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U.S. Supreme Court

Sanders v. Armour Fertilizer Works, 292 U.S. 190 (1934)

Sanders v. Armour Fertilizer Works

No. 106

Submitted February 5, 1934

Decided April 30, 1934

292 U.S. 190


1. Two claimants of a fund due by a fire insurance company, one claiming it as insurance money due under a policy and the other claiming it as a creditor of the first who had attached the fund by garnishing the insurance company, are adverse claimants within the intendment of the Interpleader Act of May 8, 1926; 28 U.S.C. § 41(26). P. 292 U. S. 199.

2. The purpose of the Interpleader Act of May 8, 1926, 28 U.S.C. § 41(26), is to protect the stakeholder and to determine the claims according to equity, weighing the right or title of each claimant under the law of the State in which his claim arose. Full faith and credit must be given by the forum to judicial proceedings in other States upon which claims are founded. Pp. 292 U. S. 199, 292 U. S. 204.

3. Under this Act, the fund paid into court by the applicant for interpleader does not come under the domination of the law of the particular State in which the suit is brought, and the rights of

Page 292 U. S. 191

claimants cannot be varied by the applicant's choice of forum. Pp. 292 U. S. 200, 292 U. S. 205.

4. Under the law of Illinois, a garnishment, with judgment by default against the debtor after service on him by publication, gives the plaintiff in the garnishment proceeding at least an inchoate lien upon the fund or debt attached which may be perfected by a final judgment against the garnishee. P. 292 U. S. 203.

5. An exemption from execution extended by statutes of Texas to proceeds of fire insurance on property appertaining to a homestead in that State is not recognized by the laws of Illinois when the insured is sued there on a debt and the insurance money is attached by garnishment served on the insurance company. P. 292 U. S. 203.

6. A fire insurance company owing money to a resident of Texas on account of the burning of his homestead property in that State was garnished in Illinois in an action on a debt against the insured in which he suffered judgment by default. The company then interpleaded the garnishor-plaintiff and the insured by a suit in the federal court in Texas under 28 U.S.C. § 41(26), paid the insurance money into the registry, and prosecution of the Illinois action was enjoined. Held that the Illinois claimant was entitled to the fund as against the insured, who claimed that it was exempt under the Texas homestead exemption statutes. P. 292 U. S. 204.

63 F.2d 902, affirmed.

Certiorari, 290 U.S. 623, to review the reversal of a judgment recovered by Sanders in a case of interpleader in the federal court. See also 33 F.2d 157, 38 id. 212, on the question of the District Court's jurisdiction.

Page 292 U. S. 194

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