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An equitable proceeding brought by a third person to have a court determine the ownership rights of rival claimants to the same money or property that is held by that third person.

Interpleader is a form of equitable relief. Equitable remedies are ways for courts to enforce rights other than by issuing a judgment for money damages. Interpleader is employed when two or more parties seek ownership of money or property that is held by a third party. The property in question is called the stake, and the third party who has custody of it is called the stakeholder. The stakeholder is faced with a legal dilemma: giving the property to either one of the parties will likely lead to a lawsuit by the other party against the stakeholder and the new property owner.

Interpleader enables the stakeholder to turn the controversy over to a court and to be dismissed from the legal action. It is designed to eliminate multiple lawsuits over the same stake and to protect the stakeholder from actual or potential multiple liability. Typically, interpleader will involve corporate Securities or proceeds from insurance policies.

The stakeholder initiates an interpleader by filing an action that states that he or she has no claim to the money or property in controversy, and does not know to which claimant it should be lawfully delivered. The stakeholder must also establish the possibility of multiple lawsuits. The stakeholder then may be required to deposit the stake with the court, and notifies possible claimants that they can present their claims of ownership in court for determination.

The court must decide whether the interpleader is proper. It has discretion to allow the interpleader, and may deny the relief if the stake-holder is guilty of Laches (unreasonable delay) or was responsible for the creation of the adverse claim. If the court grants the interpleader, the stakeholder is dismissed from the action. The rival claimants are given the right to litigate their claims, and they will be bound by the decision of the court.

Interpleader is primarily a device of federal Civil Procedure. Two types of interpleader are available in federal courts: one under the Federal Rules of Civil Procedure and one under federal statute. When interpleader is sought through rule 22 of the Federal Rules of Civil Procedure, more than $10,000 must be at issue in the action, and the claimants must reside in the same state and must be citizens of a state other than the one in which the stakeholder is a citizen. The action can be tried where the stakeholder resides, where the Cause of Action arose, or where the claimants reside. The stakeholder is not obligated to deposit the stake with the court, an important advantage when the property is used for purposes of investment and to generate income.

Interpleader authorized under 28 U.S.C.A. § 1335 differs in several respects from rule 22 interpleader. The dispute may involve as little as $500, at least two of the claimants must be from different states, and the citizenship of the stake-holder is immaterial. The venue, or place of trial, is anywhere that a claimant resides. At the time the suit is filed, the stakeholder must deposit the stake or post a bond in an amount equivalent to its value.

Claimants in an interpleader proceeding may be permitted to assert additional claims against each other or the stakeholder if they satisfy jurisdictional requirements and do not unreasonably complicate or delay the action. Courts must decide, on the particular facts of each case, whether such claims will be considered.



West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.


n. the procedure when two parties are involved in a lawsuit over the right to collect a debt from a third party, who admits the money is owed but does not know which person to pay. The debtor deposits the funds with the court ("interpleads"), asks the court to dismiss him/her/it from the lawsuit, and lets the claimants fight over it in court.

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.


the remedy sought by a person holding property or obliged to do something who is being asked to deliver or perform by more than one person. The process has the claimants fight among themselves before involving the often innocent holder. For Scotland see MULTIPLE POINDING.
Collins Dictionary of Law © W.J. Stewart, 2006

INTERPLEADER, practice. Interpleaders may be had at law and in equity.
     2. An interpleader at law a proceeding in the action of detinue, by which the defendant states the fact that the thing sued for is in his hands, and that it is claimed by a third person, and that whether such person or the plaintiff is entitled to it, is unknown to the defendant, and thereupon the defendant prays, that a process of garnishment may be issued to compel such third person, so claiming, to become defendant in his stead. 3 Reeves, Hist. of the Eng. Law, ch. 23; Mitford, Eq. Pl. by Jeremy, 141; Story, Eq. Jur. Sec. 800, 801, 802. Interpleader is allowed to avoid inconvenience; for two parties claiming adversely to each other, cannot be entitled to the same thing. Bro. Abr. Interpleader, 4. Hence the rule which requires the defendant to allege that different parties demand the same thing. Id. pl. 22.
     3. If two persons sue the same person in detinue for the thing, and both action; are depending in the same court at the same time, the defendant may plead that fact, produce the thing (e. g. a deed or charter in court, and aver his readiness to deliver it to either as the court shall adjudge; and thereupon pray that they may interplead. In such a case it has been settled that the plaintiff whose writ bears the earliest teste has the right to begin the interpleading, and the other will be compelled to answer. Bro. Abr. Interpl. 2.
     4. In equity, interpleaders are common. Vide Bill of Interpleader, and 8 Vin. Ab. 419; Doct. Pl. 247; 3 Bl. Com. 448; Com. Dig. Chancery, 3 T; 2 Story, Eq. Jur. Sec. 800.

A Law Dictionary, Adapted to the Constitution and Laws of the United States. By John Bouvier. Published 1856.
References in periodicals archive ?
[section] 2361 contains an express provision authorizing the reimbursement of interpleader costs and expenses, most courts recognize that they have the discretion to do so.
The last step for a stakeholder is to be dismissed from the interpleader. A dismissal can include a discharge of the stakeholder from further liability and an order permanently "restraining [the claimants] from instituting or prosecuting any proceeding in any State or United States court affecting the property, instrument or obligation involved in the interpleader action...." (28) The dismissal of the stakeholder will not likely disturb a court's jurisdiction under 28 U.S.C.
1964) ("The availability of nationwide service of process under the Federal interpleader (28 U.S.C.
However, some courts have found that under a rule interpleader, a court may grant an injunction under 28 U.S.C.
2009) (rule interpleader) ("[t]o allow [the insurer] to be exposed to liability under these circumstances would run counter to the very idea behind the interpleader remedy--namely, that a 'stakeholder should not be obliged at his peril to determine which claimant has the better claim.'").