An interpleader application was brought by a municipality holding the remaining balance of a developer’s subdivision security deposit after the original developer defaulted.
Competing claims were made by the developer’s secured creditor and by a subsequent purchaser who completed the subdivision under a new agreement.
The court interpreted the original subdivision agreement, particularly provisions governing default and the return of securities upon voiding of the agreement.
It held that once the municipality declared the agreement null and void, the remaining security was contractually required to be returned to the original owner, subject to expenses.
As the secured creditor of that owner, the creditor was entitled to the remaining funds.
