Beltran vs. People's Homesite & Housing Corporation

Interpleader lies only where conflicting claims upon the same subject matter are or may be made against the plaintiff-in-interpleader, who claims no interest therein or an interest not disputed by the claimants. Conflicting claims between the defendants themselves over ownership or administration, with no competing demand for payment against plaintiffs and with both defendants directing payment to one of them, do not satisfy the indispensable element.

Jose A. Beltran and others sued in their own behalf and in behalf of all residents of Project 4 in Quezon City, who occupied housing units under lease from PHHC with monthly rentals. The defendants were PHHC and GSIS, two government corporations linked as debtor and creditor, with GSIS having instituted extrajudicial foreclosure proceedings against PHHC properties. No other extrinsic context is required to understand the payment dispute that followed.

Since 1953, plaintiffs occupied their respective housing units at Project 4 in Quezon City under lease from PHHC, paying monthly rentals with assurance from competent authority that after five years of continuous occupancy they would be entitled to purchase the units. On February 21, 1961, PHHC announced to tenants that management, administration and ownership of Project 4 would be transferred to GSIS in payment of PHHC debts to GSIS, and in the same announcement asked tenants to signify conformity to buy at the selling price indicated, with thirty (30%) percent of rentals paid credited as down payment. The tenants accepted the offer. Thereafter, on March 27, 1961, PHHC announced that all payments made after March 31, 1961 would be considered amortizations or installment payments, and by memorandum of May 16, 1961 instructed the Project Housing Manager to accept as installments payments made after March 31, 1961 by tenants up-to-date as of said date.

In September, 1961, pursuant to the PHHC-GSIS arrangement, collections from tenants on rentals and/or installment payments were delivered by PHHC to GSIS. On December 27, 1961, the agreement of turnover of administration and ownership of PHHC properties, including Project 4, was executed by PHHC in favor of GSIS, pursuant to release of mortgage and amicable settlement of extrajudicial foreclosure proceedings instituted in May, 1960 by GSIS against PHHC. Subsequently, PHHC through its new Chairman-General Manager Esmeraldo Eco refused to recognize all agreements and undertakings previously entered into with GSIS, while GSIS insisted on its legal rights to enforce said agreements and was upheld by both the Government Corporate Counsel and the Secretary of Justice. Plaintiffs alleged these conflicting claims caused great inconvenience and incalculable moral and material damage because they did not know to whom monthly amortizations should be paid, adding that as mostly GSIS policy holders they preferred implementation of the outright sale by GSIS.

On August 21, 1962, plaintiffs filed the interpleader suit praying that the two corporations be compelled to litigate between themselves their alleged conflicting claims. Upon urgent ex parte motion, the trial court on August 23, 1962 designated People's First Savings Bank to receive payments in trust. After hearing the defendants' motion to dismiss on September 1, 1962, the trial court found no dispute that payments should be made directly to PHHC alone, with GSIS expressing conformity and assuring that payments to PHHC would be credited by either defendant. At the October 24, 1962 conference, Manager Diaz of GSIS recorded no objection to payment to PHHC, while Manager Eco of PHHC recorded the standing arrangement for issuance of title upon remittance of the purchase price, with assurance that upon payment of the whole purchase price title would issue.

• Need for Trial on Facts: Petitioner argued that the allegations in the complaint raised questions of fact that could 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.
• Uncertainty of Payee and Title: Petitioner maintained that they did not know who, as between GSIS and PHHC, was the right and lawful party to receive monthly amortizations as would eventually entitle them to clear title to their dwelling units.
• Unresolved Ownership and Commitments: Petitioner argued that other issues required judgment after trial, such as the right of ownership over the houses and lots in Project 4 and the status of commitment agreements and undertakings made by the previous PHHC administration, particularly those of then General Manager Bernardo Torres.

• Failure to State Cause of Action: Respondent countered that the complaint stated no cause of action for interpleader and that the trusteeship order for the bank to receive payments should be lifted.
• Conformity on Payment to PHHC: Respondent maintained that there was no dispute as to whom amortizations should be paid, with GSIS having no objection to direct payment to PHHC, and that whatever dispute between the corporations would not affect or prejudice tenants' rights as payments would be credited by either defendant.
• Recognition of Payments: Respondent argued that no possible injustice or prejudice would result from continuing payments to PHHC because any proper, legal and due payments would be recognized by whoever might take over, specifically by GSIS if the conflict were resolved in its favor.

• Requisites of Interpleader: Whether conflicting claims upon the same subject matter were made against plaintiffs by PHHC and GSIS so as to sustain a complaint for interpleader.
• Unresolved Ownership and Undertakings: Whether alleged unresolved issues on ownership of Project 4 and the status of prior PHHC commitments required trial on the merits despite resolution of the payment issue.

• Requisites of Interpleader: No. Interpleader did not lie because no conflicting claims upon the same subject matter were made against plaintiffs, both defendants being in conformity that payments be made to PHHC alone.
• Unresolved Ownership and Undertakings: No. Those matters involved conflicting claims between the corporations only, not against plaintiffs, and could not be litigated through interpleader, the remedy for breach being an ordinary action for specific performance or other appropriate suit.

• Requisites of Interpleader: Rule 63, section 1 of the Revised Rules of Court requires as an indispensable element conflicting claims upon the same subject matter against the plaintiff-in-interpleader, who claims no interest or an interest not disputed by claimants. While PHHC and GSIS may have had conflicting claims between themselves on management, administration and ownership, no allegation showed any corporation other than PHHC, the only entity privy to the lease-purchase agreement, ever claimed payment from plaintiffs. Both corporations agreed monthly payments be made directly to PHHC, GSIS undertook to recognize such payments, and Par. III, section M of the December 27, 1961 turnover agreement expressly required GSIS to recognize PHHC awards, contracts of sale, lease agreements and commitments to sell Projects 4, 6 and 8-A. Interpleader protects against double vexation in respect of one liability, not merely double liability, and was therefore unavailable.
• Unresolved Ownership and Undertakings: The enforceability or non-recognition of the turnover agreement and questions of ownership and prior commitments were irrelevant to interpleader because they were disputes exclusively between the corporations, both of which bound themselves to recognize tenants' rights. The record, including the Government Corporate Counsel's written reiteration and the managers' assurances embodied in the November 20, 1962 order, negated any claim of decision on mere oral manifestations. Any breach of PHHC undertakings toward plaintiffs would support an ordinary action, not the special civil action of interpleader.

• Interpleader; indispensable element of conflicting claims against plaintiff — Interpleader 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, under Rule 63, section 1 of the Revised Rules of Court, formerly Rule 14. Applied here, disputes between PHHC and GSIS over ownership and administration, without competing demands for payment against the tenants and with agreement that payment go to PHHC, failed to meet the element.
• Interpleader; protection against double vexation — The action of interpleader is a remedy whereby a person having property in possession or an obligation to render, without claiming right therein, asks that defendants with conflicting claims upon him be required to litigate among themselves to determine entitlement; the remedy protects against double vexation in respect of one liability, not merely double liability. Applied here, tenants faced no double vexation because both corporations directed payment to PHHC and assured credit therefor.
• Interpleader unavailable for separate and distinct claims — Where claimants enforce separate and distinct claims not upon the same subject matter against the plaintiff, interpleader does not lie, as illustrated by Camilo vs. Arcamo where occupants facing two ejectment suits over adjoining parcels could not compel the owners to interplead. Applied here by analogy, the inter-corporate ownership dispute could not be forced into interpleader by tenants who were subject to only one payee.

• "conflicting claims upon the same subject matter are or may be made" — States the indispensable statutory element of interpleader whose absence was decisive to affirming dismissal.
• "who claims no interest whatever in the subject matter or an interest which in whole or in part is not disputed by the claimants." — Completes the canonical formulation of the plaintiff-in-interpleader's standing and disinterest.
• "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." — Defines the purpose of interpleader, borrowed from Alvarez vs. Commonwealth of the Philippines, and explains why agreed single payment defeated the suit.
• "GSIS shall recognize and respect all awards, contracts of sale, lease agreements and transfer of rights to lots and housing units made and approved by PHHC, subsisting as of the signing of this agreement, and PHHC commitment to sell its housing projects 4, 6 and 8-A at the selling prices less rental credits fixed by PHHC and as finally approved by the OEC." — Quotes the turnover agreement's protection of tenants, supporting the finding of no conflicting demand against them.

• Alvarez vs. Commonwealth of the Philippines, et al., 65 Phil. 302, 311-312 (1938) — Followed as authority defining interpleader as requiring defendants to litigate among themselves entitlement to property or payment, afforded to protect against double vexation in respect of one liability.
• Camilo vs. Arcamo, 3 SCRA 146 (1961) — Followed by analogy to hold interpleader improper where there are no conflicting claims upon the same subject matter against the plaintiff, but only separate claims or an inter-defendant dispute.

• Section 1, Rule 63, Revised Rules of Court (formerly Rule 14) — Requires conflicting claims upon the same subject matter against the plaintiff-in-interpleader who claims no interest or an undisputed interest; applied to dismiss the suit for absence of competing claims for payment against the tenants.

Concepcion, C.J., Dizon, Makalintal, Sanchez, Castro, Fernando, Capistrano and Barredo, JJ., concur. Reyes, J.B.L., and Zaldivar, JJ., were on leave.