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ETERNAL GARDENS vs IAC

G.R. No. 73794/19 September 1988
J. Paras
Topic: Interpleader
Doctrine: Deposit is proper in interpleader since P may not continue to benefit from
the property/funds in litigation during the pendency of the suit at the expense of
whoever will ultimately be decided as entitled thereto.
Facts: P (Petitioner) and PR [Private Respondent- Philippine Union Mission
Corporation of the Seventh Day Adventists (MISSION)], executed a Land
Development Agreement, whereby P would construct at its own expense a memorial
park subdivided into and sold as memorial plot lots, on the property owned by PR.
40% of the proceeds be remitted monthly by P to PR through a designated
depositary trustee bank. On the same date, they also executed a Deed of Absolute
Sale with Mortgage on said lots. All went well until Maysilo Estate asserted its claim
of ownership over the land in question. Confronted with such conflicting claims,
petitioner filed a complaint for interpleader against PR and Maysilo Estate. Alleging
among others that P was not yet the owner but a purchaser thereof, and its
willingness to pay to whoever will be declared as owner. Trial Court (here still CFI)
granted.
PR filed MTD; denied. Both, filed an answer. PR filed a motion for the placing
on judicial deposit the amounts due and unpaid from petitioner; denied. An
amended order was issued, still in favor of P. Trial court passed a resolution
reversing the judgment and ruled in favour of PR ordering the judicial deposit and
dismissal of the interpleader. The heirs of the Maysilo Estate moved for
reconsideration of the order of dismissal; granted. In spite of that PR filed a motion
for Writ of Execution of the resolution; denied. PR elevated on certiorari and
mandamus to the Intermediate Appellate; denied. SC-denied. Meanwhile the case
still pending, PR filed Petition for Certiorari before Respondent IAC; GRANTED,
ordering the deposit. P MR-denied. Hence, this petition.
Issue: Whether judicial deposit is proper in the complaint for interpleader.
Decision: YES, petition dismissed. Since, P admitted in its complaint its willingness
to pay; there is no cogent reason for its refusal to deposit the amount.
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."
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.