O'daniel v. Porter

Appellant, Pat O'Daniel, appeals from the grant of a preliminary injunction restraining him from prosecuting a foreclosure action against appellee in a Texas state court. The Texas suit was instituted to foreclose a collateral note, on which appellant claims as assignee of the payee, and upon which note appellee has allegedly defaulted in monthly payments. Appellee explains the default in a subsequently filed interpleader action,1 which shows her monthly installments have been subject to garnishments issued by one Hardy pursuant to an action commenced by Hardy against appellant's assignor (W. Lee O'Daniel). Moreover, appellee has, in that action, deposited with the court the sum representing the monthly payments due on the note, and has asked the court to determine whether appellant, his assignor, or Hardy is entitled to the funds. The preliminary injunction was granted incident to this interpleader action.

Federal courts have the power to enjoin state court proceedings affecting the subject matter involved in an action under the Federal Interpleader Act.2 Appellee, forced to choose at her risk between ignoring a series of garnishments on the one hand and having her collateral security foreclosed for nonpayment of installments on the other, properly pursued her remedy in filing an interpleader action. Appellant cannot be prejudiced by a judicial determination of his rights in this manner.

Affirmed.