Swedish-American National Bank of Minneapolis v. T. Bleecker

Decision Date31 May 1898
Docket Number10,947 - (70)
Citation75 N.W. 740,72 Minn. 383
CourtMinnesota Supreme Court

On Rehearing June 17, 1898.

Appeal by defendant from a judgment of the district court for Hennepin county, adjudging that plaintiff recover of Commercial Union Assurance Company (Limited) of London garnishee, the sum of $800, entered in pursuance of the order of Simpson, J. Reversed.


Garnishment -- Foreign Insurance Company -- Service on Insurance Commissioner -- Action in Rem.

The defendant, a resident of North Dakota, insured his house situated in that state, against loss by fire in the garnishee, a foreign insurance company organized in England and doing business in North Dakota and in this state. A loss occurred, and this action was brought in this state by a creditor of defendant. Service was made on the garnishee by serving on the insurance commissioner, and service in the main action was made on the defendant by publication. None of the transactions out of which the indebtedness arose took place in this state, and the indebtedness was not payable in this state. Held, the action was one in rem.

Garnishment -- Situs of Debt at Domicile of Creditor.

Held further, as between different states or sovereignties, the situs of a debt is at the domicile of the creditor; but the statute may, for the purpose of attachment or garnishment, give the debt a situs also at the domicile of the debtor.

Garnishment -- Stipulation as to Process Filed with Insurance Commissioner -- Effect of Stipulation.

Our statute requires a foreign insurance company, before doing business in this state, to file a stipulation agreeing that any legal process affecting such company, served on the insurance commissioner, shall have the same effect as if personally served on the company. Held, such a stipulation filed by the garnishee does not give it a domicile in this state for all purposes, or bring into this state the situs of a debt which it owes elsewhere by reason of business transacted elsewhere, and such a debt cannot be seized in an action in rem in this state.

Gilfillan, Willard & Willard, for appellant.

In a garnishment proceeding, where the defendant is not served and does not appear, the court acquires jurisdiction only by attachment of the res. The proceeding is purely in rem. Aultman, Miller & Co. v. Markley, 61 Minn. 404; Plummer v. Hatton, 51 Minn. 181; Lydiard v. Chute, 45 Minn. 277; Kenney v. Goergen, 36 Minn. 191; Douglass v. Phoenix Ins. Co., 138 N.Y. 209, 218; Pennoyer v. Neff, 95 U.S. 714, 728. Assuming that the res in this case was present in this state, for purposes of garnishment, jurisdiction over it could be obtained only by service of the garnishee summons on the person in whose possession it was. Garnishment is a purely statutory remedy, and the requirements must be strictly followed. 2 Shinn, Attachm. & Garn. § 485; Scott v. McNeal, 154 U.S. 34, 46; Netter v. Board of Trade, 12 Ill.App. 607; Kennedy v. McLellan, 76 Mich. 598. Proper service of the garnishee summons upon the garnishee is jurisdictional. Schindler v. Smith, 18 La. An. 476; Hebel v. Amazon Ins. Co., 33 Mich. 400; Hartford F. Ins. Co. v. Owen, 30 Mich. 441; Epstein v. Salorgne, 6 Mo.App. 352; State v. Duncan, 37 Neb. 631; Nelson v. Sanborn, 64 N.H. 310; Edler v. Hasche, 67 Wis. 653. And any insufficiency of service upon the garnishee is fatal. Swallow v. Duncan, 18 Mo.App. 622; Central Trust Co. v. Chattanooga R. & C.R. Co., 68 F. 685; Hebel v. Amazon Ins. Co., supra. The garnishee cannot waive any of defendant's rights. Aultman, Miller & Co. v. Markley, supra; Epstein v. Salorgne, supra. Garnishment being purely statutory, courts of general jurisdiction in entertaining proceedings under it become courts of special limited jurisdiction and, as such, their authority to entertain it and their authority to proceed against the res must appear affirmatively upon the record. Nothing is to be presumed in favor of the jurisdiction. Drake, Attachm. § 87b; Thatcher v. Powell, 6 Wheat. 119; Haywood v. Collins, 60 Ill. 328; Eaton v. Badger, 33 N.H. 228; Waples, Garn. 329; Star Brewery v. Otto, 63 Ill.App. 40. The garnishee summons in this action was served upon the state insurance commissioner, and no other service will be presumed. Barber v. Morris, 37 Minn. 194; Godfrey v. Valentine, 39 Minn. 337; Hempsted v. Cargill, 46 Minn. 143; Jewett v. Iowa Land Co., 64 Minn. 539; Galpin v. Page, 18 Wall. 350, 366.

Under Laws 1895, c. 175, § 77, it is only in actions or proceedings against the company itself that service can be made upon the insurance commissioner, and that the commissioner is authorized to receive service. Rehm v. German I. & S. Inst., 125 Ind. 135; Gibbs v. Queen Ins. Co., 63 N.Y. 114, 124; Moore v. Speed, 55 Mich. 84; Smith v. Mutual L. Ins. Co., 14 Allen, 336; Sawyer v. North Amer. L. Ins. Co., 46 Vt. 697; Seamans v. Christian Brothers Mill Co., 66 Minn. 208; Central R. & B. v. Carr, 76 Ala. 388; Reimers v. Seatco Mnfg. Co., 37 U.S. App. 426; Lafayette Ins. Co. v. French, 18 How. 404. If the legislature had intended that process could be served upon the insurance commissioner, it would have so declared or have left the law as it was prior to 1895. G.S. 1894, §§ 3183, 3189. If a foreign insurance company, doing business in this state, is subject to garnishment at all, it must be by virtue of the indirect provision in G.S. 1894, § 5311, which statute must be strictly followed, and service must be made upon the "agent" of such corporation. Gibbs v. Queen Ins. Co., 63 N.Y. 117; Danforth v. Penny, 3 Metc. (Mass.) 564. The state insurance commissioner is not such an agent. Unless the company has, at the time of service, some liability outstanding in this state, the commissioner is not authorized to receive or accept service. His authority terminates as soon as the company is relieved from liability here. Laws 1895, c. 175, § 77; G.S. 1894, § 3185. To sustain its garnishment, respondent must sustain the jurisdiction of the court at every step. Drake, Attachm. § 87b; Eaton v. Badger, supra; Boswell v. Otis, 9 How. 350; Ransom v. Williams, 2 Wall. 313. Plaintiff must make it appear that the commissioner was qualified to receive service, and hence must show that there was some liability of the garnishee outstanding in this state. This must appear from the record, see cases supra, Waples, Garn. 330, and from the return of service, Waples, Garn. 332. The loss under the policy was not subject to garnishment in this state. If there is no jurisdiction over the garnishee there is none over the res, and if none over the res there can be none over the defendant. Aultman, Miller & Co. v. Markley, supra: Stevenot v. Eastern Ry. Co., 61 Minn. 104; Gates v. Tusten, 89 Mo. 13; Martz v. Detroit F. & M. Ins. Co., 28 Mich. 201; Jones v. Crews, 64 Ala. 368; Steen v. Norton, 45 Wis. 412; Raymond v. Rockland Co., 40 Conn. 401; Nelson v. Sanborn, 64 N.H. 310; Insurance Co. v. Friedman, 74 Tex. 56; Ahrens & O. Mnfg. Co. v. Patton S.D. & B. Co., 94 Ga. 247; Rood, Garn. § 271; 2 Shinn, Attachm. & Garn. § 664. The debt was not in this state. Central Trust Co. v. Chattanooga, 68 F. 685; Reimers v. Seatco Mnfg. Co., supra; Everett v. Connecticut M.L. Ins. Co., 4 Colo.App. 509; Ward v. Boyce, 152 N.Y. 191; Douglass v. Phoenix Ins. Co., supra; Straus v. Chicago G. Co., 108 N.Y. 654; Wood v. Furtick, 17 Misc. 561; Illinois C.R. Co. v. Smith, 70 Miss. 344; Atchison, T. & S.F.R. Co. v. Maggard, 6 Colo.App. 85; Alabama G.S.R. Co. v. Chumley, 92 Ala. 317; American C. Ins. Co. v. Hettler, 37 Neb. 849; Morawetz v. Sun Ins. Co., 96 Wis. 175; Reiner v. Hurlbut, 81 Wis. 24; Louisville & N.R. Co. v. Dooley, 78 Ala. 524; Craig v. Gunn, 67 Vt. 92; Osborne v. Shawmut Ins. Co., 51 Vt. 278; Bucy v. Kansas C.M. & B.R. Co. (Miss.) 22 So. 296; Williams v. Ingersoll, 89 N.Y. 508; Mason v. Beebee, 44 F. 556; Daniels v. Meinhard Bros., 53 Ga. 359; Kelley v. Machine, 4 Ohio L.D. 374; Caledonia Ins. Co. v. Wenar (Tex. Civ. App.) 34 S.W. 385; Pennoyer v. Neff, supra; Lawrence v. Smith, 45 N.H. 533; Green v. Farmers & C. Bank, 25 Conn. 452; Rorer, Inter-St. Law, 179; 2 Shinn, Attachm. & Garn. § 626; Stevenot v. Eastern Ry. Co., supra; Bates v. Chicago, M. & St. P.R. Co., 60 Wis. 296; Reno, NonResidents, § 169.

A judgment of this court, under which the garnishee should pay this money to plaintiff, would be no defense to an action on the policy in North Dakota by defendant against the company. Thompson v. Whitman, 18 Wall. 457; Lafayette Ins. Co. v. French, 18 How. 404; Douglass v. Phoenix Ins. Co., supra; Laing v. Rigney, 160 U.S. 531; Ward v. Boyce, supra; Pennoyer v. Neff, supra. The natural place for bringing a suit on this policy would be North Dakota, where the creditor lives, or New York, where the loss is payable. If brought in the former state, whether or not the company would have to pay twice, would, as we have seen, depend on what that court should hold on the question of the jurisdiction of the Minnesota court. If brought in New York, the company would have to pay its loss twice. Douglass v. Phoenix Ins. Co., supra; Reiner v. Hurlbut, supra; American C. Ins. Co. v. Hettler, 37 Neb. 849; Edwards v. Roepke, 74 Wis. 571. The decision in the Harvey case was largely based on Embree v. Hanna, 5 Johns. 101. That case, as modified by Martin v. Central V.R. Co., 50 Hun, 347, and Douglass v. Phoenix Ins. Co., supra, still stands as the law of New York, but the courts of that state from the time of that decision have held that an action of this kind cannot be maintained. Ward v. Boyce, supra; Douglass v. Phoenix Ins. Co., supra; Straus v. Chicago G. Co., supra; Martin v. Central V.R. Co., supra; Williams v. Ingersoll, supra.

The insurance company is not in this state for...

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