Md. Cas. Co. v. Martin

• Decision Date: 05 January 1937
• Parties: MARYLAND CASUALTY CO. v. MARTIN et al.
• Court: New Hampshire Supreme Court

189 A. 162

MARYLAND CASUALTY CO.

v. MARTIN et al.

Supreme Court of New Hampshire. Hillsborough.

Jan. 5, 1937.

Transferred from Superior Court, Hillsborough County; Burque, Judge.

Petition for a declaratory judgment by the Maryland Casualty Company against Joseph E. Martin and others. Case transferred.

Decree for plaintiff.

Petition, for a declaratory judgment, to determine whether the plaintiff's Massachusetts motor vehicle liability policy issued to the defendant Martin, a resident of that state, gave coverage for claims against him arising out of his alleged negligence while driving his automobile in New Hampshire. The defendants other than Martin are persons seeking, or who may seek, to recover on such claims. Transferred by Burque, J, on certain questions of law not ruled upon and on various exceptions. The opinion states additional facts, and the issues of law appear therein.

Hughes & Burns, of Dover (S. M. Burns, of Dover, orally), for plaintiff.

Wyman, Starr, Booth, Wadleigh & Langdell, of Manchester (Wm. J. Starr,

Jr., of Manchester, orally), for certain defendants claiming liability.

Irving E. Forbes and Paul J. Doyle, both of Manchester (Paul J. Doyle, of Manchester, orally), for other defendants claiming liability.

ALLEN, Chief Justice.

I. Certain nonresident defendants were served with process outside the state and have entered no appearance. No valid decree in the suit determining their rights can be made. They are beyond the court's jurisdiction and have not submitted to it. No conditions of status exist, and no property or res in which they may be interested and over which the court has jurisdiction is a subject-matter of the suit. While a debt may have the situs of the debtor and be property there (Robinson v. Carroll, 87 N.H. 114, 174 A. 772, 94 A.L. R. 1437), the issue here is not of the rights of claimants to property, but whether the claim of right has merit. The inquiry is one solely of personal contractual liability. The declaratory judgment statute (Laws 1929, c. 86) is not interested in such an inquiry so far as to create jurisdiction over nonresidents not locally served with process and not submitting voluntarily to the court's actual jurisdiction. If it had so wide a designed scope, it would be ineffective therefor. Due process does not permit one denying himself to be a debtor to compel, by service outside his state, a nonresident claiming to be a creditor to have the liability adjudicated in the courts of that state. Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565; Baker v. Baker, Eccles & Company, 242 U.S. 394, 401, 37 S.Ct. 152, 61 L.Ed. 386; McDonald v. Mabee, 243 U.S. 90, 37 S.Ct. 343, 61 L.Ed. 608, L.R.A.1917F, 458. The jurisdictional issue is the same whether the plaintiff claims or denies liability.

II. Other nonresident defendants have appeared specially to raise the issue of jurisdiction but have here argued the merits of the main issues in the litgation. By so doing they have yielded to the jurisdiction and are personally in court. Dolber v. Young, 81 N.H. 157, 123 A. 218, and cases cited. They had the right to a decision of the jurisdictional issue in advance of further participation in the suit, but they have not seen fit thus to proceed.

The fact that they have first contested the merits in this court is immaterial. The principle that one "cannot take the chance of succeeding on any other objection to the case made against him, and at the same time reserve his exception to service or notice" (Merrill v. Houghton, 51 N.H. 61), is decisive against these defendants. Having made their special appearance general by opposing the plaintiff as though they were duly in court, they abandoned their right to say they were not. Their attempt to obviate this result by request, that no consideration be given to their brief on the merits if the jurisdictional issue was to be thereby prejudiced, is vain. The proposal that a brief may be filed on a conditional basis invokes an innovation Contrary to good practice. When a brief is filed, all of it is presented. It is submitted unreservedly, and the condition is not to be recognized. The attempt is as futile as that of avoiding the change from a special to a general appearance after action upon the merits has been taken. The issue of jurisdiction is not only separate but also preliminary, and reasonable procedure demands that it be finally decided before other issues of the litigation are reached. Orderly course of litigation calls for a consecutive disposal of the issues. The undertaking not to be in court and at the same time take part in the trial of the main issues is one of inconsistency, and technique of pleading or practice is of no avail to validate it.

Nothing said herein is of bearing on a special appearance entered by one not subject to the jurisdiction for the purpose of defending his rights in property attached or of asserting his claim of interest in property or a res which is the subject of controversy.

III. The plaintiff asserts that its right to a decree against the named assured establishes its right to one against the other defendants who are before the court. The policy is to be construed according to the law of Massachusetts. It was issued there, and even performance there at least in some measure was contemplated by it. Seely v. Insurance Co, 72 N.H. 49, 54, 55 A. 425; Cunningham v. Ferguson, 81 N.H. 380, 127 A. 436; Lord v. Roberts, 84 N.H. 517, 519, 153 A. 1. By the Massachusetts law a policy insuring liability for casualty is one of indemnity; liability being established, the injured party may proceed directly against the insurer to collect his judgment against the insured. Lorando v. Gethro, 228 Mass. 181, 117 N. E. 185, 1 A.L.R. 1374. An agreement or admission by the insured that the insurer is not liable is ineffective to determine the fact, as to persons injured. The insured being indemnified against liability, the protection of the indemnity extends to his judgment creditors as beneficiaries, whose rights may be waived or surrendered only by themselves. Hence, although they may have no rights superior to those of the insured, he has no authority or agency to impair or destroy such as they do have. The doctrine of privity is of no aid to the plaintiff. The policy with the law controlling it determines the respective rights of the insured and of parties injured by him. The extent or conditions of the insurance may be affected by the insured's action and may be dependent upon it, but the insurance being ascertained, the rights of claimants become fixed and beyond his control.

The Massachusetts law is understood to be unaffected by subsequent legislation for compulsory motor vehicle insurance, and accords with the local rule declared in Sanders v. Frankfort Marine, etc. Insurance Company, 72 N.H. 485, 57 A. 655, 101 Am.St.Rep. 688. There was no occasion for any claimant against the defendant Martin to obtain leave to appear for him in order to avoid loss of the claimant's rights under the policy.

IV. The problem of coverage remains. The policy consists of two parts. One is of Massachusetts statutory coverage. The other is of coverage outside Massachusetts. By a paragraph entitled "Exclusions," the second part is stated not to cover various obligations and uses,...