subject land from Tironas lessor.
maintenance of public order. The question of ownership Tironas continued occupation of the subject land
is to be settled in the proper court and in a proper amounted to acquiescence to Ocampos terms. However,
action.[34] Tirona eventually refused to pay rent to Ocampo, thus
In actions for forcible entry and [unlawful] detainer, the violating the lease.
main issue is possession de facto, independently of any
Finally, legal interest at the annual rate of 6% is due on The records of the police show that Associated Bank
the unpaid monthly rentals starting from 7 August 1995 received the lost check for clearing on December 31,
when Ocampo made an extrajudicial demand on Tirona 1983, coming from Prudential Bank, Escolta Branch. The
for payment of the monthly rental.[40] On finality of our check was immediately dishonored by Associated Bank
decision, annual interest at 12%, in lieu of 6% annual by sending it back to Prudential Bank, with the words
interest, is due on the amounts the MTC awarded until "Payment Stopped" stamped on it. However, the same
full payment.[41] was again returned to Associated Bank on January 4,
WHEREFORE, we GRANT the instant petition for 1984 and for the second time it was dishonored. Several
review. The Decision dated 27 June 1996 of Branch 110 days later, respondent Associated Bank received a
of the RTC in Civil Case No. 96-0209, which affirmed the letter, dated January 9, 1984, from a certain Atty.
Decision dated 29 December 1995 of Branch 47 of the Lorenzo Navarro demanding payment on the cashier's
MTC in Civil Case No. 754-95, is REINSTATED. The check in question, which was being held by his client. He
Decision dated 29 November 2000 of the appellate court however refused to reveal the name of his client and
in CA-G.R. SP No. 41686, and its Resolution dated 16 threatened to sue, if payment is not made. Respondent
April 2001 denying the motion for reconsideration, are bank, in its letter, dated January 20, 1984, replied saying
SET ASIDE. the check belonged to Jose Go who lost it in the bank
SO ORDERED. and is laying claim to it.
Davide, Jr., C.J., (Chairman), Quisumbing, Ynares- On February 1, 1984, police sent a letter to the Manager
Santiago, and Azcuna, JJ., concur. of the Prudential Bank, Escolta Branch, requesting
assistance in Identifying the person who tried to encash
Republic of the Philippines the check but said bank refused saying that it had to
SUPREME COURT protect its client's interest and the Identity could only be
Manila revealed with the client's conformity. Unsure of what to
SECOND DIVISION do on the matter, respondent Associated Bank on
G.R. No. 70145 November 13, 1986 February 2, 1984 filed an action for Interpleader naming
MARCELO A. MESINA, petitioner, vs. as respondent, Jose Go and one John Doe, Atty.
THE HONORABLE INTERMEDIATE APPELLATE Navarro's then unnamed client. On even date,
COURT, HON. ARSENIO M. GONONG, in his capacity respondent bank received summons and copy of the
as Judge of Regional Trial Court — Manila (Branch complaint for damages of a certain Marcelo A. Mesina
VIII), JOSE GO, and ALBERT UY, respondents. from the Regional Trial Court (RTC) of Caloocan City
filed on January 23, 1984 bearing the number C-11139.
PARAS, J.: Respondent bank moved to amend its complaint, having
This is an appeal by certiorari from the decision of the been notified for the first time of the name of Atty.
then Intermediate Appellate Court (IAC for short), now Navarro's client and substituted Marcelo A. Mesina for
the Court of Appeals (CA) in AC-G.R. S.P. 04710, dated John Doe. Simultaneously, respondent bank, thru
Jan. 22, 1985, which dismissed the petition for certiorari representative Albert Uy, informed Cpl. Gimao of the
and prohibition filed by Marcelo A. Mesina against the Western Police District that the lost check of Jose Go is
trial court in Civil Case No. 84-22515. Said case (an in the possession of Marcelo Mesina, herein petitioner.
Interpleader) was filed by Associated Bank against Jose When Cpl. Gimao went to Marcelo Mesina to ask how he
Go and Marcelo A. Mesina regarding their conflicting came to possess the check, he said it was paid to him by
claims over Associated Bank Cashier's Check No. Alexander Lim in a "certain transaction" but refused to
011302 for P800,000.00, dated December 29, 1983. elucidate further. An information for theft (Annex J) was
Briefly, the facts and statement of the case are as instituted against Alexander Lim and the corresponding
follows: warrant for his arrest was issued (Annex 6-A) which up
Respondent Jose Go, on December 29, 1983, to the date of the filing of this instant petition remains
purchased from Associated Bank Cashier's Check No. unserved because of Alexander Lim's successful evation
011302 for P800,000.00. Unfortunately, Jose Go left thereof.
said check on the top of the desk of the bank manager Meanwhile, Jose Go filed his answer on February 24,
when he left the bank. The bank manager entrusted the 1984 in the Interpleader Case and moved to participate
check for safekeeping to a bank official, a certain Albert as intervenor in the complain for damages. Albert Uy
Uy, who had then a visitor in the person of Alexander filed a motion of intervention and answer in the
Lim. Uy had to answer a phone call on a nearby complaint for Interpleader. On the Scheduled date of
telephone after which he proceeded to the men's room. pretrial conference inthe interpleader case, it was
When he returned to his desk, his visitor Lim was disclosed that the "John Doe" impleaded as one of the
already gone. When Jose Go inquired for his cashier's defendants is actually petitioner Marcelo A. Mesina.
check from Albert Uy, the check was not in his folder and Petitioner instead of filing his answer to the complaint in
nowhere to be found. The latter advised Jose Go to go the interpleader filed on May 17, 1984 an Omnibus
to the bank to accomplish a "STOP PAYMENT" order, Motion to Dismiss Ex Abudante Cautela alleging lack of
which suggestion Jose Go immediately followed. He also jurisdiction in view of the absence of an order to litigate,
executed an affidavit of loss. Albert Uy went to the police failure to state a cause of action and lack of personality
to report the loss of the check, pointing to the person of to sue. Respondent bank in the other civil case (CC-
Alexander Lim as the one who could shed light on it.
11139) for damages moved to dismiss suit in view of the 3. IAC erred in upholding the trial court's order declaring
existence already of the Interpleader case. petitioner as in default when there was no proper order
The trial court in the interpleader case issued an order for him to plead in the interpleader complaint.
dated July 13, 1984, denying the motion to dismiss of 4. IAC went beyond the scope of its certiorari jurisdiction
petitioner Mesina and ruling that respondent bank's by making findings of facts in advance of trial.
complaint sufficiently pleaded a cause of action for Petitioner now interposes the following prayer:
itnerpleader. Petitioner filed his motion for 1. Reverse the decision of the IAC, dated January 22,
reconsideration which was denied by the trial court on 1985 and set aside the February 18, 1985 resolution
September 26, 1984. Upon motion for respondent Jose denying the Motion for Reconsideration.
Go dated October 31, 1984, respondent judge issued an 2. Annul the orders of respondent Judge of RTC Manila
order on November 6, 1984, declaring petitioner in giving due course to the interpleader suit and declaring
default since his period to answer has already expirecd petitioner in default.
and set the ex-parte presentation of respondent bank's Petitioner's allegations hold no water. Theories and
evidence on November 7, 1984. examples advanced by petitioner on causes and effects
Petitioner Mesina filed a petition for certioari with of a cashier's check such as 1) it cannot be
preliminary injunction with IAC to set aside 1) order of countermanded in the hands of a holder in due course
respondent court denying his omnibus Motion to Dismiss and 2) a cashier's check is a bill of exchange drawn by
2) order of 3) the order of default against him. the bank against itself-are general principles which
On January 22, 1985, IAC rendered its decision cannot be aptly applied to the case at bar, without
dimissing the petition for certiorari. Petitioner Mesina considering other things. Petitioner failed to substantiate
filed his Motion for Reconsideration which was also his claim that he is a holder in due course and for
denied by the same court in its resolution dated consideration or value as shown by the established facts
February 18, 1985. of the case. Admittedly, petitioner became the holder of
Meanwhile, on same date (February 18, 1985), the trial the cashier's check as endorsed by Alexander Lim who
court in Civil Case #84-22515 (Interpleader) rendered a stole the check. He refused to say how and why it was
decisio, the dispositive portion reading as follows: passed to him. He had therefore notice of the defect of
WHEREFORE, in view of the foregoing, judgment is his title over the check from the start. The holder of a
hereby rendered ordering plaintiff Associate Bank to cashier's check who is not a holder in due course cannot
replace Cashier's Check No. 011302 in favor of Jose Go enforce such check against the issuing bank which
or its cas equivalent with legal rate of itnerest from date dishonors the same. If a payee of a cashier's check
of complaint, and with costs of suit against the latter. obtained it from the issuing bank by fraud, or if there is
SO ORDERED. some other reason why the payee is not entitled to
On March 29, 1985, the trial court in Civil Case No. C- collect the check, the respondent bank would, of course,
11139, for damages, issued an order, the pertinent have the right to refuse payment of the check when
portion of which states: presented by the payee, since respondent bank was
The records of this case show that on August 20, 1984 aware of the facts surrounding the loss of the check in
proceedings in this case was (were) ordered suspended question. Moreover, there is no similarity in the cases
because the main issue in Civil Case No. 84-22515 and cited by petitioner since respondent bank did not issue
in this instant case are the same which is: who between the cashier's check in payment of its obligation. Jose Go
Marcelo Mesina and Jose Go is entitled to payment of bought it from respondent bank for purposes of
Associated Bank's Cashier's Check No. CC-011302? transferring his funds from respondent bank to another
Said issue having been resolved already in Civil casde bank near his establishment realizing that carrying
No. 84-22515, really this instant case has become moot money in this form is safer than if it were in cash. The
and academic. check was Jose Go's property when it was misplaced or
WHEREFORE, in view of the foregoing, the motion stolen, hence he stopped its payment. At the outset,
sholud be as it is hereby granted and this case is respondent bank knew it was Jose Go's check and no
ordered dismissed. one else since Go had not paid or indorsed it to anyone.
In view of the foregoing ruling no more action should be The bank was therefore liable to nobody on the check
taken on the "Motion For Reconsideration (of the order but Jose Go. The bank had no intention to issue it to
admitting the Intervention)" dated June 21, 1984 as well petitioner but only to buyer Jose Go. When payment on
as the Motion For Reconsideration dated September 10, it was therefore stopped, respondent bank was not the
1984. one who did it but Jose Go, the owner of the check.
SO ORDERED. Respondent bank could not be drawer and drawee for
Petitioner now comes to Us, alleging that: clearly, Jose Go owns the money it represents and he is
1. IAC erred in ruling that a cashier's check can be therefore the drawer and the drawee in the same
countermanded even in the hands of a holder in due manner as if he has a current account and he issued a
course. check against it; and from the moment said cashier's
2. IAC erred in countenancing the filing and maintenance check was lost and/or stolen no one outside of Jose Go
of an interpleader suit by a party who had earlier been can be termed a holder in due course because Jose Go
sued on the same claim. had not indorsed it in due course. The check in question
suffers from the infirmity of not having been properly
negotiated and for value by respondent Jose Go who as petitioner concealed the circumstances known to him
already been said is the real owner of said instrument. and now that private respondent bank brought these
In his second assignment of error, petitioner stubbornly circumstances out in court (which eventually rendered its
insists that there is no showing of conflicting claims and decision in the light of these facts), petitioner charges it
interpleader is out of the question. There is enough with "gratuitous excursions into these non-issues."
evidence to establish the contrary. Considering the Respondent IAC cannot rule on whether respondent
aforementioned facts and circumstances, respondent RTC committed an abuse of discretion or not, without
bank merely took the necessary precaution not to make being apprised of the facts and reasons why respondent
a mistake as to whom to pay and therefore interpleader Associated Bank instituted the Interpleader case. Both
was its proper remedy. It has been shown that the parties were given an opportunity to present their sides.
interpleader suit was filed by respondent bank because Petitioner chose to withhold substantial facts.
petitioner and Jose Go were both laying their claims on Respondents were not forbidden to present their side-
the check, petitioner asking payment thereon and Jose this is the purpose of the Comment of respondent to the
Go as the purchaser or owner. The allegation of petition. IAC decided the question by considering both
petitioner that respondent bank had effectively relieved the facts submitted by petitioner and those given by
itself of its primary liability under the check by simply respondents. IAC did not act therefore beyond the scope
filing a complaint for interpleader is belied by the of the remedy sought in the petition.
willingness of respondent bank to issue a certificate of WHEREFORE, finding that the instant petition is merely
time deposit in the amount of P800,000 representing the dilatory, the same is hereby denied and the assailed
cashier's check in question in the name of the Clerk of orders of the respondent court are hereby AFFIRMED in
Court of Manila to be awarded to whoever wig be found toto.
by the court as validly entitled to it. Said validity will SO ORDERED.
depend on the strength of the parties' respective rights
and titles thereto. Bank filed the interpleader suit not Republic of the Philippines
because petitioner sued it but because petitioner is SUPREME COURT
laying claim to the same check that Go is claiming. On Manila
the very day that the bank instituted the case in EN BANC
interpleader, it was not aware of any suit for damages G.R. No. L-15653 September 29, 1961
filed by petitioner against it as supported by the fact that PETRA CARPIO VDA. DE CAMILO, ET
the interpleader case was first entitled Associated Bank AL., petitioners-appellees,
vs. Jose Go and John Doe, but later on changed to vs.
Marcelo A. Mesina for John Doe when his name became THE HON. JUSTICE OF THE PEACE SAMUEL A.
known to respondent bank. ARCAMO, ONG PENG KEE and ADELIA
In his third assignment of error, petitioner assails the ONG, respondents-appellants.
then respondent IAC in upholding the trial court's order Flavio Macaso for petitioners-appellees.
declaring petitioner in default when there was no proper Dionisio M. Labuga for respondents-appellants.
order for him to plead in the interpleader case. Again,
such contention is untenable. The trial court issued an
order, compelling petitioner and respondent Jose Go to PAREDES, J.:
file their Answers setting forth their respective claims. This appeal stemmed from a petition
Subsequently, a Pre-Trial Conference was set with for Certiorari and Mandamus filed by Petra Carpio Vda.
notice to parties to submit position papers. Petitioner de Camilo and others, against Samuel A. Arcamo,
argues in his memorandum that this order requiring Justice of the Peace of Malangas, Zamboanga del Sur,
petitioner to file his answer was issued without Ong Peng Kee and Adelia Ong.
jurisdiction alleging that since he is presumably a holder Petitioner Petra Carpio Vda. de Camilo, had been by
in due course and for value, how can he be compelled to herself and predecessor in interest in peaceful, open and
litigate against Jose Go who is not even a party to the adverse possession of a parcel of public foreshore land,
check? Such argument is trite and ridiculous if we have situated in Malangas, Zamboanga del Sur, containing an
to consider that neither his name or Jose Go's name area of about 400 square meters. A commercial building
appears on the check. Following such line of argument, was erected on the property which was declared under
petitioner is not a party to the check either and therefore Tax Dec. No. 5286 and assessed at P7,400.00.
has no valid claim to the Check. Furthermore, the Order Respondent Ong Peng Kee was a lessee of one of the
of the trial court requiring the parties to file their answers apartments of said commercial building since June 1,
is to all intents and purposes an order to interplead, 1957.
substantially and essentially and therefore in compliance On August 1, 1957, Arthur Evert Bannister filed an
with the provisions of Rule 63 of the Rules of Court. unlawful detainer case against both De Camilo and Ong
What else is the purpose of a law suit but to litigate? Peng Kee (Civ. Case No. 64) with the JP of Malangas.
The records of the case show that respondent bank had For failure of Bannister and/or counsel to appear at the
to resort to details in support of its action for trial, they were declared in default and P100.00 was
Interpleader. Before it resorted to Interpleader, awarded to De Camilo on her counterclaim. The motion
respondent bank took an precautionary and necessary for reconsideration presented by Bannister was denied.
measures to bring out the truth. On the other hand,
The other petitioners, Severino Estrada, Felisa, Susana, Answer of respondents which contained the usual
Antonio and the minors Isabelo, Rene and Ruben, all admissions and denials, sustained the contrary view.
surnamed Francisco, the said minors represented by The CFI rendered judgment, the dispositive portion of
their mother Susana, had also been in possession (in which reads: —
common), peaceful, open and adverse, since 1937, of a IN VIEW OF THE FOREGOING, the Court hereby
parcel of public foreshore land, about 185 square meters declares the Justice of the Peace Court of Malangas to
which is adjoining that land occupied by De Camilo. On be without jurisdiction to try the case for interpleader and
this parcel, a commercial building assessed at hereby sets aside its Order dated September 30, 1958,
P1,000.00 was erected by the Franciscos, and had the denying the motion to dismiss the interpleader case; and
same declared under Tax Dec. No. 4911. considering that Civil Cases 78 and 105 have long been
On September 1, 1957, the two commercial buildings pending, the respondent Justice of the Peace of
were burned down. Two weeks thereafter, respondents Malangas is hereby ordered to proceed to try the same,
Ong Peng Kee and Adelia Ong, constructed a building of without pronouncement as to costs.
their own, occupying about 120 square meters. The The only issue raised in the present appeal is whether or
building, however, was so built that portions of the lands not the Justice of the Peace Court has jurisdiction to
previously occupied by petitioner (De Camilo and the take cognizance of the Interpleader case.
Franciscos) were encroached upon. The petitioners claimed the possession of the respective
Under date of December 3, 1957, De Camilo filed Civil portion of the lands belonging to them on which the
Case No. 78 for Forcible Entry against Ong Peng Kee respondents had erected their house after the fire which
and Adelia Ong with the JP of Malangas, with respect to destroyed petitioners' buildings. This being the case, the
portion belonging to her wherein the building of Ong contention of petitioners-appellants that the complaint to
Peng Kee was erected. On August 8, 1958, Severino interplead lacked cause of action, is correct.
Estrada and the Franciscos filed a similar case (No. Section 1, Rule 14 of the Rules of Court provides —
105). In answer to the complaints, the defendants (Ong Interpleader when proper. — Whenever conflicting
Peng Kee and Adelia Ong), claimed that the land where claims upon the same subject matter are or may be
they constructed their building was leased to them by the made against a person, who claims no interest whatever
Municipality of Malangas. in the subject-matter, or an interest which in whole or in
Pending trial of the two cases, the respondents Ong part is not disputed by the claimants, he may bring an
Peng Kee and Adelia Ong filed a complaint for action against the conflicting claimants to compel them
Interpleader against De Camilo, Severino Estrada, the to interplead and litigate their several claims among
Franciscos, Arthur Evert Bannister, the Mayor and themselves.
Treasurer of Malangas (Civ. Case No. 108), alleging that The petitioners did not have conflicting claims against
the filing of the three cases of forcible entry (Civ. Cases the respondents. Their respective claim was separate
Nos. 64, 78 an 105), indicated that the defendants (in and distinct from the other. De Camilo only wanted the
the Interpleader) had conflicting interests, since they all respondents to vacate that portion of her property which
claimed to be entitled to the possession of the lot in was encroached upon by them when they erected their
question and they (Peng Kee and Adelia) could not building. The same is true with Estrada and the
determine without hazard to themselves who of Franciscos. They claimed possession of two different
defendants was entitled to the possession. Interpleader parcels of land of different areas, adjoining each other.
plaintiffs further alleged that they had no interest in the Furthermore, it is not true that respondents Ong Peng
property other than as mere lessees. Kee and Adelia Ong did not have any interest in the
A motion to dismiss the complaint for Interpleader was subject matter. Their interest was the prolongation of
presented by the defendants therein (now petitioners), their occupancy or possession of the portions
contending that (1) the JP had no jurisdiction to try and encroached upon by them. It is, therefore, evident that
to hear the case; (2) There were pending other actions the requirements for a complaint of Interpleader do not
between the parties for the same cause; and (3) The exist.
complaint for Interpleader did not state a cause of action. Even in the supposition that the complaint presented a
Peng Kee and Adelia registered their opposition to the cause of action for Interpleader, still We hold that the JP
motion and on September 30, 1957, respondent Justice had no jurisdiction to take cognizance thereof. The
of the Peace denied the motion to dismiss and ordered complaint asking the petitioners to interplead, practically
the defendants therein to interplead (Annex D). The two took the case out of the jurisdiction of the JP court,
forcible entry cases were dismissed. because the action would then necessarily "involve the
The defendants (now petitioners) instituted the present title to or possession of real property or any interest
proceedings, for certiorari and mandamus before the therein" over which the CFI has original jurisdiction (par.
Court of First Instance of Zamboanga, claiming that [b], sec. 44, Judiciary Act, as amended). Then also, the
respondent JP in denying the motion to dismiss acted subject matter of the complaint (interpleader) would
without jurisdiction, and for having given due course to come under the original jurisdiction of the CFI, because
the complaint for Interpleader, the respondent JP gravely it would not be capable of pecuniary estimation (Sec. 44,
abused his discretion, and unlawfully neglected the par. [a], Judiciary Act), there having been no showing
performance of an act which was specifically enjoined by that rentals were asked by the petitioners from
law, and for which there was no plain, speedy and respondents.
adequate remedy in the ordinary course of law. The
IN VIEW OF ALL THE FOREGOING, We find that the 16, 1961 to accept as installments on the selling price
decision appealed from is in conformity with the law, and the payments made after March 31, 1961 by tenants
the same should be, as it is hereby affirmed, with costs who were up-to-date in their accounts as of said date. In
against respondents-appellants Ong Peng Kee and September, 1961, pursuant to the PHHC-GSIS
Adelia Ong. arrangement, collections from tenants on rentals and/or
Bengzon, C.J., Padilla, Labrador, Concepcion, Reyes, installment payments were delivered by the PHHC to the
J.B.L., and De Leon, JJ., concur. GSIS. On December 27, 1961, the agreement of
Bautista Angelo, Barrera and Dizon, JJ., took no part. turnover of administration and ownership of PHHC
properties, including Project 4 was executed by PHHC in
Republic of the Philippines favor of GSIS, pursuant to the release of mortgage and
SUPREME COURT amicable settlement of the extrajudicial foreclosure
Manila proceedings instituted in May, 1960 by GSIS against
EN BANC PHHC. Subsequently, however, PHHC through its new
G.R. No. L-25138 August 28, 1969 Chairman-General Manager, Esmeraldo Eco, refused to
JOSE A. BELTRAN, ET AL., plaintiffs-appellants, vs. recognize all agreements and undertakings previously
PEOPLE'S HOMESITE & HOUSING entered into with GSIS, while GSIS insisted on its legal
CORPORATION, defendants-appellees. rights to enforce the said agreements and was upheld in
Beltran, Cendaña, Camu, Pelias and Manuel for its contention by both the Government Corporate
plaintiffs-appellants. Counsel and the Secretary of Justice. Plaintiffs thus
Government Corporate Counsel Tomas P. Matic Jr. and claimed that these conflicting claims between the
Assistant Government Corporate Counsel Romualdo defendants-corporations caused them great
Valera for defendants-appellees. inconvenience and incalculable moral and material
damage, as they did not know to whom they should pay
the monthly amortizations or payments. They further
TEEHANKEE, J.: alleged that as the majority of them were GSIS policy
Appeal on purely questions of law from an order of holders, they preferred to have the implementation of the
dismissal of the complaint for interpleader, on the ground outright sale in their favor effected by the GSIS, since
that it does not state a cause of action, as certified to this the GSIS was "legally entitled to the management,
Court by the Court of Appeals. We affirm the dismissal administration and ownership of the PHHC properties in
on the ground that where the defendants sought to be question." 1
interpleaded as conflicting claimants have no conflicting Upon urgent ex parte motion of plaintiffs, the trial Court
claims against plaintiff, as correctly found by the trial issued on August 23, 1962 its Order designating the
court, the special civil action of interpleader will not lie. People's First Savings Bank at Quezon City "to receive
This interpleader suit was filed on August 21, 1962, by in trust the payments from the plaintiffs on their monthly
plaintiffs in their own behalf and in behalf of all residents amortizations on PHHC lots and to be released only
of Project 4 in Quezon City, praying that the two upon proper authority of the Court." 2
defendant-government corporations be compelled to On August 29, 1962, the two defendant corporations
litigate and interplead between themselves their alleged represented by the Government Corporate Counsel filed
conflicting claims involving said Project 4. a Motion to Dismiss the complaint for failure to state a
Plaintiffs' principal allegations in their complaint were as cause of action as well as to lift the Court's order
follows: Since they first occupied in 1953 their respective designating the People's First Savings Bank as trustee
housing units at Project 4, under lease from the People's to receive the tenants' payments on the PHHC lots.
Homesite & Housing Corporation (PHHC) and paying The trial Court heard the motion on September 1, 1962
monthly rentals therefor, they were assured by in the presence of all the parties, and thereafter issued
competent authority that after five years of continuous its Order of September 6, 1962, dismissing the
occupancy, they would be entitled to purchase said Complaint, ruling that: "During the hearing of the said
units. On February 21, 1961, the PHHC announced to motion and opposition thereto, the counsel for the
the tenants that the management, administration and defendants ratified the allegations in his motion and
ownership of Project 4 would be transferred by the made of record that the defendant Government Service
PHHC to the Government Service Insurance System Insurance System has no objection that payments on the
(GSIS) in payment of PHHC debts to the GSIS. In the monthly amortizations from the residents of Project 4 be
same announcement, the PHHC also asked the tenants made directly to the defendant People's Homesite and
to signify their conformity to buy the housing units at the Housing Corporation. From what appears in said motion
selling price indicated on the back thereof, agreeing to and the statement made in open court by the counsel for
credit the tenants, as down payment on the selling price, defendants that there is no dispute as to whom the
thirty (30%) percent of what had been paid by them as residents of Project 4 should make their monthly
rentals. The tenants accepted the PHHC offer, and on amortizations payments, there is, therefore, no cause of
March 27, 1961, the PHHC announced in another action for interpleading and that the order of August 23,
circular that all payments made by the tenants after 1962 is not warranted by the circumstances surrounding
March 31, 1961 would be considered as amortizations or the case. In so far as payments are concerned,
installment payments. The PHHC furthermore instructed defendant GSIS has expressed its conformity that they
the Project Housing Manager in a memorandum of May be made directly to defendant PHHC. Counsel for
defendants went further to say that whatever dispute, if called, are between the two corporations and not against
any, may exist between the two corporations over the plaintiffs. Both defendant corporations were in
lots and buildings in Project 4, payments made to the conformity and had no dispute, as pointed out by the trial
PHHC will not and cannot in any way affect or prejudice court that the monthly payments and amortizations
the rights of the residents thereof as they will be credited should be made directly to the PHHC alone.
by either of the two defendants." 3 The record rejects plaintiffs' claim that the trial courts
Plaintiffs subsequently filed their motion for order was based on "mere oral manifestations in court."
reconsideration and the trial court, "with a view to thresh The Reply to Opposition of September 11, 1962 filed by
out the matter once and for all," called the Managers of the Government Corporate Counsel expressly "reiterates
the two defendants-corporations and the counsels for his manifestation in open court that no possible injustice
the parties to appear before it for a conference on or prejudice would result in plaintiffs by continuing to
October 24, 1962. "During the conference," the trial court make payments of such rentals or amortizations to
related in its Order of November 20, 1962, denying defendant PHHC because any such payments will be
plaintiffs' Motion for Reconsideration, "Manager Diaz of recognized as long as they are proper, legal and in due
the GSIS made of record that he has no objection that course by anybody who might take over the property.
payments be made to the PHHC. On the other hand, Specifically, any such payments will be recognized by
Manager Eco of the PHHC made of record that at the GSIS in the event that whatever conflict there might
present there is a standing arrangement between the be (and this is only on the hypothetical assumption that
GSIS and the PHHC that as long as there is showing such conflict exists) between the PHHC and the GSIS
that the PHHC has remitted 100% of the total purchase should finally be resolved in favor of the GSIS". 6 The
price of a given lot to the GSIS, the latter corporation assurances and undertakings to the same affect given
shall authorize the issuance of title to the corresponding by the Managers of the defendants-corporations at the
lot. It was also brought out in said conference that there conference held by the trial Court are expressly
is a new arrangement being negotiated between the two embodied in the Court's Order of November 20, 1962
corporations that only 50% of the purchase price be quoted above. The GSIS' undertaking to recognize and
remitted to the GSIS by the PHHC, instead of the respect the previous commitments of PHHC towards its
100%. At any rate the two Managers have assured tenants is expressly set forth in Par. III, section M of the
counsel for the plaintiffs that upon payment of the whole turnover agreement, Annex "F" of plaintiffs' complaint,
purchase price of a given lot, the title corresponding to wherein it is provided that "GSIS shall recognize and
said lot will be issued." 4 respect all awards, contracts of sale, lease agreements
On appeal, plaintiffs claim that the trial Court erred in and transfer of rights to lots and housing units made and
dismissing their suit, contending the allegations in their approved by PHHC, subsisting as of the signing of this
complaint "raise questions of fact that can be established agreement, and PHHC commitment to sell its housing
only by answer and trial on the merits and not by a projects 4, 6 and 8-A at the selling prices less rental
motion to dismiss heard by mere oral manifestations in credits fixed by PHHC and as finally approved by the
open court," and that they "do not know who, as between OEC. PHHC, however, shall be liable and answerable
the GSIS and the PHHC, is the right and lawful party to for any and all claims and consequences arising from
receive their monthly amortizations as would eventually double or multiple awards or in the case of awards of
entitle them to a clear title to their dwelling units." 5 non-existing houses and/or lots." 7
Plaintiffs entirely miss the vital element of an action of In fine, the record shows clearly that there were no
interpleader. Rule 63, section 1 of the Revised Rules of conflicting claims by defendant corporations as against
Court (formerly Rule 14) requires as an indispensable plaintiff-tenants, which they may properly be compelled
element that "conflicting claims upon the same subject in an interpleader suit to interplead and litigate among
matter are or may be made" against the plaintiff-in- themselves. Both defendant corporations were agreed
interpleader "who claims no interest whatever in the that PHHC should continue receiving the tenants'
subject matter or an interest which in whole or in part is payments, and that such payments would be duly
not disputed by the claimants." While the two defendant recognized even if the GSIS should eventually take over
corporations may have conflicting claims between Project 4 by virtue of their turnover agreement of
themselves with regard to the management, December 27, 1961. As held by this Court in an early
administration and ownership of Project 4, such case, the action of interpleader is a remedy whereby a
conflicting claims are not against the plaintiffs nor do person who has property in his possession or has an
they involve or affect the plaintiffs. No allegation is made obligation to render wholly or partially, without claiming
in their complaint that any corporation other than the any right in both, comes to court and asks that the
PHHC which was the only entity privy to their lease- defendants who have made upon him conflicting claims
purchase agreement, ever made on them any claim or upon the same property or who consider themselves
demand for payment of the rentals or amortization entitled to demand compliance with the obligation be
payments. The questions of fact raised in their complaint required to litigate among themselves in order to
concerning the enforceability, and recognition or non- determine who is entitled to the property or payment of
enforceability and non-recognition of the turnover the obligation. "The remedy is afforded not to protect a
agreement of December 27, 1961 between the two person against a double liability but to protect him
defendant corporations are irrelevant to their action of against a double vexation in respect of one
interpleader, for these conflicting claims, loosely so- liability." 8 Thus, in another case, where the occupants of
two different parcels of land adjoining each other
belonging to two separate plaintiffs, but on which the
occupants had constructed a building encroaching upon
both parcels of land, faced two ejectment suits from the
plaintiffs, each plaintiff claiming the right of possession
and recovery over his respective portion of the lands
encroached upon, this Court held that the occupants
could not properly file an interpleader suit, against the
plaintiffs, to litigate their alleged conflicting claims; for
evidently, the two plaintiff did not have any conflicting
claims upon the same subject matter against the
occupants, but were enforcing separate and distinct
claims on their respective properties. 9
Plaintiffs' other contention in their appeal is that
notwithstanding that the issue as to which of the
defendants is authorized to receive the tenants'
payments was resolved in favor of the PHHC, they had
raised other issues that were not resolved and would
require rendition of judgment after trial on the merits,
such as "the issue of the right of ownership over the
houses and lots in Project 4 (and) the issue of the status
of the commitment agreements and undertakings made
by the previous PHHC Administration, particularly those
of the then PHHC General Manager Bernardo
Torres." 10 This contention is without merit, for no
conflicting claims have been made with regard to such
issues upon plaintiffs by defendant corporations, who
both bound themselves to recognize and respect the
rights of plaintiffs-tenants. The resolution of such issues
affecting the defendant corporations exclusively may not
properly be sought through the special civil action of
interpleader. Should there be a breach of the PHHC
undertakings towards plaintiffs, plaintiffs' recourse would
be an ordinary action of specific performance or other
appropriate suit against either the PHHC or GSIS or
both, as the circumstances warrant.
We find no error, therefore, in the trial court's order of
dismissal of the complaint for interpleader and the lifting,
as a consequence, of its other order designating the
People's First Savings Bank as trustee to receive the
tenants' payments on the PHHC lots.
ACCORDINGLY, the trial Court's order of dismissal is
hereby affirmed. Without costs.1äwphï1.ñët
Concepcion, C.J., Dizon, Makalintal, Sanchez, Castro,
Fernando, Capistrano and Barredo, JJ., concur.
Reyes, J.B.L., and Zaldivar, JJ., are on leave.