RULE 63
prohibition with prayer for issuance of TRO and preliminary
RCBC vs. METROCAN G.R. No. 127913 13 September 2001
FACTS:
In 1990, Ley Construction Corporation contracted a loan from Rizal
Commercial Banking Corporation in the amount of P30 million with
a real estate mortgage over property in Valenzuela secured. LEYCON
failed to settle its obligation to pay back the loan thereby prompting
RCBC to foreclose the mortgage with the latter being the highest
bidder in 1992. LEYCON promptly filed an action for Nullification of
Extrajudicial Foreclosure Sale and Damages against RCBC. The case
was raffled to the Regional Trial Court (RTC) of Valenzuela, Branch
172. Meanwhile, RCBC consolidated its ownership over the property
due to LEYCONs failure to redeem it within the 12-month
redemption period and a new TCT was issued if favor of the
bank. By virtue thereof, RCBC demanded rental payments from
Metro Container Corporation (METROCAN) which was leasing the
property from LEYCON. In 1994, LEYCON filed an action for Unlawful
Detainer against RCBC before MeTC Valenzuela Branch 82.
METROCAN filed later a complaint for Interpleader before RTC
Valenzuela Branch 75 against LEYCON and RCBC to compel them to
interplead their claims between themselves and to determine which
of them shall rightfully receive the payment rentals on the subject
property. In 1995, judgment was rendered in the Unlawful Detainer
case, which ordered METROCAN to pay LEYCON whatever rentals
were due on the subject land. Said MeTC decision became final and
executory. By reason thereof, METROCAN and LEYCON separately
filed motions to dismiss the interpleader case. However, said
motions were dismissed for lack of merit. METROCAN went to the
Court of Appeals seeking relief via a petition for certiorari and
injunction. In 1996, CA ruled in favor of METROCAN and ordered the
dismissal of the interpleader case.
ISSUE:
May METROCAN unilaterally have the interpleader case dismissed?
RULING:
Yes. An action for interpleader is afforded to protect a person not
against double liability but against double vexation in respect of one
liability. It requires that conflicting claims upon the same subject
matter are or may be made against the plaintiff-in-interpleader who
claims no interest whatever in the subject matter or an interest
which in whole or in part is not disputed by the claimants. When the
decision in the Unlawful Detainer case became final and executory,
METROCAN had no other alternative left but to pay rentals to
LEYCON. Precisely because there was a judicial fiat to METROCAN,
there was no more reason to continue with the interpleader case.
Thus, METROCAN moved for the dismissal of the interpleader action
not because it was no longer interested but because there was no
more need to pursue the action. The Unlawful Detainer case
resolved the conflicting claims insofar as payment of rentals was
concerned. RCBC correctly contended that it was not bound by the
decision in the Unlawful Detainer case as it was not a party thereto.
However, it could not compel METROCAN to pursue the
Interpleader case. RCBC has other avenues to prove its claim.

LIM vs. COMMERCIAL DEVELOPMENT CORPORATION
G.R. No. L-41818; G.R. No. L-41831 18 February 1976
FACTS:
In 1973, Continental Development Corporation filed a complaint for
interpleader against Benito Gervasio Tan and Zoila Co Lim alleging
that: in plaintiff’s books, Tan’s name appears as one of its
stockholders in 1957 with 50 common shares, and subsequently
credited with 75 shares by way of dividends, or an outstanding total
of 125 shares of par value of P250 each; that Tan had since
December 1972 been demanding CDC to release the certificates of
stock but which plaintiff had not done so far and was prevented
from doing so because of Lim’s adverse claims; that Lim laid claim
on the very same shares of stock being demanded by Tan, alleging
that the same belonged to her late mother; that both defendants
threatened to take punitive measures against CDC should it take
any step that shall prejudice their interests; that plaintiff was not
sufficiently informed of the rights of the respective claimants and
therefore not in a sufficient position to adjudicate their claims; that
CDC has no interest of any kind of stock and was willing to issue
certificates of stock to the claimants; and prayed that defendants be
directed to interplead between themselves their respective claims
over the said shares of stock and determine which truly belong to
them. CFI Manila Branch XXVI dismissed the complaint for lack of
cause of action invoking Sec. 35 of Act No. 1459 (Corporation Law).
Lim and CDC filed their respective motions for reconsideration of
the order to which Tan filed his rejoinder. Said motions were denied
in 1974.
RULING:
The interpleader must be granted. It is patent from the pleadings in
the lower court that both Tan and Lim assert conflicting rights to the
questioned shares of stock. Precisely in his motion to dismiss the
complaint for interpleader, Tan states that petitioner corporation,
through its Vice-President, notified him on July 23, 1973 "that the
shares of stock are in the possession of its treasurer Mr. Ty Lim, and
urged defendant to directly obtain them from the former, who
allegedly was on vacation at the time. Mr. Ty Lim, on August 30,
1973, through counsel, replied to Tan that said certificates were not
in his possession but surmised, without reference to any record,
that the same might have been delivered to the deceased So Bi.
Continental Development Corporation expressly stated in the
complaint that both defendants, through their respective lawyers,
threatened to take punitive measures against it should it adopt any
steps that may prejudice their respective interests in the shares of
stock in question; and that it is not sufficiently informed of the
rights of the respective claimants and therefore not in a position to
determine justly and correctly their conflicting claims. And in its
opposition to the motion to dismiss its complaint, petitioner
Continental Development Corporation stressed that it might be
liable to one defendant should it comply with the demands of the
other with respect to the transfer or entry of the shares of stock in
the books of the corporation. Since there is an active conflict of
interests between the two defendants, now herein respondent
Benito Gervasio Tan and petitioner Zoila Co Lim, over the disputed
shares of stock, the trial court gravely abused its discretion in
dismissing the complaint for interpleader, which practically decided
ownership of the shares of stock in favor of defendant Benito
Gervasio Tan. The two defendants should be given full opportunity
to litigate their respective claims. Rule 63, Section 1 of the New
Rules of Court tells us when a cause of action exists to support a
complaint in interpleader: "Whenever conflicting claims upon the
same subject matter are or may be made against a person, who
claims no interest whatever in the subject matter, or an interest
which in whole or in part is not disputed by the claimants, he may
bring an action against the conflicting claimants to compel them to
interplead and litigate their several claims among themselves." This
provision only requires as an indispensable requisite: "that
conflicting claims upon the same subject matter are or may be
made against the plaintiff-in-interpleader who claims no interest
whatever in the subject matter or an interest which in whole or in
part is not disputed by the claimants." Indeed, CDC is placed in the
same situation as a lessee who does not know the person to whom
he will pay the rentals due to the conflicting claims over tine
property leased, or a sheriff who finds himself puzzled by conflicting
claims to a property seized by him. In these examples, the lessee
(Pangkalinawan v. Rodas, 80 Phil. 28) and the sheriff (Sy-Quia v.
Sheriff, 46 Phil. 400) were each allowed to file a complaint in
interpleader to determine the respective rights of the claimants.
GREGORIO SYQUIA vs. SHERIFF OF ILOCOS SUR
G.R. No. L-22807 10 October 1924
FACTS:
In 1915, Miguel Aglipay Cheng-Laco and Feliciano Reyes Cheng-
Kiangco executed a chattel mortgage in favor of Gregorio Syquia on
their mercantile establishment as a security for a debt of P6,000.
The chattel mortgage was duly registered and due date fell two
years later. From its terms, it was the parties’ intention that the
mortgagors were to be permitted to sell their merchandise
replenishing their stock from time to time and that the new stock
shall also be subject to the mortgage. In 1924, Cheng-Laco executed
another chattel mortgage over the same establishment in favor of
Filadelfo de Leon. After the second mortgage was registered, Syquia
requested the sheriff to take possession of the mortgaged property
to sell it at public auction under the Chattel Mortgage Law. The
sheriff then seized the property in question but de Leon presented
an adverse claim to the property stating that by virtue of the second
chattel mortgage, Syquia’s was no longer effective. In doubt as to
the priority of the claims, the sheriff suspended the proceedings
and brought an action for interpleader. Thereupon, the present
proceeding in mandamus was instituted, the petitioner alleging that
the duty of the sheriff to proceed with the sale was a ministerial one
and praying that the sheriff be commanded to proceed.
RULING:
Though it perhaps, would have been better practice for the sheriff
to sell the property and hold the proceeds of the sale subject to the
outcome of the action of interpleader, we, nevertheless, are of the
opinion that the facts shown do not justify our interference by
mandamus. The sheriff might lay himself open to an action for
damages if he sold the goods without the consent of the holder of
the last mortgage, and it does not appear that the petitioner
offered to give bond to hold him harmless in such an event. In these
circumstances, his action in suspending the sale pending the
determination of the action of interpleader seems justified. We may
say further that in cases such as the present, the petition for
mandamus should be addressed to the Courts of First Instance
rather than to this court.
ALFONSO PAGKALINAWAN vs. SOTERO RODAS G.R. No. L- 1806
25 February 1948
FACTS:
In an ejectment suit between Manuel Tambunting and Alfonso and
Manuel Pagkalinawan, the latter appealed from the lower court to
CFI Manila. The appellate court then rendered a decision sentencing
the Pagkalinawans to vacate the house in question and pay rentals
due to Tambunting from November 1946 at P45 per month plus
costs. Acting upon a motion for reconsideration filed by the
Pagkalinawans, CFI granted the motion and absolved them from the
complaint. On motion from Tambunting, the same court reversed
the Pagkalinawans’ motion and ordered the latter to pay the rent
for the property in question. Defendants, however, moved to stay
execution of the new judgment on the ground that they had filed
with the same court an interpleader suit against plaintiff and Angel
de Leon Ong, praying that the latter two be ordered to litigate their
conflicting claims over rentals due from the defendants. CFI acceded
to the motion but did not stop the execution of its judgment. Failing
to obtain a reconsideration of the latter order, the defendants
instituted the present petition for certiorari and prohibition, seeking
from us an order directing Hon. Sotero Rodas, Judge of the Court of
First Instance of Manila, and Joaquin Garcia, sheriff, to desist from
carrying out the writ of execution.
RULING:
Petition has merit. It is true that the decision ordering the payment
of rentals to Tambunting is now final and executory. However, in
connection with the suit for interpleader filed by petitioners, said
rentals were deposited with the Clerk of Court, of which fact the
respondent judge was informed by petitioners. Such deposits, in our
opinion, constitute a bona fide compliance with the decision of the
respondent judge, since it is undeniable that the petitioners were
warned by Angel de Leon Ong not to pay rentals to the respondent
Manuel Tambunting. That there is really a conflicting claim between
Angel de Leon Ong and respondent Manuel Tambunting is
evidenced by the fact that there are pending in the Court of First
Instance of Manila civil case No. 815, between Manuel Tambunting,
plaintiff, and Angel de Leon Ong and Ong Hoa, defendants, for the
annulment of a contract of sale involving the premises in question,
and civil case No. 2690, between Angel de Leon Ong, plaintiff, and
Manuel Tambunting, defendant, for the ejectment of Tambunting
from the property located at Nos. 329 to 339 Tanduay Street,
Manila, which includes the premises held by the petitioners. Under
the law, the latter have a right to file the interpleader suit in view of
the claim for rentals of Angel de Leon Ong; and if the respondent
Tambunting believes that he is legally entitled to said rentals, he is
free to move for the withdrawal of the deposits made by the
petitioners.

UCPB vs. IAC and MAKATI BEL-AIR CONDOMINIUM
G. R. Nos. 72664-5 20 March 1990
FACTS:
In 1979, United Coconut Planters’ Bank filed in the lower court a
complaint-in-interpleader against Makati Bel-Air Condominium
Developers and against Altiura Investors. The subject matter of the
complaint was a manager’s check in the amount of P494,000 issued
by UCPB payable to Makati Bel-Air, having been purchased by
Altiura. Altiura delivered the check to Makati Bel-Air as part
payment on an office condominium unit in the Cacho-Gonzales
Building. UCPB received instructions from Altiura to hold payment
of the check, in view of a material discrepancy in the area of the
office unit purchased by Altiura which unit actually measured
124.58 square meters, instead of 165 square meters as stipulated in
the contract of sale. Petitioner Bank immediately requested private
respondent Makati Bel-Air to advise the Bank why it should not
issue the stop payment order requested by Altiura. The next day,
UCPB received a reply from Makati Bel-Air explaining the latter's
side of the controversy and at the same proposing a possible
reduction of the office unit's purchase price. UCPB received a letter
from Altiura requesting the Bank to hold payment of its manager's
check while Altiura was discussing Makati Bel-Air's proposal for
reduction of the purchase price and requesting the Bank to give
both parties fifteen (15) days within which to settle their differences.
UCPB requested Makati Bel-Air to hold in abeyance for a period not
exceeding fifteen (15) days the presentation of the manager's check,
so that both parties could settle their differences amicably, but
UCPB did not agree to such arrangement. Thereupon, UCPB filed a
complaint-in-interpleader against Altiura and Makati Bel-Air to
require the latter to litigate with each other their respective claims
over the funds represented by the manager's check involved, and at
the same time asking the court for authority to deposit the funds in
a special account until the conflicting claims shall have been
adjudicated. The trial court ordered the deposit of the funds into a
special account with any reputable banking institution subject to
further orders of the court. Makati Bel-Air filed its answer and
incorporated therein a counter-claim against petitioner Bank and a
cross-claim against Altiura. In turn, Altiura filed an answer to the
complaint-in-interpleader, with motion to dismiss the cross-claim of
Makati Bel-Air. Meantime, on 23 July 1979, Altiura had filed a
complaint for rescission of the contract of sale of the condominium
unit, with damages, against Makati Bel-Air docketed as Civil Case No.
33967, which case was eventually consolidated with the
interpleader case. UCPB filed a "motion to withdraw complaint and
motion to dismiss counter-claim", stating that there was no longer
any conflict between Makati Bel-Air and Altiura as to who was
entitled to the funds covered by the manager's check, since Makati
Bel-Air in its answer had alleged that it had cancelled and rescinded
the sale of the condominium unit and had relinquished any claim it
had over the funds covered by the manager's check. Makati Bel-Air
delivered to petitioner Bank the original of the manager's check.
The trial court in Civil Case No. 33961 issued an order directing the
release of the funds covered by the manager's check to Altiura. On
28 April 1983, the trial court issued an order resolving petitioner
Bank's motion to withdraw complaint-in-interpleader and to dismiss
counter-claim, declaring that motion to withdraw the complaint-in-
interpleader had been rendered moot and academic by the court's
earlier order of 18 February 1980 directing petitioner Bank to
release to Altiura the P494,000.00 covered by the manager's check,
which Makati Bel-Air had not opposed nor appealed from. In the
same order, the trial court granted Makati Bel-Air's motion to
consolidate Civil Case No. 33961 (the interpleader case) and Civil
Case No. 33967 (the rescission plus damages case). Makati Bel-Air
moved for reconsideration of the 12 July 1983 clarificatory order of
the trial court, without success. Makati Bel-Air then went to the
respondent appellate court on petition for certiorari. In its decision
dated 27 June 1985, the appellate court granted certiorari and
nullified the trial court's orders of 12 July and 30 August 1983 to the
extent that these had dismissed Makati Bel-Air's counter-claim. The
appellate court held that the withdrawal of the complaint-in-
interpleader and its dismissal as moot and academic did not operate
ipso facto to dismiss Makati Bel-Air's counter-claim for the reason
that said counter-claim was based on "an entirely different cause of
action from that in the complaint-[in]-interpleader."
RULING:
Interpleader is a proper remedy where a bank which had issued a
manager's check is subjected to opposing claims by persons who
respectively claim a right to the funds covered by the manager's
check. The Bank is entitled to take necessary precautions so that, as
far possible, it does not make a mistake as to who is entitled to
payment; the necessary precautions include, precisely, recourse to
an interpleader suit. In the instant case, petitioner Bank having been
informed by both Altiura and Makati Bel-Air of their respective
positions in their controversy, and Makati Bel-Air having refused the
Bank's suggestion voluntarily to refrain for fifteen (15) days from
presenting the check for payment, petitioner Bank felt compelled to
resort to the remedy of interpleader. It will be seen that Makati Bel-
Air's counter-claim arose out of or was necessarily connected with
the recourse of petitioner to this remedy of interpleader. Makati
Bel-Air was in effect claiming that petitioner Bank had in bad faith
refused to honor its undertaking to pay represented by the
manager's check it had issued. When the trial court granted
petitioner's motion for withdrawal of its complaint-in-interpleader,
as having become moot and academic by reason of Makati Bel-Air's
having cancelled the sale of the office unit to Altiura and having
returned the manager's check to the Bank and acquiesced in the
release of the funds to Altiura, the trial court in effect held that
petitioner Bank's recourse to interpleader was proper and not a
frivolous or malicious maneuver to evade its obligation to pay to the
party lawfully entitled the funds represented by the manager's
check. Having done so, the trial court could not have logically
allowed Makati Bel-Air to recover on its counterclaim for damages
against petitioner Bank. There are other considerations supporting
the conclusion reached by this Court that respondent appellate
court had committed reversible error. Makati Bel-Air was a party to
the contract of sale of an office condominium unit to Altiura, for the
payment of which the manager's check was issued. Accordingly,
Makati Bel-Air was fully aware, at the time it had received the
manager's check, that there was, or had arisen, at least partial
failure of consideration since it was unable to comply with its
obligation to deliver office space amounting to 165 square meters
to Altiura. Makati Bel-Air was also aware that petitioner Bank had
been informed by Altiura of the claimed defect in Makati Bel-Air's
title to the manager's check or its right to the proceeds thereof. Vis
a vis both Altiura and petitioner Bank, Makati Bel-Air was not a
holder in due course 3 of the manager's check.
ELIZABETH DEL CARMEN vs. SPOUSES RESTITUTO AND MIMA
SABORDO G.R. No. 181723 11 August 2014
FACTS:
Spouses Toribio and Eufrocina Suico entered into a business venture
by establishing a rice and corn mill in Mandaue, Cebu. As part of
their capital, they obtained a loan from the Development Bank of
the Philippines and had mortgaged 4 parcels of land of theirs (Lots
506, 512, 513 and 514) as well as a lot belonging to one of their
partners, Juliana del Rosario. Subsequently, the Suico spouses and
their business partners failed to pay their loan obligations forcing
DBP to foreclose the mortgage. After the Suico spouses and their
partners failed to redeem the foreclosed properties, DBP
consolidated its ownership over the same. Nonetheless, DBP later
allowed the Suico spouses and spouses Reginald and Beatriz Flores,
as substitutes for Juliana Del Rosario, to repurchase the subject lots
by way of a conditional sale for the sum of P240,571.00. The Suico
and Flores spouses were able to pay the downpayment and the first
monthly amortization, but no monthly installments were made
thereafter. Threatened with the cancellation of the conditional sale,
the Suico and Flores spouses sold their rights over the said
properties to herein respondents Restituto and Mima Sabordo,
subject to the condition that the latter shall pay the balance of the
sale price. On September 3, 1974, respondents and the Suico and
Flores spouses executed a supplemental agreement whereby they
affirmed that what was actually sold to respondents were Lots 512
and 513, while Lots 506 and 514 were given to them as
usufructuaries. DBP approved the sale of rights of the Suico and
Flores spouses in favor of herein respondents. Subsequently,
respondents were able to repurchase the foreclosed properties of
the Suico and Flores spouses. On September 13, 1976, respondent
Restituto Sabordo filed with the then Court of First Instance of
Negros Occidental an original action for declaratory relief with
damages and prayer for a writ of preliminary injunction raising the
issue of whether or not the Suico spouses have the right to recover
from respondents Lots 506 and 514. In its Decision dated December
17, 1986, the Regional Trial Court of San Carlos City, Negros
Occidental, ruled in favor of the Suico spouses directing that the
latter have until August 31, 1987 within which to redeem or buy
back from respondents Lots 506 and 514. On appeal, the Court of
Appeals modified the decision and gave the Suicos until 31 October
1990 to redeem the lot from respondents by paying P127,500. The
Suicos were given an additional 90 days from notice to redeem the
property. In the meantime, Toribio Suico (Toribio) died leaving his
widow, Eufrocina, and several others, including herein petitioner, as
legal heirs. Later, they discovered that respondents mortgaged Lots
506 and 514 with Republic Planters Bank (RPB) as security for a loan
which, subsequently, became delinquent. Thereafter, claiming that
they are ready with the payment of P127,500.00, but alleging that
they cannot determine as to whom such payment shall be made,
petitioner and her co-heirs filed a Complaint with the RTC of San
Carlos City, Negros Occidental seeking to compel herein
respondents and RPB to interplead and litigate between themselves
their respective interests on the abovementioned sum of money.
The Complaint also prayed that respondents be directed to
substitute Lots 506 and 514 with other real estate properties as
collateral for their outstanding obligation with RPB and that the
latter be ordered to accept the substitute collateral and release the
mortgage on Lots 506 and 514. Upon filing of their complaint, the
heirs of Toribio deposited the amount of P127,500.00 with the RTC
of San Carlos City, Branch 59. Respondents filed their Answer with
Counterclaim praying for the dismissal of the above Complaint on
the grounds that (1) the action for interpleader was improper since
RPB is not laying any claim on the sum of P127,500.00; (2) that the
period within which the complainants are allowed to purchase Lots
506 and 514 had already expired; (3) that there was no valid
consignation, and (4) that the case is barred by litis pendencia or res
judicata. On the other hand, RPB filed a Motion to Dismiss the
subject Complaint on the ground that petitioner and her co-heirs
had no valid cause of action and that they have no primary legal
right which is enforceable and binding against RPB. On December 5,
2001, the RTC rendered judgment, dismissing the Complaint of
petitioner and her co-heirs for lack of merit. Respondents'
Counterclaim was likewise dismissed. Petitioner and her co-heirs
filed an appeal with the CA contending that the judicial deposit or
consignation of the amount of P127,500.00 was valid and binding
and produced the effect of payment of the purchase price of the
subject lots. In its assailed Decision, the CA denied the above appeal
for lack of merit and affirmed the disputed RTC Decision.
RULING:
Petition lacks merit. This court quotes the CA’s prior decision to wit
on consignation: “… consignation [is] the act of depositing the thing
due with the court or judicial authorities whenever the creditor
cannot accept or refuses to accept payment, and it generally
requires a prior tender of payment. It should be distinguished from
tender of payment which is the manifestation by the debtor to the
creditor of his desire to comply with his obligation, with the offer of
immediate performance. Tender is the antecedent of consignation,
that is, an act preparatory to the consignation, which is the principal,
and from which are derived the immediate consequences which the
debtor desires or seeks to obtain. Tender of payment may be
extrajudicial, while consignation is necessarily judicial, and the
priority of the first is the attempt to make a private settlement
before proceeding to the solemnities of consignation. Tender and
consignation, where validly made, produces the effect of payment
and extinguishes the obligation.” This Court held that while “[t]he
deposit, by itself alone, may not have been sufficient, but with the
express terms of the petition, there was full and complete offer of
payment made directly to defendants-appellants (Arzaga vs.
Rumbaoa).”In the instant case, however, petitioner and her co-heirs,
upon making the deposit with the RTC, did not ask the trial court
that respondents be notified to receive the amount that they have
deposited. In fact, there was no tender of payment. Instead, what
petitioner and her co-heirs prayed for is that respondents and RPB
be directed to interplead with one another to determine their
alleged respective rights over the consigned amount; that
respondents be likewise directed to substitute the subject lots with
other real properties as collateral for their loan with RPB and that
RPB be also directed to accept the substitute real properties as
collateral for the said loan. Nonetheless, the trial court correctly
ruled that interpleader is not the proper remedy because RPB did
not make any claim whatsoever over the amount consigned by
petitioner and her co-heirs with the court. tender of payment
involves a positive and unconditional act by the obligor of offering
legal tender currency as payment to the obligee for the former’s
obligation and demanding that the latter accept the same. In the
instant case, the Court finds no cogent reason to depart from the
findings of the CA and the RTC that petitioner and her co-heirs failed
to make a prior valid tender of payment to respondents.
It is settled that compliance with the requisites of a valid
consignation is mandatory. Failure to comply strictly with any of the
requisites will render the consignation void. One of these requisites
is a valid prior tender of payment. Under Article 1256, prior tender
of payment is excused: (1) when the creditor is absent or unknown,
or does not appear at the place of payment; (2) when the creditor is
incapacitated to receive the payment at the time it is due; (3) when,
without just cause, the creditor refuses to give a receipt; (4) when
two or more persons claim the same right to collect; and (5) when
the title of the obligation has been lost. None of these instances are
present in the instant case. Hence, the fact that the subject lots are
in danger of being foreclosed does not excuse petitioner and her co-
heirs from tendering payment to respondents, as directed by the
court.
SUBASH PASRICHA vs. DON LUIS DISON REALTY
G.R. No. 136409 14 March 2008
FACTS:
Don Luis Dison Realty and the Pasrichas (Subash and Josephine)
executed two lease contracts whereby the former agreed to lease
to the latter Units 22, 24, 32, 33, 34, 35, 36, 37 and 38 of the San
Luis Building, located at 1006 M.Y. Orosa cor. T.M. Kalaw Streets,
Ermita, Manila. Petitioners, in turn, agreed to pay monthly rentals
as well as utilities expenses therefor. While the contracts were in
effect, petitioners dealt with Francis Pacheco, then General
Manager of private respondent. Thereafter, Pacheco was replaced
by Roswinda Bautista. Petitioners religiously paid the monthly
rentals until May 1992. After that, however, despite repeated
demands, petitioners continuously refused to pay the stipulated
rent. Consequently, respondent was constrained to refer the matter
to its lawyer who, in turn, made a final demand on petitioners for
the payment of the accrued rentals amounting to P916,585.58.
Because petitioners still refused to comply, a complaint for
ejectment was filed by private respondent through its
representative, Ms. Bautista, before the Metropolitan Trial Court
(MeTC) of Manila. The case was raffled to Branch XIX. Petitioners
admitted their failure to pay the stipulated rent for the leased
premises starting July until November 1992, but claimed that such
refusal was justified because of the internal squabble in respondent
company as to the person authorized to receive payment. To
further justify their non-payment of rent, petitioners alleged that
they were prevented from using the units subject matter of the
lease contract, except Room 35. Petitioners eventually paid their
monthly rent for December 1992 in the amount of P30,000.00, and
claimed that respondent waived its right to collect the rents for the
months of July to November 1992 since petitioners were prevented
from using Rooms 22, 24, 32, 33, and 34. However, they again
withheld payment of rents starting January 1993 because of
respondent's refusal to turn over Rooms 36, 37 and 38. To show
good faith and willingness to pay the rents, petitioners alleged that
they prepared the check vouchers for their monthly rentals from
January 1993 to January 1994. Petitioners further averred in their
Amended Answer that the complaint for ejectment was
prematurely filed, as the controversy was not referred to the
barangay for conciliation. On November 24, 1994, the MeTC
rendered a Decision dismissing the complaint for ejectment. It
considered petitioners' non-payment of rentals as unjustified. The
court held that mere willingness to pay the rent did not amount to
payment of the obligation; petitioners should have deposited their
payment in the name of respondent company. On the matter of
possession of the subject premises, the court did not give credence
to petitioners' claim that private respondent failed to turn over
possession of the premises. The court, however, dismissed the
complaint because of Ms. Bautista's alleged lack of authority to sue
on behalf of the corporation. Deciding the case on appeal, the
Regional Trial Court (RTC) of Manila, Branch 1, in Civil Case No. 94-
72515, reversed and set aside the MeTC Decision. Aggrieved,
petitioners elevated the matter to the Court of Appeals in a petition
for review on certiorari. On March 18, 1998, petitioners filed an
Omnibus Motion to cite Ms. Bautista for contempt; to strike down
the MeTC and RTC Decisions as legal nullities; and to conduct
hearings and ocular inspections or delegate the reception of
evidence. Without resolving the aforesaid motion, on May 26, 1998,
the CA affirmed the RTC Decision.
RULING:
Petition lacks merit. It is undisputed that petitioners and
respondents entered into 2 separate contracts of lease involving 9
rooms. Records likewise show that respondent repeatedly
demanded that petitioners vacate the premises, but the latter
refused to heed the demand; thus, they remained in possession of
the premises. What was clearly established by the evidence was
petitioners' non-payment of rentals because ostensibly, they did not
know to whom payment should be made. However, this did not
justify their failure to pay, because if such were the case, they were
not without any remedy. They should have availed of the provisions
of the Civil Code on consignation of payment and of the Rules of
Court on interpleader. An action for interpleader is proper when the
lessee does not know to whom payment of rentals should be made
due to conflicting claims on the property (or on the right to collect).
The remedy is afforded not to protect a person against double
liability but to protect him against double vexation in respect of one
liability. Notably, instead of availing of the above remedies,
petitioners opted to refrain from making payments. Neither can
petitioners validly invoke the non-delivery of Rooms 36, 37 and 38
as a justification for non-payment of rentals. Although the two
contracts embraced the lease of nine (9) rooms, the terms of the
contracts - with their particular reference to specific rooms and the
monthly rental for each - easily raise the inference that the parties
intended the lease of each room separate from that of the others.
There is nothing in the contract which would lead to the conclusion
that the lease of one or more rooms was to be made dependent
upon the lease of all the nine (9) rooms. Accordingly, the use of
each room by the lessee gave rise to the corresponding obligation
to pay the monthly rental for the same. Notably, respondent
demanded payment of rentals only for the rooms actually delivered
to, and used by, petitioners. It may also be mentioned that the
contract specifically provides that the lease of Rooms 36, 37 and 38
was to take effect only when the tenants thereof would vacate the
premises. Absent a clear showing that the previous tenants had
vacated the premises, respondent had no obligation to deliver
possession of the subject rooms to petitioners. Thus, petitioners
cannot use the non-delivery of Rooms 36, 37 and 38 as an excuse
for their failure to pay the rentals due on the other rooms they
occupied. In light of the foregoing disquisition, respondent has
every right to exercise his right to eject the erring lessees. The
parties' contracts of lease contain identical provisions, to wit: In
case of default by the LESSEE in the payment of rental on the fifth
(5th) day of each month, the amount owing shall as penalty bear
interest at the rate of FOUR percent (4%) per month, to be paid,
without prejudice to the right of the LESSOR to terminate his
contract, enter the premises, and/or eject the LESSEE as hereinafter
set forth; Moreover, Article 1673 of the Civil Code gives the lessor
the right to judicially eject the lessees in case of non-payment of the
monthly rentals. A contract of lease is a consensual, bilateral,
onerous and commutative contract by which the owner temporarily
grants the use of his property to another, who undertakes to pay
the rent therefor.[64] For failure to pay the rent, petitioners have
no right to remain in the leased premises.
EDGAR ARREZA vs. MONTANO DIAZ, JR.
G.R. No. 133113 30 August 2001
FACTS:
Bliss Development owned a housing unit located at Lot 27, Block 30,
New Capitol Estates, Quezon City. It filed before RTC Makati Branch
146 a complaint for interpleader in the midst of a conflict of
ownership between Edgar Arreza and Montano Diaz, Jr. The trial
court ruled on the interpleader in favor of Arreza, and Bliss, in view
of that decision, made a contract to sell the property to Arreza and
Diaz was ordered to transfer possession and fruits of the property
to Arreza. Thereafter, Diaz sued Arreza, Domingo Tapay and Bliss
before RTC Makati Branch 59. He sought to hold Bliss and Arreza
liable for the reimbursement to him of P1,706,915.58 representing
the cost of acquisition and improvements on the property with 8%
interest per annum. Arreza filed a Motion to Dismiss the case, citing
as grounds res adjudicata or conclusiveness of the judgment in the
interpleader case as well as lack of cause of action. Said motion and
a subsequent motion for reconsideration were dismissed by the RTC.
Arreza filed a petition for certiorari before the Court of Appeals
alleging that the Orders dated February 4 and March 20, 1997, were
issued against clear provisions of pertinent laws, the Rules of Court,
and established jurisprudence such that respondent court acted
without or in excess of jurisdiction, or grave abuse of discretion
amounting to lack or excess of jurisdiction. The petition was
dismissed for lack of merit. The CA held that res judicata does not
apply because the interpleader case only settled the issue on who
had a better right. It did not determine the parties‘respective rights
and obligations. The action filed by Diaz seeks principally the
collection of damages in the form of the payments Diaz made to
Bliss and the value of the improvements he introduced on the
property matters that were not adjudicated upon in the previous
case for interpleader.
ISSUE:
Whether or not Diaz’s claims for reimbursement against Arreza are
barred by res adjudicata.
RULING:
The court in a complaint for interpleader shall determine the rights prior case, rendered in Civil Case No. 94-2086 by Branch 146 of the
and obligations of the parties and adjudicate their respective claims. Regional Trial Court of Makati, which acquired jurisdiction over the
Such rights, obligations and claims could only be adjudicated if put same parties, the same subject property, and the same cause of
forward by the aggrieved party in assertion of his rights. That party action, the present complaint of respondent herein (Diaz) against
in this case referred to respondent Diaz. The second paragraph of petitioner Arreza docketed as Civil Case No. 96-1372 before the
Section 5 of Rule 62 of the 1997 Rules of Civil Procedure provides Regional Trial of Makati, Branch 59 should be dismissed on the
that the parties in an interpleader action may file counterclaims, ground of res adjudicata.
cross-claims, third party complaints and responsive pleadings
thereto, as provided by these Rules. The second paragraph was LEONCIA BACLAYON, et. al. vs. COURT OF APPEALS, et. al.
added to Section 5 to expressly authorize the additional pleadings G.R. No. 89132 26 February 1990
and claims enumerated therein, in the interest of a complete
adjudication of the controversy and its incidents. Pursuant to said FACTS:
Rules, respondent should have filed his claims against petitioner
Leoncia, Martin, Policarpio, Hilarion, Ireneo, Juliana and Tomas, all
Arreza in the interpleader action. Having asserted his rights as a
surnamed Baclayon; Rosendo, Felicidad and Silvestra, all surnamed
buyer in good faith in his answer, and praying relief therefor,
Abanes; and Tomasa, Leoncia, Anacleto, Monica, Guillerma and
respondent Diaz should have crystallized his demand into specific
Gertrudes all surnamed Abellare filed with the then CFI-Cebu,
claims for reimbursement by petitioner Arreza. This he failed to
Branch 2, in Civil Case No. R-11185, a complaint for recovery of
do. Having failed to set up his claim for reimbursement, said claim
ownership and possession, and damages, against spouses Marciano
of respondent Diaz being in the nature of a compulsory
Bacalso and Gregoria Sabandeja of Lot No. 5528 of the Cebu
counterclaim is now barred. Elements of res judicata: (1) the former
Cadastre. The trial court ruled in favor of spouses Bacalso, declaring
judgment must be final; (b) the court which rendered judgment had
them owners of the subject lot, which decision was appealed to the
jurisdiction over the parties and the subject matter; (c) it must be a
Court of Appeals. CA reversed the trial court’s decision holding that
judgment on the merits; and (d) there must be between the first
the heirs of the late Matias Baclayaon owned the land at bar. The
and second causes of action identity of parties, subject matter, and
decision in favor of the petitioners having become final and
cause of action. In the present case, we find there is an identity of
executory, they filed a motion for execution of judgment and
causes of action between Civil Case No. 94-2086 and Civil Case No.
possession which was opposed by the private respondents. The
96-1372. Respondent Diaz's cause of action in the prior case, now
private respondents argued that since they were builders in good
the crux of his present complaint against petitioner, was in the
faith, they were entitled to the reimbursement of the necessary and
nature of an unpleaded compulsory counterclaim, which is now
useful expenses incurred from the owner of the land. The presiding
barred. There being a former final judgment on the merits in the
judge of RTC Cebu Branch 15, Hon. German Lee, granted the motion
for execution and ordered the judgment to be executed. Private
respondents appealed the said order but it was dismissed by Lee.
Later, private respondents filed a petition for certiorari, mandamus
and prohibition with CA concerning the orders of the RTC Cebu
which was granted by respondent court, thereby setting aside the
trial court’s orders and ordering the same court to hear respondents’
evidence that they were builders in good faith.
RULING:
The rule is well established that once a decision has become final
and executory the only jurisdiction left with the trial court is to
order its execution. To require now the trial court in a hearing
supplementary to execution, to receive private respondents'
evidence to prove that they are builders in good faith of the
improvements and the value of said improvements, is to disturb a
final executory decision; which may even cause its substantial
amendment. It appears that the private respondent's opposition to
the motion for the execution of the judgment, possession and
demolition is their last straw to prevent the satisfaction of the
judgment. Sad to say, we have to cut this straw. We disagree with
the respondent court that any counterclaim for reimbursement of
the value of the improvements thereon by reason of private
respondents' being builders in good faith, which presupposes that
they are not the owners of the land, would run counter to the
defense of ownership and therefore could not have been set up
before the trial court. It should be emphasized that Rule 8, Section 2
of the Rules of Court allows a party to set forth two or more
statements of a claim or defense alternatively or hypothetically,
either in one cause of action or defense or in separate causes of
action or defenses. A corollary question that We might as well
resolve now (although not raised as an issue in the present petition,
but conformably with Gayos, et al. v. Gayos, et al., G.R. No. L-27812,
September 26, 1975, 67 SCRA 146, that it is a cherished rule of
procedure that a court should always strive to settle the entire
controversy in a single proceeding leaving no root or branch to bear
the seeds of future litigation) is whether or not the private
respondents can still file a separate complaint against the
petitioners on the ground that they are builders in good faith and
consequently, recover the value of the improvements introduced by
them on the subject lot. The case of Heirs of Laureano Marquez v.
Valencia, 99 Phil. 740, provides the answer: "If, aside from relying
solely on the deed of sale with a right to repurchase and failure on
the part of the vendors to purchase it within the period stipulated
therein, the defendant had set up an alternative though
inconsistent defense that he had inherited the parcel of land from
his late maternal grandfather and presented evidence in support of
both defenses, the overruling of the first would not bar the
determination by the court of the second. The defendant having
failed to set up such alternative defenses and chosen or elected to
rely on one only, the overruling thereof was a complete
determination of the controversy between the parties which bars a
subsequent action based upon an unpleaded defense, or any other
cause of action, except that of failure of the complaint to state a
cause of action and of lack of jurisdiction of the Court. The
determination of the issue joined by the parties constitutes res
judicata."
 through its new Chairman-General Manager, Esmeraldo Eco,
refused to recognize agreements previously entered into with GSIS,
while GSIS insisted on its legal rights to enforce the said agreements
and was upheld in its contention by both the Government
Corporate Counsel and the Secretary of Justice. Plaintiffs thus
JOSE BELTRAN vs. PEOPLE’S HOMESITE & HOUSING CORPORATION claimed that these conflicting claims between PHHC and GSIS
caused them great inconvenience and incalculable moral and
G.R. No. L-25138 28 August 1969
material damage, as they did not know to whom they should pay
FACTS: the monthly amortizations or payments.

In 1962, an interpleader suit was commenced by Jose Beltran, et. al. TC: Designated the People's First Savings Bank, QC "to receive in
in their own behalf and in behalf of the residents of Project 4 in trust the payments from the plaintiffs on their monthly
Quezon City, praying that the People’s Homesite & Housing amortizations on PHHC lots and to be released only upon proper
Corporation and Government Service Insurance System be authority of the Court."
compelled to litigate between themselves their conflicting claims
PHHC and GSIS filed a Motion to Dismiss the complaint of Beltran,
over Project 4. PHHC leased out housing units to plaintiffs in 1953.
et al. for failure to state a cause of action as well as to lift the
The lessees, paying monthly rentals therefor, were assured by
Court's order designating the People's First Savings Bank as trustee
competent authority that after 5 years of continuous occupancy,
to receive the tenants' payments on the PHHC lots. TC granted the
they would be entitled to purchase these units. In 1961, the PHHC
Motion, ruling that the counsel for GSIS ratified the allegations in his
announced that the management, administration and ownership
motion and made of record that GSIS has no objection that
of Project 4 would be transferred to GSIS in payment of PHHS debts
payments on the monthly amortizations be made directly to PHHC.
to GSIS. PHHC also asked the tenants to signify their conformity to
There was thus no dispute as to whom the residents pay and
buy the housing units at the selling price indicated on the back
therefore no cause of action for interpleading. Counsel for
thereof, agreeing to credit the tenants, as down payment on the
defendants went further to say that whatever dispute, if any, may
selling price, 30% of what had been paid by them as rentals. The
exist between the two corporations over the lots and
tenants accepted the PHHC offer, and on March 27, 1961, the PHHC
buildings in Project 4, payments made to the PHHC will
announced in another circular that all payments made by the
not and cannot in any way affect or prejudice the rights
tenants after March 31, 1961 would be considered as amortizations
of the residents thereof as they will be credited by either of the
or installment payments. By the end of 1960, administration and
two defendants.
ownership of Project 4 was turned over to GSIS. PHHC, however,
On appeal, plaintiffs claim that the trial Court erred in dismissing
their suit, contending the allegations in their complaint "raise
questions of fact that can be established only by answer and trial on
the merits and not by a motion to dismiss heard by mere oral
manifestations in open court," and that they "do not know who, as
between the GSIS and the PHHC, is the right and lawful party
to receive their monthly amortizations as would eventually
entitle them to a clear title to their dwelling units."
ISSUE:
Whether the dismissal of the complaint for interpleader was
proper?
RULING:
Yes. Plaintiffs entirely missed the vital element of an action of
interpleader. Rule 62, section 1 of the Revised Rules of Court
requires as an indispensable element that "conflicting claims upon
the same subject matter are or may be made" against the plaintiff-
in-interpleader "who claims no interest whatever in the subject
matter or an interest which in whole or in part is not disputed by
the claimants."
While PHHC and GSIS may have conflicting claims between
themselves with regard to the management, administration and
ownership of Project 4, such conflicting claims are not against the
plaintiffs nor do they involve or affect the plaintiffs. No allegation is
made in their complaint that any corporation other than the PHHC
which was the only entity privy to their lease-purchase agreement,
ever made on them any claim or demand for payment of the rentals
or amortization payments. The questions of fact raised in their
complaint concerning the enforceability, and recognition or non-
enforceability and non-recognition of the turnover agreement of
December 27, 1961 between the two defendant corporations are
irrelevant to their action of interpleader, for these conflicting claims,
loosely so-called, are between the two corporations and not against
plaintiffs. Both defendant corporations were in conformity and had
no dispute, as pointed out by the trial court that the monthly
payments and amortizations should be made directly to the PHHC
alone.
WACK WACK GOLF & COUNTRY CLUB vs. LEE WON
G.R. No. L-23851 26 March 1976
FACTS:
Wack Wack Golf & Country Club, a non-stock, civic and athletic
corporation organized under the laws of the Philippines, filed a
complaint of interpleader. It alleged, for its first cause of action,
that defendants Lee Won and Bienvenido Tan were both claiming
ownership over the Corporation’s membership fee certificate
(“MFC”) 201: Won, by virtue of the decision of the CFI of Manila in
civil case 26044 and by MFC 201-serial no. 1478 issued on Oct. 17,
1963 by the deputy clerk of court for and in behalf of the president
and secretary of the corporation and of the People’s Bank & Trust
Company; Tan, on the other hand, by virtue of MFC 201-serial no.
1199 issued on July 24, 1950 pursuant to an assignment in his favor
by Swan, Culbertson and Fritz, the original owner of MFC 201. For
its second cause of action, the Corporation alleged that MFC 201-
serial no. 1478 issued by the deputy clerk of court in behalf of the
Corporation is null and void because it was issued in violation of the
Corporation’s by-laws, which require the surrender and cancellation
of the outstanding MFC 201 before issuance may be made to the
transferee of a new certificate duly signed by its president and
secretary, aside from the fact that the decision of the CFI of Manila
in civil case 26044 is not binding upon defendant Tan. The
Corporation prayed for the issuance of an order requiring Lee and
Tan to interplead and litigate their conflicting claims, declaring who
the lawful owner of MFC 201 is, and ordering the surrender and
cancellation of MFC 201-serial no. 1478 issued in the name of Lee.
The trial court dismissed the complaint upon motion of the
defendants on the grounds of res judicata, failure of the complaint
to state a cause of action, and bar by prescription.
ISSUE:
Whether or not the action of interpleader was proper and timely
filed.
HELD:
No. The Supreme Court affirmed the dismissal of the complaint. The
action of interpleader, under §120 of the Code of Civil Procedure, is
a remedy whereby a person who has personal property in his
possession, or an obligation to render wholly or partially, without
claiming any right to either, comes to court and asks that the
persons who claim the said personal property or who consider
themselves entitled to demand compliance with the obligation, be
required to litigate among themselves in order to determine finally
who is entitled to tone or the one thing. The remedy is afforded to
protect a person not against double liability but against double
vexation in respect of one liability. A stakeholder should use
reasonable diligence to hale the contending claimants to court. He
need not await actual institution of independent suits against him
before filing a bill of interpleader. He should file an action of
interpleader within a reasonable time after a dispute has arisen
without waiting to be sued by either of the contending claimants.
Otherwise, he may be barred by laches or undue delay. But where
he acts with reasonable diligence in view of the environmental
circumstances, the remedy is not barred. If a stakeholder defends a
suit filed by one of the adverse claimants and allows said suit to
proceed to final judgment against him, he cannot later on have that
part of the litigation repeated in an interpleader suit. In the case at
hand, the Corporation allowed civil case 26044 to proceed to final
judgment. And it offered no satisfactory explanation for its failure to
implead Tan in the same litigation. In this factual situation, it is clear
that this interpleader suit cannot prosper because it was filed much
too late. A successful litigant cannot later be impleaded by his
defeated adversary in an interpleader suit and compelled to prove
his claim anew against other adverse claimants, as that would in
effect be a collateral attack upon the judgment. In fine, the
interpleader suit cannot prosper because the Corporation had
already been made independently liable in civil case 26044 and,
therefore, its application for interpleader would in effect be a
collateral attack upon the final judgment in the said civil case; Lee
had already established his rights to MFC 201 in the civil case and,
therefore, this interpleader suit would compel him to establish his
rights anew, and thereby increase instead of diminish litigations,
which is one of the purposes of an interpleader suit, with the
possibility that the benefits of the final judgment in the said civil
case might eventually be taken away from him; and because the
Corporation allowed itself to be sued to final judgment in the
said case, its action of interpleader was filed inexcusably late, for
which reason it is barred by laches or unreasonable delay.