Brief Fact Summary. Plaintiff sued to recover on her father’s life insurance policy, which the lower court ordered to be paid to Plaintiff. Defendant insurance company alleged that in an interpleader action arising from a judgment against Plaintiff and her father by a third party, the policy had been determined to belong to Plaintiff’s father. Plaintiff was not served with notice of the interpleader action and never appeared during the proceedings.
Synopsis of Rule of Law. An action in interpleader is separate from a related action on a valid judgment notwithstanding the fact that the interpleader action is brought to determine the disposition of assets being garnished for the judgment. Therefore, there must be an independent basis for personal jurisdiction over the claimant in order for the claimant to be bound by the court’s decision in such action.
If a judicial proceeding is begun with jurisdiction over the person of the party concerned it is within the power of a State to bind him by every subsequent order in the cause.View Full Point of Law
Issue. Did the Pennsylvania court in the interpleader action have personal jurisdiction over Plaintiff such as to bind her to the court’s judgment regarding the disposition of the proceeds?
Held. No. Reversed. The court did have jurisdiction to garnish the property of Plaintiff regarding the judgment against her by Boggs. However, the interpleader action was an entirely separate action. When an interpleader action is instituted, the court only has jurisdiction over those claimants that it could obtain personal jurisdiction over in an ordinary proceeding. Because Plaintiff was absent from the state, not a citizen of the state, and was not served within the state, the judgment against her was void for lack of jurisdiction.
Discussion. This case states the old rule for interpleader actions in federal court requiring traditional bases for personal jurisdiction in order to bind claimants in interpleader actions.