Nat'l Fire Ins. Co. of Hartford, Conn v. Chambers

• Citation: 32 A. 663,53 N.J.E. 468
• Parties: NATIONAL FIRE INS. CO. OF HARTFORD, CONN v. CHAMBERS et al.
• Decision Date: 13 July 1895
• Court: New Jersey Court of Chancery

32 A. 663

53 N.J.E. 468

NATIONAL FIRE INS. CO. OF HARTFORD, CONN

v. CHAMBERS et al.

Court of Chancery of New Jersey.

July 13, 1895.

(Syllabus by the Court.)

Bill of interpleader by the National Fire Insurance Company of Hartford, Conn., against Frank Chambers and others.

The contest in this case is between the defendants Harding, Whitman & Co. on the one side and Mr. J. J. Crandall on the other. Both parties claim under the defendant Frank Chambers, an admitted creditor of the complainant. Harding, Whitman & Co. claim under an attachment issued out of the court of common pleas No. 4 of the city of Philadelphia against Chambers, and Mr. Crandall claims under an assignment from him subsequent in date to the attachment of Harding, Whitman & Co. The question is whether Harding, Whitman & Co.'s attachment gave them a lien upon the debt due from complainant to Chambers, or, as otherwise expressed, effected an involuntary assignment of it from Chambers to them. The facts which clearly appear are as follows:

Chambers was and is a resident of New Jersey, engaged in manufacturing, with a plant at Camden, which was insured against loss by fire by the complainant and other insurance companies. A fire occurred in it on the 20th of June, 1893. On or shortly before the 29th of June the representatives of the different underwriters met and adjusted the amount of the loss, and also apportioned it as between themselves, with the result that the amount allotted to the complainant was $591.68. On June 29th the defendants William P. Datz and Alois D. Datz, trading as W. P. Datz & Bro., sued out of the court of common pleas No. 2 of the county of Philadelphia, state of Pennsylvania, a writ of foreign attachment against Chambers, returnable on the third Monday of September, 1893, founded on a claim of $285.91 against Chambers. The instructions indorsed on that writ commanded the sheriff to attach "all and singular the goods and chattels, lands and tenements, rights and credits of the defendant Frank Chambers, in whose hands soever they may be, and summon them as garnishees, and especially all sums due by the National Fire Insurance Company of Hartford, Connecticut, and Rochester German Insurance Company, to said defendant, and summon them as garnishees." By virtue of that writ the sheriff of the county of Philadelphia, by his deputy, at a quarter after 3 o'clock, June 29th, made the usual declaration in attachment, In the presence of William F. Bradway, named in the writ as the agent of the complainant in Pennsylvania, designated as such by the complainant, at his office in the city of Philadelphia. The complainant duly appeared to this suit, and then, according to the practice in the Pennsylvania courts, the plaintiffs, Datz & Bro., served interrogatories upon it, wherein, among other questions, they asked whether at the time the writ was served upon complainant's agent there was anything due from it to Frank Chambers on a policy of insurance. To that interrogatory the complainant answered that the sum of $591.68 was due from it to said Frank Chambers, which it was willing and ready to pay to the person entitled to receive the same. On the 3d of August, 1893, the defendants, Harding, Whitman & Co. sued out of the court of common pleas No. 4 of the city of Philadelphia a like writ of attachment against Frank Chambers, returnable on the third Monday of September, 1893, which the sheriff served in precisely the same manner as he had served the previous one of Datz & Bro. To that writ the complainant herein duly entered an appearance. In each of the attachment suits the respective plaintiffs filed statements of their claims, with an affidavit of one of the firm that the amount claimed was due, and in each judgment was entered against the defendant Chambers,—in the case of Datz & Bro., for the sum of $299.92, March 26, 1894; and in the case of Harding, Whitman & Co., for $5,549.93, April 6, 1894. On the 30th of January, 1894.—seven months after the adjustment of the loss,—the defendant Chambers commenced an action on contract against the complainant in the Camden county circuit court, founded upon the amount found to be due as above stated upon the policy of insurance issued by complainant to him under which the loss occurred, and served process upon complainant through its agent in this state; whereupon, on the 19th of February, 1894, the complainant filed its bill of interpleader against Datz & Bro. Harding, Whitman & Co., and Chambers, and paid into court the sum of $591.68, and obtained from this court an injunction against further prosecution of the garnishment proceedings by Datz & Bro. and Harding, Whitman & Co. against it in the courts of Philadelphia and the action at law by Chambers in the Camden circuit. Motion was made to dismiss this bill before Vice Chancellor Green, and was refused by him on the 20th of March, 1894. The usual order discharging the complainant, and that the defendants interplead, was made on the 23d of July, 1894. Datz & Bro. did not submit to the jurisdiction of this court, and on the 3d of April, 1894, a rule to show cause was granted in their suit in common pleas No. 2 why judgment should not be entered against the insurance company, complainant herein, as garnishee. That rule was resisted, and the complainant was permitted to file supplemental answers to the interrogatories which had been previously administered to it, according to the practice in the Pennsylvania courts; and in those, by way of plea puis darrein continuance, it set up the suit brought by Chambers against it in the Camden circuit, and that, being advised that it would not be able to set up as a defense at law to that action the attachment proceedings in Pennsylvania, it had filed its bill of interpleader in this court, and had obtained an injunction against Chambers and Datz & Bro. It further set up as an affirmative defense to the proceedings in garnishment that the amount due to Chambers under its policy was not due or payable in the state of Pennsylvania, but at the main office of the company in the city of Hartford, Conn.; that the policy of insurance was not issued in the state of Pennsylvania, nor had the amount due thereunder, either at the time of the writ of attachment or prior or subsequent thereto, been in the possession of the agent of the company in the state of Pennsylvania, or in the hands of any other person in the state of Pennsylvania The court of common pleas No. 2, after argument, in a considered judgment reviewing the authorities, overruled this defense, holding that this court had no power to enjoin Datz & Bro., and that the complainant was subject to garnishment in Pennsylvania through its duly-authorized agent, and entered judgment against complainant for $299.92, the amount previously recovered against Chambers, with $16.12 costs. This judgment has been paid by the complainant Harding, Whitman & Co. did not follow up their judgment in attachment against Chambers by garnishee proceedings against the complainant herein, but obeyed the injunction of this court.

Mr. John J. Crandall presented his petition to this court on the 20th of April, 1894. setting up that on the 19th of January, 1894, a few days before the commencement of the suit by Chambers against complainant in the Camden circuit court, he (Chambers) assigned to him (Crandall) all the moneys to be recovered on the policy, and authorized him to proceed to recover the money by suit in Chambers' name. On the basis of that petition an order was made admitting Mr. Crandall as a defendant herein, and on the 19th of May, 1894, he filed his answer, setting up that he was entitled to the moneys to be recovered in the suit in the Camden circuit by virtue of the assignment to him of the 19th of January, 1894, and asserting that Harding, Whitman & Co. obtained no rights, either at law or in equity, by virtue of their attachment proceedings in the state of Pennsylvania, Incorporated in this answer of Mr. Crandall was a cross bill praying that the money might be paid to him. The defendants Harding, Whitman & Co. answered on the 19th of July, 1894, setting up their claim against Chambers and the attachment in the state of Pennsylvania; also a judgment recovered in this state against Chambers on the same claim, and for the same amount.

By the statutes of Pennsylvania, all of Which were put in evidence, it is provided as follows (Act April 4, 1873, § 13 [P. L. 20]; Brightly, Purd. Dig. p. 1060, pi. 147; Pepper & Lewis's Digest, p. 2391, pl. 114): "No insurance company, not of this state, nor its agents, shall do business in this state, until he has filed with the insurance commissioner of this state a written stipulation, duly authenticated by the company, agreeing that any legal process affecting the company, served on the insurance commissioner, or the party designated by him, or the agent specified by the company to receive service of process for said company, shall have the same effect as if served personally on the company within this state; and if such company should cease to maintain such agent in this state so designated, such process may thereafter be served on the insurance commissioner, but so long as any liability of the stipulating company to any resident of this state continues, such stipulation cannot be revoked or modified, except that a new one may be substituted, so as to require or dispense with the service at the office of the said company within this state, and that such service of process, according to this stipulation, shall be sufficient personal service on the company. The term 'process' shall be construed to mean and include any and every writ, rule, order, notice or decree, including any process of execution that may issue in or upon any action, suit or legal proceedings to which said company may be a party by themselves, or jointly with others, whether the same shall arise upon a policy of insurance or otherwise, by or in any cou...