At times, a person may find themselves in the unenviable position of holding property that is the subject of competing claims. The stakeholder in such a scenario does not own the property but merely has possession or custody of it, yet risks being sued by multiple parties if they release it to the wrong claimant.
For example, a garage owner may be holding a motor vehicle which two different individuals both insist belongs to them. A mortician may be in custody of a body, with different relatives laying claim to the right of burial. A bank may be holding funds in a dormant or disputed account, with rival claimants asserting entitlement.
Simlilarly, an auctioneer may have seized goods under lawful process, only for a third party to step forward alleging ownership.
In each of these cases, the person in possession of the disputed subject matter is not interested in the dispute itself, but faces the danger of double liability should they hand it over to one party while another claims a better right. To resolve such dilemmas, the law provides a procedural safeguard known as interpleader proceedings.
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