Douglas v. Phoenix Ins.

Mayham, P. J. By the demurrer the plaintiff admits all the allegations of fact, if any, in the answer demurred to; and the first question to be examined on this appeal seems to be whether that part of the answer interposed as an affirmative defense was sufficient upon its face to show that the attachment alleged to have been issued in Massachusetts in favor of creditors of the plaintiff residing "there was a valid and effectual lien on the debt due the plaintiff from the defendant on this insurance policy, so that, if the defendant should pay the plaintiff, it would still be liable to the attaching creditors. It is quite clear that, if this foreign attachment had so far levied upon this claim as to suspend the plaintiff’s control over it, and transfer the same to the custody of the law, in trust for the payment of the claim of the attaching creditors of the plaintiff, that fact, properly alleged, would constitute a defense to this action, either in abatement, if the attachment proceedings were still pending, or in bar, if the attachment creditors had recovered the money of the defendant, provided the plaintiff had been properly before the court in the attachment proceedings. Ember v. Hanna, 5 Johns. 101; Donovan v. Hunt, 7 Abb. Pr. 29; Martin v. Railroad Co., (Sup.) 3 N. Y. Supp. 82. But the defendant, in order to avail itself of such a defense, must, in its answer, allege facts showing that the foreign attachment has by its operation divested the plaintiff of his right to the control of the property or rights in action upon which it is levied or claimed to have operated, and that under it jurisdiction has been acquired of the person of the plaintiff and of the property, or at least of the property which is within the jurisdiction and control of the attaching tribunal. The answer does not allege that the attachment was served on the plaintiff, and it in effect admits that the plaintiff is a nonresident of the state of Massachusetts, and that the domicile of the defendant is in the state of New York, and that the policy was issued in this state to the plaintiff on property in this state, where the loss occurred; but it alleges that by reason of certain provisions of the laws of Massachusetts the defendant was, by complying with the laws of that state, authorized to do business therein; that the defendant had complied with such laws, and had an agency in that state, on whom legal process could be served; and that the process of attachment was served on the agent of the defendant in the state of Massachusetts. No other service is alleged in the answer, and no allegation is contained in the same that any actual seizure under the attachment was made of the claim of the plaintiff against the defendant, or that such claim was in that state; nor does the answer allege as a fact that the plaintiff’s claim on which the attachment is claimed to operate had any existence in the state of Massachusetts. Under the allegations of fact in the answer we do think that the attachment could be held to operate on the amount due on this policy. It cannot be claimed that the courts of Massachusetts have extraterritorial jurisdiction. It seems to be the settled rule that the state courts are confined in the exercise of their jurisdiction to the limits of their own state, and jurisdiction between citizens of different states is by the federal constitution conferred on the federal courts. In Plimpton v. Bigelow, 93 N. Y. 592, the court says: “In the case of tangible property, capable of actual manucaption, it must have [263] an actual situs within the jurisdiction. But credits, choses in action, and other intangible interests are made by the statute susceptible of seizure by attachment. The same principle, however, in this case as in the other, the res—that is, the intangible right of interest to be subject to attachment— must be within the jurisdiction.” Again, in the same case, the court says: “When the defendant who owes a credit is within the jurisdiction, there is no difficulty, through proceedings in personam, in reaching and applying it in discharge of his debt to the plaintiff. But where he is out of the jurisdiction, and the debt or duty owing to him or the right he possessés exists against some person within the jurisdiction, attachment laws fasten upon that circumstance, and, by notice to the debtor or person.owing the duty or representing the right, impound the debt, duty, or right to answer the obligation which the attachment proceeding-is intended to enforce. ” The answer in this action does not, in terms, charge that the plaintiff had a debt due him from the insurance company in.the state of Massachusetts; nor can it be inferred from the answer, except from the fact that the defendant, while chartered by the laws of New York, and domiciled in that state, having its principal place of business there, had established an agency in the state of Massachusetts. There seems no warrant for holding that the defendant owed this debt for the purpose of attachment in all the states of this Union where it had an agency, and that the situs of the debt was where the defendant saw fit to locate a person on whom process against the defendant might be served. In discussing the question of the location of a corporation for the purposes of an attachment, Andrews, J., in Plimpton v. Bigelow, supra, says: “If the corporation, by having its officers and by transacting business in a state other than its domicile of origin, is deemed to be itself present as an entity in such foreign state, to the same extent and in the same sense as it is present in the state which created it, it may be conceded that its shares might properly be attached in such foreign jurisdiction. But we regard the principle to be too familiarly settled by repeated adjudication of the federal and state courts to admit of further controversy, that a corporation has its domicile and residence alone within the bounds of the sovereignty which created it, and that it is incapable of passing personally beyond that jurisdiction.” Again, as to personal property consisting of debts, choses in action, and contracts, the situs seems to be that of the residence of the creditors. In Williams v. Ingersoll, 89 N. Y. 523, Earl, J., says: “A debt always, under general jurisprudence, has its situs either at the domicile of the creditor, or' where the written obligation upon which it is due is held, and not at the situs of the debtor.” It follows, therefore, that, in the absence of any special provisions of law, this debt from the defendant to the plaintiff on the policy in question had its situs in the state of New York, and could not be reached under an attachment issued under the laws of Massachusetts, as there was no property in that state upon which the attachment was or could be served, and no personal service of the attachment on the plaintiff. But it is insisted by the appellant that the answer alleged the jurisdiction of the Massachusetts court, and the full and complete control of the property under the attachment. The difficulty of that contention is that the allegations of this character in the answer are conclusions, and not allegations of fact. While the demurrer admits all the allegations of facts in the pleadings to which it is interposed, it does not admit the conclusions, either of fact or law, set out in the pleading. In Angell v. Van Schaick, (Sup.) 9 N. Y. Supp. 571, the court, in discussing the manner of pleading foreign statutes, uses this language: “After setting forth the foreign statutes, and averring that they were the whole of the law of the state of Pennsylvania relating to the subject, the pleader alleges that by such statutes the plaintiff was absolutely prohibited from exercising his trade without a license, and that he was prohibited by such statutes from recovering in this action. But these averments [264] are mere inferences and deductions drawn from the statute, and are not in any sense allegations of fact. In interposing a demurrer, the plaintiff, did not thereby admit the construction put upon the statute by the pleading demurred to, or the correctness of the inference, but only the truth of such facts as were properly stated in the answer.” This language is identical with that used by the court of appeals in Bogardus v. Insurance Co., 101 N. Y. 337, 4 N. E. Rep. 522. In the case at bar the defendant has omitted entirely the provisions of the Massachusetts statute, or any appropriate reference thereto, as facts, but states only the conclusions which the pleader draws from such statutes. This we think insufficient, and the demurrer to such answer does not admit the conclusions of the pleader. But if it could be held that the Massachusetts statutes are sufficiently pleaded in the answer, still, as the situs of the claim of the plaintiff is in the state of New York, where the plaintiff resides, and where the defendant has its domicile or origin, and where the contract of insurance between the plaintiff and defendant was made, and no personal service in the attachment proceedings having been made on the plaintiff, it would seem to follow that he was not before the court in such attachment, and that no jurisdiction over his person or property was acquired in such attachment proceedings. If this be so, the plaintiff had no hearing or opportunity to be heard on this attachment proceeding, and no statute that the legislature of Massachusetts could enact could deprive the plaintiff of his interest in this policy under the provisions of section 1 of the fourteenth amendment of the constitution of the "United States, which, among other things provides: “Nor shall any state deprive any person of life, liberty, or property without due process of law. ” It had been held in Stuart v. Palmer, 74 N. Y. 191, that “due process of law requires an orderly proceeding, adapted to the nature of the case, in which the citizen has an opportunity to be heard, and to defend, enforce, and protect his rights. A hearing or an opportunity of being heard is absolutely essential. We cannot conceive of dueprocess of law without this.” In Martin v. Railroad Co., (Sup.) 3 N. Y. Supp. 83, Learned, J., says: “It seems hardly necessary to argue that a judgment which deprives a man of his property cannot lawfully be recovered without notice to him. We do not mean that against absent debtors the law may not authorize an attachment of the alleged debtor’s property. It may thereby acquire jurisdiction of the thing, but, in order to make the jurisdiction perfect, it must give due notice to the owner before it attempt to divest his title.” But in this case the proceedings in rem seem to have been instituted and property seized, and the only defect was in giving notice to the owner. In the case at bar no proceeding in rem was operative in the state of Massachusetts. The res was not within that state. It was but a right in action against the defendant, and the situs of that right was in New York, and the process of the Massachusetts court, which can operate only in that state, did not attach to it in this state, or operate to bring either the plaintiff or his interest in this policy within the jurisdiction of the laws of the process of the courts of the state of Massachusetts. The answer, therefore, as to the new matter did not'constitute a defense to this action, and the demurrer thereto was properly sustained, and judgment for the plaintiff upon the demurrer was proper, and should be affirmed. J udgment affirmed, with costs. All concur.