Hartford Fire Insurance Co. v. Citizens' Bank of Booneville

• Citation: 266 S.W. 675,166 Ark. 551
• Decision Date: 15 December 1924
• Docket Number: 51
• Parties: HARTFORD FIRE INSURANCE COMPANY v. CITIZENS' BANK OF BOONEVILLE
• Court: Supreme Court of Arkansas

266 S.W. 675

HARTFORD FIRE INSURANCE COMPANY v. CITIZENS' BANK OF BOONEVILLE

166 Ark. 551

No. 51

Supreme Court of Arkansas

December 15, 1924

Appeal from Logan Circuit Court, Southern District; James Cochran Judge; reversed.

Judgment reversed and cause remanded.

Rittenhouse & Rittenhouse, John P. Roberts and Thompson, Knight, Baker & Harris, for appellants.

1. The Oklahoma court had authority and jurisdiction to try and determine the garnishment suit, and to render judgment therein. Chap. 3, art. 9, Comp. Statutes Oklahoma, 1921 §§ 353, 356, 366; 113 Ark. 467, 169 S.W. 223; 49 Ark. 386, 96 S.W. 397; 69 Ark. 401, 63 S.W. 996; 174 U.S 710, 43 L. ed. 1144; 198 U.S. 215, 49 L. ed. 1023; L. R. A. 1915F, 881, note; 54 So. 728; 53 Okla. 515; 157 P. 106.

2. The judgment of the Oklahoma court is entitled to full faith and credit, and renders the issue in this case res judicata, to the extent of that judgment. Section 1, art. 4, Const. U. S.; Revised Statutes U.S. § 905, U. S. Comp. Stats. 1916, § 1519, 3 Fed. Stat. Ann., 37; 91 Ark. 252; 120 S.W. 993; 240 U.S. 620, 60 L. ed. 829; 169 P. 619; 134 N.W. 573 (Ia.); 100 N.W. 918 (Mich.); 25 N.W. 49 (Mich.); 9 N.W. 646 (Neb.); 141. S.W. 595 (Mo.), 53 S.E. 831 (N. C.); 115 S.W. 275 (Tex.); 66 N.E. 43 (Ind.); 104 N.W. 878 (New); 53 S.E. 831 (N. C.); 45 Ill.App. 533; 35 Ala. 144, 73 Am. Dec. 484; 11 Mass. 256; 28 C. J. 384; Id. 399.

3. The defendants, having tendered to plaintiffs the balance due on the fire loss over and above the amount of the Oklahoma judgment and costs, said plaintiffs were not entitled to judgment for more than the amount so tendered and the cost then accrued.

Evans & Evans, for appellees.

1. By assignment of the polices and the written consent thereto by the insurance companies, the latter ceased to have any contractual relations with Donothan with reference to the subject-matter covered by the policies, and entered into contractual relations with appellees, and, by this new contract, agreed to pay the loss, when adjusted, to the appellees, respectively; and the appellees had the right to sue on this new contract without joining Donothan as a party to the suit; 97 Me. 547; 94 Am. St. Rep. 521; 14 R. C. L. 1004, § 182; 123 Ga. 181; 51 S.E. 429; 3 Ann. Cas. 372, and note; 40 Pa.St. 289; 80 Am. Dec. 573; 10 W.Va. 546; 27 Am. Rep. 593; 56 Am. Dec. 749, note; 3 Ann. Cas. 477, note.

2. The Oklahoma court had no jurisdiction to try and determine the garnishment suit, or to render any judgment therein affecting the rights of the appellees in this suit. Where there is no jurisdiction in personam nor in rem, there is no jurisdiction at all. The undisputed evidence is that there was no res of Donothan within the jurisdiction of the Oklahoma court, and that he himself was not within its jurisdiction. 243 U.S. 269; 61 L. ed. 713; 49 P. 48; 71 Vt. 457, 76 A. S. R. 787; 44 S.C. 95, 51 A. S. R. 794.

3. A judgment of the court of another State which is rendered without jurisdiction of the person of the defendant or without seizure of any of his property, is not a judgment entitled to full faith and credit. It is void. 123 Ark. 42; art. 4, § 1, U. S. Const.; Rev. Statutes U. S. § 905; 151 P. 879; 48 Ark. 151; 105 Ark. 5; 95 U.S. 714, 24 L. ed. 565; 181 U.S. 155, 45 L. ed. 794; 201 U.S. 562, 50 L. ed. 867; 9 D. C. L. 515; 226 U.S. 551, 57 L. ed. 347.

OPINION

WOOD, J.

These actions were instituted in the Logan Circuit Court, February 21, 1923, by the respective plaintiffs below (appellees here) against the respective defendants below (appellants here). The actions were to recover on fire insurance policies issued by each of the respective appellants in favor of one F. L. Donothan, a resident of Booneville, Arkansas. The policies covered a theater building and its equipment. The appellants are foreign insurance companies doing business in this State, and had an insurance agency at Booneville through which these policies were negotiated.

The property insured was destroyed by fire on January 26, 1923. On the 30th of January, 1923, Donothan, the insured, for a valuable consideration, assigned the policies to the appellees, with the express consent of the appellants indorsed thereon. On the 8th or 9th of February, 1923, the terms of the policy as to notice and proof of loss were duly complied with. The amount due under the policies was payable in sixty days after proof of loss.

On February 12, 1923, an action was instituted in the district court of Oklahoma County, Oklahoma, by the Vitograph, Inc., against Donothan, for an alleged indebtedness on a contract in the sum of $ 600. Writs of garnishment in that action were issued and served on the appellants, garnishees, to impound the proceeds of the policies in the hands of the appellants. Donothan, the defendant in the action, and at that time a citizen of Booneville, Arkansas, was served with process according to the statutes of Oklahoma. The garnishees, appellants, were likewise duly served with process in the Oklahoma action, and they answered alleging that they were not in any manner indebted to Donothan, the defendant in the action, and did not have any real estate or personal effects in their possession in which he had an interest. They denied liability to him, and further set up that the court was without jurisdiction, and that the proceeds of the insurance policies issued to Donothan were not subject to garnishment.

Thereafter, on March 24, 1923, the appellants filed their amended answers in the Oklahoma suit, in which they set up that they were liable for loss on the policies issued to Donothan, and that an action had been instituted against them by the appellees, assignees of the policies, in Arkansas, to recover said loss, and that they had on hand the proceeds of the amounts due under the policies, which they held subject to the garnishments and assignments mentioned. They alleged that, since the service of the writs of garnishment upon them, the assignees of the policies, the appellees herein, had brought suit in Logan County, Arkansas, to recover the sums due under the policies, and they prayed that the appellees be required to interplead in the Oklahoma suit, to the end that "the rights of all parties may be adjudicated in this action, and that these garnishees be not vexed with two suits for the same debt and be compelled to pay the same twice."

The appellees were thus made parties defendant to the Oklahoma suit, and were duly served with process in that action under the Oklahoma law, and directed to answer within twenty days after such service. The defendant Donothan and the appellees failed to appear and plead in the Oklahoma action, and they were adjudged by the Oklahoma court, on May 5, 1923, to be in default. The cause in the Oklahoma court came on for trial on May 7, 1923, and judgment was rendered in that action in favor of the plaintiff, the Vitograph Incorporated Company, against the defendant Donothan, in the sum of $ 600, with interest, total $ 668.30.

The court also rendered judgment against the appellants. Against the Philadelphia company in the sum of $ 368.88, and the Hartford company in the sum of $ 645.55, an aggregate sum of $ 1,014.43, as the proceeds of the policies in their hands as garnishees, and commanded them to pay the sum of $ 668.30 into court, and also the sum of $ 72 to cover interest pending an appeal in the Oklahoma Supreme Court, amounting in the aggregate to the sum of $ 740. The Oklahoma court, in its judgment, further ordered that the appellees, who were interpleaded and made defendants in that action, be forever barred from any right or interest in the proceeds of the policies to the extent of the above judgment. The appellant insurance companies duly prosecuted their appeal from the judgment of the Oklahoma district court to the Supreme Court.

At the beginning of the trial of this action, the appellants tendered the appellee in open court the sum of $ 274.13 in settlement of all claims against the appellants, the amount being the balance of the proceeds of the policies in their hands over and above the amount of the Oklahoma judgment. In their answers in this action the appellants pleaded the disclaimer and interpleader statutes of Oklahoma, pursuant to which the Oklahoma action and proceedings were prosecuted, and also pleaded the judgment of the district court of Oklahoma in bar of the present action to the extent of that judgment.

There was testimony on behalf of the appellees to the effect that Elkins was the local agent of the appellants at Booneville, and issued the policies to Donothan; that the property covered by the policies was destroyed by fire about the 26th of January, 1923. He consented, acting for the appellants, to the assignment of the policies by Donothan to the appellees after the loss occurred. A few days after the assignment of the policies, a man by the name of Kincannon came to see witness, to get him to give the name of the companies issuing the policies. Witness refused, and told him the policies had been assigned to the appellees.

Witness Kincannon testified that he was an attorney at law in Booneville, Arkansas; that, a few days after the loss covered by the policies, a man by the name of Myers, claiming that he represented the Vitograph Inc. Company, came to see witness. He retained witness' services. Witness interviewed Elkins, the local agent of the appellants, to ascertain the names of the companies issuing the policies, in order to determine whether they had made an adjustment, and witness was advised by Elkins that the policies had been assigned.

Chas I. Evans testified that he was an attorney at law at Booneville, Arkansas, and that he had a conversation with Myers a few days after the assignment of the policies to the appellees. ...