G.R. No. L-56766 February 28, 1985
CRESENCIO YU, et al., petitioners, vs. HONORABLE COURT OF APPEALS, ROSETTE’S STORE, et al., respondents.

FACTS

Petitioners are the co-owners of a commercial building in Cebu City. Private respondents are their lessees occupying the premises on a verbal month-to-month basis. In 1976, petitioners informed respondents of a rental increase and later of necessary building repairs. The lessees refused both demands. Petitioners then demanded that the lessees vacate the premises. Instead of complying, the lessees filed a complaint for “Interpleader, Specific Performance, Fix Duration of Lease, Consignation with Injunction” (Civil Case No. R-15971), denying petitioners’ title and seeking judicial intervention.
The trial court dismissed the complaint. It found no basis for interpleader as the lessees had been paying rentals to the co-owners without objection, indicating recognition of their title. Furthermore, the court ruled the action was barred by the pendency of another case (Civil Case No. R-14977) involving the same parties and issues, which was then on appeal. Private respondents appealed this dismissal to the Court of Appeals.

ISSUE

Whether the Court of Appeals committed grave abuse of discretion in reinstating the appeal and remanding the case for further proceedings, despite the trial court’s valid dismissal based on lack of a valid cause of action and lis pendens.

RULING

Yes, the Supreme Court granted the petition, annulling the Court of Appeals’ resolutions. The trial court correctly dismissed the complaint. An action for interpleader is proper only when there are conflicting claims against the complainant, who claims no interest in the subject matter. Here, the lessees themselves were asserting a claim and denying their landlords’ title, making interpleader improper. Consignation was also inappropriate as it is not a proceeding to determine landlord-tenant relationships.
Critically, the dismissal was justified under the rule on lis pendens (pendency of another action). The requisites were present: substantial identity of parties, identity of rights asserted and relief prayed for founded on the same facts. The earlier interpleader case (Civil Case No. R-14977) involved the same core issue—the validity of the lessors’ title and the right to collect rent. A judgment in that case would constitute res judicata. The lease being on a month-to-month basis, petitioners had the clear right to terminate it. The lessees’ multiple lawsuits were a transparent tactic to prolong occupancy. Therefore, the appeal was frivolous, and the Court of Appeals’ order for further proceedings constituted grave abuse of discretion, impairing the speedy administration of justice. The Supreme Court reversed the appellate court and reinstated the trial court’s dismissal order.