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Civil litigation

funds in registry of court

When there is a dispute over money (funds) or property, and the money or property is held by a person or entity who is not a party to the dispute—such as an insurance company in possession of insurance proceeds or a payment due a business under a contract in which a former employee or business partner claims an ownership interest—the party holding the disputed funds or property may place it in the registry of the court (by filing an interpleader action) and allowing the court to safeguard the funds or property until it determines the rightful owner.

In Texas, when there is a dispute over funds or property held by a third party not involved in the dispute, the third party can use an interpleader action to deposit the disputed assets with the court. This legal process allows the court to hold the funds or property in its registry while the dispute is resolved. The Texas Rules of Civil Procedure provide the framework for interpleader actions, which are designed to protect stakeholders from multiple liabilities and lawsuits over the same property or funds. By filing an interpleader, the stakeholder acknowledges that they do not have a claim to the assets and seeks the court's assistance in determining the rightful owner. The court will then notify all claimants, who must then litigate their claims to the property or funds. Once the court makes a determination, it will distribute the assets accordingly, thereby relieving the stakeholder from further liability regarding those assets.


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