Wack Wack Golf v. Won

FACTS: Wack Wack Golf & Country Club (“Corporation”), a non-stock, civic and athletic corporation organized under the laws of the Philippines, filed a complaint of interpleader. It alleged, for its first cause of action, that defendants Lee Won and Bienvenido Tan were both claiming ownership over the Corporation’s membership fee certificate (“MFC”) 201: Won, by virtue of the decision of the CFI of Manila in civil case 26044 and by MFC 201-serial no. 1478 issued on Oct. 17, 1963 by the deputy clerk of court for and in behalf of the president and secretary of the corporation and of the People’s Bank & Trust Company; Tan, on the other hand, by virtue of MFC 201-serial no. 1199 issued on July 24, 1950 pursuant to an assignment in his favor by Swan, Culbertson and Fritz, the original owner of MFC 201. For its second cause of action, the Corporation alleged that MFC 201-serial no. 1478 issued by the deputy clerk of court in behalf of the Corporation is null and void because it was issued in violation of the Corporation’s by-laws, which require the surrender and cancellation of the outstanding MFC 201 before issuance may be made to the transferee of a new certificate duly signed by its president and secretary, aside from the fact that the decision of the CFI of Manila in civil case 26044 is not binding upon defendant Tan.

The Corporation prayed for the issuance of an order requiring Lee and Tan to interplead and litigate their conflicting claims, declaring who the lawful owner of MFC 201 is, and ordering the surrender and cancellation of MFC 201-serial no. 1478 issued in the name of Lee.

The trial court dismissed the complaint upon motion of the defendants on the grounds of res judicata, failure of the complaint to state a cause of action, and bar by prescription.

ISSUE: Whether or not the action of interpleader was proper and timely filed.

HELD: No. The Supreme Court affirmed the dismissal of the complaint.

The action of interpleader, under §120 of the Code of Civil Procedure, is a remedy whereby a person who has personal property in his possession, or an obligation to render wholly or partially, without claiming any right to either, comes to court and asks that the persons who claim the said personal property or who consider themselves entitled to demand compliance with the obligation, be required to litigate among themselves in

order to determine finally who is entitled to tone or the one thing. The remedy is afforded to protect a person not against double liability but against double vexation in respect of one liability.

A stakeholder should use reasonable diligence to hale the contending claimants to court. He need not await actual institution of independent suits against him before filing a bill of interpleader. He should file an action of interpleader within a reasonable time after a dispute has arisen without waiting to be sued by either of the contending claimants. Otherwise, he may be barred by laches or undue delay. But where he acts with reasonable diligence in view of the environmental circumstances, the remedy is not barred.

If a stakeholder defends a suit filed by one of the adverse claimants and allows said suit to proceed to final judgment against him, he cannot later on have that part of the litigation repeated in an interpleader suit. In the case at hand, the Corporation allowed civil case 26044 to proceed to final judgment. And it offered no satisfactory explanation for its failure to implead Tan in the same litigation. In this factual situation, it is clear that this interpleader suit cannot prosper because it was filed much too late.

A successful litigant cannot later be impleaded by his defeated adversary in an interpleader suit and compelled to prove his claim anew against other adverse claimants, as that would in effect be a collateral attack upon the judgment.

In fine, the interpleader suit cannot prosper because the Corporation had already been made independently liable in civil case 26044 and, therefore, its application for interpleader would in effect be a collateral attack upon the final judgment in the said civil case; Lee had already established his rights to MFC 201 in the civil case and, therefore, this interpleader suit would compel him to establish his rights anew, and thereby increase instead of diminish litigations, which is one of the purposes of an interpleader suit, with the possibility that the benefits of the final judgment in the said civil case might eventually be taken away from him; and because the Corporation allowed itself to be sued to final judgment in the said case, its action of interpleader was filed inexcusably late, for which reason it is barred by laches or unreasonable delay.

RCBC v. Metro Container Corp.

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FACTS: Sept. 1990, Ley Construction Corporation (LEYCON) contracted a loan from RCBC in the amount of P30 million which was secured by a real estate mortgage over a Valenzuela property. LEYCON failed to settle its obligations prompting RCBC to institute extrajudicial foreclosure proceedings against it and in Dec. 1992, RCBC was the highest bidder.

LEYCON as a response, filed an action for Nullificatoin of Extrajudicial Foreclosure Sale and Damages against RCBC but eventually RCBC was able to consolidate its ownership over the property due to LEYCON’s failure to redeem. Metro Container Corporation (METROCAN) which was leasing the property from LEYCON was demanded by RCBC to make rental payments. LEYCON filed an action for Unlawful Detainer against METROCAN.

METROCAN, meanwhile, filed a complaint for Interpleader against LEYCON and RCBC to compel them to interplead and litigate their several claims among themselves and to determine which among them shall rightfully receive the payment of monthly rentals. In the Interpleader case, an amicable settlement was made between METROCAN and LEYCON with respect to back rentals. However, in the Unlawful Detainer case, METROCAN was order to pay LEYCON whatever rentals were due. METRPCAN claims interpleader case is moot and academic because of amicable settlement. RCBC alleges, however, that the decision of the lower court in the ejectment case cannot render the Interpleader action moot and academic.

ISSUE: W/N the Party who initiates the interpleader action may be compelled to litigate if he is no longer interested to pursue such cause of action?

RULING: It is undisputed that METROCAN filed the interpleader action because LEYCON was claiming payment of the rentals as lessor and RCBC was making a demand by virtue of the consolidation of the title of the property in its name. The Supreme Court said that the unlawful detainer case involves issue of material possession and not of ownership, therefore, the reason for the interpleader ceased when the lower court rendered judgment ordering METROCAN to pay LEYCON. It should be remembered that an action for interpleader is afforded to protect a person not against double liability but against double vexation in respect of one liability.

Lim vs. Continental Development Corporation

Almeda vs. Bathala Marketing Industries,Inc.

Facts: In May 1997, respondent Bathala Marketing Industries, Inc. (lessee) entered into a contract of lease with petitioners (lessors). Provisions of the contract of lease include: 

6th - Lessee shall pay an increased rent if there is any new tax imposed on the property 

7th - In case of supervening extraordinary inflation or devaluation of the PHP, the value of PHP at the time of the establishment of the obligation shall be the basis of payment 

Petitioners later demanded payment of VAT and 73% adjusted rentals pursuant to the foregoing provisions. Respondent refused and filed an action for declaratory relief. Petitioners filed an action for ejectment. 

Issue: Whether or not declaratory relief is proper. 

Held: YES. Petitioners insist that respondent was already in breach of the contract when the petition was filed, thus, respondent is barred from filing an action for declaratory relief. However, after petitioners demanded payment of adjusted rentals and in the months that followed, respondent complied with the terms and conditions set forth in their contract of lease by paying the rentals stipulated therein. Respondent religiously fulfilled its obligations to petitioners even during the pendency of the present suit. There is no showing that respondent committed an act constituting a breach of the subject contract of lease. Thus, respondent is not barred from instituting before the trial court the petition for declaratory relief. 

Petitioners further claim that the instant petition is not proper because a separate action for rescission, ejectment and damages had been commenced before another court; thus, the construction of the subject contractual provisions should be ventilated in the same forum. 

As a rule, the petition for declaratory relief should be dismissed in view of the pendency of a separate action for unlawful detainer. In this case, however, the trial court had not yet resolved the rescission/ejectment case during the pendency of the declaratory relief petition. In

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fact, the trial court, where the rescission case was on appeal, initiated the suspension of the proceedings pending the resolution of the action for declaratory relief.

Velarde vs. Social Justice Society

FACTS: The Petition prayed for the resolution of the question "whether or not the act of a religious leader like any of herein respondents, in endorsing the candidacy of a candidate for elective office or in urging or requiring the members of his flock to vote for a specified candidate, is violative of the letter or spirit of the constitutional provisions .They alleged that the questioned Decision did not contain a statement of facts and a dispositive portion.

ISSUE: What is the standard form of a Decision? Did the challenge Decision comply with the aforesaid form?

RULING: The decision shall be in writing, personally and directly prepared by the judge, stating clearly and distinctly the facts and the law on which it is based, signed by the issuing magistrate, and filed with the clerk of court. In general, the essential parts of a good decision consist of the following: (1) statement of the case; (2) statement of facts; (3) issues or assignment of errors; (4) court ruling, in which each issue is, as a rule, separately considered and resolved; and, finally, (5) dispositive portion. The ponente may also opt to include an introduction or a prologue as well as an epilogue, especially in cases in which controversial or novel issues are involved.No. Counsel for SJS has utterly failed to convince the Court that there are enough factual and legal bases to resolve the paramount issue. On the other hand, the Office of the Solicitor General has sided with petitioner insofar as there are no facts supporting the SJS Petition and the assailed Decision. The Petition failed to state directly the ultimate facts that it relied upon for its claim. During the Oral Argument, counsel for SJS candidly admitted that there were no factual allegations in its Petition for Declaratory Relief. Neither were there factual findings in the assailed Decision. At best, SJS merely asked the trial court to answer a hypothetical question. In effect, it merely sought an advisory opinion, the rendition of which was beyond the court’s constitutional mandate and jurisdiction.

Indeed, the assailed Decision was rendered in clear violation of the Constitution, because it made no findings of facts and final disposition.

PDIC V CA

FACTS: Prior to May 22, 1987 – Respondents (Jose Abad, Leonor Abad, Sabina Abad, Josie Beata Abad-Orlina, Cecilia Abad, Pio Abad, Dominic Abad, and Teodora Abad) had, individually or jointly with each other, 71 certificates of time deposits denominated as “Golden Time Deposits” (GTD) with an aggregate face value of P1,115,889.96 in Manila Banking Corp (MBC).

May 22, 1987 - a Friday, the Monetary Board (MB) of the Central Bank of the Philippines (now BSP) issued Resolution 505 prohibiting MBC to do business in the Philippines, and placing its assets and affairs under receivership. The Resolution, however, was not served on MBC until Tuesday the following week, or on May 26, 1987, when the designated Receiver took over.

May 25, 1987 - The next banking day following the issuance of the MB Resolution, Jose Abad was at the MBC at 9 AM for the purpose of pre-terminating the 71 aforementioned GTDs and re-depositing the fund represented thereby into 28 new GTDs in denominations of P40,000.00 or less under the names of herein respondents individually or jointly with each other. Of the 28 new GTDs, Jose Abad pre-terminated 8 and withdrew the value thereof in the total amount of P320,000.00. The Abads then filed their claims for the payment of the remaining 20 GTDs.

February 11, 1988 - PDIC paid respondents the value of 3 claims in the total amount of P120,000.00. PDIC, however, withheld payment of the 17 remaining claims after Washington Solidum, Deputy Receiver of MBC-Iloilo, submitted a report to the PDIC that there was massive conversion and substitution of trust and deposit accounts on May 25, 1987 at MBC-Iloilo. According to the report, MBC-Iloilo was “found to have recorded an unusually heavy movements in terms of volume and amount for all types of deposits and trust accounts.” Apparently the impending receivership of MBC appeared to have been known already to many depositors on account of the massive withdrawals paid on this day which practically wiped out the branch's entire cash position.

Because of the said report, PDIC entertained serious reservation in recognizing the Abads’ GTDs as deposit liabilities of MBC-Iloilo. - August 30, 1991, PDIC filed a petition for declaratory relief against respondents with the Iloilo City RTC for a judicial declaration

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determination of the insurability of respondents' GTDs at MBC-Iloilo.

Respondents set up a counterclaim against PDIC whereby they asked for payment of their insured deposits.

February 22, 1994 - The Iloilo RTC declared the 20 GTDs of respondents to be deposit liabilities of MBC, hence, are liabilities of PDIC as statutory insurer. The RTC ordered PDIC to pay the Abads the value of said 20 GTDs less the value of 3 GTDs it paid on February 11, 1988. The CA affirmed the RTC decision.

PDIC’s arguments are as follows:

- Under its charter, PDIC is liable only for deposits received by a bank "in the usual course of business." Convinced that the questioned bank transactions were so massive, hence, irregular, PDIC essentially seeks a judicial declaration that such transactions were not made "in the usual course of business" and, therefore, it cannot be made liable for deposits subject thereof.

- PDIC posits that there was no consideration for the 20 GTDs subject of respondents' claim. Because when the 20 GTDs were made, MBC had been experiencing liquidity problems. Hence, even if respondents had wanted to convert the face amounts of the GTDs to cash, MBC could not have complied with it.

- PDIC argues that the trial court erred in ordering it to pay the balance of the deposit insurance to respondents, maintaining that the instant petition stemmed from a petition for declaratory relief which does not essentially entail an executory process, and the only relief that should have been granted by the trial court is a declaration of the parties' rights and duties. As such no order of payment may arise from the case as this is beyond the office of declaratory relief proceedings.

ISSUE: WON the trial court erred in ordering PDIC to pay the balance of the deposit insurance to respondents:

a) based on the factual backdrop

b) based on the fact that the petition stemmed from a petition for declaratory relief

HELD: NO

Reasoning

a) Factual aspect

- While the MB issued Resolution 505 on May 22, 1987, a copy thereof was served on MBC only on May 26, 1987. MBC and its clients could be given the benefit of the doubt that they were not aware that the MB resolution had been passed, given the necessity of confidentiality of placing a banking institution under receivership. Mere conjectures that MBC had actual knowledge of its impending closure do not suffice. The MB resolution could not thus have nullified respondents' transactions which occurred prior to May 26, 1987.

b) Procedural aspect:

- There is nothing in the nature of a special civil action for declaratory relief that proscribes the filing of a counterclaim based on the same transaction, deed or contract subject of the complaint.

- A special civil action is after all not essentially different from an ordinary civil action, which is generally governed by Rules 1 to 56 of the Rules of Court, except that the former deals with a special subject matter which makes necessary some special regulation.

- But the identity between their fundamental nature is such that the same rules governing ordinary civil suits may and do apply to special civil actions if not inconsistent with or if they may serve to supplement the provisions of the peculiar rules governing special civil actions.

- A petition for declaratory relief does not essentially entail an executory process. There is nothing in its nature, however, that prohibits a counterclaim from being set-up in the same action.

Disposition WHEREFORE, the assailed decision of the Court of Appeals is hereby AFFIRMED.

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