RULE-62-and-70-FINAL.pdf - RULE 62 INTERPLEADER Section 1...

Unformatted text preview: RULE 62: INTERPLEADER 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. (1a, R63) Section 2. Order. — Upon the 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. (2a, R63) Section 3. Summons. — Summons shall be served upon the conflicting claimants, together with a copy of the complaint and order. (3, R63) Section 4. Motion to dismiss. — Within the time for filing an answer, each claimant may file a motion to dismiss on the ground of impropriety of the interpleader action 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 which shall not be less than five (5) days in any event, reckoned from notice of denial. (n) Section 5. Answer and other pleadings. — 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 of the 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. The parties in an interpleader action may file counterclaims, cross-claims, third-party complaints and responsive pleadings thereto, as provided by these Rules. (4a, R63) Section 6. Determination. — 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. (5a, R63) Section 7. Docket and other lawful fees, costs and litigation expenses as liens. — 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. (6a, R63) What is an Interpleader? An Interpleader is a legal remedy whereby a person who Page 1 of 116 a. b. c. has in his possession personal or real property, or has 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. 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."1 The subject matter of an Interpleader is a property, whether personal or real, and an obligation to be rendered wholly or partially. For an action in interpleader to prosper, the following elements must be present2: 1. The plaintiff claims no interest in the subject matter or his claim thereto is not disputed. 2. There must be at least two or more conflicting claimants. 3. The parties to be interpleaded must make effective claims. 4. The subject matter must be one and the same. What is the essence of Interpleader? An action of interpleader is a rule founded on justice and equity. There is, on the part of the complainant-in-interpleader, a disavowal of his interest in the property in litigation, such that he deposits the property or funds in controversy with the court. What is the purpose of an Interpleader? Through this action, the law spares the complainant-in-interpleader from taking into his hands the matter of deciding who among the conflicting claimants is entitled to the subject matter, it being beyond his capability. The remedy is afforded him not merely to protect him against double liability, but also to protect him against double vexation in respect of one liability. That is, there will be no double payment or double satisfaction of the obligation with respect to which the conflicting claimants assert a right. When the court orders that the claimants litigate among themselves, there arises in reality a new action and the former are styled interpleaders, and in such a case the 1 Rizal Commercial Banking Corporation v. Metro Container Corporation, G.R. No. 127913, September 13, 2001 2 Oscar M. Herrera, III Remedial Law 225 (2006) Page 2 of 116 pleading which initiates the action is called a complaint of interpleader and not a crosscomplaint.3 The result of the action will determine which claimant is entitled to the property or to the satisfaction of the obligation. Who can file an Interpleader? It may be filed by the person in possession of personal or real property or has an obligation to render, wholly or partially, without claiming any right thereto. This civil action is peculiar in that the party who initiates the proceeding is not a party interested in the subject matter of the action. In other words, he claims no enforceable right or interest thereto. There exists, however, two or more persons who are each claiming conflicting rights or interests on the same subject matter in his possession. The plaintiff in interpleader is called a complainant-in-interpleader or a stakeholder. When must an Interpleader be filed? This remedy can only prosper when it is filed within a reasonable time before becoming liable to either claimants by virtue of a judgment. In other words, the Interpleader should be filed after the plaintiff becomes aware of the conflicting claims. Significantly, it should be filed without awaiting to be sued by one of the contending parties. It does not become available to a person who has become independently liable in a civil case to any of the contending claimants by virtue of a judgment. 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.4 Should there have already been a suit against the complainant-in-interpleader, he becomes barred by laches by reason of undue delay. Where a judgment has already been obtained by one claimant, the plaintiff in an action for interpleader becomes liable to the former who has become a judgment creditor by virtue of such judgment. In the case of Yarborough v. Thompson5, It has been held that a stakeholder's action of interpleader is too late when filed after judgment has been rendered against him 3 Oscar M. Herrera, III Remedial Law 224 (2006) citing Alvarez, et al. v. Commonwealth, et al., 65 Phil. 302 (1938); Ocampo v. Tirona G.R. No. 147812, April 6, 2005. 4 Wack Wack Golf & Country Club, Inc. v. Won, G.R. No. L-23851, March 26, 1976 5 41 Am. Dec. 626 Page 3 of 116 in favor of one of the contending claimants, 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. In Wack Wack Golf & Country Club, Inc. v. Won6, the interpleader suit was not allowed to c prosper because the Corporation had already been made independently liable in civil case 26044 and, therefore, the 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, the 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. Finally, 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. Where should the action be filed? The court which has jurisdiction over the action will depend on the value of the property subject matter of the action. The rules with respect to the jurisdictional amounts of courts shall apply, to wit: (A) Municipal Trial Court 1. Real Property Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in civil cases. – Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise: xxx (3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property, or any interest therein where the assessed value of the property or interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses and costs: Provided, That value of such property shall be determined by the assessed value of the adjacent lots. (as amended by R.A. No. 7691)7 6 G.R. No. L-23851, March 26, 1976 BP 129 - The Judiciary Reorganization Act of 1980 7 Page 4 of 116 2. Personal Property xxx (1) Exclusive original jurisdiction over civil actions and probate proceedings, testate and intestate, including the grant of provisional remedies in proper cases, where the value of the personal property, estate, or amount of the demand does not exceed One hundred thousand pesos (P100,000.00) or, in Metro Manila where such personal property, estate, or amount of the demand does not exceed Two hundred thousand pesos (P200,000.00) exclusive of interest damages of whatever kind, attorney's fees, litigation expenses, and costs, the amount of which must be specifically alleged: Provided, That where there are several claims or causes of action between the same or different parties, embodied in the same complaint, the amount of the demand shall be the totality of the claims in all the causes of action, irrespective of whether the causes of action arose out of the same or different transactions; xxx (B) Regional Trial Court 1. Real Property Section 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise exclusive original jurisdiction: xxx (2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or for civil actions in Metro Manila, where such the value exceeds Fifty thousand pesos (50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts8 xxx 2. Personal Property xxx 8 BP 129 - The Judiciary Reorganization Act of 1980 Page 5 of 116 (8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and costs or the value of the property in controversy exceeds One hundred thousand pesos (100,000.00) or, in such other abovementioned items exceeds Two hundred thousand pesos (200,000.00). (as amended by R.A. No. 7691*) xxx Court Order and Summons Upon the 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.9 It is necessary that there be an order issued by the court requiring the conflicting claimants to interplead with one another before the defendants (conflicting claimants) may litigate among themselves. However, it was ruled in Mesina v. Intermediate Appellate Court, the Order of the trial court requiring the parties to file their answers is to all intents and purposes an order to interplead, substantially and essentially and was therefore in compliance with the provisions of Rule 62 of the Rules of Court.10 Subsequently, the following shall be served upon the conflicting claimants: (1) Summons, together with (2) a Copy of the Complaint; and (3) Order. What other actions may be undertaken by the claimant after being served with summons and copies of the order? 1. Claimant may move to dismiss11 the action for interpleader. Upon proper service of the summons upon the conflicting claimants, together with a copy of the complaint and order, a claimant may file a motion to dismiss within the time for the filing of an answer upon the following grounds: I. Impropriety of the action for interpleader; Non-compliance with the requirements under Section 1 of Rule 62 such as the allegations do not show conflicting claims between or among the persons required to 9 Section 2, Rule 62, Rules of Court G.R. No. 70145, November 13, 1986 11 Section 4 of Rule 62 10 Page 6 of 116 interplead, the complaint is subject to dismissal on the ground of impropriety of the interpleader. Rule 63, Section 1 of the Revised Rules of Court (formerly Rule 14) 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." 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. The questions of fact raised in their complaint concerning the enforceability, and recognition or non-enforceability and non-recognition of the turnover agreement of December 27, 1961 between the two defendant corporations are irrelevant to their action of interpleader, for these conflicting claims, loosely so-called, are between the two corporations and not against plaintiffs. 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.12 Also, where the occupants of two different parcels of land adjoining each other belonging to two separate plaintiffs, but on which the occupants had constructed a building encroaching upon both parcels of land, faced two ejectment suits from the plaintiffs, each plaintiff claiming the right of possession and recovery over his respective portion of the lands encroached upon, this Court held that the occupants could not properly file an interpleader suit, against the plaintiffs, to litigate their alleged conflicting claims; for evidently, the two plaintiff did not have any conflicting claims upon the same subject matter against the occupants, but were enforcing separate and distinct claims on their respective properties.13 Likewise, an interpleader action is said to be improper when not filed within a reasonable time. A party may no longer file for an application for interpleader when it has been formerly sued by one of the conflicting claimants and, instead of interpleading the other claimant, proceeded with the litigation.14 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. 12 Beltran v. People’s Homesite and Housing Corporation, G.R. No. L-25138 August 28, 1969 Vda de Camilo v. Arcamo, G.R. No. L-15653 September 29, 1961 14 Wack-Wack Golf and Country Club, G.R. No. L-23851 March 26, 1976 13 Page 7 of 116 II. Other appropriate grounds specified in Rule 16 of the Rules of court. The enumerations under Rule 16 are made to apply and may be invoked in the motion to dismiss the complaint for interpleader. For instance, a motion to dismiss may be filed on the ground that the court has no jurisdiction over the subject matter of the action when the complaint to interplead involving chattels with a value of P300,000.00 was filed in the Regional Trial Court.15 A motion to dismiss may also be filed on the ground of litis pendencia, res judicata, or prescription, and other grounds stated in Rule 16. 2. Claimant may file an answer16 thereto Upon proper service of the summons upon the conflicting claimants, together with a copy of the complaint and order, a claimant may file his respective answer, setting for his claim within fifteen (15) days from the service of summons. He shall serve a copy of his answer to other conflicting claimants who may file a reply thereto. The rule does not consider the filing of a reply mandatory. If the motion to dismiss is filed within the time for filing an answer, the period to filed an answer shall be tolled. If the motion to dismiss is denied, the movant may file his answer within the remaining period, provide however, that such period should not be less than five (5) days to be reckoned from the denial. 3. Claimant may fail to file an answer; corresponding effects If any claimant fails to plead within the time fixed by the rules, the court may, on motion, declare him in default. However, unlike ordinary default, which no longer requires the plaintiff to prove the allegations in the complaint-in-interpleader, the court thereafter shall render judgment barring him from any claim in respect to the subject matter. In a complaint for interpleader, the court shall determine the rights and obligations of the parties and adjudicate their respective claims. Such rights, obligations, and claims could only be adjudicated if put forward by the aggrieved party in assertion of his rights. That party in this case referred to respondent Diaz. The second paragraph of Section 5 of Rule 62 of the 1997 Rules of Civil Procedure provides that the parties in an interpleader action may file counterclaims, cross-claims, third party complaints and responsive pleadings thereto, "as provided by these Rules." The second paragraph of Section 5 of Rule 62 of the 1997 Rules of Civil Procedure provides that the parties in an interpleader action may file counterclaims, cross-claims, third party complaints and responsive pleadings thereto, "as provided by these Rules." The second paragraph was added to 15 16 Riano, Willard B. (2009). Civil Procedure: The Bar Lecture Series, Volume II, pg. 203 Section 5 of Rule Rule 62 Page 8 of 116 Section 5 to expressly authorize the additional pleadings and claims ...
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