SPECIAL CIVIL ACTIONSINTERPLEADERG.R. No. L-23851 March 26, 1976WACK WACK GOLF & COUNTRY CLUB, INC., plaintiff-appellant, vs.LEE E. WON alias RAMON LEE and BIENVENIDO A. TAN, defendants-appellees.Leonardo Abola for appellant.Alfonso V. Agcaoli & Ramon A. Barcelona for appellee Lee E. Won.Bienvenido A. Tan in his own behalf.CASTRO, C.J.:This is an appeal from the order of the Court of First Instance of Rizal, in civil case 7656, dismissing the plaintiff-appellant's complaint of interpleader upon the grounds of failure to state a cause of action and res judicata.In its amended and supplemental complaint of October 23, 1963, the Wack Wack Golf & Country Club, Inc., a non-stock, civic and athletic corporation duly organized under the laws of the Philippines, with principal office in Mandaluyong, Rizal (hereinafter referred to as the Corporation), alleged, for its first cause of action, that the defendant Lee E. Won claims ownership of its membership fee certificate 201, by virtue of the decision rendered in civil case 26044 of the CFI of Manila, entitled "Lee E. Won alias Ramon Lee vs. Wack Wack Golf & Country Club, Inc." and also by virtue of membership fee certificate 201-serial no. 1478 issued on October 17, 1963 by Ponciano B. Jacinto, deputy clerk of court of the said CFI of Manila, for and in behalf of the president and the secretary of the Corporation and of the People's Bank & Trust Company as transfer agent of the said Corporation, pursuant to the order of September 23, 1963 in the said case; that the defendant Bienvenido A. Tan, on the other hand, claims to be lawful owner of its aforesaid membership fee certificate 201 by virtue of membership fee certificate 201-serial no. 1199 issued to him on July 24, 1950 pursuant to an assignment made in his favor by "Swan, Culbertson and Fritz," the original owner and holder of membership fee certificate 201; that under its articles of incorporation and by-laws the Corporation is authorized to issue a maximum of 400 membership fee certificates to persons duly elected or admitted to proprietary membership, all of which have been issued as early as December 1939; that it claims no interest whatsoever in the said membership fee certificate 201; that it has no means of determining who of the two defendants is the lawful owner thereof; that it is without power to issue two separate certificates for the same membership fee certificate 201, or to issue another membership fee certificate to the defendant Lee, without violating its articles of incorporation and by-laws; and that the membership fee certificate 201-serial no. 1199 held by the defendant Tan and the membership fee certificate 201-serial No. 1478 issued to the defendant Lee proceed from the same membership fee certificate 201, originally issued in the name of "Swan, Culbertson and Fritz".For its second cause of action. it alleged that the membership fee certificate 201-serial no. 1478 issued by the deputy clerk of court of court of the CFI of Manila in behalf of the Corporation is null and void because issued in violation of its by-laws, which require the surrender and cancellation of the outstanding membership fee certificate 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 the defendant Tan, holder of membership fee certificate 201-serial no. 1199; that Tan is made a party because of his refusal to join it in this action or bring a separate action to protect his rights despite the fact that he has a legal and beneficial interest in the subject matter of this litigation; and that he is made a part so that complete relief may be accorded herein.The Corporation prayed that (a) an order be issued requiring Lee and Tan to interplead and litigate their conflicting claims; and (b) judgment. be rendered, after hearing, declaring who of the two is the lawful owner of membership fee certificate 201, and ordering the surrender and cancellation of membership fee certificate 201-serial no. 1478 issued in the name of Lee.In separate motions the defendants moved to dismiss the complaint upon the grounds of res judicata, failure of the complaint to state a cause of action, and bar by prescription. 1 These motions were duly opposed by the Corporation. Finding the grounds of bar by prior judgment and failure to state a cause of action well taken, the trial court dismissed the complaint, with costs against the Corporation.In this appeal, the Corporation contends that the court a quo erred (1) in finding that the allegations in its amended and supplemental complaint do not constitute a valid ground for an action of interpleader, and in holding that "the principal motive for the present action is to reopen the Manila Case and collaterally attack the decision of the said Court"; (2) in finding that the decision in civil case 26044 of the CFI of Manila constitutes res judicata and bars its present action; and (3) in dismissing its action instead of compelling the appellees to interplead and litigate between themselves their respective claims.The Corporations position may be stated elsewise as follows: The trial court erred in dismissing the complaint, instead of compelling the appellees to interplead because there actually are conflicting claims between the latter with respect to the ownership of membership fee certificate 201, and, as there is not Identity of parties, of subject-matter, and of cause of action, between civil case 26044 of the CFI of Manila and the present action, the complaint should not have been dismissed upon the ground of res judicata.On the other hand, the appellees argue that the trial court properly dismissed the complaint, because, having the effect of reopening civil case 26044, the present action is barred by res judicata.Although res judicata or bar by a prior judgment was the principal ground availed of by the appellees in moving for the dismissal of the complaint and upon which the trial court actually dismissed the complaint, the determinative issue, as can be gleaned from the pleadings of the parties, relates to the propriety and timeliness of the remedy of interpleader.The action of interpleader, under section 120 of the Code of Civil Procedure, 2 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. 3 The procedure under the Rules of Court 4 is the same as that under the Code of Civil Procedure, 5 except that under the former the remedy of interpleader is available regardless of the nature of the subject-matter of the controversy, whereas under the latter an interpleader suit is proper only if the subject-matter of the controversy is personal property or relates to the performance of an obligation.There is no question that the subject matter of the present controversy, i.e., the membership fee certificate 201, is proper for an interpleader suit. What is here disputed is the propriety and timeliness of the remedy in the light of the facts and circumstances obtaining.A stakeholder 6 should use reasonable diligence to hale the contending claimants to court. 7 He need not await actual institution of independent suits against him before filing a bill of interpleader. 8 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. 9 Otherwise, he may be barred by laches 10 or undue delay. 11 But where he acts with reasonable diligence in view of the environmental circumstances, the remedy is not barred. 12Has the Corporation in this case acted with diligence, in view of all the circumstances, such that it may properly invoke the remedy of interpleader? We do not think so. It was aware of the conflicting claims of the appellees with respect to the membership fee certificate 201 long before it filed the present interpleader suit. It had been recognizing Tan as the lawful owner thereof. It was sued by Lee who also claimed the same membership fee certificate. Yet it did not interplead Tan. It preferred to proceed with the litigation (civil case 26044) and to defend itself therein. As a matter of fact, final judgment was rendered against it and said judgment has already been executed. It is not therefore too late for it to invoke the remedy of interpleader.It has been held that a stakeholder's action of interpleader is too late when filed after judgment has been rendered against him in favor of one of the contending claimants, 13 especially where he had notice of the conflicting claims prior to the rendition of the judgment and neglected the opportunity to implead the adverse claimants in the suit where judgment was entered. This must be so, because once judgment is obtained against him by one claimant he becomes liable to the latter. 14 In once case, 15 it was declared:The record here discloses that long before the rendition of the judgment in favor of relators against the Hanover Fire Insurance Company the latter had notice of the adverse claim of South to the proceeds of the policy. No reason is shown why the Insurance Company did not implead South in the former suit and have the conflicting claims there determined. The Insurance Company elected not to do so and that suit proceeded to a final judgment in favor of relators. The Company thereby became independently liable to relators. It was then too late for such company to invoke the remedy of interpleaderThe Corporation has not shown any justifiable reason why it did not file an application for interpleader in civil case 26044 to compel the appellees herein to litigate between themselves their conflicting claims of ownership. It was only after adverse final judgment was rendered against it that the remedy of interpleader was invoked by it. By then it was too late, because to he entitled to this remedy the applicant must be able to show that lie has not been made independently liable to any of the claimants. And since the Corporation is already liable to Lee under a final judgment, the present interpleader suit is clearly improper and unavailing.It is the general rule that before a person will be deemed to be in a position to ask for an order of intrepleader, he must be prepared to show, among other prerequisites, that he has not become independently liable to any of the claimants. 25 Tex. Jur. p. 52, Sec. 3; 30 Am. Jur. p. 218, Section 8.It is also the general rule that a bill of interpleader comes too late when it is filed after judgment has been rendered in favor of one of the claimants of the fund, this being especially true when the holder of the funds had notice of the conflicting claims prior to the rendition of the judgment and had an opportunity to implead the adverse claimants in the suit in which the judgment was rendered. United Procedures Pipe Line Co. v. Britton, Tex. Civ. App. 264 S.W. 176; Nash v. McCullum, Tex. Civ. 74 S.W. 2d 1046; 30 Am. Jur. p. 223, Sec. 11; 25 Tex. Jur. p. 56, Sec. 5; 108 A.L.R., note 5, p. 275. 16Indeed, 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.If a stakeholder defends a suit by one claimant and allows it to proceed so far as a judgment against him without filing a bill of interpleader, it then becomes too late for him to do so. Union Bank v. Kerr, 2 Md. Ch. 460; Home Life Ins. Co. v. Gaulk, 86 Md. 385, 390, 38 A. 901; Gonia v. O'Brien, 223 Mass. 177, 111 N.E. 787. It is one o the main offices of a bill of interpleader to restrain a separate proceeding at law by claimant so as to avoid the resulting partial judgment; and if the stakeholder acquiesces in one claimant's trying out his claim and establishing it at law, he cannot then have that part of the litigation repeated in an interpleader suit. 4 Pomeroy's Eq. Juris. No. 162; Mitfor's Eq. Pleading (Tyler's Ed.) 147 and 236; Langdell's Summary of Eq. Pleading, No. 162' De Zouche v. Garrizon, 140 Pa. 430, 21 A/450. 17It is the general rule that a bill of interpleader comes too late when application therefore is delayed until after judgment has been rendered in favor of one of the claimants of the fund, and that this is especially true where the holder of the fund had notice of the conflicting claims prior to the rendition of such judgment and an opportunity to implead the adverse claimants in the suit in which such judgment was rendered. (See notes and cases cited 36 Am. Dec. 703, Am. St. Rep. 598, also 5 Pomeroy's Eq. Juris. Sec. 41.)The evidence in the opinion of the majority shows beyond dispute that the appellant permitted the Parker county suit to proceed to judgment in favor of Britton with full notice of the adverse claims of the defendants in the present suit other than the assignees of the judgment (the bank and Mrs. Pabb) and no excuse is shown why he did not implead them in the suit. 18To now permit the Corporation to bring Lee to court after the latter's successful establishment of his rights in civil case 26044 to the membership fee certificate 201, is to increase instead of to diminish the number of suits, which is one of the purposes of an action of interpleader, with the possibility that the latter would lose the benefits of the favorable judgment. This cannot be done because having elected to take its chances of success in said civil case 26044, with full knowledge of all the fact, the Corporation must submit to the consequences of defeat.The act providing for the proceeding has nothing to say touching the right of one, after contesting a claim of one of the claimants to final judgment unsuccessfully, to involve the successful litigant in litigation anew by bringing an interpleader action. The question seems to be one of first impression here, but, in other jurisdictions, from which the substance of the act was apparently taken, the rule prevails that the action cannot be resorted to after an unsuccessful trial against one of the claimants.It is well settled, both by reasons and authority, that one who asks the interposition of a court of equity to compel others, claiming property in his hands, to interplead, must do so before putting them to the test of trials at law. Yarborough v. Thompson, 3 Smedes & M. 291 (41 Am. Dec. 626); Gornish v. Tanner, 1 You. & Jer. 333; Haseltine v. Brickery, 16 Grat. (Va.) 116. The remedy by interpleader is afforded to protect the party from the annoyance and hazard of two or more actions touching the same property or demand; but one who, with knowledge of all the facts, neglects to avail himself of the relief, or elects to take the chances for success in the actions at law, ought to submit to the consequences of defeat. To permit an unsuccessful defendant to compel the successful plaintiffs to interplead, is to increase instead of to diminish the number of suits; to put upon the shoulders of others the burden which he asks may be taken from his own. ....'It is urged, however, that the American Surety Company of New York was not in position to file an interpleader until it had tested the claim of relatrix to final judgment, and that, failing to meet with success, it promptly filed the interpleader. The reason why, it urges, it was not in such position until then is that had it succeeded before this court in sustaining its construction of the bond and the law governing the bond, it would not have been called upon to file an interpleader, since there would have been sufficient funds in its hands to have satisfied all lawful claimants. It may be observed, however, that the surety company was acquainted with all of the facts, and hence that it simply took its chances of meeting with success by its own construction of the bond and the law. Having failed to sustain it, it cannot now force relatrix into litigation anew with others, involving most likely a repetition of what has been decided, or force her to accept a pro rata part of a fund, which is far from benefits of the judgment. 19Besides, 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.The jurisprudence of this state and the common law states is well-settled that a claimant who has been put to test of a trial by a surety, and has establish his claim, may not be impleaded later by the surety in an interpleader suit, and compelled to prove his claim again with other adverse claimants. American Surety Company of New York v. Brim, 175 La. 959, 144 So. 727; American Surety Company of New York v. Brim (In Re Lyong Lumber Company), 176 La. 867, 147 So. 18; Dugas v. N.Y. Casualty Co., 181 La. 322, 159 So. 572; 15 Ruling Case Law, 228; 33 Corpus Juris, 477; 4 Pomeroy's Jurisprudence, 1023; Royal Neighbors of America v. Lowary (D.C.) 46 F2d 565; Brackett v. Graves, 30 App. Div. 162, 51 N.Y.S. 895; De Zouche v. Garrison, 140 Pa. 430, 21 A. 450, 451; Manufacturer's Finance Co. v. W.I. Jones Co. 141 Ga., 519, 81 S.E. 1033; Hancock Mutual Life Ins. Co. v. Lawder, 22 R.I. 416, 84 A. 383.There can be no doubt that relator's claim has been finally and definitely established, because that matter was passed upon by three courts in definitive judgments. The only remaining item is the value of the use of the land during the time that relator occupied it. The case was remanded solely and only for the purpose of determining the amount of that credit. In all other aspects the judgment is final. 20It is generally held by the cases it is the office of interpleader to protect a party, not against double liability, but against double vexation on account of one liability. Gonia v. O'Brien, 223 Mass. 177, 111 N.E. 787. And so it is said that it is too late for the remedy of interpleader if the party seeking this relef has contested the claim of one of the parties and suffered judgment to be taken.In United P.P.I. Co. v. Britton (Tex. Civ. App.) 264 S.W. 576. 578, it was said: 'It is the general rule that a bill of interpleader comes too late when application therefor is delayed until after judgment has been rendered in favor of one of the claimants of the fund, and this is especially true where the holder of the fund had notice of the conflicting claims prior to the rendition of such judgment and an opportunity to implead the adverse claimants in the suit in which such judgment was rendered. See notes and cases cited 35 Am. Dec. 703; 91 An. St. Rep. 598; also 5 Pomeroy's Equity Jurisprudence No. 41.'The principle thus stated has been recognized in many cases in other jurisdictions, among which may be cited American Surety Co. v. O'Brien, 223 Mass. 177, 111 N.E. 787; Phillips v. Taylor, 148 Md. 157, 129 A. 18; Moore v. Hill, 59 Ga. 760, 761; Yearborough v. Thompson, 3 Smedes & M. (11 Miss.) 291, 41 Am. Dec. 626. See, also, 33 C.J. p. 447, No. 30; Nash v. McCullum, (Tex. Civ. App.) 74 S.W. 2d 1042, 1047.It would seem that this rule should logically follow since, after the recovery of judgment, the interpleading of the judgment creditor is in effect a collateral attack upon the judgment. 21In fine, the instant interpleader suit cannot prosper because the Corporation had already been made independently liable in civil case 26044 and, therefore, its present application for interpleader would in effect be a collateral attack upon the final judgment in the said civil case; the appellee Lee had already established his rights to membership fee certificate 201 in the aforesaid 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 possiblity 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.ACCORDINGLY, the order of May 28, 1964, dismissing the complaint, is affirmed, at appellant's cost.Teehankee, Makasiar, Antonio, Esguerra, Muoz Palma, Aquino and Concepcion, Jr., JJ., concur.Barredo and Martin, JJ., took no part.Fernando, J., is on leave.G.R. No. 73794 September 19, 1988ETERNAL GARDENS MEMORIAL PARKS CORPORATION, petitioner, vs.FIRST SPECIAL CASES DIVISION INTERMEDIATE APPELLATE COURT and NORTH PHILIPPINE UNION MISSION OF THE SEVENTH-DAY ADVENTISTS, respondents.PARAS, J.:This is a special civil action for certiorari, prohibition and mandamus seeking to set aside the two resolutions of public respondent First Special Cases Division of the then Intermediate Appellate Court in AC-G.R. No. 04869 entitled "North Philippine Union Mission of the Seventh Day Adventists versus Hon. Antonia Corpus-Macandog, Presiding Judge, Branch CXX, Regional Trial Court, Caloocan City and Eternal Gardens Memorial Park Corporation, (a) dated September 5, 1985 (Rollo, pp. 21-25) reconsidering its Decision 1 of February 27, 1985 (Rollo, pp. 38-48) and ordering petitioner to deposit whatever amounts due from it under the Land Development Agreement, and (b) dated February 13, 1986 (Rollo, p. 27) denying for lack of merit petitioner's motion for reconsideration. Petitioner Eternal Gardens Memorial Parks Corporation and private respondent North Philippine Union Mission Corporation of the Seventh Day Adventists (MISSION for short) are corporations duly organized and existing under and by virtue of the laws of the Republic of the Philippines. They executed a Land Development Agreement (Rollo, pp. 179-182) on October 6, 1976 whereby the former undertook to introduce and construct at its own expense and responsibility necessary improvements on the property owned by private respondent into a memorial park to be subdivided into and sold as memorial plot lots, at a stipulated area and price per lot. Out of the proceeds from the sale, private respondent is entitled to receive 40% of the net gross collection from the project to be remitted monthly by petitioner to private respondent through a designated depositary trustee bank. On the same date private respondent executed in petitioner's favor a Deed of Absolute Sale with Mortgage (Rollo, pp. 183-186) on the lots with titles involved in the land development project. The deed was supplemented by a Sale of Real Property with Mortgage and Special Conditions dated October 28, 1978 (Rollo, pp. 189-194 The amounts totalling about P984,110.82 paid by petitioner were to be considered as part of the 40% due private respondent under the Land Development Agreement. All went well until Maysilo Estate asserted its claim of ownership over the parcel of land in question. Confronted with such conflicting claims, petitioner as plaintiff filed a complaint for interpleader (Rollo, pp. 169-179) against private respondent MISSION and Maysilo Estate, docketed as Special Court Case No. C-9556 of the then CFI of Rizal, Branch XII, Caloocan, alleging among others, that in view of the conflicting claims of ownership of the defendants (herein private respondent and Maysilo Estate) over the properties subject matter of the contracts, over which plaintiff corporation (herein petitioner) has no claim of ownership except as a purchaser thereof, and to protect the interests of plaintiff corporation which has no interest in the subject matter of the dispute and is willing to pay whoever is entitled or declared to be the owners of said properties, the defendants should be required to interplead and litigate their several claims between themselves (Rollo, p. 177). An order was issued by the presiding judge 2 requiring defendants to interplead on October 22, 1981. MISSION filed a motion to dismiss dated November 10, 1981 for lack of cause of action but also presented an answer dated November 12, 1981. The motion to dismiss was denied in an Order dated January 12, 1982. The heirs of Maysilo Estate filed their own answer dated November 11, 1981 and an amended answer dated October 20, 1983 thru the estate's special receiver. The heirs of Pedro Banon filed an "Answer in Intervention with Special and Affirmative Defenses" dated October 24, 1983, while Lilia B. Sevilla and husband Jose Seelin filed their "Answer in Cross-claim" dated October 31, 1983 (Rollo, p. 30). The heirs of Sofia O'Farrel y Patino, et al. filed their Answer in Intervention dated November 10, 1983.However, earlier on November 21, 1982, private respondent presented a motion for the placing on judicial deposit the amounts due and unpaid from petitioner. Acting on such motion, the trial court 3 denied judicial deposit in its order dated February 13, 1984, the decretal portion of which reads: PREMISES CONSIDERED, all or the full amount the plaintiff, Eternal Gardens Memorial Parks Corporation have already paid the North Philippine Union Mission Corporation of the Seventh Day Adventist is hereby ordered to deposit the same to this Court within thirty (30) days from receipt of this order considering that real or true owner of the subject properties in question, due hearing of this court has yet to be undergone in order to decide as to who is the true owner which is a prejudicial question. Hence the motion dated November 21, 1983 of the NPUM for the Eternal Gardens Corporation to deposit the balance due and unpaid is hereby ordered denied and the opposition thereto dated December 19, 1983 is hereby ordered granted. The contract between the Eternal Gardens Corporation and the North Philippine Union Mission dated October 16, 1976 is ordered and declared ineffective as of today, February 13, 1984 because the subject matter of the sale is not existing between the contracting parties until after the question of ownership is resolved by this court. The court will order the revival of the contract if the North Philippine Union Mission will win. If not, the declared winner among the intervenors will be the party to enter into a contract of sale with the plaintiff as aforementioned. (Rollo, p. 66). Another order dated October 26, 1984 was issued amending the February 13, 1984 order and setting aside the order for private respondent's deposit of the amounts it had previously received from petitioner, thus: WHEREFORE IN VIEW OF ALL THE FOREGOING CONSIDERATIONS the order of February 13, 1984, is hereby ordered amended, reconsidered and modified by this same Court as follows: (a) The order directing the NORTH PHILIPPINE UNION MISSION CORPORATION OF SEVENTH-DAY ADVENTISTS to deposit the amounts it received under the implementation of the LAND DEVELOPMENT AGREEMENT which is not questioned by the plaintiff, Eternal Gardens, is hereby ordered set aside for the reason that the titles to ownership, the North Philippine Union Mission Corporation of Seventh Day Adventists on the lots subject matter of the aforesaid agreement is not established invalid, and the alleged titles of intervenors are not proven yet by competent evidence; (b) The motion to require Eternal Gardens to deposit the balance under the Land Development Agreement is likewise hereby ordered denied considering the fact the aforesaid plaintiff had not denied its obligations under the aforesaid contract; and (c) The trial or hearing is hereby ordered as scheduled to proceed on November 29, 1984 and on December 6, 1984 at 8:30 in the morning per order of this Court dated October 4, 1984 in order to determine the alleged claims of ownership by the intervenors and all claims and allegations of each party to the instant" case will be considered and decided carefully by this court on just and meritorious grounds. (Rollo, p. 39) Said Orders were assailed twice in the Intermediate Appellate Court (Court of Appeals) and in the Supreme Court as follows: In G.R. No. 73569 it appeared that on January 11, 1985, MISSION filed a motion to dismiss the Interpleader and the claims of the Maysilo Estate and the Intervenors and to order the Eternal Gardens to comply with its Land Management with MISSION. On January 28, 1985, the trial court passed a resolution, the dispositive portion of which reads: WHEREFORE, premises considered, this Court, after a lengthy, careful judicious study and perusal of all the stand of each and everyone of all the parties participating in this case, hereby orders the dismissal of the interpleader, and the interventions filed by the intervenors, heirs of Pedro Banon, heirs of O'Farrel, heirs of Rivera, heirs of Maria del Concepcion Vidal, consolidated with the Maysilo Estate as represented by receiver Arturo Salientes the heirs of Vicente Singson Encarnacion, and Lilia Sevilla Seeling This Court likewise orders the plaintiff, Eternal Gardens Memorial Parks Corporation to comply with the Land Development Agreement dated October 6, 1978, it entered into with the North Philippine Union Mission Corporation of the Seventh-Day Adventists. (Rollo. p. 68) The heirs of the Maysilo Estate moved for reconsideration of the aforementioned order of dismissal, the hearing of which was requested to be set on February, 28, 1985. However, the trial judge, on February 14, 1985 issued the following orders: Considering Motions for Reconsideration filed, the Court resolves that the same be GRANTED and instead of a hearing of the said motions on February 20, 1985, at 8:30 a.m., a hearing on the merits shall be held. (Rollo, p. 68) In spite of the February 14, 1985 order, MISSION filed on March 6, 1985 a motion for Writ of Execution of the resolution of January 28, 1985. This was denied on June 25, 1985. The said court further set the case for pre-trial and trial on July 18, 1985. It was elevated on certiorari and mandamus to the Intermediate Appellate Court (Court of Appeals), docketed as AC-G.R. Sp No. 06696 "North Philippine Union Mission of the Seventh Day Adventists, vs. Hon. Antonia Corpus-Macandog Presiding Judge, Branch CXX, Regional Trial Court, Caloocan City, Eternal Gardens Memorial Parks Corporation, and Heirs of Vicente Singson Encarnacion It was raffled to the Second Special Division. MISSION assailed the February 14, 1985 and June 25, 1985 orders as violative of due process and attended by grave abuse of discretion amounting to lack of jurisdiction. The petition was however dismissed in the decision of said Appellate Court, promulgated on December 4, 1985, the dispositive portion of which reads: WHEREFORE, for want of merit the petition for certiorari and mandamus under consideration cannot be given due course and is accordingly, DISMISSED, without any pronouncement, as to costs. The restraining order embodied in Our Resolution of July 31, 1985, is hereby lifted. (Rollo, G.R. No. 73569 p. 232) The private respondent challenged the above decision in the Supreme Court in G.R. No. 73569. In its resolution dated June 11, 1986, the Supreme Court denied the petition for review on certiorari for lack of merit, as follows: G.R. No. 73569 (North Philippine Union Mission Corporation of the Seventh Day Adventists vs. Intermediate Appellate Court, et al.) considering the allegations, issues, and arguments adduced in the petition for review on certiorari, the Court Resolved to DENY the same for lack of merit. (Ibid p. 263) Said resolution has become final and executory on July 16, 1986. (Ibid p. 269) Earlier in 1983, the heirs of the late spouses Vicente Singson Encarnacion and Lucila Conde filed Civil Case No. C-11836 for quieting of title with Branch CXXII, Regional Trial Court, Caloocan City, where petitioner and private respondent were named as defendants. Said case is still pending in the lower Court. In the case at bar, G.R. No. 73794, MISSION, herein private respondent filed a petition for certiorari with the then Intermediate Appellate Court docketed as AC-G.R. No. 04869 praying that the aforementioned Orders of February 13, 1984 and October 26, 1984 of the Regional Trial Court be set aside and that an order be issued to deposit in court or in a depositor trustee bank of any and all payments, plus interest thereon, due the private respondent MISSION under the Land Development Agreement, said amounts deposited to be paid to whomever may be found later to be entitled thereto, with costs. (Rollo, G.R. No. 73794 p. 38) The Intermediate Appelate Court, acting through its First Special Cases Division 4 dismissed the petition in its decision on February 27, 1985 (Rollo, pp. 38-48). In its Resolution 5 promulgated on September 5, 1985, the Court however, reversed its decision, thus: WHEREFORE, the Court reconsiders its decision of February 27, 1986, and sets aside the questioned portions of the respondent Court's orders of February 13 and October 26, 1984. The private respondent is hereby ordered to deposit whatever amounts are due from it under the Land Development Agreement of October 6, 1976 with a reputable bank to be designated by the respondent court to be the depository trustee of the said amounts to be paid to whoever shall be found entitled thereto. No costs. (Rollo, p. 25) Eternal Gardens moved for a reconsideration of the above decision but it was denied for lack of merit in a resolution promulgated on February 13, 1986, which states: The private respondent Eternal Gardens Memorial Park Corporation's Motion for Reconsideration of the Court's resolution promulgated September 5, 1985 requiring it "to deposit whatever amounts are due from it under the Land Development Agreement of October 6, 1976 ...," which was strongly opposed by the petitioner North Philippine Union Mission of the Seventh Day Adventists, is hereby denied for lack of merit, reiterating as it does, the very same issues and arguments that were passed upon and considered by the Court in the very same resolution sought to be reconsidered. (Rollo, p. 27) Hence, this petition. On July 8,1987, the Third Division of this Court issued the following resolution: ... the court RESOLVED to give due course to this petition and require the parties to file memoranda. In the meantime, to avoid possible wastage of funds, the Court RESOLVED to require the private respondent 6 to DEPOSIT its accruing installments within ten (10) days from notice with a reputable commercial bank in a savings deposit account, in the name of the Supreme Court of the Philippines, with the details to be reported or manifested to this Court within ten (10) days from the time the deposit/deposits are made, such deposits not to be withdrawn without authority from this Court. (Rollo, p. 162) Petitioner's Memorandum With Prayer for the Deferment of Time to Make Deposit (Rollo, p. 218-236) was filed on July 14, 1987. Its prayer was granted for a period of ten (10) days for the purpose, in the resolution of July 29, 1987 (Rollo, p. 238). Private respondent filed its Opposition to Deferment of Time to Make Deposit (Rollo, pp. 239-253) on July 24, 1987 to which petitioner filed its Reply to Opposition on August 4, 1987 (Rollo, pp. 256-267). Both were noted by the Court in its resolution dated September 7, 1987 (Rollo, p. 270). On August 25, 1987, private respondent filed its Rejoinder to Petitioner's Reply to Opposition (Rollo, pp. 271-292). Petitioner filed its Supplemental Memorandum with Reply to Opposition (To Deferment of time to Make Deposit) on August 31, 1987 (Rollo, pp. 294-313) and a Sur-rejoinder on September 1, 1987 (Rollo, pp. 304-315). The main issues in this case are: I Whether or not respondent Court of Appeals abused its discretion amounting to lack of jurisdiction in reconsidering its resolution of February 27, 1985 and in requiring instead in the resolution of September 5, 1985, that petitioner Eternal Gardens deposit whatever amounts are due from it under the Land Development Agreement with a reputable bank to be designated by the respondent court. II Whether or not the dismissal of AC-G.R. SP No. 06696 (North Philippine Union Mission of the Seventh Day Adventists vs. Hon. Macandog, et al.) by the Second Special Cases Division of the IAC which was affirmed by the Supreme Court in G.R. No. 73569 constitutes a basis for the dismissal of the case at bar on the ground of res adjudicata. I There is no question that courts have inherent power to amend their judgments, to make them conformable to the law applicable provided that said judgments have not yet attained finality (Villanueva v. Court of First Instance of Oriental Mindoro, Pinamalayan Branch II, 119 SCRA 288 [1982]). In fact, motions for reconsideration are allowed to convince the courts that their rulings are erroneous and improper Siy v. Court of Appeals, 138 SCRA 543-544 [1985]; Guerra Enterprises Co., Inc. v. CFI of Lanao del Sur (32 SCRA 317 [1970]) and in so doing, said courts are given sufficient opportunity to correct their errors. In the case at bar, a careful analysis of the records will show that petitioner admitted among others in its complaint in Interpleader that it is still obligated to pay certain amounts to private respondent; that it claims no interest in such amounts due and is willing to pay whoever is declared entitled to said amounts. Such admissions in the complaint were reaffirmed in open court before the Court of Appeals as stated in the latter court's resolution dated September 5, 1985 in A.C. G.R. No. 04869 which states: The private respondent (MEMORIAL) then reaffirms before the Court its original position that it is a disinterested party with respect to the property now the subject of the interpleader case ...In the light of the willingness, expressly made before the court, affirming the complaint filed below, that the private respondent (MEMORIAL) will pay whatever is due on the Land Development Agreement to the rightful owner/owners, there is no reason why the amount due on subject agreement has not been placed in the custody of the Court. (Rollo, p. 227). Under the circumstances, there appears to be no plausible reason for petitioner's objections to the deposit of the amounts in litigation after having asked for the assistance of the lower court by filing a complaint for interpleader where the deposit of aforesaid amounts is not only required by the nature of the action but is a contractual obligation of the petitioner under the Land Development Program (Rollo, p. 252). As correctly observed by the Court of Appeals, the essence of an interpleader, aside from the disavowal of interest in the property in litigation on the part of the petitioner, is the deposit of the property or funds in controversy with the court. it is a rule founded on justice and equity: "that the plaintiff may not continue to benefit from the property or funds in litigation during the pendency of the suit at the expense of whoever will ultimately be decided as entitled thereto." (Rollo, p. 24). The case at bar was elevated to the Court of Appeals on certiorari with prohibitory and mandatory injunction. Said appellate court found that more than twenty million pesos are involved; so that on interest alone for savings or time deposit would be considerable, now accruing in favor of the Eternal Gardens. Finding that such is violative of the very essence of the complaint for interpleader as it clearly runs against the interest of justice in this case, the Court of Appeals cannot be faulted for finding that the lower court committed a grave abuse of discretion which requires correction by the requirement that a deposit of said amounts should be made to a bank approved by the Court. (Rollo, p.-25) Petitioner would now compound the issue by its obvious turn-about, presently claiming in its memorandum that there is a novation of contract so that the amounts due under the Land Development Agreement were allegedly extinguished, and the requirement to make a deposit of said amounts in a depositary bank should be held in abeyance until after the conflicting claims of ownership now on trial before Branch CXXII RTC-Caloocan City, has finally been resolved. All these notwithstanding, the need for the deposit in question has been established, riot only in the lower courts and in the Court of Appeals but also in the Supreme Court where such deposit was required in "the resolution of July 8, 1987 to avoid wastage of funds. IIThe claim that this case should be barred by res judicata is even more untenable. The requisite of res judicata are: (1) the presence of a final former judgment; (2) the former judgment was rendered by a court having jurisdiction over the subject matter and the parties; (3) the former judgment is a judgment on the merits; and (4) there is between the first and the second action identity of parties, of subject matter, and of causes of action Arguson v. Miclat 135 SCRA 678 [1985]; Carandang v. Venturanza, 133 SCRA 344 [1984]). There is no argument against the rule that parties should not be permitted to litigate the same issue more than once and when a right or fact has been judicially tried and determined by a court of competent jurisdiction, so long as it remains unreversed, it should be conclusive upon the parties and those in privity with them in law or estate (Sy Kao v. Court of Appeals, 132 SCRA 302 [1984]). But a careful review of the records shows that there is no judgment on the merits in G.R. No. 73569 and in the case at bar, G.R. No. 73794; both of which deal on mere incidents arising therefrom. In G.R. No 73569, the issue raised is the propriety of the grant of the motion for reconsideration without a hearing thereon and the denial of the motion for execution, while in the case at bar, what is assailed is the propriety of the order of respondent appellant court that petitioner Eternal Gardens should deposit whatever amounts are due from it under the Land Development Agreement with a reputable bank to be designated by the Court. In fact, there is a pending trial on the merits in the trial court which the petitioner insists is a prejudicial question which should first be resolved. Moreover, while there may be Identity of parties and of subject matter, the Land Development Contract, there is no Identity of issues as clearly shown by the petitions filed. PREMISES CONSIDERED, (a) the petition is DISMISSED for lack of merit; (b) this case (together with all the claims of the intervenors on the merits) is REMANDED to the lower court for further proceedings; and (c) the resolution of the Third Division of this Court of July 8, 1987 requiring the deposit by the petitioner (see footnote No. 6) of the amounts contested in a depositary bank STANDS (the Motion for Reconsideration thereof being hereby DENIED for reasons already discussed) until after the decision on the merits shall have become final and executory. SO ORDERED. SUBHASH C. PASRICHA and JOSEPHINE A. PASRICHA, Petitioners,- versus -DON LUIS DISON REALTY, INC.,Respondent. G.R. No. 136409 Present: YNARES-SANTIAGO, J., Chairperson, QUISUMBING,* AUSTRIA-MARTINEZ, CHICO-NAZARIO, and NACHURA, JJ. . Promulgated: March 14, 2008

x------------------------------------------------------------------------------------xDECISIONNACHURA, J.:This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking the reversal of the Decision[footnoteRef:1][1] of the Court of Appeals (CA) dated May 26, 1998 and its Resolution[footnoteRef:2][2] dated December 10, 1998 in CA-G.R. SP No. 37739 dismissing the petition filed by petitioners Josephine and Subhash Pasricha. [1: ] [2: ]

The facts of the case, as culled from the records, are as follows:Respondent Don Luis Dison Realty, Inc. and petitioners executed two Contracts of Lease[footnoteRef:3][3] whereby the former, as lessor, agreed to lease to the latter Units 22, 24, 32, 33, 34, 35, 36, 37 and 38 of the San Luis Building, located at 1006 M.Y. Orosa cor. T.M. Kalaw Streets, Ermita, Manila. Petitioners, in turn, agreed to pay monthly rentals, as follows: [3: ]

For Rooms 32/35:From March 1, 1991 to August 31, 1991 P5,000.00/P10,000.00From September 1, 1991 to February 29, 1992 P5,500.00/P11,000.00From March 1, 1992 to February 28, 1993 P6,050.00/P12,100.00From March 1, 1993 to February 28, 1994 P6,655.00/P13,310.00From March 1, 1994 to February 28, 1995 P7,320.50/P14,641.00From March 1, 1995 to February 28, 1996 P8,052.55/P16,105.10From March 1, 1996 to February 29, 1997 P8,857.81/P17,715.61From March 1, 1997 to February 28, 1998 P9,743.59/P19,487.17From March 1, 1998 to February 28, 1999 P10,717.95/P21,435.89From March 1, 1999 to February 28, 2000 P11,789.75/P23,579.48[footnoteRef:4][4] [4: ]

For Rooms 22 and 24:Effective July 1, 1992 P10,000.00 with an increment of 10% every two years.[footnoteRef:5][5] [5: ]

For Rooms 33 and 34:Effective April 1, 1992 P5,000.00 with an increment of 10% every two years.[footnoteRef:6][6] [6: ]

For Rooms 36, 37 and 38:Effective when tenants vacate said premises P10,000.00 with an increment of 10% every two years.[footnoteRef:7][7] [7: ]

Petitioners were, likewise, required to pay for the cost of electric consumption, water bills and the use of telephone cables.[footnoteRef:8][8] [8: ]

The lease of Rooms 36, 37 and 38 did not materialize leaving only Rooms 22, 24, 32, 33, 34 and 35 as subjects of the lease contracts.[footnoteRef:9][9] While the contracts were in effect, petitioners dealt with Francis Pacheco (Pacheco), then General Manager of private respondent. Thereafter, Pacheco was replaced by Roswinda Bautista (Ms. Bautista).[footnoteRef:10][10] Petitioners religiously paid the monthly rentals until May 1992.[footnoteRef:11][11] After that, however, despite repeated demands, petitioners continuously refused to pay the stipulated rent. Consequently, respondent was constrained to refer the matter to its lawyer who, in turn, made a final demand on petitioners for the payment of the accrued rentals amounting to P916,585.58.[footnoteRef:12][12] Because petitioners still refused to comply, a complaint for ejectment was filed by private respondent through its representative, Ms. Bautista, before the Metropolitan Trial Court (MeTC) of Manila.[footnoteRef:13][13] The case was raffled to Branch XIX and was docketed as Civil Case No. 143058-CV. [9: ] [10: ] [11: ] [12: ] [13: ]

Petitioners admitted their failure to pay the stipulated rent for the leased premises starting July until November 1992, but claimed that such refusal was justified because of the internal squabble in respondent company as to the person authorized to receive payment.[footnoteRef:14][14] To further justify their non-payment of rent, petitioners alleged that they were prevented from using the units (rooms) subject matter of the lease contract, except Room 35. Petitioners eventually paid their monthly rent for December 1992 in the amount of P30,000.00, and claimed that respondent waived its right to collect the rents for the months of July to November 1992 since petitioners were prevented from using Rooms 22, 24, 32, 33, and 34.[footnoteRef:15][15] However, they again withheld payment of rents starting January 1993 because of respondents refusal to turn over Rooms 36, 37 and 38.[footnoteRef:16][16] To show good faith and willingness to pay the rents, petitioners alleged that they prepared the check vouchers for their monthly rentals from January 1993 to January 1994.[footnoteRef:17][17] Petitioners further averred in their Amended Answer[footnoteRef:18][18] that the complaint for ejectment was prematurely filed, as the controversy was not referred to the barangay for conciliation. [14: ] [15: ] [16: ] [17: ] [18: ]

For failure of the parties to reach an amicable settlement, the pre-trial conference was terminated. Thereafter, they submitted their respective position papers.On November 24, 1994, the MeTC rendered a Decision dismissing the complaint for ejectment.[footnoteRef:19][19] It considered petitioners non-payment of rentals as unjustified. The court held that mere willingness to pay the rent did not amount to payment of the obligation; petitioners should have deposited their payment in the name of respondent company. On the matter of possession of the subject premises, the court did not give credence to petitioners claim that private respondent failed to turn over possession of the premises. The court, however, dismissed the complaint because of Ms. Bautistas alleged lack of authority to sue on behalf of the corporation. [19: ]

Deciding the case on appeal, the Regional Trial Court (RTC) of Manila, Branch 1, in Civil Case No. 94-72515, reversed and set aside the MeTC Decision in this wise:WHEREFORE, the appealed decision is hereby reversed and set aside and another one is rendered ordering defendants-appellees and all persons claiming rights under them, as follows:(1) to vacate the leased premised (sic) and restore possession thereof to plaintiff-appellant;(2) to pay plaintiff-appellant the sum of P967,915.80 representing the accrued rents in arrears as of November 1993, and the rents on the leased premises for the succeeding months in the amounts stated in paragraph 5 of the complaint until fully paid; and(3) to pay an additional sum equivalent to 25% of the rent accounts as and for attorneys fees plus the costs of this suit.SO ORDERED.[footnoteRef:20][20] [20: ]

The court adopted the MeTCs finding on petitioners unjustified refusal to pay the rent, which is a valid ground for ejectment. It, however, faulted the MeTC in dismissing the case on the ground of lack of capacity to sue. Instead, it upheld Ms. Bautistas authority to represent respondent notwithstanding the absence of a board resolution to that effect, since her authority was implied from her power as a general manager/treasurer of the company.[footnoteRef:21][21] [21: ]

Aggrieved, petitioners elevated the matter to the Court of Appeals in a petition for review on certiorari.[footnoteRef:22][22] On March 18, 1998, petitioners filed an Omnibus Motion[footnoteRef:23][23] to cite Ms. Bautista for contempt; to strike down the MeTC and RTC Decisions as legal nullities; and to conduct hearings and ocular inspections or delegate the reception of evidence. Without resolving the aforesaid motion, on May 26, 1998, the CA affirmed[footnoteRef:24][24] the RTC Decision but deleted the award of attorneys fees.[footnoteRef:25][25] [22: ] [23: ] [24: ] [25: ]

Petitioners moved for the reconsideration of the aforesaid decision.[footnoteRef:26][26] Thereafter, they filed several motions asking the Honorable Justice Ruben T. Reyes to inhibit from further proceeding with the case allegedly because of his close association with Ms. Bautistas uncle-in-law.[footnoteRef:27][27] [26: ] [27: ]

In a Resolution[footnoteRef:28][28] dated December 10, 1998, the CA denied the motions for lack of merit. The appellate court considered said motions as repetitive of their previous arguments, irrelevant and obviously dilatory.[footnoteRef:29][29] As to the motion for inhibition of the Honorable Justice Reyes, the same was denied, as the appellate court justice stressed that the decision and the resolution were not affected by extraneous matters.[footnoteRef:30][30] Lastly, the appellate court granted respondents motion for execution and directed the RTC to issue a new writ of execution of its decision, with the exception of the award of attorneys fees which the CA deleted.[footnoteRef:31][31] [28: ] [29: ] [30: ] [31: ]

Petitioners now come before this Court in this petition for review on certiorari raising the following issues:I.Whether this ejectment suit should be dismissed and whether petitioners are entitled to damages for the unauthorized and malicious filing by Rosario (sic) Bautista of this ejectment case, it being clear that [Roswinda] whether as general manager or by virtue of her subsequent designation by the Board of Directors as the corporations attorney-in-fact had no legal capacity to institute the ejectment suit, independently of whether Director Pacanas Order setting aside the SEC revocation Order is a mere scrap of paper.II.Whether the RTCs and the Honorable Court of Appeals failure and refusal to resolve the most fundamental factual issues in the instant ejectment case render said decisions void on their face by reason of the complete abdication by the RTC and the Honorable Justice Ruben Reyes of their constitutional duty not only to clearly and distinctly state the facts and the law on which a decision is based but also to resolve the decisive factual issues in any given case.III.Whether the (1) failure and refusal of Honorable Justice Ruben Reyes to inhibit himself, despite his admission by reason of his silence of petitioners accusation that the said Justice enjoyed a $7,000.00 scholarship grant courtesy of the uncle-in-law of respondent corporations purported general manager and (2), worse, his act of ruling against the petitioners and in favor of the respondent corporation constitute an unconstitutional deprivation of petitioners property without due process of law.[footnoteRef:32][32] [32: ]

In addition to Ms. Bautistas lack of capacity to sue, petitioners insist that respondent company has no standing to sue as a juridical person in view of the suspension and eventual revocation of its certificate of registration.[footnoteRef:33][33] They likewise question the factual findings of the court on the bases of their ejectment from the subject premises. Specifically, they fault the appellate court for not finding that: 1) their non-payment of rentals was justified; 2) they were deprived of possession of all the units subject of the lease contract except Room 35; and 3) respondent violated the terms of the contract by its continued refusal to turn over possession of Rooms 36, 37 and 38. Petitioners further prayed that a Temporary Restraining Order (TRO) be issued enjoining the CA from enforcing its Resolution directing the issuance of a Writ of Execution. Thus, in a Resolution[footnoteRef:34][34] dated January 18, 1999, this Court directed the parties to maintain the status quo effective immediately until further orders. [33: ] [34: ]

The petition lacks merit.We uphold the capacity of respondent company to institute the ejectment case. Although the Securities and Exchange Commission (SEC) suspended and eventually revoked respondents certificate of registration on February 16, 1995, records show that it instituted the action for ejectment on December 15, 1993. Accordingly, when the case was commenced, its registration was not yet revoked.[footnoteRef:35][35] Besides, as correctly held by the appellate court, the SEC later set aside its earlier orders of suspension and revocation of respondents certificate, rendering the issue moot and academic.[footnoteRef:36][36] [35: ] [36: ]

We likewise affirm Ms. Bautistas capacity to sue on behalf of the company despite lack of proof of authority to so represent it. A corporation has no powers except those expressly conferred on it by the Corporation Code and those that are implied from or are incidental to its existence. In turn, a corporation exercises said powers through its board of directors and/or its duly authorized officers and agents. Physical acts, like the signing of documents, can be performed only by natural persons duly authorized for the purpose by corporate by-laws or by a specific act of the board of directors.[footnoteRef:37][37] Thus, any person suing on behalf of the corporation should present proof of such authority. Although Ms. Bautista initially failed to show that she had the capacity to sign the verification and institute the ejectment case on behalf of the company, when confronted with such question, she immediately presented the Secretarys Certificate[footnoteRef:38][38] confirming her authority to represent the company. [37: ] [38: ]

There is ample jurisprudence holding that subsequent and substantial compliance may call for the relaxation of the rules of procedure in the interest of justice.[footnoteRef:39][39] In Novelty Phils., Inc. v. Court of Appeals,[footnoteRef:40][40] the Court faulted the appellate court for dismissing a petition solely on petitioners failure to timely submit proof of authority to sue on behalf of the corporation. In Pfizer, Inc. v. Galan,[footnoteRef:41][41] we upheld the sufficiency of a petition verified by an employment specialist despite the total absence of a board resolution authorizing her to act for and on behalf of the corporation. Lastly, in China Banking Corporation v. Mondragon International Philippines, Inc,[footnoteRef:42][42] we relaxed the rules of procedure because the corporation ratified the managers status as an authorized signatory. In all of the above cases, we brushed aside technicalities in the interest of justice. This is not to say that we disregard the requirement of prior authority to act in the name of a corporation. The relaxation of the rules applies only to highly meritorious cases, and when there is substantial compliance. While it is true that rules of procedure are intended to promote rather than frustrate the ends of justice, and while the swift unclogging of court dockets is a laudable objective, we should not insist on strict adherence to the rules at the expense of substantial justice.[footnoteRef:43][43] Technical and procedural rules are intended to help secure, not suppress, the cause of justice; and a deviation from the rigid enforcement of the rules may be allowed to attain that prime objective, for, after all, the dispensation of justice is the core reason for the existence of courts.[footnoteRef:44][44] [39: ] [40: ] [41: ] [42: ] [43: ] [44: ]

As to the denial of the motion to inhibit Justice Reyes, we find the same to be in order. First, the motion to inhibit came after the appellate court rendered the assailed decision, that is, after Justice Reyes had already rendered his opinion on the merits of the case. It is settled that a motion to inhibit shall be denied if filed after a member of the court had already given an opinion on the merits of the case, the rationale being that a litigant cannot be permitted to speculate on the action of the court x x x (only to) raise an objection of this sort after the decision has been rendered.[footnoteRef:45][45] Second, it is settled that mere suspicion that a judge is partial to one of the parties is not enough; there should be evidence to substantiate the suspicion. Bias and prejudice cannot be presumed, especially when weighed against a judges sacred pledge under his oath of office to administer justice without regard for any person and to do right equally to the poor and the rich. There must be a showing of bias and prejudice stemming from an extrajudicial source, resulting in an opinion on the merits based on something other than what the judge learned from his participation in the case.[footnoteRef:46][46] We would like to reiterate, at this point, the policy of the Court not to tolerate acts of litigants who, for just about any conceivable reason, seek to disqualify a judge (or justice) for their own purpose, under a plea of bias, hostility, prejudice or prejudgment.[footnoteRef:47][47] [45: ] [46: ] [47: ]

We now come to the more substantive issue of whether or not the petitioners may be validly ejected from the leased premises. Unlawful detainer cases are summary in nature. In such cases, the elements to be proved and resolved are the fact of lease and the expiration or violation of its terms.[footnoteRef:48][48] Specifically, the essential requisites of unlawful detainer are: 1) the fact of lease by virtue of a contract, express or implied; 2) the expiration or termination of the possessors right to hold possession; 3) withholding by the lessee of possession of the land or building after the expiration or termination of the right to possess; 4) letter of demand upon lessee to pay the rental or comply with the terms of the lease and vacate the premises; and 5) the filing of the action within one year from the date of the last demand received by the defendant.[footnoteRef:49][49] [48: ] [49: ]

It is undisputed that petitioners and respondent entered into two separate contracts of lease involving nine (9) rooms of the San Luis Building. Records, likewise, show that respondent repeatedly demanded that petitioners vacate the premises, but the latter refused to heed the demand; thus, they remained in possession of the premises. The only contentious issue is whether there was indeed a violation of the terms of the contract: on the part of petitioners, whether they failed to pay the stipulated rent without justifiable cause; while on the part of respondent, whether it prevented petitioners from occupying the leased premises except Room 35.This issue involves questions of fact, the resolution of which requires the evaluation of the evidence presented. The MeTC, the RTC and the CA all found that petitioners failed to perform their obligation to pay the stipulated rent. It is settled doctrine that in a civil case, the conclusions of fact of the trial court, especially when affirmed by the Court of Appeals, are final and conclusive, and cannot be reviewed on appeal by the Supreme Court.[footnoteRef:50][50] Albeit the rule admits of exceptions, not one of them obtains in this case.[footnoteRef:51][51] [50: ] [51: ]

To settle this issue once and for all, we deem it proper to assess the array of factual findings supporting the courts conclusion. The evidence of petitioners non-payment of the stipulated rent is overwhelming. Petitioners, however, claim that such non-payment is justified by the following: 1) the refusal of respondent to allow petitioners to use the leased properties, except room 35; 2) respondents refusal to turn over Rooms 36, 37 and 38; and 3) respondents refusal to accept payment tendered by petitioners.Petitioners justifications are belied by the evidence on record. As correctly held by the CA, petitioners communications to respondent prior to the filing of the complaint never mentioned their alleged inability to use the rooms.[footnoteRef:52][52] What they pointed out in their letters is that they did not know to whom payment should be made, whether to Ms. Bautista or to Pacheco.[footnoteRef:53][53] In their July 26 and October 30, 1993 letters, petitioners only questioned the method of computing their electric billings without, however, raising a complaint about their failure to use the rooms.[footnoteRef:54][54] Although petitioners stated in their December 30, 1993 letter that respondent failed to fulfill its part of the contract,[footnoteRef:55][55] nowhere did they specifically refer to their inability to use the leased rooms. Besides, at that time, they were already in default on their rentals for more than a year. [52: ] [53: ] [54: ] [55: ]

If it were true that they were allowed to use only one of the nine (9) rooms subject of the contract of lease, and considering that the rooms were intended for a business purpose, we cannot understand why they did not specifically assert their right. If we believe petitioners contention that they had been prevented from using the rooms for more than a year before the complaint for ejectment was filed, they should have demanded specific performance from the lessor and commenced an action in court. With the execution of the contract, petitioners were already in a position to exercise their right to the use and enjoyment of the property according to the terms of the lease contract.[footnoteRef:56][56] As borne out by the records, the fact is that respondent turned over to petitioners the keys to the leased premises and petitioners, in fact, renovated the rooms. Thus, they were placed in possession of the premises and they had the right to the use and enjoyment of the same. They, likewise, had the right to resist any act of intrusion into their peaceful possession of the property, even as against the lessor itself. Yet, they did not lift a finger to protect their right if, indeed, there was a violation of the contract by the lessor. [56: ]

What was, instead, clearly established by the evidence was petitioners non-payment of rentals because ostensibly they did not know to whom payment should be made. However, this did not justify their failure to pay, because if such were the case, they were not without any remedy. They should have availed of the provisions of the Civil Code of the Philippines on the consignation of payment and of the Rules of Court on interpleader. Article 1256 of the Civil Code provides:Article 1256. If the creditor to whom tender of payment has been made refuses without just cause to accept it, the debtor shall be released from responsibility by the consignation of the thing or sum due.Consignation alone shall produce the same effect in the following cases:x x x x(4) When two or more persons claim the same right to collect;x x x x.Consignation shall be made by depositing the things due at the disposal of a judicial authority, before whom the tender of payment shall be proved in a proper case, and the announcement of the consignation in other cases.[footnoteRef:57][57] [57: ]

In the instant case, consignation alone would have produced the effect of payment of the rentals. The rationale for consignation is to avoid the performance of an obligation becoming more onerous to the debtor by reason of causes not imputable to him.[footnoteRef:58][58] Petitioners claim that they made a written tender of payment and actually prepared vouchers for their monthly rentals. But that was insufficient to constitute a valid tender of payment. Even assuming that it was valid tender, still, it would not constitute payment for want of consignation of the amount. Well-settled is the rule that tender of payment must be accompanied by consignation in order that the effects of payment may be produced.[footnoteRef:59][59] [58: ] [59: ]

Moreover, Section 1, Rule 62 of the Rules of Court provides:Section 1. When interpleader proper. Whenever conflicting claims upon the same subject matter are or may be made against a person who claims no interest whatever in the subject matter, or an interest which in whole or in part is not disputed by the claimants, he may bring an action against the conflicting claimants to compel them to interplead and litigate their several claims among themselves.Otherwise stated, an action for interpleader is proper when the lessee does not know to whom payment of rentals should be made due to conflicting claims on the property (or on the right to collect).[footnoteRef:60][60] The remedy is afforded not to protect a person against double liability but to protect him against double vexation in respect of one liability.[footnoteRef:61][61] [60: ] [61: ]

Notably, instead of availing of the above remedies, petitioners opted to refrain from making payments. Neither can petitioners validly invoke the non-delivery of Rooms 36, 37 and 38 as a justification for non-payment of rentals. Although the two contracts embraced the lease of nine (9) rooms, the terms of the contracts - with their particular reference to specific rooms and the monthly rental for each - easily raise the inference that the parties intended the lease of each room separate from that of the others. There is nothing in the contract which would lead to the conclusion that the lease of one or more rooms was to be made dependent upon the lease of all the nine (9) rooms. Accordingly, the use of each room by the lessee gave rise to the corresponding obligation to pay the monthly rental for the same. Notably, respondent demanded payment of rentals only for the rooms actually delivered to, and used by, petitioners. It may also be mentioned that the contract specifically provides that the lease of Rooms 36, 37 and 38 was to take effect only when the tenants thereof would vacate the premises. Absent a clear showing that the previous tenants had vacated the premises, respondent had no obligation to deliver possession of the subject rooms to petitioners. Thus, petitioners cannot use the non-delivery of Rooms 36, 37 and 38 as an excuse for their failure to pay the rentals due on the other rooms they occupied.In light of the foregoing disquisition, respondent has every right to exercise his right to eject the erring lessees. The parties contracts of lease contain identical provisions, to wit: In case of default by the LESSEE in the payment of rental on the fifth (5th) day of each month, the amount owing shall as penalty bear interest at the rate of FOUR percent (4%) per month, to be paid, without prejudice to the right of the LESSOR to terminate his contract, enter the premises, and/or eject the LESSEE as hereinafter set forth;[footnoteRef:62][62] [62: ]

Moreover, Article 1673[footnoteRef:63][63] of the Civil Code gives the lessor the right to judicially eject the lessees in case of non-payment of the monthly rentals. A contract of lease is a consensual, bilateral, onerous and commutative contract by which the owner temporarily grants the use of his property to another, who undertakes to pay the rent therefor.[footnoteRef:64][64] For failure to pay the rent, petitioners have no right to remain in the leased premises. [63: ] [64: ]

WHEREFORE, premises considered, the petition is DENIED and the Status Quo Order dated January 18, 1999 is hereby LIFTED. The Decision of the Court of Appeals dated May 26, 1998 and its Resolution dated December 10, 1998 in CA-G.R. SP No. 37739 are AFFIRMED.SO ORDERED. G.R. Nos. 154470-71 September 24, 2012BANK OF COMMERCE, Petitioner, vs.PLANTERS DEVELOPMENT BANK and BANGKO SENTRAL NG PILIPINAS, Respondent.x - - - - - - - - - - - - - - - - - - - - - - - xG.R. Nos. 154589-90BANGKO SENTRAL NG PILIPINAS, Petitioner, vs.PLANTERS DEVELOPMENT BANK, Respondent.D E C I S I O NBRION, J.:Before the Court are two consolidated petitions for review on certiorari under Rule 45,1 on pure questions of law, filed by the petitioners Bank of Commerce (BOC) and the Bangko Sentral ng Pilipinas (BSP). They assail the January 10, 2002 and July 23, 2002 Orders (assailed orders) of the Regional Trial Court (RTC) of Makati City, Branch 143, in Civil Case Nos. 94-3233 and 94-3254. These orders dismissed (i) the petition filed by the Planters Development Bank (PDB), (ii) the "counterclaim" filed by the BOC, and (iii) the counter-complaint/cross-claim for interpleader filed bythe BSP; and denied the BOCs and the BSPs motions for reconsideration.THE ANTECEDENTSThe Central Bank billsI. First set of CB billsThe Rizal Commercial Banking Corporation (RCBC) was the registered owner of seven Central Bank (CB) bills with a total face value of P 70 million, issued on January 2, 1994 and would mature on January 2, 1995.2 As evidenced by a "Detached Assignment" dated April 8, 1994,3 the RCBC sold these CB bills to the BOC.4 As evidenced by another "Detached Assignment"5 of even date, the BOC, in turn, sold these CB bills to the PDB.6 The BOC delivered the Detached Assignments to the PDB.7On April 15, 1994 (April 15 transaction), the PDB, in turn, sold to the BOC Treasury Bills worth P 70 million, with maturity date of June 29, 1994, as evidenced by a Trading Order8 and a Confirmation of Sale.9 However, instead of delivering the Treasury Bills, the PDB delivered the seven CB bills to the BOC, as evidenced by a PDB Security Delivery Receipt, bearing a "note: ** substitution in lieu of 06-29-94" referring to the Treasury Bills.10 Nevertheless, the PDB retained possession of the Detached Assignments. It is basically the nature of this April 15 transaction that the PDB and the BOC cannot agree on.The transfer of the first set of seven CB billsi. CB bill nos. 45351-53On April 20, 1994, according to the BOC, it "sold back"11 to the PDB three of the seven CB bills. In turn, the PDB transferred these three CB bills to Bancapital Development Corporation (Bancap). On April 25, 1994, the BOC bought the three CB bills from Bancap so, ultimately, the BOC reacquired these three CB bills,12 particularly described as follows:Serial No.:2BB XM 0453512BB XM 0453522BB XM 045353

Quantity:Three (3)

Denomination:Php 10 million

Total Face Value:Php 30 million

ii. CB bill nos. 45347-50On April 20, 1994, the BOC sold the remaining four (4) CB bills to Capital One Equities Corporation13 which transferred them to All-Asia Capital and Trust Corporation (All Asia). On September 30, 1994, All Asia further transferred the four CB bills back to the RCBC.14On November 16, 1994, the RCBC sold back to All Asia one of these 4 CB bills. When the BSP refused to release the amount of this CB bill on maturity, the BOC purchased from All Asia this lone CB bill,15 particularly described as follows:16Serial No.:2BB XM 045348

Quantity:One (1)

Denomination:Php 10 million

Total Face Value:Php 10 million

As the registered owner of the remaining three CB bills, the RCBC sold them to IVI Capital and Insular Savings Bank. Again, when the BSP refused to release the amount of this CB bill on maturity, the RCBC paid back its transferees, reacquired these three CB bills and sold them to the BOC ultimately, the BOC acquired these three CB bills.All in all, the BOC acquired the first set of seven CB bills.II. Second set of CB billsOn April 19, 1994, the RCBC, as registered owner, (i) sold two CB bills with a total face value of P 20 million to the PDB and (ii) delivered to the PDB the corresponding Detached Assignment.17 The two CB bills were particularly described as follows:Serial No.:BB XM 045373BB XM 045374

Issue date:January 3, 1994

Maturity date:January 2, 1995

Denomination:Php 10 million

Total Face value:Php 20 million

On even date, the PDB delivered to Bancap the two CB bills18 (April 19 transaction). In turn, Bancap sold the CB bills to Al-Amanah Islamic Investment Bank of the Philippines, which in turn sold it to the BOC.19PDBs move against the transfer ofthe first and second sets of CB billsOn June 30, 1994, upon learning of the transfers involving the CB bills, the PDB informed20 the Officer-in-Charge of the BSPs Government Securities Department,21 Lagrimas Nuqui, of the PDBs claim over these CB bills, based on the Detached Assignments in its possession. The PDB requested the BSP22 to record its claim in the BSPs books, explaining that its non-possession of the CB bills is "on account of imperfect negotiations thereof and/or subsequent setoff or transfer."23Nuqui denied the request, invoking Section 8 of CB Circular No. 28 (Regulations Governing Open Market Operations, Stabilization of the Securities Market, Issue, Servicing and Redemption of the Public Debt)24 which requires the presentation of the bond before a registered bond may be transferred on the books of the BSP.25In a July 25, 1994 letter, the PDB clarified to Nuqui that it was not "asking for the transfer of the CB Bills. rather it intends to put the BSP on formal notice that whoever is in possession of said bills is not a holder in due course," and, therefore the BSP should not make payment upon the presentation of the CB bills on maturity.26 Nuqui responded that the BSP was "not in a position at that point in time to determine who is and who is not the holder in due course since it is not privy to all acts and time involving the transfers or negotiation" of the CB bills. Nuqui added that the BSPs action shall be governed by CB Circular No. 28, as amended.27On November 17, 1994, the PDB also asked BSP Deputy Governor Edgardo Zialcita that (i) a notation in the BSPs books be made against the transfer, exchange, or payment of the bonds and the payment of interest thereon; and (ii) the presenter of the bonds upon maturity be required to submit proof as a holder in due course (of the first set of CB bills). The PDB relied on Section 10 (d) 4 of CB Circular No. 28.28 This provision reads:(4) Assignments effected by fraud Where the assignment of a registered bond is secured by fraudulent representations, the Central Bank can grant no relief if the assignment has been honored without notice of fraud. Otherwise, the Central Bank, upon receipt of notice that the assignment is claimed to have been secured by fraudulent representations, or payment of the bond the payment of interest thereon, and when the bond is presented, will call upon the owner and the person presenting the bond to substantiate their respective claims.If it then appears that the person presenting the bond stands in the position of bonafide holder for value, the Central Bank, after giving the owner an opportunity to assert his claim, will pass the bond for transfer, exchange or payments, as the case may be, without further question.In a December 29, 1994 letter, Nuqui again denied the request, reiterating the BSPs previous stand.In light of these BSP responses and the impending maturity of the CB bills, the PDB filed29 with the RTC two separate petitions for Mandamus, Prohibition and Injunction with prayer for Preliminary Injunction and Temporary Restraining Order, docketed as Civil Case No. 94-3233 (covering the first set of CB bills) and Civil Case 94-3254 (covering the second set of CB bills) against Nuqui, the BSP and the RCBC.30The PDB essentially claims that in both the April 15 transaction (involving the first set of CB bills) and the April 19 transaction (involving the second set of CB bills), there was no intent on its part to transfer title of the CB bills, as shown by its non-issuance of a detached assignment in favor of the BOC and Bancap, respectively. The PDB particularly alleges that it merely "warehoused"31 the first set of CB bills with the BOC, as security collateral.On December 28, 1994, the RTC temporarily enjoined Nuqui and the BSP from paying the face value of the CB bills on maturity.32 On January 10, 1995, the PDB filed an Amended Petition, additionally impleading the BOC and All Asia.33 In a January 13, 1995 Order, the cases were consolidated.34 On January 17, 1995, the RTC granted the PDBs application for a writ of preliminary prohibitory injunction.35 In both petitions, the PDB identically prayed:WHEREFORE, it is respectfully prayed x x x that, after due notice and hearing, the Writs of Mandamus, Prohibition and Injunction, be issued; (i) commanding the BSP and Nuqui, or whoever may take her place -(a) to record forthwith in the books of BSP the claim of x x x PDB on the [two sets of] CB Bills in accordance with Section 10 (d) (4) of revised C.B. Circular No. 28; and(b) also pursuant thereto, when the bills are presented on maturity date for payment, to call (i) x x x PDB, (ii) x x x RCBC x x x, (iii) x x x BOC x x x, and (iv) x x x ALL-ASIA x x x; or whoever will present the [first and second sets of] CB Bills for payment, to submit proof as to who stands as the holder in due course of said bills, and, thereafter, act accordingly;and (ii) ordering the BSP and Nuqui to pay jointly and severally to x x x PDB the following:(a) the sum of P 100,000.00, as and for exemplary damages;(b) the sum of at least P 500,000.00, or such amount as shall be proved at the trial, as and for attorneys fees;(c) the legal rate of interest from the filing of this Petition until full payment of the sums mentioned in this Petition; and(d) the costs of suit.36After the petitions were filed, the BOC acquired/reacquired all the nine CB bills the first and second sets of CB bills (collectively, subject CB bills).Defenses of the BSP and of the BOC37The BOC filed its Answer, praying for the dismissal of the petition. It argued that the PDB has no cause of action against it since the PDB is no longer the owner of the CB bills. Contrary to the PDBs "warehousing theory,"38 the BOC asserted that the (i) April 15 transaction and the (ii) April 19 transaction covering both sets of CB bills - were valid contracts of sale, followed by a transfer of title (i) to the BOC (in the April 15 transaction) upon the PDBs delivery of the 1st set of CB bills in substitution of the Treasury Bills the PDB originally intended to sell, and (ii) to Bancap (in the April 19 transaction) upon the PDBs delivery of the 2nd set of CB bills to Bancap, likewise by way of substitution.The BOC adds that Section 10 (d) 4 of CB Circular No. 28 cannot apply to the PDBs case because (i) the PDB is not in possession of the CB bills and (ii) the BOC acquired these bills from the PDB, as to the 1st set of CB bills, and from Bancap, as to the 2nd set of CB bills, in good faith and for value. The BOC also asserted a compulsory counterclaim for damages and attorneys fees.On the other hand, the BSP countered that the PDB cannot invoke Section 10 (d) 4 of CB Circular No. 28 because this section applies only to an "owner" and a "person presenting the bond," of which the PDB is neither. The PDB has not presented to the BSP any assignment of the subject CB bills, duly recorded in the BSPs books, in its favor to clothe it with the status of an "owner."39 According to the BSP Section 10 d. (4) applies only to a registered bond which is assigned. And the issuance of CB Bills x x x are required to be recorded/registered in BSPs books. In this regard, Section 4 a. (1) of CB Circular 28 provides that registered bonds "may be transferred only by an assignment thereon duly executed by the registered owner or his duly authorized representative x x x and duly recorded on the books of the Central Bank."x x x xThe alleged assignment of subject CB Bills in PDBs favor is not recorded/registered in BSPs books.40 (underscoring supplied)Consequently, when Nuqui and the BSP refused the PDBs request (to record its claim), they were merely performing their duties in accordance with CB Circular No. 28.Alternatively, the BSP asked that an interpleader suit be allowed between and among the claimants to the subject CB bills on the position that while it is able and willing to pay the subject CB bills face value, it is duty bound to ensure that payment is made to the rightful owner. The BSP prayed that judgment be rendered:a. Ordering the dismissal of the PDBs petition for lack of merit;b. Determining which between/among [PDB] and the other claimants is/are lawfully entitled to the ownership of the subject CB bills and the proceeds thereof;c. x x x;d. Ordering PDB to pay BSP and Nuqui such actual/compensatory and exemplary damages as the RTC may deem warranted; ande. Ordering PDB to pay Nuqui moral damages and to pay the costs of the suit.41Subsequent eventsThe PDB agreed with the BSPs alternative response for an interpleader 4. PDB agrees that the various claimants should now interplead and substantiate their respective claims on the subject CB bills. However, the total face value of the subject CB bills should be deposited in escrow with a private bank to be disposed of only upon order of the RTC.42Accordingly, on June 9, 199543 and August 4, 1995,44 the BOC and the PDB entered into two separate Escrow Agreements.45 The first agreement covered the first set of CB bills, while the second agreement covered the second set of CB bills. The parties agreed to jointly collect from the BSP the maturity proceeds of these CB bills and to deposit said amount in escrow, "pending final determination by Court judgment, or amicable settlement as to who shall be eventually entitled thereto."46 The BOC and the PDB filed a Joint Motion,47 submitting these Escrow Agreements for court approval. The RTC gave its approval to the parties Joint Motion.48 Accordingly, the BSP released the maturity proceeds of the CB bills by crediting the Demand Deposit Account of the PDB and of the BOC with 50% each of the maturity proceeds of the amount in escrow.49In view of the BOCs acquisition of all the CB bills, All Asia50 moved to be dropped as a respondent (with the PDBs conformity51), which the RTC granted.52 The RCBC subsequently followed suit.53In light of the developments, on May 4, 1998, the RTC required the parties to manifest their intention regarding the case and to inform the court of any amicable settlement; "otherwise, th[e] case shall be dismissed for lack of interest."54 Complying with the RTCs order, the BOC moved (i) that the case be set for pre-trial and (ii) for further proceeding to resolve the remaining issues between the BOC and the PDB, particularly on "who has a better right over the subject CB bills."55 The PDB joined the BOC in its motion.56On September 28, 2000, the RTC granted the BSPs motion to interplead and, accordingly, required the BOC to amend its Answer and for the conflicting claimants to comment thereon.57 In October 2000, the BOC filed its Amended Consolidated Answer with Compulsory Counterclaim, reiterating its earlier arguments asserting ownership over the subject CB bills.58In the alternative, the BOC added that even assuming that there was no effective transfer of the nine CB bills ultimately to the BOC, the PDB remains obligated to deliver to the BOC, as buyer in the April 15 transaction and ultimate successor-in-interest of the buyer (Bancap) in the April 19 transaction, either the original subjects of the sales or the value thereof, plus whatever income that may have been earned during the pendency of the case.59That BOC prayed:1. To declare BOC as the rightful owner of the nine (9) CB bills and as the party entitled to the proceeds thereof as well as all income earned pursuant to the two (2) Escrow Agreements entered into by BOC and PDB.2. In the alternative, ordering PDB to deliver the original subject of the sales transactions or the value thereof and whatever income earned by way of interest at prevailing rate.Without any opposition or objection from the PDB, on February 23, 2001, the RTC admitted60 the BOCs Amended Consolidated Answer with Compulsory Counterclaims.In May 2001, the PDB filed an Omnibus Motion,61 questioning the RTCs jurisdiction over the BOCs "additional counterclaims." The PDB argues that its petitions pray for the BSP (not the RTC) to determine who among the conflicting claimants to the CB bills stands in the position of the bona fide holder for value. The RTC cannot entertain the BOCs counterclaim, regardless of its nature, because it is the BSP which has jurisdiction to determine who is entitled to receive the proceeds of the CB bills.The BOC opposed62 the PDBs Omnibus Motion. The PDB filed its Reply.63In a January 10, 2002 Order, the RTC dismissed the PDBs petition, the BOCs counterclaim and the BSPs counter-complaint/cross-claim for interpleader, holding that under CB Circular No. 28, it has no jurisdiction (i) over the BOCs "counterclaims" and (ii) to resolve the issue of ownership of the CB bills.64 With the denial of their separate motions for Reconsideration,65 the BOC and the BSP separately filed the present petitions for review on certiorari.66THE BOCS and THE BSPS PETITIONSThe BOC argues that the present cases do not fall within the limited provision of Section 10 (d) 4 of CB Circular No. 28, which contemplates only of three situations: first, where the fraudulent assignment is not coupled with a notice to the BSP, it can grant no relief; second, where the fraudulent assignment is coupled with a notice of fraud to the BSP, it will make a notation against the assignment and require the owner and the holder to substantiate their claims; and third, where the case does not fall on either of the first two situations, the BSP will have to await action on the assignment pending settlement of the case, whether by agreement or by court order.The PDBs case cannot fall under the first two situations. With particular regard to the second situation, CB Circular No. 28 requires that the conflict must be between an "owner" and a "holder," for the BSP to exercise its limited jurisdiction to resolve conflicting claims; and the word "owner" here refers to the registered owner giving notice of the fraud to the BSP. The PDB, however, is not the registered owner nor is it in possession (holder) of the CB bills.67 Consequently, the PDBs case can only falls under the third situation which leaves the RTC, as a court of general jurisdiction, with the authority to resolve the issue of ownership of a registered bond (the CB bills) not falling in either of the first two situations.The BOC asserts that the policy consideration supportive of its interpretation of CB Circular No. 28 is to have a reliable system to protect the registered owner; should he file a notice with the BSP about a fraudulent assignment of certain CB bills, the BSP simply has to look at its books to determine who is the owner of the CB bills fraudulently assigned. Since it is only the registered owner who complied with the BSPs requirement of r