JOSE A. BELTRAN, ET AL.

, plaintiffs-appellants,
vs.
PEOPLE'S HOMESITE & HOUSING
CORPORATION, defendants-appellees.
G.R. No. L-25138

August 28, 1969

Teehankee, J:
Facts: An interpleader suit was filed on August 21, 1962, by
plaintiffs Jose Beltran, et al. in their own behalf and in behalf
of all residents of Project 4 in Quezon City, praying that the
People's Homesite & Housing Corporation (PHHC) and GSIS
be compelled to litigate and interplead between themselves
their alleged conflicting claims involving said Project 4.
PHHC leased out housing units to plaintiffs in 1953. The
lessees, paying monthly rentals therefor, were assured by
competent authority that after 5 years of continuous
occupancy, they would be entitled to purchase these units.
In 1961, the PHHC announced that the management,
administration and ownership of Project 4 would be
transferred to GSIS in payment of PHHS debts to GSIS.
PHHC also asked the tenants to signify their conformity to
buy the housing units at the selling price indicated on the
back thereof, agreeing to credit the tenants, as down
payment on the selling price, 30% of what had been paid by
them as rentals. The tenants accepted the PHHC offer, and
on March 27, 1961, the PHHC announced in another circular
that all payments made by the tenants after March 31, 1961
would be considered as amortizations or installment
payments.

By the end of 1960, administration and ownership of Project

4 was turned over to GSIS. PHHC, however, through its new
Chairman-General Manager, Esmeraldo Eco, refused to
recognize all agreements previously entered into with GSIS,
while GSIS insisted on its legal rights to enforce the said
agreements and was upheld in its contention by both the
Government Corporate Counsel and the Secretary of Justice.

Plaintiffs thus claimed that these conflicting claims between

PHHC and GSIS caused them great inconvenience and
incalculable moral and material damage, as they did not
know to whom they should pay the monthly amortizations or
payments.

TC: Designated the People's First Savings Bank, QC "to

receive in trust the payments from the plaintiffs on their
monthly amortizations on PHHC lots and to be released only
upon proper authority of the Court."

PHHC and GSIS filed a Motion to Dismiss the complaint of

Beltran, et al. 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 trustee to receive the tenants' payments on
the PHHC lots.

TC granted the Motion, ruling that the counsel for GSIS

ratified the allegations in his motion and made of record that
GSIS has no objection that payments on the monthly
amortizations be made directly to PHHC. There was thus no
dispute as to whom the residents pay and therefore no
cause of action for interpleading. Counsel for defendants
went further to say that whatever dispute, if any, may exist
between the two corporations over the lots and buildings in
Project 4, payments made to the PHHC will not and cannot
in any way affect or prejudice the rights of the residents
thereof as they will be credited by either of the two
defendants.
On appeal, plaintiffs claim that the trial Court erred in
dismissing their suit, contending the 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 right and lawful party to receive their
monthly amortizations as would eventually entitle them to a
clear title to their dwelling units."

Issue: Whether the dismissal

interpleader was proper? YES.

of

the

complaint

for

Ruling: Plaintiffs entirely missed the vital element of an

action of interpleader. Rule 62, section 1 of the Revised
Rules of Court requires as an indispensable element 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." While
PHHC and GSIS may have conflicting claims 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 allegation is made in their complaint that any
corporation other than the PHHC which was the only entity
privy to their lease-purchase agreement, ever made on
them any claim or demand for payment of the rentals or
amortization payments. The questions of fact raised in their
complaint concerning the enforceability, and recognition or
non-enforceability and non-recognition of the turnover
agreement of December 27, 1961 between the two
defendant corporations are irrelevant to their action of
interpleader, for these conflicting claims, loosely so-called,
are between the two corporations and not against plaintiffs.
Both defendant corporations were in conformity and had no
dispute, as pointed out by the trial court that the monthly
payments and amortizations should be made directly to the
PHHC alone.