Douglass v. Phenix Ins. Co. of Brooklyn

Decision Date25 April 1893
PartiesDOUGLASS v. PHENIX INS. CO. OF BROOKLYN.
CourtNew York Court of Appeals Court of Appeals

OPINION TEXT STARTS HERE

Appeal from supreme court, general term, third department.

Action by Hiram A. Douglass against the Phenix Insurance Company of Brooklyn on a fire insurance policy. From a judgment of the general term (18 N. Y. Supp. 259) affirming a judgment for plaintiff on sustaining a demurrer to the answer, defendant appeals. Affirmed.

G. A. Seixas, for appellant.

William P. Cantwell, for respondent.

ANDREWS, C. J.

The defense demurred to is, in substance, that the debt owing by the Phenix Insurance Company to the plaintiff had been, prior to the commencement of this action, attached, in the state of Massachusetts, in an action in the superior court of that state, brought by John S. Alley and others against the plaintiffs in this action and the insurance company, to recover a debt owing by the plaintiffs to the attaching creditors, and that the Massachusetts action was still pending. This defense was pleaded in abatement of the present action. The Phenix Insurance Company is a domestic corporation organized under the laws of this state. On the 5th day of February, 1891, at Malone, in Franklin county, it issued to the plaintiff, who then was, and ever since has been, a resident of Franklin county, a policy of insurance, insuring him against loss or damage by fire, in the sum of $2,000, upon his stock of bark at his tannery in said county. The policy was delivered to the plaintiff, and has ever since remained in his possession. The property insured was destroyed by fire May 10, 1891, and the plaintiff sustained a loss thereby exceeding the sum insured, for which, under the policy, the defendant became liable to pay the sum mentioned therein. This action was commenced in the supreme court of this state, against the defendant, in August, 1891, on the contract of insurance, to recover the sum insured.

In determining the question whether the defense of foreign attachment set up by the defendant in its answer in abatement of this action is good in law, the facts hereinbefore stated are to be taken as admitted. They are alleged in the complaint, and are not denied by the defendant in its defense, based upon the attachment proceedings. The answer does contain, in the part which precedes this defense, a denial of the allegation in the complaint as to the residence of the plaintiff, and of the fact that from the 5th day of February, 1891, the date of the policy, he had at all times had possession thereof, and it expressly admits that the defendant is a domestic corporation. The attachment proceedings are set up as an affirmative defense to the cause of action alleged in the complaint, and its sufficiency in law is, upon demurrer, to be determined from what appears therein. The allegations of the complaint, not denied in the affirmative defense, are, for the purposes of the question now presented, to be deemed admitted. The affirmative defense is to be treated as a separate plea, and the defendant is not entitled to have the benefit of denials made in another part of the answer, unless repeated or incorporated by reference, and made a part of the affirmative defense.

The answer in question alleges the appointment by the defendant of an agent in Massachusetts, under the laws of that state, upon whom process may be served, which was required as a condition of its doing business therein, and that it was engaged in carrying on its business in that state; that in May, 1891, and prior to the commencement of the present action, an action was commenced in the superior court of Massachusetts, in favor of Alley and others, against the present plaintiff, to recover a debt on contract owing by the present plaintiff to Alley and others, in which action the defendant, the Phenix Insurance Company, was joined and made a party defendant, as trustee of the plaintiffs in that action; that ‘the said action was commenced by trustee process or writ directed to and against this defendant as trustee, severally, of the plaintiff herein.’ It alleges that the trustee process or attachment was served on the defendant by service on its attorney in Massachusetts, and that it was levied on the debt owing by the defendant to the plaintiff, and that by virtue of the statutes of Massachusetts, and the proceedings referred to, the debt owing to the plaintiff from the defendant passed into the custody of the law of Massachusetts, and became subject to the control and disposition of the Massachusetts court, and that the attachment action and proceedings are pending and undetermined. The answer further alleges that under the law of Massachusetts, and the proceedings mentioned, the Massachusetts court acquired jurisdiction of the parties to the action, and of the subject-matter and control of the debt owing by the defendant to the plaintiff. In the fourteenth paragraph of the answer it is alleged that the plaintiff had notice of all the proceedings in the attachment action, and full and ample opportunity to defend the same, ‘and that said plaintiff was and is named as a party defendant in said action, and was duly served with process therein.’ It is quite evident from reading the whole answer that the allegation that the plaintiff ‘was duly served with process' in the Massachusetts action was not intended as an averment that personal service of process was made on the plaintiff within the state of Massachusetts. It, at most, can only mean that he was constructively served, through service made on the garnishee, or by publication. The answer in the prior clauses specifically points out how the action was commenced, viz. ‘by service of the trustee process' on the defendant, the garnishee. It was not claimed on the argument that plaintiff was in fact personally served with process, and it is not averred in the clause quoted that he was served within the state of Massachusetts. It must be assumed, therefore, on this appeal, that the attachment proceeding pleaded in abatement to this action was commenced by process served on the agent of the defendant corporation in Massachusetts, and that the plaintiff, although named as a defendant in the proceedings, was never served with process in that state, and never appeared in the action. In the view we take of the case, it may be further admitted, as claimed by the defendant, that it sufficiently appears by the averments in the answer that by the law of Massachusetts the debt due to the plaintiff, a resident of this state, from the defendant, a corporation of this state, could be attached and held under trustee process served on the defendant's agent in that state, in proceedings instituted by a creditor of the plaintiff in Massachusetts, and this although the plaintiff was neither served with process in Massachusetts, nor appeared in the action.

We are of opinion that the answer demurred to was insufficient, in law, to stay the further prosecution of this action. The right of the plaintiff to prosecute his action in the courts of his own state cannot be defeated by the pendency of attachment proceedings in another jurisdiction by a creditor there, to reach the debt owing to the plaintiff by the...

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