New York Life Ins. Co. v. Dunlevy
241 U.S. 518 (1916)
NY Life issued an insurance
policy worth $2.5k. Three people filed claims with NY Life for the money:
A guy named Gould (in
Gould's daughter Dunlevy
(who lived in California),
A department store in
NY Life started an interpleader action in Pennsylvania State Court, who decided
that Gould should get the money.
NY Life tried to bring
Dunlevy into the case as an interpleader under Rule 22, but they were unable to get in personam
jurisdiction on Dunlevy in the
Afterwards, Dunlevy sued in
California Court saying that the Pennsylvania Court didn't bind her
because they lacked in personam jurisdiction.
The California Court found
that the Pennsylvania decision was not binding, and awarded the money to
Therefore, NY Life had to
pay twice on the same policy!
The whole point of an interpleader action is to not have to pay multiple claims
on the same policy. This case illustrated that the system was broken.
In response, Congress passed
the Federal Interpleader Act (aka
28 U.S.C. §§ 1335, 1397, 2361), which gives an express grant of Federal
subject matter jurisdiction over interpleader claims (aka statutory
This means that interpleader cases can be heard in Federal Court, which has
jurisdiction over everybody, and this problem won't happen again.
interpleader you only need two
adverse claimants with diversity.
The claimants here were
Gould and Dunlevy.
Remember, since it is a Federal
law, venue exists wherever any
Also remember that since it
is a Federal law, there is nationwide service of process.
Btw, you can also sue under Rule
22, (aka rule interpleader),
as an alternative basis, but there might be jurisdictional problems (as
seen in this case).