Republic of the Philippines announced in another circular that all payments made by the tenants after March 31,

in another circular that all payments made by the tenants after March 31, 1961
SUPREME COURT would be considered as amortizations or installment payments. The PHHC furthermore
Manila instructed the Project Housing Manager in a memorandum of May 16, 1961 to accept as
installments on the selling price the payments made after March 31, 1961 by tenants who
EN BANC were up-to-date in their accounts 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 the PHHC to the GSIS. On December 27, 1961, the agreement of turnover of
G.R. No. L-25138             August 28, 1969
administration and ownership of PHHC properties, including Project 4 was executed by
PHHC in favor of GSIS, pursuant to the release of mortgage and amicable settlement of the
JOSE A. BELTRAN, ET AL., plaintiffs-appellants, extrajudicial foreclosure proceedings instituted in May, 1960 by GSIS against PHHC.
vs. Subsequently, however, PHHC through its new Chairman-General Manager, Esmeraldo Eco,
PEOPLE'S HOMESITE & HOUSING CORPORATION, defendants-appellees. refused to recognize all agreements and undertakings previously entered into with GSIS,
while GSIS insisted on its legal rights to enforce the said agreements and was upheld in its
Beltran, Cendaña, Camu, Pelias and Manuel for plaintiffs-appellants. contention by both the Government Corporate Counsel and the Secretary of Justice. Plaintiffs
Government Corporate Counsel Tomas P. Matic Jr. and Assistant Government Corporate thus claimed that these conflicting claims between the defendants-corporations caused them
Counsel Romualdo Valera for defendants-appellees. great inconvenience and incalculable moral and material damage, as they did not know to
whom they should pay the monthly amortizations or payments. They further alleged that as
the majority of them were GSIS policy holders, they preferred to have the implementation of
the outright sale in their favor effected by the GSIS, since the GSIS was "legally entitled to
the management, administration and ownership of the PHHC properties in question."  1
TEEHANKEE, J.:
Upon urgent ex parte motion of plaintiffs, the trial Court issued on August 23, 1962 its Order
designating the People's First Savings Bank at Quezon City "to receive in trust the payments
Appeal on purely questions of law from an order of dismissal of the complaint for interpleader,
from the plaintiffs on their monthly amortizations on PHHC lots and to be released only upon
on the ground that it does not state a cause of action, as certified to this Court by the Court of
proper authority of the Court." 2
Appeals. We affirm the dismissal on the ground that where the defendants sought to be
interpleaded as conflicting claimants have no conflicting claims against plaintiff, as correctly
found by the trial court, the special civil action of interpleader will not lie. On August 29, 1962, the two defendant corporations represented by the Government
Corporate Counsel filed a Motion to Dismiss the complaint for failure to state a cause of
action as well as to lift the Court's order designating the People's First Savings Bank as
This interpleader suit was filed on August 21, 1962, by plaintiffs in their own behalf and in
trustee to receive the tenants' payments on the PHHC lots.
behalf of all residents of Project 4 in Quezon City, praying that the two defendant-government
corporations be compelled to litigate and interplead between themselves their alleged
conflicting claims involving said Project 4. The trial Court heard the motion on September 1, 1962 in the presence of all the parties, and
thereafter issued its Order of September 6, 1962, dismissing the Complaint, ruling
that: "During the hearing of the said motion and opposition thereto, the counsel for the
Plaintiffs' principal allegations in their complaint were as follows: Since they first occupied in
defendants ratified the allegations in his motion and made of record that the defendant
1953 their respective housing units at Project 4, under lease from the People's Homesite &
Government Service Insurance System has no objection that payments on the monthly
Housing Corporation (PHHC) and paying monthly rentals therefor, they were assured by
amortizations from the residents of Project 4 be made directly to the defendant People's
competent authority that after five years of continuous occupancy, they would be entitled to
Homesite and Housing Corporation. From what appears in said motion and the statement
purchase said units. On February 21, 1961, the PHHC announced to the tenants that the
made in open court by the counsel for defendants that there is no dispute as to whom the
management, administration and ownership of Project 4 would be transferred by the PHHC to
residents of Project 4 should make their monthly amortizations payments, there is, therefore,
the Government Service Insurance System (GSIS) in payment of PHHC debts to the GSIS. In
no cause of action for interpleading and that the order of August 23, 1962 is not warranted by
the same announcement, the PHHC also asked the tenants to signify their conformity to buy
the circumstances surrounding the case. In so far as payments are concerned, defendant
the housing units at the selling price indicated on the back thereof, agreeing to credit the
GSIS has expressed its conformity that they be made directly to defendant PHHC. Counsel
tenants, as down payment on the selling price, thirty (30%) percent of what had been paid by
for defendants went further to say that whatever dispute, if any, may exist between the two
them as rentals. The tenants accepted the PHHC offer, and on March 27, 1961, the PHHC

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corporations over the lots and buildings in Project 4, payments made to the PHHC will not The record rejects plaintiffs' claim that the trial courts order was based on "mere oral
and cannot in any way affect or prejudice the rights of the residents thereof as they will be manifestations in court." The Reply to Opposition of September 11, 1962 filed by the
credited by either of the two defendants."  3 Government Corporate Counsel expressly "reiterates his manifestation in open court that no
possible injustice or prejudice would result in plaintiffs by continuing to make payments of
Plaintiffs subsequently filed their motion for reconsideration and the trial court, "with a view to such rentals or amortizations to defendant PHHC because any such payments will be
thresh out the matter once and for all," called the Managers of the two defendants- recognized as long as they are proper, legal and in due course by anybody who might take
corporations and the counsels for the parties to appear before it for a conference on October over the property. Specifically, any such payments will be recognized by the GSIS in the
24, 1962. "During the conference," the trial court related in its Order of November 20, 1962, event that whatever conflict there might be (and this is only on the hypothetical assumption
denying plaintiffs' Motion for Reconsideration, "Manager Diaz of the GSIS made of record that such conflict exists) between the PHHC and the GSIS should finally be resolved in favor
that he has no objection that payments be made to the PHHC. On the other hand, Manager of the GSIS". 6 The assurances and undertakings to the same affect given by the Managers of
Eco of the PHHC made of record that at present there is a standing arrangement between the the defendants-corporations at the conference held by the trial Court are expressly embodied
GSIS and the PHHC that as long as there is showing that the PHHC has remitted 100% of in the Court's Order of November 20, 1962 quoted above. The GSIS' undertaking to
the total purchase price of a given lot to the GSIS, the latter corporation shall authorize the recognize and respect the previous commitments of PHHC towards its tenants is expressly
issuance of title to the corresponding lot. It was also brought out in said conference that there set forth in Par. III, section M of the turnover agreement, Annex "F" of plaintiffs' complaint,
is a new arrangement being negotiated between the two corporations that only 50% of the wherein it is provided that "GSIS shall recognize and respect all awards, contracts of sale,
purchase price be remitted to the GSIS by the PHHC, instead of the 100%. At any rate the lease agreements and transfer of rights to lots and housing units made and approved by
two Managers have assured counsel for the plaintiffs that upon payment of the whole PHHC, subsisting as of the signing of this agreement, and PHHC commitment to sell its
purchase price of a given lot, the title corresponding to said lot will be issued." 4 housing projects 4, 6 and 8-A at the selling prices less rental credits fixed by PHHC and as
finally approved by the OEC. PHHC, however, shall be liable and answerable for any and all
claims and consequences arising from double or multiple awards or in the case of awards of
On appeal, plaintiffs claim that the trial Court erred in dismissing their suit, contending the
non-existing houses and/or lots." 7
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 In fine, the record shows clearly that there were no conflicting claims by defendant
right and lawful party to receive their monthly amortizations as would eventually entitle them corporations as against plaintiff-tenants, which they may properly be compelled in an
to a clear title to their dwelling units." 5 interpleader suit to interplead and litigate among themselves. 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
Plaintiffs entirely miss the vital element of an action of interpleader. Rule 63, section 1 of the
virtue of their turnover agreement of December 27, 1961. As held by this Court in an early
Revised Rules of Court (formerly Rule 14) requires as an indispensable element that
case, the action of interpleader is a remedy whereby a person who has property in his
"conflicting claims upon the same subject matter are or may be made" against the plaintiff-in-
possession or has an obligation to render wholly or partially, without claiming any right in
interpleader "who claims no interest whatever in the subject matter or an interest which in
both, comes to court and asks that the defendants who have made upon him conflicting
whole or in part is not disputed by the claimants." While the two defendant corporations may
claims upon the same property or who consider themselves entitled to demand compliance
have conflicting claims between themselves with regard to the management, administration
with the obligation be required to litigate among themselves in order to determine who is
and ownership of Project 4, such conflicting claims are not against the plaintiffs nor do they
entitled to the property or payment of the obligation. "The remedy is afforded not to protect a
involve or affect the plaintiffs. No allegation is made in their complaint that any corporation
person against a double liability but to protect him against a double vexation in respect of one
other than the PHHC which was the only entity privy to their lease-purchase agreement, ever
liability." 8 Thus, in another case, where the occupants of two different parcels of land
made on them any claim or demand for payment of the rentals or amortization payments. The
adjoining each other belonging to two separate plaintiffs, but on which the occupants had
questions of fact raised in their complaint concerning the enforceability, and recognition or
constructed a building encroaching upon both parcels of land, faced two ejectment suits from
non-enforceability and non-recognition of the turnover agreement of December 27, 1961
the plaintiffs, each plaintiff claiming the right of possession and recovery over his respective
between the two defendant corporations are irrelevant to their action of interpleader, for these
portion of the lands encroached upon, this Court held that the occupants could not properly
conflicting claims, loosely so-called, are between the two corporations and not against
file an interpleader suit, against the plaintiffs, to litigate their alleged conflicting claims; for
plaintiffs. Both defendant corporations were in conformity and had no dispute, as pointed out
evidently, the two plaintiff did not have any conflicting claims upon the same subject matter
by the trial court that the monthly payments and amortizations should be made directly to the
against the occupants, but were enforcing separate and distinct claims on their respective
PHHC alone.
properties. 9

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Plaintiffs' other contention in their appeal is that notwithstanding that the issue as to which of defendant ratified the allegations in his motion and made of record that GSIS has no objection that
the defendants is authorized to receive the tenants' payments was resolved in favor of the payments on the monthly amortizations from the residents of Project 4 be made directly to PHHC.
PHHC, they had raised other issues that were not resolved and would require rendition of
Plaintiffs appealed, contending the allegations in their complaint raise questions of fact that can be
judgment after trial on the merits, such as "the issue of the right of ownership over the houses
and lots in Project 4 (and) the issue of the status of the commitment agreements and established only by answer and trial on the merits and not by a motion to dismiss heard by mere oral
undertakings made by the previous PHHC Administration, particularly those of the then manifestations in open court.
PHHC General Manager Bernardo Torres." 10 This contention is without merit, for no
conflicting claims have been made with regard to such issues upon plaintiffs by defendant Issue: Did the trial court erred in dismissing the complaint for interpleader?
corporations, who both bound themselves to recognize and respect the rights of plaintiffs-
tenants. The resolution of such issues affecting the defendant corporations exclusively may Held: No. Rule 63, section 1 of the Revised Rules of Court requires as an indispensable element that
not properly be sought through the special civil action of interpleader. Should there be a "conflicting claims upon the same subject matter are or may be made" against the plaintiff-in-
breach of the PHHC undertakings towards plaintiffs, plaintiffs' recourse would be an ordinary
interpleader "who claims no interest whatever in the subject matter or an interest which in whole or
action of specific performance or other appropriate suit against either the PHHC or GSIS or
both, as the circumstances warrant. in part is not disputed by the claimants."

We find no error, therefore, in the trial court's order of dismissal of the complaint for
interpleader and the lifting, as a consequence, of its other order designating the People's First
Savings Bank as trustee to receive the tenants' payments on the PHHC lots. 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
ACCORDINGLY, the trial Court's order of dismissal is hereby affirmed. Without litigate among themselves. While the two defendant corporations may have conflicting claims
costs.1äwphï1.ñët 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
Concepcion, C.J., Dizon, Makalintal, Sanchez, Castro, Fernando, Capistrano and Barredo, allegation is made in their complaint that any corporation other than the PHHC which was the only
JJ., concur.
entity privy to their lease-purchase agreement, ever made on them any claim or demand for payment
Reyes, J.B.L., and Zaldivar, JJ., are on leave.
of the rentals or amortization payments. Both defendant corporations were in conformity and had no
https://lawphil.net/judjuris/juri1969/aug1969/gr_l-25138_1969.html 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. (Beltran, et al.
Facts: Plaintiffs since they first occupied their housing units under lease from PHHC, under lease and vs. PHHC, G.R. No. L-25138, August 28, 1969)
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 http://remediallawnotes.blogspot.com/2016/09/beltran-vs-phhc-case-digest.html
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

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