Interpleader Suits

In one line

An interpleader suit is one brought by a person who holds property he does not claim, against two or more people who both claim it from him, so that the court can decide which of them is entitled and he can hand it over safely.

The word is worth unpacking. To interplead is to plead against one another. The plaintiff drops out; the defendants fight.

Why the Code provides for it

Consider a warehouse keeper holding goods, and two people each demanding them, each threatening to sue him if he gives them to the other. He is in an impossible position through no fault of his own. If he guesses wrong he pays twice: once by delivering the goods, and again in damages to the true owner.

An interpleader suit takes him out of the dispute. He puts the property before the court, says he claims nothing, and asks the court to decide between the claimants and to protect him. He is then discharged, usually with his costs.

Notice how unusual that makes the suit. In an ordinary suit the plaintiff wants something from the defendants. Here the plaintiff wants nothing except to be let go, and the real contest is between the defendants.

The provision: section 88

Section 88: where two or more persons claim adversely to one another the same debts, sum of money or other property, movable or immovable, from another person, who claims no interest therein other than for charges or costs, and who is ready to pay or deliver it to the rightful claimant, such other person may institute a suit of interpleader against all the claimants for the purpose of obtaining a decision as to the person to whom the payment or delivery shall be made, and of obtaining indemnity for himself.

The proviso: where any suit is pending in which the rights of all parties can properly be decided, no such suit of interpleader shall be instituted.

The conditions, which are what an exam answer needs

Break the section into its elements and there are five, all of which must be present.

One, there must be a debt, a sum of money, or other property, movable or immovable.

Two, two or more persons must claim it adversely to one another. Not merely two people interested in it: their claims must conflict, so that satisfying one defeats the other.

Three, the person holding it must claim no interest in it, other than for charges or costs. This is the heart of the thing. A holder who has a claim of his own is not a stakeholder; he is a party to the dispute and must fight it out.