INTERPLEADER

BY: ARELLANO, RAFAEL

POLINTAN, RHEA
4LM2

WHAT IS AN INTERPLEADER?
An interpleader is an equitable proceeding brought by a third person to have a
court determine the ownership rights of rival claimants to the same money or property
that is held by a third person.

PURPOSE OF INTERPLEADER?
The remedy is afforded not to protect a person against a double liability but to
protect him against a double vexation in respect of one liability.

IMPORTANCE OF INTERPLEADER?
The importance of an interpleader is to help the courts and claimants determine
the rightful recipient of the property or payment being held in trial.

PROCEDURE

1. Filing
- A complaint for interpleader is filed by the person against whom the conflicting
claims are made.

2. Court Order
- The court shall issue an order requiring the conflicting claimants to interplead
with one another.

3. Summons
- Summons shall be served upon the conflicting claimants, together with a copy of
the complaint and order.

4. Motion to Dismiss
- The time for filing an answer is 15 days, each claimant may file a motion to
dismiss on the grounds specified in Rule 16 and on the ground of impropriety of
the action for interpleader.

5. Answer
 - Each claimant shall file an answer within 15 days from service of the summons,
serving a copy thereof upon each of the other conflicting claimants, who may file
their reply thereto.

6. Other pleadings
- The parties may file counterclaims, crossclaims, third-party complaints and
responsive pleadings thereto.

7. Pre-trial
- A pre-trial will be conducted in accordance with the Rules of Court.

8. Determination
- Court shall determine conflicting claimants’ respective rights and adjudicate
their several claims.

CASES:

1. RCBC vs. Metro Container Corporation

Facts: For failure of Ley Construction Corporation (LEYCON) to settle its loan
obligations, Rizal Commercial Banking Corporation (RCBC) instituted an extrajudicial
foreclosure proceeding against it. In a bidding, RCBC was adjudged the highest bidder.
LEYCON promptly filed an action for Nullification of Extrajudicial Foreclosure Sale and
Damages against RCBC. Meanwhile, RCBC consolidated its ownership over the property
due to LEYCON's failure to redeem the mortgaged property within the 12-month
redemption period. By virtue, thereof, RCBC demanded rental payments from Metro
Container Corporation (METROCAN) which was leasing the mortgaged property from
LEYCON.

On the other hand, LEYCON filed an action for Unlawful Detainer against
METROCAN before the MeTC. Consequently, METROCAN filed a complaint for
Interpleader against LEYCON and RCBC before the RTC 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 on the subject property.

On 31 October 1995, judgment was rendered in the Unlawful Detainer case,

which, among other things, ordered METROCAN to pay LEYCON whatever rentals due
on the subject premises. The said decision became final and executory. By reason
thereof, METROCAN and LEYCON separately filed a motion to dismiss the interpleader
case. However, the said motions were dismissed for lack of merit. METROCAN
appealed to the Court of Appeals which granted the petition and ordered the dismissal of
the interpleader case. Hence, RCBC filed the instant petition.

Issue: May METROCAN unilaterally cause the dismissal of the interpleader case?

Held: Yes. An action of interpleader is afforded to protect a person not against double
liability but against double vexation in respect of one liability. It requires, as an
indispensable requisite, that conflicting claims upon the same subject matter are or may
be made against the plaintiff-in-interpleader who claims no interest whatever in the
subject matter or an interest which in whole or in part is not disputed by the claimants.

When the decision in the Unlawful Detainer case became final and executory,
METROCAN has no other alternative left but to pay the rentals to LEYCON. Precisely
because there was already a judicial fiat to METROCAN, there was no more reason to
continue with the interpleader case. Thus, METROCAN moved for the dismissal of the
interpleader action not because it is no longer interested but because there is no more
need for it to pursue such cause of action. The decision in the Unlawful Detainer
case resolved the conflicting claims insofar as payment of rentals was concerned.

RCBC was correct in saying that it is not bound by the decision in the Unlawful
Detainer case. It is not a party thereto. However, it could not compel METROCAN to
pursue the interpleader case. RCBC has other avenues to prove its claim. It is not
berefted of other legal remedies. In fact, the issue of ownership can very well be threshed
out in the case for Nullification of Extrajudicial Foreclosure Sale and Damages filed by
LEYCON against RCBC.

2. Wack Wack Golf & Country Club, Inc., vs. Lee E. Won alis Ramon Lee and
Bienvenido A. Tan

Facts: Wack Wack Golf and Country Club filed a complaint for interpleader against
Won and Tan who both claim ownership over membership fee certificate 201. Won
claims its ownership stemming from a decision rendered in Civil Case 26044 entitled
"Lee E. Won alias Ramon Lethe alleged true owner of the same certificate. The trial
court dismissed the complaint on the ground of res judicata by reason of the previous
civil case that issued Won the right to the certificate. Hence, the appeal.

Issue: Whether or not the remedy of interpleader was proper and timely?

Held: 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. However, the
Corporation may not properly invoke the remedy of interpleader.
 To now permit the Corporation to bring Won 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.

Besides, 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 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 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. 

3. Jose A. Beltran, et al., vs. People’s Homesite & housing Corporation

Facts: Plaintiffs since they first occupied their housing units under lease from PHHC,
under lease and paying monthly rentals therefor, they were assured that after 5 years of
continuous occupancy they would be entitled to purchase said units. In 1991, PHHC
announced that the management of the project would be transferred to GSIS in payment
of PHHC's debts to GSIS. Subsequently, however, the new manager of PHHC refused to
recognize all transactions and undertakings previously entered into with GSIS. Alleging
that they do not know now to whom they should pay the monthly amortizations, plaintiffs
filed an interpleader suit against GSIS and PHHC.

GSIS and PHHC filed a motion to dismiss for failure to state a cause of action.
After hearing the motion, the court dismissed the interpleader case ruling that during the
hearing, the counsel for defendant ratified the allegations in his motion and made of
record that GSIS has no objection that payments on the monthly amortizations from the
residents of Project 4 be made directly to PHHC. Plaintiffs appealed, contending the
allegations in their complaint raise questions of fact that can be established only by
answer and trial on the merits and not by a motion to dismiss heard by mere oral
manifestations in open court. 

Issue: Whether or not the trial court erred in dismissing the complaint for interpleader?

Held: No. Rule 63, section 1 of the Revised Rules of Court requires as an indispensable
element that "conflicting claims upon the same subject matter are or may be made"
against the plaintiff-in-interpleader "who claims no interest whatever in the subject
matter or an interest which in whole or in part is not disputed by the claimants."

The record shows clearly that there were no conflicting claims by defendant
corporations as against plaintiff-tenants, which they may properly be compelled in an
interpleader suit to interplead and litigate among themselves. While the two defendant
corporations may have conflicting claims between themselves with regard to the
management, administration and ownership of Project 4, such conflicting claims are not
against the plaintiffs nor do they involve or affect the plaintiffs. No allegation is made in
their complaint that any corporation other than the PHHC which was the only entity privy
to their lease-purchase agreement, ever made on them any claim or demand for payment
of the rentals or amortization payments. Both defendant corporations were in conformity
and had no dispute, as pointed out by the trial court that the monthly payments and
amortizations should be made directly to the PHHC alone. Both defendant corporations
were agreed that PHHC should continue receiving the tenants' payments, and that such
payments would be duly recognized even if the GSIS should eventually take over Project
4 by virtue of their turnover agreement.