Milam v. SOL NEWMAN COMPANY, Civ. A. No. 10102.

• Citation: 205 F. Supp. 649
• Decision Date: 12 June 1962
• Docket Number: Civ. A. No. 10102.
• Parties: James D. MILAM, Jr., Plaintiff, v. SOL NEWMAN COMPANY, a corporation, et al., Defendants.
• Court: U.S. District Court — Northern District of Alabama

205 F. Supp. 649

James D. MILAM, Jr., Plaintiff, v. SOL NEWMAN COMPANY, a corporation, et al., Defendants.

Civ. A. No. 10102.

United States District Court N. D. Alabama, S. D.

June 12, 1962.

Huie, Fernambucq & Stewart, Birmingham, Ala., for plaintiff.

Lange, Simpson, Robinson & Somerville, Birmingham, Ala., for defendants.

LYNNE, Chief Judge.

Plaintiff seeks by this action to recover damages for personal injuries allegedly sustained in an automobile collision occurring in Alabama. Before this suit was instituted, the alleged driver of the other automobile, Philip R. Rosenfield, died, and the defendant Eva Rosenfield was appointed executrix of his estate by the Surrogate's Court in New York. Substituted service of process in the usual manner prescribed by the nonresident motorist statutes was therefore made upon Eva Rosenfield, as executrix of Philip R. Rosenfield, in accordance with the recently added¹ provisions of Ala.Code, Tit. 7, § 199,² which permit such service upon the personal representative of a deceased nonresident motorist. By motions to dismiss and to quash service, defendant Eva Rosenfield questions (1) the jurisdiction of this court as respects her, and (2) the constitutionality and validity otherwise of Section 199 insofar as it authorizes substituted service upon her.

These questions apparently have not been decided either by the courts of Alabama or by the Fifth Circuit Court of Appeals in respect to comparable statutes of other states. Other courts, however, have upheld overwhelmingly the validity of similar statutes against attacks urging their unconstitutionality under the Due Process Clause of the Fourteenth Amendment and the termination by the nonresident motorist's death of the agency created in the appointment of the Secretary of State as process agent.³

In her first objection attacking this court's jurisdiction, the defendant can rely upon the doctrine, deeply ingrained in the common law of most states, that an executor or administrator cannot sue or be sued outside of the state conferring his authority.⁴ The rule as it exists in Alabama is set out at length in Jefferson v. Beall, 117 Ala. 436, 23 So. 44 (1897), where the court refused to allow enforcement of a Georgia judgment against an Alabama executor on a debt owed by his decedent.⁵

It therefore must first be determined, before examining considerations of due process, whether jurisdiction can be validly exercised over a foreign representative by a state court or a federal court with diversity jurisdiction. While the reasons for the rule of the foreign representative's immunity and the territorial limitation of his powers have been variously stated,⁶ it seems to rest fundamentally on two related factors. The primary reason expressed is that the assumption of jurisdiction over a judgment against a foreign representative is considered an interference with the domiciliary state's orderly administration which would impinge upon the sovereignty of that state.⁷ This is clearly indicated in the Alabama Supreme Court's opinion in Jefferson v. Beall, supra, where the problem is viewed as that of "power * * * over the subject-matter of the administration of assets * * * and to the capacity of the defendant to do any act to the prejudice of the domestic administration," so that, being a matter of sovereign concern, the immunity could not be relinquished by even the representative's consent. The second reason, upon which the decision in Knoop v. Anderson, supra, seems partially to rely, is that a suit against the fiduciary in his representative capacity is actually an action in rem against the estate requiring jurisdiction over the estate assets. As to the first reason, the question to be resolved is whether the present action against the fiduciary on a delictual claim arising from the decedent's acts in the forum state — as of course are all actions within the contemplation of the nonresident motorist statute — is really an interference with the domiciliary administration. And as to the second reason, the question is whether such an action is really of an in rem character.

The answer to each, it is believed, is afforded by Morris v. Jones, 329 U.S. 545, 67 S.Ct. 451, 91 L.Ed. 488 (1947), which was concerned not with jurisdiction but with the recognition to be given by an Illinois court with in rem jurisdiction of assets in liquidation to a Missouri judgment on a tort claim (malicious prosecution and false imprisonment) against the Illinois association after it had entered liquidation. In requiring full faith and credit to be accorded the Missouri judgment, the court remarked in 329 U.S. at 548-550, 67 S.Ct. at 454, 455:

"We are not dealing here with any question of priority of claims against the property of the debtor. For in this proceeding petitioner is not seeking, nor is respondent denying him, anything other than the right to prove his claim in judgment form. * * * Nor do we have here a challenge to the possession of the liquidator either through an attempt to obtain a lien on the property or otherwise. As pointed out in Riehle v. Margolies, 279 U.S. 218, 224 49 S.Ct. 310, 73 L.Ed. 669, the distribution of assets of a debtor among creditors ordinarily has a `twofold aspect.' It deals `directly with the property' when it fixes the time and manner of distribution. No one can obtain part of the assets or enforce a right to specific property in the possession of the liquidation court except upon application to it. But proof and allowance of claims are matters distinct from distribution. They do not `deal directly with any of the property.' `The latter function, which is spoken of as the liquidation of a claim, is strictly a proceeding in personam.' Id., 279 U.S. p. 224, 49 S.Ct. at. The establishment of the existence and amount of a claim against the debtor in no way disturbs the possession of the liquidation court, in no way affects title to the property, and does not necessarily involve a determination of what priority the claim should have. * * *

"One line of cases holds that where a statutory liquidator or receiver is appointed, the court taking jurisdiction of the property draws unto itself exclusive control over the proof of all claims. Footnote omitted. But the notion that such control over the proof of claims is necessary for the protection of the exclusive jurisdiction of the court over the property is a mistaken one. As Justice Beach of the Supreme Court of Errors of Connecticut aptly said, `The question is simply one of the admissibility and effect of evidence; and the obligation to receive a judgment in evidence is no more derogatory to the jurisdiction in rem than the obligation to receive in evidence a promissory note or other admissible evidence of debt.'" Emphasis added.

Riehle v. Margolies, supra, which was cited in Morris, is one of several Supreme Court decisions which, in harmonizing the concurrent jurisdiction of state and federal courts, have developed the rule that a federal or state court may take jurisdiction of a suit in personam against a receivership or other administration of assets over which the other has assumed prior jurisdiction in rem, although either court must refrain from assuming an in rem jurisdiction under the same circumstances.⁸ The rationale, of course, is that jurisdiction in personam to determine only the validity and amount of a claim is considered to be in no way an interference with the other court's control of the res.⁹ The same principle and reasoning have been applied to permit federal courts to take jurisdiction of actions in personam against the executor or administrator of a decedent's estate.¹⁰ No reason appears why the principles of Morris and the other cases mentioned above do not serve in the present instance both to dispel the notion that this proceeding, insofar as it pertains to Eva Rosenfield in her capacity as executrix, is strictly in rem and to remove all objections which form the basis for the rule of the foreign representative's immunity.¹¹ It is believed, therefore, that these decisions uphold the right of the Alabama courts and this court to assume jurisdiction in personam of a foreign personal representative to decide the validity and amount of a delictual claim against his decedent's estate.

But even should the assumption of jurisdiction by this court be deemed an interference with the domiciliary state's exclusive in rem jurisdiction, because of the great interest of Alabama in securing adequate redress to persons injured on her highways there should be, on the strength of the basic public policy considerations underlying Hess v. Pawloski, 274 U.S. 352, 356, 47 S.Ct. 632, 71 L.Ed. 1091 (1927), little doubt that this is a proper exercise by Alabama of her police power.¹² For by the Hess decision, too, certain inroads were necessarily made on the traditionally exclusive jurisdiction of the state of the motorist's residence.¹³

The next question raised by defendant Eva Rosenfield's motions is whether the acquisition of jurisdiction, which it has thus been concluded that this court can assume without unconstitutionally transgressing upon the domiciliary state's sovereignty, through the particular mode of service prescribed by Section 199 is violative of the due process guaranteed by the Fourteenth Amendment. Past legislative attempts to subject foreign personal representatives to jurisdiction in personam usually have met with judicial opposition on this ground.¹⁴ It is evident, though, that this concern over due process is because of the dual capacity of the personal representative.¹⁵ Since in Thorburn, for example, the executor was served personally while unofficially in the forum state, it is particularly significant that Judge Hand cited along with Pennoyer the case of Goldey v. Morning News, 156 U.S. 518, 15 S.Ct. 559, 39 L.Ed. 517 (1895), which had held invalid an attempted service on an unqualified foreign corporation by serving its officer...