Continental Corp V Lim

G.R. No.
L-41831 February 18, 1976

CONTINENTAL DEVELOPMENT CORPORATION, petitioner, vs. BENITO GERVASIO TAN and ZOILA CO
LIM, respondents.
MAKASIAR, J.:
FACTS:
Continental Development Corporation filed a complaint for interpleader against the defendants Benito Gervasio Tan and
Zoila Co Lim, alleging among others:
2. That in the books of the plaintiff, there appears the name of the defendant Benito Gervasio Tan as one of its
stockholders initially sometime in 1975 with fifty (50) common shares covered by of stock Nos. 12 and 13, and
subsequently credited with (75) shares by way of dividends covered by certificates of stock Nos. 20 and 25, or an
outstanding total stockholding of one hundred twenty five (125) common shares of the par value of Two Hundred Fifty
Pesos (P250.00) each.
3. That said defendant Benito Gervasio Tan, personally or through his lawyer, has since December, 1972, been
demanding from by letters and telegrams, the release to him of the certificates stock aforesaid but which the plaintiff has
not done so far and is prevented from doing so because of the vehement and adverse claim thereto by the other
defendant, Zoila Co Lim.
4. That the defendant Zoila Co Lim, by letters sent to the plaintiff through her counsel, has laid claim and persists in
claiming the very same shares of stock being demanded by the other defendant alleging that said stocks really belonged
to her mother So now already deceased, and strongly denying her proclaim to the same.
5. That both defendants, through their respective lawyers, threaten to take punitive measures against the plaintiff company
should it take any steps that may prejudice their respective interests in so far as the stocks in question are concerned.
6. That plaintiff is not sufficiently informed of the right of the respective claimants and therefore not in a position to
determine justly and correctly their conflicting claims.
7. That the plaintiff company has no interest of any kind in said stocks and is ready and willing to deliver the corresponding
certificates of ownership to whomsoever as this Honorable Court may direct.
and praying that the defendants be directed to interplead and litigate their respective claims over the aforementioned
shares of stock and to determine their respective rights thereto.
Respondent Benito Gervasio Tan filed a motion to dismiss the complaint, on the ground, inter alia, that paragraph 2 of the
complaint itself states that the shares of stock in question are recorded in the books of petitioner in the same of defendant
Benito Gervasio Tan, who should therefore be declared owner thereof pursuant to Section 52 of the Corporation Law.
Zoila Co Lim filed her answer expressly admitting paragraph 2 of the complaint, but alleging that the said shares of stock
had previously been delivered in trust to the defendant Benito Gervasio Tan for her (Zoila's) mother, the late So Bi, alias
Tawa, the actual owner of the shares of stock; that now Benito GervasioTan would want the re-issuance and release to
him of new replacement certificates, which petitioner has not so far done; and that as the daughter and heir of said So Bi,
alias Tawa, she is now the owner of the said shares of stock, which should be delivered to her.
Continental Development Corporation filed its opposition to Benito's motion to dismiss.
It is patent from the pleadings in the lower court that both defendants Benito Gervasio Tan and Zoila Co Lim assert
conflicting rights to the questioned shares of stock. Precisely in his motion to dismiss the complaint for interpleader,
defendant Benito Gervasio Tan states that petitioner corporation, through its Vice-President, notified him on July 23, 1973
"that the shares of stock are in the possession of its treasurer, Mr. Ty Lim, and urged defendant to directly obtain them
from the former, who allegedly was on vacation at the time. Mr. Ty Lim, on August 30, 1973, through counsel, replied to
the defendant Benito Gervasio Tan that said certificates were not in his possession but surmised, without reference to any
record, that the same might have been delivered to the deceased So Bi. And, on October 29, 1973, same counsel of Mr.
Ty Lim, wrote the corporation, in behalf of defendant Zoila Co Lim, alleged heir of So Bi, claiming ownership of the stocks".
Defendant Zoila Co Lim, on the other hand. as heretofore stated, claims sole-ownership of said shares of stock as
inheritance from her late mother So Bi, alias Tawa.
And petitioner Continental Development Corporation expressly stated in the complaint that both defendants, through their
respective lawyers, threatened to take punitive measures against it should it adopt any steps that may prejudice then
respective interests in the shares of stock in question; and that it is not sufficiently informed of the rights of the respective
claimants and therefore not in a position to determine justly and correctly their conflicting claims.
ISSUE:
Whether or not the trial court gravely abused its discretion in dismissing the complaint for interpleader since there are
active conflict of interests between the two defendants
RULING:
YES.
Rule 63, Section 1 of the New Rules of Court tells us when a cause of action exists to support a complaint in 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 complainants to compel them
to interplead and litigate their several claims among themselves (Italics supplied).
This provision only 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
This ruling, penned by Mr. Justice Tee the principle in Alvarez vs. Commonwealth (65 Phil. 302), that
The action of interpleader under section 120, is a remedy whereby a person who has personal property in his possession,
or an obligation to render wholly or partially, without claiming any right in both comes to court and asks that the persons
who claim the said personal 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. 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'
An interpleader merely demands as a sine qua non element
... that there be two or more claimants to the fund or thing in dispute through separate and different interests. The claims
must be adverse before relief can be granted and the parties sought to be interpleaded must be in a position to make
effective claims (33 C.J. 430).
Additionally, the fund, thing, or duty over which the parties assert adverse claims must be one and the same and derived
from the same source.
Indeed, petitioner corporation is placed in the same situation as a lessee who does not know the person to whom he will
pay the rentals due to the conflicting claims over the property leased, or a sheriff who finds himself puzzled by conflicting
claims to a property seized by him. In these examples, the lessee and the sheriff were each allowed to file a complaint in
interpleader to determine the respective rights of the claimants.

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G.R. No.

L-41831 February 18, 1976

Continental Development Corporation filed its opposition to Benito's motion to dismiss.

This provision only requires as an indispensable requisite:

An interpleader merely demands as a sine qua non element

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