« ForrigeFortsett »
This must be so, or confusion and conflict would ensue; for if, on the facts in the Barnhill Case, the res was within the jurisdiction of the Tennessee court, and subject to seizure, it was equally so in Alabama, and, a fortiori, so in Mississippi. It certainly cannot be maintained that the situs of this debt was at the same time in all of these states, and, as the supreme court of Colorado in the recent case cited stated: “If such fund could be reached by service of garnishment papers in this state, it must be obvious that the plaintiff could have attached by garnishee proceedings at any station on its line where it had an agent, upon the theory
that the claim was ambulatory, and had a situs in the office of each agent, regardleSS Of location.”
And so in Alabama. I have not thought it necessary to refer to the contract in the Barnhill Case, as fixing the situs in Mississippi, nor to extend the inquiry at all in that direction.
The case in hand, being instituted in this court, involves the question how far the remedy by attachment is available in the courts of the United States in the exercise of original jurisdiction. It avoids possible confusion to keep in mind the distinction between cases wherein the validity of attachment proceedings in state courts is considered, as in Cooper V. Reynolds and Pennoyer v. Neff, and those in which the question of the extent to which the courts of the United States can entertain jurisdiction of an attachment suit is discussed, as in Toland v. Sprague, 12 Pet. 300, and Ex parte Railroad Co., 103 U. S. 794. No legislation of congress has provided or attempted to provide an attachment remedy in the federal courts like those existing by statute in the states, except to the extent noticed further on. And the provision, “But no person shall be arrested in one district for trial in another in any civil action before a circuit or district court,” has been continued without interruption in all the judiciary acts from that of 1789 to the corrected act of 1888. Process served on the defendant Within the district, or voluntary appearance, is necessary, and the process of foreign attachment cannot give jurisdiction without such service or appearance. Toland v. Sprague, 12 Pet. 300; Pollard v. Dwight, 4 Cranch, 424; Chaffee v. Hayward, 20 How. 208. The decision in Toland v. Sprague was not questioned as being the settled rule until the act of 1872, re-enacted in the Revised Statutes (section 915), Which is as follows:
“Sec. 915. In common-law cases in the circuit and district courts the plaintiff shall be entitled to similar remedies, by attachment or other process, against the property of the defendant, which are now provided by the laws of the State in Which Such Court is held for the courts thereof; and Such circuit or district courts may, from time to time, by general rules, adopt such state laws as may be in force in the States Where they are held in relation to attachments and other process: provided, that similar preliminary affidavits or proofs, and
similar security, as required by such state laws, shall be first furnished by the party seeking such attachment or other remedy.”
It has been held, however, that this act does not confer upon. United States courts jurisdiction to entertain suits by the process of foreign attachment, and that the statute and any rule adopting the state laws do not give a circuit or district court power thus to acquire jurisdiction over a person not a resident of the district, nor served with process therein. Ex parte Railroad, 103 U. S. 794; Chittenden v. Darden, Fed. Cas. No. 2,688; Anderson v. Shaffer, 10 Fed. 266; Boston Electric Co. v. Electric Gaslighting Co., 23 Fed. 838; Harland v. United Lines Tel. Co., 40 Fed. 308; Treadwell v. Seymour, 41 Fed. 581. The restriction has been held not to apply to a suit removed into a circuit court of the United States from the state court. Lank v. Pagenstecher, 44 Fed. 706. This limited power of the courts of the United States alone might have been examined, and the case under consideration adjudged, under that aspect of the question. But the facts to be stated justified, it was thought, a somewhat extended examination of the subject, and a review of the leading cases. The United States circuit court for this district is held in the city of Chattanooga, situated near the line of Tennessee and the corner lines of Georgia and Alabama, and questions of the character here involved are presented often. It is well known personally to older members of the bar of this city that prior to 1870, when a citizen of the state of Georgia found the exemption laws of his own state an obstruction to execution against his poor neighbor, he only waited patiently and vigilantly until the neighbor came to this city to market produce or barter transported by wagon, and then appeared promptly on the ground with an attachment issued from the State courts based on nonresidence. Seizure and sacrifice of property, with expense and wrong of the most repugnant form, followed. The general assembly interfered, and the act passed is found in section 4193 of the Code (Mill. & V.) as follows: “4193. When the debtor and creditor are both nonresidents of this state, and residents of the same state, the creditor shall not have attachment against the property of his debtor unless he swear that the property of the debtor has been
fraudulently removed to this state to evade the process of law in the state of their domicile Or residence.”
This statute to a large extent suppressed the existing abuse. Another similar perversion of legal process still exists in the local justice of the peace courts, in violation of the intent and purpose of the act. Where a citizen of Georgia has a debt against another citizen of the same state in the employment of a corporation operating a railway into this state, and desires to evade the exemption laws and the above statute, the debt is transferred pro forma to a friend or collection agent in this city, and garnishment proceeding in the name of the latter is instituted, with notice to the foreign corporation's local agent. The amount is small, and the expense of coming to this state to defend is considerable, and out of all proportion to the debt involved. The laborer is practically powerless. There is here an entire want of everything real and substantial to support jurisdiction. The case goes practically without defense, and sheer confiscation and petty oppression result.
In the Nebraska case, referring to the fact that an unwarranted exercise of jurisdiction in these cases may result in compelling the garnishee to pay the debt twice, Judge Maxwell characterized the result as “abhorrent to our sense of justice,” and these terms fitly describe the abuse just mentioned. And on the facts of the Barnhill Case, while the supreme court of Alabama, following its own decisions, would have denied jurisdiction, the Supreme court of Mississippi, consistently with its own rulings, would have sustained its own jurisdiction, and the proceedings in Tennessee, being, in that court's opinion, without jurisdiction, would have been no bar to a recovery by Joyner, and the garnishee could be thus compelled to pay a second time; and in an affair of magnitude this is probably what would happen. In Joyner's case it is not difficult to suppose that he would practically be put to an election between his rights and his position, and in such alternative, the amount being small, would give up the former. The courts holding the better opinion on the question, in dealing with these cases, recognize and give effect to the proposition that the principal parties to the litigation are the plaintiff on one side and the principal debtor on the other, and that the position of the garnishee is practically that of a mere trustee. In some of the cases sustaining jurisdiction, the discussion treats the garnishee as if sued in respect of a liability of the garnishee's own, while the real defendant to be seriously affected by the result is given a secondary position. In such cases process statutes are cited which affect the mode of acquiring jurisdiction of the foreign corporation in respect to a right asserted against it alone, and thus quite a strong case is made against the garnishee. As the case turns on the question of jurisdiction, I do not find it necessary to consider the point of giving effect in the Tennessee forum to the exemption laws of the state of Georgia, and the question is apparently settled in this state. Carson V. Railroad Co., 88 Tenn. 646, 13 S. W. 588. The conclusions reached are: 1. That a suit by attachment in the ordinary or garnishment form cannot be maintained in the courts Of the United States Without personal service on the principal defendant or his voluntary appearance. 2. That, where both garnishee and the principal debtor are nonresidents of this state, and the debt, such as wages due, is payable in the state of their residence, there is no property within the state, and the courts of the State and the courts of the United States for such state are without jurisdiction to proceed by attachment, and a judgment based on such attachment is an absolute nullity. And this rule applies fully to the case of wages due by a corporation of another state to its employé, a resident of such other state, under contract of employment there made, and is not affected by the fact that a foreign railway corporation, without being incorporated in this state, extends its railroad into this state, and is subject to suit by process on its local agents. 3. That a debt in ordinary form, or in the form of wages due from one nonresident of the State to another nonresident of the same state, is payable as matter of law or by legal implication in such other state in the absence of a place fixed by the contract, and in such case there is no property in the state subject to levy or seizure. The petition is, for want of jurisdiction upon both grounds, dismissed, with costs.
IMPERIAL FIRE INS. CO. OF LONDON V. HOME INS. CO. OF NEW ORLEA.N.S.
ROYAL INS. CO. OF LIVERPOOL. W. SAME.
1. REINSURANCE–DESCRIPTION OF RISK. The H. Ins. Co. applied to the I. Ins. Co. and the R. Ins. Co. for reinsurance of a part of its risk upon cotton. Thereupon policies were issued to it by the I. and R. companies reinsuring part of its risk on the property, described by a slip, pasted on the policies, as “cotton in bales their own or held by them in trust or on commission”; such slip also containing an agreement that the company should be liable only for Such proportion of the loss as the sum insured bears to the cash Value of the Whole property insured. Another slip was also attached to the policies, providing that they should be subject to the same risks, conditions, Valuations, indorsements, assignments, and mode of settlement as were or should be assumed or adopted by the H. Ins. Co., and the loss. if any, should be payable pro rata at the same time and in the same manner as by that company. The policies of reinsurance ran for a year, and many of the policies issued by the H. Co. were issued subsequent to the reinsurance, as was contemplated at the time. Part of such policies contained the coinsurance clause, and part did not. Held, that the limitation contained in the first-mentioned slip had no application to reinsurance; that, by the provision in the second slip that the policies of reinsurance should be subject to the same risks, etc., as Were assumed by the H. Co., the reinsuring companies agreed to be bound by any contract it might make, and that such reinsuring companies were responsible for the loss suffered by the H. Co. on its policies without the coinsurance clause, as well as those containing it. Per McCormick, Circuit Judge, and Bruce, District Judge. 2. SAME. Held, that the words “subject to coinsurance clause,” in the applications of the H. Co., were a material part of the description of the risk upon which reinsurance was sought, and that the reinsuring companies were not liable for the loss sustained by the H. Co. on policies not containing that clause. Per Pardee, Circuit Judge, dissenting.
Appeal from the Circuit Court of the United States for the Eastern District of Louisiana.
These were actions by the Home Insurance Company of New Orleans against the Imperial Fire Insurance Company of London and the Royal Insurance Company of Liverpool upon policies of reinsurance. Judgment was rendered for the plaintiff in the circuit court. Defendants appeal. Affirmed.
E. H. Farrar, B. F. Jonas, E. B. Kruttschnitt, Hewes T. Gurley, W. A. Blount, A. C. Blount, Jr., and D. B. H. Chaffe, for appellants. R. H. Browne, B. F. Choate, and Thomas J. Semmes, for appellee.
Before PARDEE and McCORMICK, Circuit Judges, and BRUCE, District Judge.
McCORMICK, Circuit Judge. These cases will be considered together in this opinion. The appellants, the Royal Insurance Company of Liverpool and the Imperial Fire Insurance Company of London, will be referred to, respectively, as the Royal and the Im. perial, and the Home Insurance Company of New Orleans, the appel lee in each case, will be referred to as the appellee.
In November and December, 1891, the appellee applied to the appellants for reinsurance, and duly received the respective policies Which are the subjects of this litigation. The applications to the Royal were made on printed forms, with certain blanks filled in writing. The application to the Imperial does not appear to have been in Writing, but was substantially to the same effect as those made to the Royal, the features of which material to note here were and are that the applicant warranted to retain $25,000, and described the property applicant had insured as “cotton subject to coinsurance clause.” The Royal has now abandoned any contention on the retention clause. The Imperial still insists on its construction of that clause, but the proof abundantly supports the action of the circuit court on the issues made on the warranty by the Home to retain $25,000 or more on the risk. During the life of these policies of coinsurance, a large amount of the cotton was destroyed by fire. At the time of the fire, the appellee had written and in force, on the cotton subject to the fire, policies with the coinsurance clause to the amount of $97,700, and policies without the coinsurance clause to the amount of $25,000. The loss on the cotton covered by the firstnamed class of these policies was $38,707.58, and the loss on the other exceeded the amount of the policies. There is substantially no issue as to what were the actual facts as to the contracts and the loss; and there can be no dispute that, if the contention of the appellee, as to the construction of the contract of coinsurance is correct, the decree of the circuit court should be affirmed. Having found that its construction of the retention clause is correct, it only remains to consider the other clauses of the policies on which issue is joined. The judgment and decree of the circuit court construe these clauses in favor of the appellee, and a majority of the judges of this court concur in that conclusion. The questions here involved are so well stated, and the authorities, so far as any authority exists bearing on the question, are so soundly applied, and the argument so full, fair, and well expressed in the brief of counsel for the appellee, that, in justice to ourselves and to him, we must adopt and use his reasoning almost literally, and to substantially the full extent that he has advanced it, there being left little or nothing to add to or qualify What he has said:
It is urged that the defendants are not liable for the losses paid by the plaintiff to Frankenbush and Borland, because the policies issued to them did not contain the coinsurance clause. It is urged that the two slips pasted on the policies of reinsurance are descriptive of the risk assumed by the reinsurer. The defendants are driven to take this ground because the reinsurer has insured the liability of the original insurer, whatever that be, unless in the contract of reinsurance there can be found some clause whereby the reinsurer stipulated that it assumed no risk, unless the original insurance contract contained the co-insurance clause. It is observed that the policies of reinsurance bear the following dates: That of the Imperial is dated November 23, 1891, and those of the Royal dated November 12, 1891, and December 26, 1891. The Frankenbush and Borland policies are dated: October 12, 1891; November 19, 1891; February 9, 1892; February 11, 1892; February 26, 1892. Only one of the policies is dated before those of the Royal, and only two are dated before that of the Imperial. Three of them are dated after all of the policies of reinsurance were issued. The description of the risk in the reinsurance policies is that the Home Insurance Company are insured on $10,000 of their liability as insurers under their Various policies, issued to various parties, for various