1. RCBC vs Metro Container Corporation G.R. No.

127913 September 13, 2001

Facts: For failure of Ley Construction Corporation (LEYCON) to settle its loan obligations,
Rizal Commercial Banking Corporation (RCBC) instituted an extrajudicial foreclosure
proceeding against it. In a bidding, RCBC was adjudged the highest bidder. LEYCON
promptly filed an action for Nullification of Extrajudicial Foreclosure Sale and Damages
against RCBC. Meanwhile, RCBC consolidated its ownership over the property due to
LEYCON's failure to redeem the mortgaged property within the 12-month redemption
period. By virtue thereof, RCBC demanded rental payments from Metro Container
Corporation (METROCAN) which was leasing the mortgaged property from LEYCON.

On the other hand, LEYCON filed an action for Unlawful Detainer against METROCAN
before the MeTC. Consequently, METROCAN filed a complaint for Interpleader against
LEYCON and RCBC before the RTC to compel them to interplead and litigate their several
claims among themselves and to determine which among them shall rightfully receive the
payment of monthly rentals on the subject property.

On 31 October 1995, judgment was rendered in the Unlawful Detainer case, which, among
other things, ordered METROCAN to pay LEYCON whatever rentals due on the subject
premises. The said decision became final and executory. By reason thereof, METROCAN
and LEYCON separately filed a motion to dismiss the interpleader case. However, the
said motions were dismissed for lack of merit. METROCAN appealed to the Court of
Appeals which granted the petition and ordered the dismissal of the interpleader case.
Hence, RCBC filed the instant petition.

Issue: May METROCAN unilaterally cause the dismissal of the interpleader case?

Held: Yes. An action of interpleader is afforded to protect a person not against double
liability but against double vexation in respect of one liability. It 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.

When the decision in the Unlawful Detainer case became final and executory,
METROCAN has no other alternative left but to pay the rentals to LEYCON. Precisely
because there was already 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 is no longer interested but because there is no more
need for it to pursue such cause of action. The decision in the Unlawful Detainer
case resolved the conflicting claims insofar as payment of rentals was concerned.

RCBC was correct in saying that it is not bound by the decision in the Unlawful Detainer
case. It is not a party thereto. However, it could not compel METROCAN to pursue the
interpleader case. RCBC has other avenues to prove its claim. It is not bereft of other legal
remedies. In fact, the issue of ownership can very well be threshed out in the case for
Nullification of Extrajudicial Foreclosure Sale and Damages filed by LEYCON against
RCBC.
2. Lim v. Continental Development Corporation, G.R. Nos. L-41818 and 41831,
February 18, 1976

Facts: On November 26, 1973, herein petitioner Continental Development Corporation

filed a complaint for interpleader against the defendants Benito Gervasio Tan and Zoila
Co Lim, and praying that the defendants be directed to interplead and litigate their
respective claims over the aforementioned shares of stock and to determine their
respective rights thereto. The trial judge dismissed the complaint for lack of cause of
action, invoking Section 35 of Act No. 1459, as amended, otherwise known as the
Corporation Law. Hence, this petition.

Issue: Whether or not there was an active conflict of interest from the defendants to make
out a complaint for interpleader

Held: YES. The action of interpleader under section 120, 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 in both 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 one or the other thing. The remedy is afforded not to protect a person against
a double liability but to protect him against a double vexation in respect of one liability. It
is patent from the pleadings in the lower court that both defendants Benito Gervasio Tan
and Zoila Co Lim assert conflicting rights to the questioned shares of stock. Precisely in
his motion to dismiss the complaint for interpleader, defendant Benito Gervasio 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 the defendant Benito Gervasio 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. And, on October
29, 1973, same counsel of Mr. Ty Lim, wrote the corporation, in behalf of defendant Zoila
Co Lim, alleged heir of So Bi, claiming ownership of the stocks". Indeed, petitioner
corporation 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 the property leased, or a
sheriff who finds himself puzzled by conflicting claims to a property seized by him

3. Sy-Quia v. Sheriff of Ilocos Sur, 46 Phi. 400 (1924)

Facts: Miguel Aglipay Cheng-Laco and Feliciano Reyes Cheng-Kiangco executed a

chattel mortgage in favor of the petitioner, Gregorio R. Sy-Quia on their mercantile,
establishment, with all the merchandise therein contained, as security for a debt of P6,000.
The chattel mortgage was duly recorded on the date of its execution and fell due on
February 3, 1917. From its terms it may be inferred that it was the intention of the parties
that the mortgagors were to be permitted to sell the merchandise replenishing their stock
from time to time and that the new stock brought in should also be subject to the mortgage.
On May 5, 1924, Miguel Aglipay Cheng-Laco executed another chattel mortgage on the
same establishment and all its contents in favor of the respondent Filadelfo de Leon as
security for the sum of P4,900, which mortgage was recorded on May 4, 1924. The sheriff
seized the establishment in question as well as its contents and fixed the date of the sale
 at June 2, 1924. In the meantime Filadelfo de Leon presented an adverse claim to the
property by virtue of his chattel mortgage, alleging that all the goods on which the chattel
mortgage of Gregorio R. Sy-Quia was given had been sold long before the chattel
mortgage in favor of De Leon was executed and that, therefore, the earlier chattel
mortgage was of no effect. The sheriff being in doubt as to the priority of the conflicting
claims, suspended the foreclosure proceedings and brought an action under section 120
of the Code of Civil Procedure requiring the two claimants to interplead.

Issue: Whether or not mandamus may lie to compel the sheriff to proceed with the
foreclosure

Held: NO. 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, the Court, nevertheless, is 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. Also that in cases such as the present, the
petition for mandamus should be addressed to the Courts of First Instance rather than to
the SC.

4. Pangkalinawan v. Rodas, 80 Phil. 28 (1976)

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.

5. United Coconut Planters Bank v. Intermediate Appellate Court, G.R. Nos. 726645-
65, 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.

6. Del Carmen v. Spouses Sabordo, G.R. No. 181723, August 11, 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
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.

7. Pasricha v. Don Luis Dison Realty, Inc., G.R. No. 136409, March 14, 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.

8. Arreza v. Diaz, G.R. No. 133113, 30 August 2001;

Facts: Bliss Development Corporation is the owner of a housing complex located in

Quezon City. It instituted before RTC Makati an interpleader case against Arreza and Diaz
who were conflicting claimants of the property (Civil Case No. 94-2086). The RTC ruled in
favor of Arreza. In view of said decision, Bliss executed a contract to sell the property to
Arreza and Diaz was constrained to transfer possession together with all improvements
to Arreza.

Thereafter, Diaz filed a case against Arreza and Bliss for the reimbursement of the cost of
his acquisition and improvements on the property (Civil Case No. 96-1372). Arreza filed a
Motion to Dismiss on the ground of res judicata and lack of cause of action. RTC denied
the Motion to Dismiss.

Arreza appealed to CA which dismissed the petition saying 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: Are Diaz's claims for reimbursement against Arreza barred by res adjudicata?

Held: The court in a complaint for interpleader shall determine the rights and obligations
of the parties and adjudicate their respective claims. Such rights, obligations and claims
could only be adjudicated if put forward by the aggrieved party in assertion of his rights.
That party in this case referred to respondent Diaz. The second paragraph of Section 5 of
Rule 62 of the 1997 Rules of Civil Procedure provides that the parties in an interpleader
action may file counterclaims, cross-claims, third party complaints and responsive
pleadings thereto, as provided by these Rules. The second paragraph was added to
Section 5 to expressly authorize the additional pleadings and claims enumerated therein,
in the interest of a complete adjudication of the controversy and its incidents. Pursuant to
said Rules, respondent should have filed his claims against petitioner Arreza in the
interpleader action. Having asserted his rights as a buyer in good faith in his answer, and
praying relief therefor, respondent Diaz should have crystallized his demand into specific
claims for reimbursement by petitioner Arreza. This he failed to do. Having failed to set up
his claim for reimbursement, said claim of respondent Diaz being in the nature of a
compulsory counterclaim is now barred.

The elements of res adjudicata are: (a) that the former judgment must be final; (b) the
court which rendered judgment had jurisdiction over the parties and the subject matter; (c)
it must be a judgment on the merits; and (d) there must be between the first and second
causes of action identity of parties, subject matter, and cause of action. In the present
 case, we find there is an identity of causes of action between Civil Case No. 94-2086 and
Civil Case No. 96-1372. Respondent Diaz's cause of action in the prior case, now the crux
of his present complaint against petitioner, was in the nature of an unpleaded compulsory
counterclaim, which is now barred. There being a former final judgment on the merits in
the prior case, rendered in Civil Case No. 94-2086 by Branch 146 of the Regional Trial
Court of Makati, which acquired jurisdiction over the same parties, the same subject
property, and the same cause of action, the present complaint of respondent herein (Diaz)
against petitioner Arreza docketed as Civil Case No. 96-1372 before the Regional Trial of
Makati, Branch 59 should be dismissed on the ground of res adjudicata.

9. Baclayon v. Court of Appeals, G.R. No. 89132, 26 February 1990;

FACTS: Leoncia, Martin, Policarpio, Hilarion, Ireneo, Juliana and Tomas, all surnamed
Baclayon; Rosendo, Felicidad and Silvestra, all surnamed Abanes; and Tomasa, Leoncia,
Anacleto, Monica, Guillerma and Gertrudes all surnamed Abellare filed with the then CFI-
Cebu, Branch 2, in Civil Case No. R-11185, a complaint for recovery of ownership and
possession, and damages, against spouses Marciano Bacalso and Gregoria Sabandeja
of Lot No. 5528 of the Cebu Cadastre. The trial court ruled in favor of spouses Bacalso,
declaring them owners of the subject lot, which decision was appealed to the Court of
Appeals. CA reversed the trial court’s decision holding that the heirs of the late Matias
Baclayaon owned the land at bar. The decision in favor of the petitioners having become
final and executory, they filed a motion for execution of judgment and possession which
was opposed by the private respondents. The private respondents argued that since they
were builders in good faith, they were entitled to the reimbursement of the necessary and
useful expenses incurred from the owner of the land. The presiding 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."

10. Beltran v. People’s Homesite and Housing Corporation, G.R. No. L-25138, 28
August 1996;

Facts: Plaintiffs since they first occupied their housing units under lease from PHHC,
under lease and paying monthly rentals therefor, they were assured that after 5 years of
continuous occupancy they would be entitled to purchase said units. In 1991, PHHC
announced that the management of the project would be transferred to GSIS in payment
of PHHC's debts to GSIS. Subsequently, however, the new manager of PHHC refused to
recognize all transactions and undertakings previously entered into with GSIS. Alleging
that they do not know now to whom they should pay the monthly amortizations, plaintiffs
filed an interpleader suit against GSIS and PHHC.

GSIS and PHHC filed a motion to dismiss for failure to state a cause of action. After
hearing the motion, the court dismissed the interpleader case ruling that during the
hearing, the counsel for defendant ratified the allegations in his motion and made of record
that GSIS has no objection that payments on the monthly amortizations from the residents
of Project 4 be made directly to PHHC. Plaintiffs appealed, 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.

Issue: Did the trial court erred in dismissing the complaint for interpleader?

Held: No. Rule 63, 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."

The record shows clearly that there were no conflicting claims by defendant corporations
as against plaintiff-tenants, which they may properly be compelled in an interpleader suit
to interplead and litigate among themselves. While the two defendant corporations 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. 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. Both defendant corporations were agreed
that PHHC should continue receiving the tenants' payments, and that such payments
would be duly recognized even if the GSIS should eventually take over Project 4 by virtue
of their turnover agreement.

11. Wack-Wack Golf & Country Club, Inc. v. Won, G.R. No. L-23851, 26 March 1976

Facts: Wack Wack Golf and Country Club filed a complaint for interpleader against Won
and Tan who both claim ownership over membership fee certificate 201. Won claims its
ownership stemming from a decision rendered in Civil Case 26044 entitled "Lee E. Won
alias Ramon Lee vs. Wack Wack Golf & Country Club, Inc." Meanwhile, Tan claims
ownership from the assignment made by the alleged true owner of the same certificate.
The trial court dismissed the complaint on the ground of res judicata by reason of the
previous civil case that issued Won the right to the certificate. Hence, the appeal.

Issue: Was the remedy of interpleader proper and timely?

Held: There is no question that the subject matter of the present controversy, i.e., the
membership fee certificate 201, is proper for an interpleader suit. However, the
Corporation may not properly invoke the remedy of interpleader.

It is the general rule that before a person will be deemed to be in a position to ask for an
order of intrepleader, he must be prepared to show, among other prerequisites, that he
has not become independently liable to any of the claimants. Indeed, 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.
It was aware of the conflicting claims of the appellees with respect to the membership fee
certificate 201 long before it filed the present interpleader suit. Yet it did not interplead
Tan. It preferred to proceed with the litigation and to defend itself therein. As a matter of
fact, final judgment was rendered against it and said judgment has already been executed.
It is therefore too late for it to invoke the remedy of interpleader

To now permit the Corporation to bring Won to court after the latter's successful
establishment of his rights in civil case 26044 to the membership fee certificate 201, is to
increase instead of to diminish the number of suits, which is one of the purposes of an
action of interpleader, with the possibility that the latter would lose the benefits of the
favorable judgment. This cannot be done because having elected to take its chances of
success in said civil case 26044, with full knowledge of all the fact, the Corporation must
submit to the consequences of defeat.

Besides, 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 instant interpleader suit cannot prosper because the Corporation had already
been made independently liable in civil case 26044 and, therefore, its present application
for interpleader would in effect be a collateral attack upon the final judgment in the said
civil case; the appellee Lee had already established his rights to membership fee
certificate 201 in the aforesaid 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.