G.R. No. L-25138, August 28, 1969
JOSE A. BELTRAN, ET AL., plaintiffs-appellants, vs. PEOPLE’S HOMESITE & HOUSING CORPORATION, defendants-appellees.

FACTS

Plaintiffs, residents of Project 4 in Quezon City, filed an interpleader suit against the People’s Homesite & Housing Corporation (PHHC) and the Government Service Insurance System (GSIS). They alleged that since 1953, they occupied housing units under a lease agreement with PHHC, with an assurance of purchase after five years. In 1961, PHHC announced the transfer of Project 4’s management and ownership to GSIS to settle PHHC’s debts and offered to sell the units to the tenants, crediting 30% of past rentals as a down payment. The tenants accepted. Subsequently, a turnover agreement was executed between PHHC and GSIS in December 1961. However, PHHC’s new Chairman-General Manager later refused to recognize prior agreements with GSIS, while GSIS insisted on enforcing them. Plaintiffs claimed this created conflicting claims between the defendants, causing them uncertainty over whom to pay their monthly amortizations. They sought to compel the defendants to interplead. The trial court initially designated a bank to receive payments in trust. The defendants, represented by the Government Corporate Counsel, moved to dismiss the complaint for failure to state a cause of action, asserting there was no dispute that payments should be made to PHHC and that such payments would be recognized by both corporations. The trial court dismissed the complaint, finding no conflicting claims against the plaintiffs, as both defendants agreed payments should be made to PHHC and would be honored regardless of any internal dispute. Plaintiffs appealed, arguing factual issues required a trial.

ISSUE

Whether the trial court correctly dismissed the complaint for interpleader on the ground that it does not state a cause of action, specifically due to the absence of conflicting claims made against the plaintiffs by the defendant corporations.

RULING

Yes, the trial court’s order of dismissal is affirmed. The Supreme Court held that an action for interpleader under Rule 63, Section 1 of the Revised Rules of Court requires that conflicting claims upon the same subject matter are or may be made against the plaintiff-in-interpleader, who claims no interest or a disputed interest in the subject matter. In this case, while the defendants (PHHC and GSIS) may have had conflicting claims between themselves regarding the management and ownership of Project 4, these claims were not made against the plaintiffs. No entity other than PHHC, which was the original party to the lease-purchase agreements, made any claim or demand for payment from the plaintiffs. Both defendants expressly agreed that payments should be made directly to PHHC and assured that such payments would be recognized and credited, even if GSIS eventually took over. The Court emphasized that interpleader is designed to protect a person from double vexation respecting one liability, not to resolve disputes between third parties that do not directly impose conflicting demands on the plaintiff. The issues raised by plaintiffs regarding ownership and the validity of prior commitments were matters between the defendants and did not constitute conflicting claims against the plaintiffs proper for interpleader. Plaintiffs’ recourse, if any breach occurred, would be an ordinary action for specific performance or other appropriate suit. Thus, the complaint failed to state a cause of action for interpleader.