G.R. No. L‑2685 (October 29 1906)

FACTS
– C. M. Cotterman, Director of Posts, deposited ₱3,020 (Mexican pesos) with the clerk of the Court of First Instance, Manila, and sought an interpleader to resolve competing claims.
– The claimants were: (1) several surety companies, alleging the money was a loan to Postmaster W. Schultze of Laoag to cover a shortage in his official accounts; (2) other defendants who had paid the same amount to Schultze for postal money orders intended for Manila, insisting that the orders had not yet been issued.
– Schultze had received the funds on July 18 1903, promised to issue the orders later, but an inspector later discovered a shortage in his accounts and seized the funds, which were then found on the money‑order table.

ISSUE
Whether the ₱3,020 deposited by Cotterman belongs to the surety companies as a personal loan to Schultze (to conceal his shortage) or to the applicants who paid for postal money orders, thereby obligating the court to determine the proper distribution of the funds.

RULING
The Supreme Court reversed the trial court’s judgment for the surety companies. It held that:

– The evidence does not support the conclusion that the funds were a personal loan intended to hide Schultze’s shortage; there is no proof that the applicants knew of the shortage or conspired with Schultze.
– The transaction was a regular purchase of postal money orders; the delay in issuance was due to Schultze’s claim of being “busy,” not fraud.
– Consequently, the deposited funds must be distributed pro‑rata among all claimants (including the surety companies) after deducting the costs of the proceedings.

The Court ordered entry of judgment within ten days and the return of the record for appropriate distribution. All justices concurred.