An interpleader is a form of civil procedure employed when two or more parties want something that is in the possession a third party, and that the third party is willing to give up. The person holding the property files a lawsuit against the parties who want ownership, effectively asking the judge to decide who's entitled to the property.

Say a person puts money in escrow to buy a house. The contract for the purchase is disputed, and both parties claim a right to the escrow money. The escrowee could file an interpleader against the buyer and the seller to have the problem sorted out in court.

Usually, a person files an interpleader because they don't want to make the wrong decision. In the above case, if the buyer was at fault but the escrowee returned the money to him anyway, the escrowee would probably get in very hot water with the seller and might lose their reputation, or even be held legally liable for the loss.

In most cases, a person who files an interpleader is entitled to have their attorney and court fees reimbursed by whichever defendant loses.

In`ter*plead"er (?), n.

1.

One who interpleads.

2. Law

A proceeding devised to enable a person, of whom the same debt, duty, or thing is claimed adversely by two or more parties, to compel them to litigate the right or title between themselves, and thereby to relieve himself from the suits which they might otherwise bring against him.

 

© Webster 1913.

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