INTERPLEADER

Wack Wack Golf and Country Club v Won

70 SCRA 165; G.R. No. L-23851March 26, 1976; 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.

Facts: Won claims ownership of a membership fee certificate at Wack Wack Golf & Country Club. Won
claims its ownership stemming from a decision rendered in Civil Case 26044 entitled "Lee E. Won alias
Ramon Lee vs. Wack Wack Golf & Country Club, Inc." By virtue of the civil case, he was issued such
certificate. But a certain Tan also claims ownership over such certificate pursuant to an assignment made
by the alleged true owner (Swan, Culbertson and Frits) of the same certificate. Thus, Wack Wack filed a
complaint to interplead Won and Tan to litigate their conflicting claims. 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.
The trial court dismissed the complaint, with costs against the Corporation.

Issue: WON the remedy of interpleader was properly and timely availed.

Ruling: NO.
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.
Interpleader suit is improper and unavailing, since the Corporation is already liable to Lee under a final
judgment.

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.
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.

Discussion:
General Rule 1: 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.
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.
To 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

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.

It 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. And so it is said that it is too late for the remedy of
interpleader if the party seeking this relief has contested the claim of one of the parties and suffered
judgment to be taken.

General Rule 2: A stakeholder should use reasonable diligence to hale the contending claimants to
court. He need not await actual institution of independent suits against him before filing a bill of
interpleader. He should file an action of interpleader within a reasonable time after a dispute has arisen
without waiting to be sued by either of the contending claimants. Otherwise, he may be barred by laches or
undue delay. But where he acts with reasonable diligence in view of the environmental circumstances, the
remedy is not barred.

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

Has the Corporation in this case acted with diligence, in view of all the circumstances, such that it may
properly invoke the remedy of interpleader? NO.

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
The 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 be 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.

Requirements before a person will be deemed to be in a position to ask for an order of interpleader:
1. he must be prepared to show, among other prerequisites,
2. that he has not become independently liable to any of the claimants.