Interpleader

Interpleader

The action of interpleader is a remedy whereby a person who has property whether personal or real, in his possession, or an obligation to render wholly or partially, without claiming any right in both, or claims an interest which in whole or in part is not disputed by the conflicting claimants, comes to court and asks that the persons who claim the said 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 one or the other thing. (Ocampo vs. Tirona, G.R. No.147812. April 6, 2005)

Purpose of the remedy

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. (Ocampo vs. Tirona, ibid.)

Requisites for interpleader

1) There must be two or more claimants with adverse or conflicting interests to a property in the custody or possession of the plaintiff;

2) The plaintiff in an action for interpleader has no claim upon the subject matter of the adverse claims or if he has an interest at all, such interest is not disputed by the claimants;

3) The subject matter of the adverse claims must be one and the same; and

4) The parties impleaded must make effective claims.

Interpleader vs. Intervention
 

INTERPLEADER	INTERVENTION
1. an original action	1. ancillary action
2. presupposes that plaintiff has no interest in the subject matter of the action or has interest therein in whole or in part which is not disputed by the other parties	2. proper in any of the four situations: persons having (a) legal interest in the matter of litigation, or (b) success of either of the parties, or (c) an interest against both, or (d) is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an offer thereof, (Rule 19, Sec. 1)
3. defendants are being sued precisely to interplead them	3. defendants are original parties to the pending suits

Procedural Peculiarities

1. Upon the filing of the complaint, the court shall issue an order requiring the conflicting claimants to interplead with one another.

2. If the interest of justice so requires, the court may direct in the same order that the subject matter of the suit be paid or delivered to the court.

3. The summons shall be served on the conflicting claimants together with a copy of the complaint and order mentioned in no. 1. (Serve: summons, complaint, order)

4. The defendants may file a motion to dismiss on the ground of:

a) the impropriety of the interpleader action or on 

b) other appropriate grounds specified in Rule 16.

5. The defendants shall serve a copy of the answer not only to the plaintiff but also to the other conflicting claimants who may file their reply thereto.

6. If any claimant fails to plead within the prescribed period, the court may, on motion, declare him in default and thereafter render judgment barring him from any claim in respect to the subject matter.

When to file to file an interpleader?

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. (Rule 62, Sec. 1)

Example:

A leased an apartment to B. So, pursuant to this agreement, B have been occupying this apartment paying the rentals.  After the lease period has run, let’s say, six (6) months, here now surfaces C. C said, “B does not pay anymore the rentals to A, this apartment is mine. Pay to me.” B is in a dilemma. If he (B) pays to A and it turns out later that C has a better right, he runs the risk of paying twice. If he pays to C, he runs the risks of paying again to A because C may not have the right.

Q. If you were B, what is the remedy available to you, so that regardless of who is the party  entitled to receive, you will be protected?

A. File a suit for interpleader. B vs. A and C. Why? So that A and C can fight it out in this case. So, B initiates the complaint against two (2) people who do not want to go to court and litigate.

               

So, this process of interpleader, A and C are compelled to fight each other. That is the concept of interpleader.

We now have this complaint by B against A and C.

Q. What is the prayer of B here?

A. That A and C be directed to interplead with each other. Meaning, that A and C should fight it out and have this matter of who is entitled to the rental. Actually, it is not B who is fighting A or C. It is A and C who are fighting each other.

Q. But who initiated the fight between the two (2)?

A. B.

Q.  What now is the procedure to be followed by the court when this interpleader action was filed? 

A. A and C will also be summoned under Rule 14. But with this difference: accompanying the summons is an order of the court.

Rule 62, Sec. 2

Upon filing of the complaint, the court shall issue an order requiring the conflicting claimants to interplead with one another. If the interests of justice so require, the court may direct in such order that the subject matter be paid or delivered to the court. 

So, the sheriff now serves on A and C the summons. Together with the summon is that order of the court directing A and C to interplead with one other. So, A will file his answer.

Q. Who will be furnished copy of the answer of A?

A. A will furnish B and C.

Q. C will file his answer. Who will be furnished with the copy of the answer of C?

A. A and B.

Q. Do you now see why this is a special civil action?

A. In ordinary civil action, do the defendants furnish each other copies of their answers? No except when the answer contains a cross-claim. But here, the defendants furnish each other. Why? Because they are the ones litigfating.

So, insofar as A is concerned, the plaintiff against him is C. Insofar as C is concerned, A is the plaintiff against him.

Q. May a motion to dismiss the action for interpleader be filed by A and C? Can A and C avail of Rule 16, before they file their answer?

A. Yes

Section 4 Rule 62

Within the time of filing an answer, each claimant may file a motion to dismiss on the ground of impropriety of the interpleader or on other appropriate grounds specified in Rule 16. The period to file the answer shall be tolled and if the motion is denied, the movant may file his answer within the remaining period, but shall not be less than five (5) days in any event, reckoned from   notice of denial.

Q. What do you notice with respect to the ground of a motion to dismiss an interpleader action and a motion to dismiss in an ordinary civil action?

A. In an ordinary civil action, the impropriety of the action is not a ground for a motion to dismiss. Under Rule 62, it is. So, the grounds for a motion to dismiss under Rule 62 are more encompassing than the ground of a motion to dismiss under Rule 16.

Sec. 5 Rule 62 covers that situation already mentioned earlier.

Sec. 5 Rule 62

Each claimant shall file his answer setting forth his claim within fifteen (15) days from service of the summons upon him, serving a copy thereof upon each other conflicting claimants who may file their reply thereto as provided by these Rules. If any claimant fails to plead within the time herein fixed, the court may, on motion, declare him in default and thereafter render judgment barring him from any claim in respect to the subject matter.

After A and C have been summoned, they will file their answer serving the plaintiff B and other defendants of the copy of the answer. In the answer of A and C, each will assert his right to the rental in this example. He will give his reasons why the rental should be paid to him.

Q. May A and C also file a counterclaim, a cross-claim?

A. Yes. 

Sec. 5 Rule 62

The parties in an interpleader action may file counterclaims, cross-claims, third-party complaints and responsive pleadings thereto, as provided by these Rules.

So, there is nothing special about this, except with this provision where they have to furnish each other with copies of their pleadings.

Q.  What now is the disposition of the court with respect to these cases?

A. After the pleadings of the conflicting claimants have been filed and pre-trial have been conducted in accordance with the rules, the court shall proceed to determine their respective rights and adjudicate their counterclaims.

   

            

Sec. 6 Rule 62

After the pleadings of the conflicting claimants have been filed, and pre-trial has been conducted in accordance with the Rules, the court shall proceed to determine their respective rights and adjudicate their several claims.

It means to say following the pre-trial, trial proper will now proceed. 

After the court has conducted the pre-trial and received the evidence, the court will now determine who between A and C is entitled to this rental. And of course, will adjudicate the counterclaims.

 

    

Sec. 7 Rule 62

The docket and other lawful fees paid by the party who filed a complaint under this Rule, as well as the costs and litigation expenses, shall constitute a lien or change upon the subject matter of the action, unless the court shall order otherwise. 

Cases:

Menzi & Co. vs. Bastida, 63 Phil 16 – The costs, expenses and attorney’s fees incurred by the plaintiff in the action is recoverable from the defendant who loses in the action and is found by the court to have caused the unnecessary litigation.

Beltran vs. PHHC, L-25138, August 28, 1969 - Action for interpleader is improper where defendants have conflicting claims against the plaintiff.

Vda. De Camilo vs. Aranio, L-15653, September 29, 1961 - Where there are no conflicting claims among the defendants, their respective claims being spearte and distinct from each other, the complaint for interpleader may be dismissed for lack of cause of action.

Wack-Wack Golf & Country Club vs. Lee Won, L-23851, March 26, 1976 - An action for interpleader must be filed within a reasonable time after the dispute has arisen, otherwise it may be barred by laches. Where a party was aware of the dispute and in fact had been sued by one of the claimants and the former did not implead the other claimant, he can no longer invoke the remedy of interpleader.