Interpleader - History


Interpleader is a civil procedure developed under equity jurisprudence, though originally it was derived the interpleader form of action at law. However, the action at law became obsolete and relief was available from the Court of Chancery.

The bill of interpeder traditionally required:

  1. The same thing, debt, or duty must be the res claimed by all the claimants;
  2. All the adverse tiles or claims must be dependent or derived from a common source;
  3. The stakeholder must not have or claim any interest it the res,
  4. The stakeholder must have incurred no independent liability to any claimant, i.e. he must be perfectly indifferent between them.

In in 1831 Parliament passed the Interpleder (England) Act, 1 & 2 Will. IV ch. 58, that authorized defendants in actions of assumpsit, debt, detinue or trover, and for sheriffs to bring a bill of interpleader in the Courts of Law.

Parliament enacted the Common Law Procedures Act of 1860, 23 & 24 Vict. ch.126 §12, which allowed a defendant in Courts of Law to interpead claimants even if title of the claimants to the res have not a common origin, but are adverse to and independent of one another.

Formerly a plaintiff had to disavow any claim to the res in order to avail himself of the interpleader remedy, but this requirement has also been relaxed or abolished in most jurisdictions by there being a Bill in the Nature of Interpleader rather than a strict bill of interpleader. A plaintiff may now argue that neither of the claimants has a right to the property at issue. For example, a person dies with a life insurance policy that excludes coverage for suicide. Two people come forward claiming to be the beneficiary named in the policy. The insurance company believes that the deceased committed suicide, but the claimants believe the death was by accident. The insurance company could interplead the two claimants and simultaneously deny the claims.

The Supreme Court ruled in New York Life v. Dunlevy 241 U.S. 518, that for a claimang to be bound by an interpleader that party must be served process in a way that obtains personal jurisdiction. The Federal Interpleader Act of 1917 39 Stat. 929 was enacted by the 64th United States Congress approved February 22, 1917 to over come this problem. Federal Interpleader Act of 1917 allowed an insurance company, or fraternal benefit society subject to multiple claims on the same policy to file a suit in equity by a bill of interpleader in United States District Courts and providing nationwide service of process. The policy must have a value of at least $500 claimed were claimed or may be claimed by adverse claimants; which is less than the amount in controversy of $3,000 in Judicial Code §48(1) then required for general diversity jurisdiction and two or more of the beneficiaries must live in different states. in 1926 was repealed and replaced by, 44 Stat. 416 approved May 8,1926, which added to those who can bring suit casualty company and surety company, empowered the court to enjoin claimant from proceeding in any state or other federal court on the same liability, adding provisions as to the proper venue for the interpleader in certain cases but required that there must be actual claims by eliminating the words "may claim" that were in the 1917 act. In 1936 the Federal Interpeader Act was again repealed and replaced by the Federal Interpleader Act of 1936, 49 Stat. 1096, approved Jan. 20, 1936, drafted by Zechariah Chafee which codified it in as United States Judicial Code §41(26), and established the modern statutory interpleader allowing suite to be brought by any person, firm, corporation, association or society having custody of money or property or insurance policy or instrument valued at $500 or more which there are two or more adverse claimant who are citizens of different states, whether or not the claims have common origins, identical, adverse or independent of each other, and allowed it to be an equitable defense in actions at law, Judicial Code §274b. When the United States Judicial Code was enacted into United States Code as positive law in 1948, 62 Stat. 931 approved June 25, 1948, it was reconstituted as 28 U.S.C. § 1335, 1397, and 2361.

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