RCBC vs. Metro

5/11/15, 2:30 PMSUPREME COURT REPORTS ANNOTATED VOLUME 365

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150 SUPREME COURT REPORTS ANNOTATED

Rizal Commercial Banking Corporation vs. MetroContainer Corporation

G.R. No. 127913. September 13, 2001.*

RIZAL COMMERCIAL BANKING CORPORATION,petitioner, vs. METRO CONTAINER CORPORATION,respondent.

Actions; Interpleader; An action for interpleader is afforded toprotect a person not against double liability but against doublevexation in respect of one liability.·It should be remembered thatan action of interpleader is afforded to protect a person not againstdouble liability but against double vexation in respect of oneliability. It requires, as an indespensable requi-

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43 People vs. Erese, 281 SCRA 316 [1997].

* FIRST DIVISION.

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Rizal Commercial Banking Corporation vs. Metro ContainerCorporation

site, that „conflicting claims upon the same subject matter are ormay be made against the plaintiff-in-interpleader who claims nointerest whatever in the subject matter or an interest which inwhole or in part is not disputed by the claimants.‰ The decision inCivil Case No. 6202 resolved the conflicting claims insofar as

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payment of rentals was concerned.

PETITION for review on certiorari of a decision of theCourt of Appeals.

The facts are stated in the opinion of the Court. Angara, Abello, Concepcion, Regala & Cruz for

petitioner. Mondragon and Montoya Law Offices for private

respondent. Noel Mingoa for Ley Construction.

KAPUNAN, J.:

Assailed in this petition for review on certiorari are theDecision, promulgated on 18 October 1996 and theResolution, promulgated on 08 January 1997, of the Courtof Appeals in CA-G-R. SP No. 41294.

The facts of the case are as follows:On 26 September 1990, Ley Construction Corporation

(LEYCON) contracted a loan from Rizal CommercialBanking Corporation (RCBC) in the amount of ThirtyMillion Pesos (P30,000,000.00). The loan was secured by areal estate mortgage over a property, located in BarrioUgong, Valenzuela, Metro Manila (now Valenzuela City)and covered by TCT No. V-17223. LEYCON failed to settleits obligations prompting RCBC to institute anextrajudicial foreclosure proceedings against it. AfterLEYCONÊs legal attempts to forestall the action of RCBCfailed, the foreclosure took place on 28 December 1992 withRCBC as the highest bidder.

LEYCON promptly filed an action for Nullification ofExtrajudicial Foreclosure Sale and Damages againstRCBC. The case, docketed as Civil Case No. 4037-V-93, wasraffled to the Regional Trial Court (RTC) of Valenzuela,Branch 172. Meanwhile, RCBC consolidated its ownershipover the property due to LEYCONÊs failure to redeem itwithin the 12-month redemption period and TCT No.

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V-332432 was issued in favor of the bank. By virtuethereof, RCBC demanded rental payments from MetroContainer Corporation (METROCAN) which was leasingthe property from LEYCON.

On 26 May 1994, LEYCON filed an action for UnlawfulDetainer, docketed as Civil Case No. 6202, againstMETROCAN before the Metropolitan Trial Court (MeTC)of Valenzuela, Branch 82.

On 27 May 1994, METROCAN filed a complaint forInterpleader, docketed as Civil Case No. 4398-V-94 beforethe Regional Trial Court of Valenzuela, Metro Manila,Branch 75 against LEYCON and RCBC to compel them tointerplead and litigate their several claims amongthemselves and to determine which among them shallrightfully receive the payment of monthly rentals on thesubject property. On 04 July 1995, during the pre-trialconference in Civil Case No. 4398-V-94, the trial courtordered the dismissal of the case insofar as METROCANand LEYCON were concerned in view of an amicablesettlement they entered by virtue of which METROCANpaid back rentals to LEYCON.

On 31 October 1995, judgment was rendered in CivilCase No. 6202, which among other things, orderedMETROCAN to pay LEYCON whatever rentals due on thesubject premises. The MeTC decision became final andexecutory.

On 01 February 1996, METROCAN moved for thedismissal of Civil Case No. 4398-V-94 for having becomemoot and academic due to the amicable settlement itentered with LEYCON on 04 July 1995 and the decision inCivil Case No. 6202 on 31 October 1995. LEYCON,likewise, moved for the dismissal of the case citing thesame grounds cited by METROCAN.

On 12 March 1996, the two motions were dismissed forlack of merit. The motions for reconsideration filed byMETROCAN and LEYCON were also denied promptingMETROCAN to seek relief from the Court of Appeals via apetition for certiorari and prohibition with prayer for theissuance of a temporary restraining order and a writ ofpreliminary injunction. LEYCON, as private respondent,also sought for the nullification of the RTC orders.

In its Decision, promulgated on 18 October 1996, theCourt of Appeals granted the petition and set aside the 12March 1996 and



(1)

(2)

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24 June 1996 orders of the RTC. The appellate court alsoordered the dismissal of Civil Case No. 4398-V-94. RCBCÊsmotion for reconsideration was denied for lack of merit inthe resolution of 08 January 1997.

Hence, the present recourse.RCBC alleged, that:

THE DECISION OF THE METROPOLITANTRIAL COURT IN THE EJECTMENT CASEBETWEEN METROCAN AND LEYCON DOESNOT AND CANNOT RENDER THEINTERPLEADER ACTION MOOT ANDACADEMIC.

WHILE A PARTY WHO INITIATES ANINTERPLEADER ACTION MAY NOT BECOMPELLED TO LITIGATE IF HE IS NOLONGER INTERESTED TO PURSUE SUCHCAUSE OF ACTION, SAID PARTY MAY NOTUNILATERALLY CAUSE THE DISMISSAL OFTHE CASE AFTER THE ANSWER HAVE BEENFILED. FURTHER, THE DEFENDANTS IN ANINTERPLEADER SUIT SHOULD BE GIVENFULL OPPORTUNITY TO LITIGATE THEIRRESPECTIVE CLAIMS.

1

We sustain the Court of Appeals.Section 1, Rule 63 of the Revised Rules of Court

2

provides:

Section 1. Interpleader when proper.·Whenever conflicting claimsupon the same subject matter are or may be made against a person,who claims no interest whatever in the subject matter, or aninterest which in whole or in part is not disputed by the claimants,he may bring an action against the conflicting claimants to compelthem to interplead and litigate their several claims amongthemselves.

In the case before us, it is undisputed that METROCAN





filed the interpleader action (Civil Case No. 4398-V-94)because it was unsure which betweten LEYCON and RCBCwas entitled to receive the payment of momthly rentals onthe subject property. LEYCON was claiming payment ofthe rentals as lessor of the property while RCBC wasmaking a demand by virtue of the consolidation of the titleof the property in its name.

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1 Rollo, p. 25.2 Now Section 1, Rule 62 of the 1997 Rules of Civil Procedure.

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It is also undisputed that LEYCON, as lessor of the subjectproperty filed an action for unlawful detainer (Civil CaseNo. 6202) against its lessee METROCAN. The issue in CivilCase No. 6202 is limited to the question of physical ormaterial possession of the premises.

3 The issue of

ownership is immaterial therein4 and the outcome of the

case could not in any way affect conflicting claims ofownership, in this case between RCBC and LEYCON. Thiswas made clear when the trial court, in denying RCBCÊs„Motion for Inclusion x x x as an Indispensable Party‰declared that „the final determination of the issue ofphysical possession over the subject premises between theplaintiff and the defendant shall not in any way affectRCBCÊs claims of ownership over the said premises, sinceRCBC is neither a co-lessor or co-lessee of the same, hencehe has no legal personality to join the parties herein withrespect to the issue of physical possession vis-à-vis thecontract of lease between the parties.‰

5 As aptly pointed by

the MeTC, the issue in Civil Case No. 6202 is limited to thedefendant LEYCONÊs breach of the provisions of theContract of Lease Rentals.

6

Hence, the reason for the interpleader action ceasedwhen the MeTC rendered judgment in Civil Case No. 6202whereby the court directed METROCAN to pay LEYCON„whatever rentals due on the subject premises x x x.‰ While







RCBC, not being a party to Civil Case No. 6202, could notbe bound by the judgment therein, METROCAN is boundby the MeTC decision. When the decision in Civil Case No.6202 became final and executory, METROCAN has noother alternative left but to pay the rentals to LEYCON.Precisely because there was already a judicial flat toMETROCAN, there was no more reason to continue withCivil Case No. 4398-V-94. Thus, METROCAN moved forthe dismissal of the interpleader action not because it is nolonger interested but because there is no more need for it topursue such cause of action.

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3 Lagrosa vs. Court of Appeals, 312 SCRA 298 (1999); Arcal vs. Court

of Appeals, 285 SCRA 34 (1998).4 Carreon vs. Court of Appeals, 291 SCRA 78 (1998).5 Rollo, p. 79.6 Id., at 76.

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It should be remembered that an action of interpleader isafforded to protect a person not against double liability butagainst double vexation in respect of one liability.

7 It

requires, as an in-despensable requisite, that „conflictingclaims upon the same subject matter are or may be madeagainst the plaintiff-in-interpleader who claims no interestwhatever in the subject matter or an interest which inwhole or in part is not disputed by the claimants.‰

8 The

decision in Civil Case No. 6202 resolved the conflictingclaims insofar as payment of rentals was concerned.

Petitioner is correct in saying that it is not bound by thedecision in Civil Case No. 6202. It is not a party thereto.However, it could not compel METROCAN to pursue CivilCase No. 4398-V-94. RCBC has other avenues to prove itsclaim. Is not bereft of other legal remedies. In fact, theissue of ownership can very well be threshed out in CivilCase No. 4037-V-93, the case for Nullification ofExtrajudicial Foreclosure Sale and Damages filed by





LEYCON against RCBC.WHEREFORE, the petition for review is DENIED and

the Decision of the Court of Appeals, promulgated on 18October 1996, as well as its Resolution promulgated on 08January 1997, are AFFIRMED.

SO ORDERED.

Davide, Jr. (C.J., Chairman), Pardo and Ynares-Santiago, JJ., concur.

Puno, J., Official leave.

Petition denied, judgment affirmed.

Note.·A party in an interpleader action, after havingasserted his rights as a buyer in good faith in his answer,and praying relief therefor, should crystallize his demandinto specific claims for

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7 Wackwack Golf and Country Club, Inc. vs. Won, 70 SCRA 165 (1976).8 Lim vs. Continental Development Corporation, 69 SCRA 349 (1976)

citing Beltran vs. PeopleÊs Homesite and Housing Corporation, 29 SCRA

145 (1969).

156


People vs. Iglesia

reimbursement by the other party. (Arreza vs. Diaz, Jr., 364SCRA 88 [2001])

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