ETERNAL GARDENS vs IAC

Interpleader

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.

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.