Campbell v. Home Insurance , 1 S.C. 158 ( 1869 )

The opinion of the Court was delivered by

Willard, A. J.

The defendants appeal, and show the following state of facts: Plaintiff, a resident of South Carolina, sued on a policy of insurance issued by defendants, a foreign corporation, created under the laws of the State of New York, and having their principal place of business in the city of New York, with an agency within this State. The property’ insured was within this State. A loss was established within the policy, and an adjustment, by compromise, effected April 1st, 1858. Previous to this adjustment, and in January, 1858, D. Carolin and James A. Carolin, claiming to be creditors of plaintiff, commenced an action against him in the Supreme Court of the State of New York, Campbell being absent from that State, and took out an attachment against his property within the City and County of New York. A similar suit and attachment proceeding was instituted in the same Court, and at or about the same time, by Charles Nourse, claiming, likewise, to be a creditor of Campbell. The plaintiffs in both attachment suits were residents of the State of New York. Judgments were obtained in the suits of Carolin and Nourse, respectively, and executions issued and satisfied out of money paid by the present defendants, and claimed by them to constitute a credit in their favor, as against the present plaintiff.

On the production, before the Circuit Court, of the exemplified proceedings in the New York suits, it appeared that Campbell was not personally served with process within the State of New York. Defendants undertook to establish a credit in their favor by proof of the attachments, and of a levy under them, and a payment, in pursuance thereof, of the sum in dispute. Exemplified records of the attachment proceedings were produced, distinct and separate from the proper judgment records in the suit in the course of which the attachments were issued, following the practice of New York, as will be more fully explained hereafter. The return endorsed •upon the attachments did not show that the funds due to Campbell had been seized in the hands of the present defendants, and they, accordingly, offered parol evidence, taken under a commission issued in this suit to the State of New York, of the fact of a levy upon the debt due from them to the present plaintiff, and the payment thereunder of the sum in dispute into the hands of the Sheriff of the City and County of New York. The plaintiff objected to parol evidence of these facts being admitted, contending that the fact of a levy and payment could only be made out by matter appearing of record, and that the introduction of proof aliunde was inadmissible. The Judge sustained the objection, holding “ that the exemplification did not show a valid judgment, as it did not appear that defendants were made parties to the proceedings by the service of warrants of attachment on them,” “ and that evidence aliunde was inadmissible to prove the fact of service;” and the jury, under this instruction, found for the plaintiff. r

The first, third and fourth grounds of appeal rest upon this instruction, and will be considered together.

The subject of controversy is a chose in action, a debt admitted •as due by one domiciled within the State of New York to a citizen of South Carolina. The creditors of Campbell, being citizens of the State of New York, were entitled, by the laws of that State, to pursue the fund in question, in order to obtain satisfaction of their demands. So far as it concerned the appropriation of that specified fund, the sovereign jurisdiction of New York extended to the adjudication of all rights pertaining thereto as between the domestic creditors, the absent debtor and the holder of the fund, and, also, to the designation of the remedial means by which such appropriation should be effected. — -Story Confl. Laws, § 549. The fund itself became, under the operation of the laws -of New York, assets for the satisfaction of domestic debts, and, as such, was specifically amenable to the domestic jurisdiction.

According to principles of public law, especially recognized by South Carolina and New York, as well as under the operation of Art. IY, Sec. 1, of the Constitution of the United States, proceedings for the satisfaction of the New York creditors, out of funds within that State, if pursued in conformity to the authority of that State, were final and conclusive upon the debtor resident in South Carolina, although not served with process, and though he did not appear and defend therein. It is true that, in order to render the judgment obtained in New York operative in South Carolina, for the purpose of further satisfaction here, it was necessary that it should operate in personam, which can only take place when the defendant has been subjected to the jurisdiction of the Court rendering the judgment, either by process served within its territorial jurisdiction or by the voluntary appearance of the defendant for the purpose of a general defence. Yet, as it is not sought, in the present suit, to employ the judgment for any other purpose than to evidence transactions fully completed within the State of New York, it is unnecessary to consider what is due to render the proceedings in question binding in personam.

It follows, therefore, that we have only to consider "the legal consequences and effects of the attachment proceedings under the laws of New York, and to give effect to Art. IY, See. 1, of the Constitution of the United States, by allowing the same effects and consequences within this Statei

The language of the Constitution is as follows: “Full faith and credit shall be given in each State to the public Acts, records and judicial proceedings of every other State, and the Congress may, by general laws, prescribe the manner in which such Acts, records and proceedings shall be proved, and the effect thereof.” — Con. U. S., Art. IV, Sec. 1. Congress has exercised this authority to the extent of prescribing the mode in which records shall be authenticated, (Act 1790,1 Stat., 122,) but has not defined the mode of proving such matters as rest in parol. Matters of record must be proved by the production of the record, or that which is made, by law, of equal import with the record itself, namely: a duly authenticated copy. Matters resting in parol must be proved by parol.

Judicial proceedings, which, from their nature, cannot be proved in the manner prescribed by the Act of Congress, are, nevertheless, in this State, held entitled to full faith and credit under the Constitution, and are to be proved in accordance with the rules of the common law. This was settled in Lawrine vs. Gaultney, (Cheves, 7,) although, when the previous case of Clark vs. Parsons, (Rice, 16,) was decided, the Court was not prepared to go so far. The judgment considered in Lawrine vs. Gaultney was rendered by a Justice of the Peace of North Carolina, and, not emanating from a Court of Record, was not capable of being evidenced by. that which, in strictness, was to be regarded as a record. This being determined in a case where it was sought to give the judgment effect in personam, is applicable, with still greater force, to a case where the only effect sought is that which ought to be allowed to a judgment in rem. It was evidently the intent of the Constitution, as expressed by the .phrase “records and judicial proceedings,” to include proceedings that could not properly be described as “ records,” or, in other words, that could only be evidenced by matter of parol.

Having thus distinguished two classes of cases to which the Constitution relates, namely ¡'proceedings capable of being wholly evidenced by matterof record, which ought to be authenticated in accordance with the Act of Congress, and proceedings which cannot be so evidenced, but are to be proven on the principles of the common law, there remains to be considered a class, embracing the case under consideration, where certain matters are susceptible of proof by means of an authenticated record, and others demanda different form of proof. It is obvious that the principles that have been stated as governing the two first named classes control the one last named. That which ought to be proven by matter of record cannot be evidenced by- proof of less dignity, and that which cannot be so proved is to be evidenced in the best manner that the nature of the case will admit of.

.The question, then, arises, whether the facts of a levy of the attachments and satisfaction by payment under it, ought to be evidenced by a record authenticated under the Act of Congress. This question depends wholly upon the laws of New York; for rules of evidence arise out of the nature of- the thing evidenced, and that, in the present instance, is a proceeding, the creature of the laws of New York. Are these facts properly matters of record, under the laws of New York ?

The attachments in question were taken under the Code of Procedure of that State. . Their system of practice has materially modified the foreign attachment, as understood in this State, and as the same formerly existed in the State of New York. The attachment is not the initial process of a suit or proceeding, but is a remedial writ, issued in the course of an action at law, and accessory to it. — N. Y. Code of Procedure, Section 227. It is not the foundation of the record; nor the ground of jurisdiction, but an incident, and accessory merely. The action in the course of which the attachment issues is, in form and essence, a suit at law, in which the non-resident debtor is the only party defendant. The jurisdiction of the Court, so far as the laws of New York are concerned, de- - pends upon proof of the non-residence of the defendant, coupled with .the fact that he has property within the State. This proof is brought before the Court by affidavit, on a motion for an order of ■publication of the summons, the real initial process in the case. The order of publication may be executed; either by publishing the summons in certain public newspapers, and depositing a copy of the same in the post office, addressed to the defendant at his place of residence, and pre-paying the postage, or, at the option or convenience of the plaintiff, by the actual service of the summons . upon the defendant personally, though without the State. The former coarse was pursued in Carolins’ case, tbe latter in Nourse’s case, the summons having been served on the defendant in Charleston. After due service is effected in the manner before stated, a complaint, the equivalent of a declaration, is filed, and unless the defendant appears and pleads to it in due time, a reference to ascertain the indebtedness of the defendant is ordered, as upon a default for want of answer, and, on the coming -in of the referee’s report, ascertaining a sum due, judgment is given against the defendant. Proof of the levying of an attachment is not necessary to authorize the entry of judgment. Execution is issued on this judgment, and satisfied out of property taken under the attachment, as well as out of all other property of the defendant found within the State.

The attachment is either issued at the same time with the summons or subsequently. It directs the Sheriff to seize and hold, subject to any judgment that may be recovered in the action, all property of the defendant within the County. Neither in the attachment, nor in the affidavit on which it issues, is there required' to be any specification of what the property consists of, nor in whose hands held. It may be levied on any property of the defendant which the Sheriff may be able to find within his County. At no stage of the proceedings does the person holding the defendant’s property appear in any character upon the record. He has no opportunity to plead and defend otherwise than in the name of the absent debtor. He cannot arrest the proceeding or dissolve the attachment otherwise than in the name of the defendant of record. The attachment may be levied on the choses in action'of the non-resident, and, in such cases, is levied by delivering a copy thereof to the person owing such debt, who is bound, if the deb't is acknowledged, to furnish the Sheriff with a certificate of the amount due.

If the debt is denied, the Sheriff is put to his action against the person alleged to be indebted to the non-resident debtor, in which action such person appears and defends, as to any right that he may possess, as against the Sheriff claiming in right of the attaching creditors. When the warrant of attachment is fully executed or discharged, the Sheriff is required to return it with his proceedings thereon.

It frequently happens that the attachment cannot be fully executed prior to the issuing of the execution. For, it is not only necessary to levy, but to reduce to possession, in order fully to execute its mandate. If the person sought to be charged, under’the attachment, contradicts the fact that he has property of, or is indebted to, the non-resident debtor, and an action has to be commenced, it is evident that the attachment may remain, in part, unexecuted at the issuing of final execution, especially when the non-resident makes no defence. It also may happen, as in the present' case, that the Sheriff, after levying the attachment, suffers the property to remain in the hands of the person with whom it was found, having obtained constructive possession. In such case the attachment may remain, in part, unexecuted at the time the execution is deposited in the Sheriff’s hands. The moment the execution is lodged the attachment is merged, the provisional process being displaced by the final, and the Sheriff proceeds to execute the judgment, and makes his return of execution accordingly. The attachment in the case supposed is returned as merged in the execution. This was the course of practice adopted by the Sheriff in the cases under consideration, and is, undoubtedly, conformable to the practice of that State. The attachment having been returned according to the fact, it is not easy to see what more could be demanded.

It seems to have been supposed by counsel that there was some jurisdictional necessity of having the fact of a seizure in the hands of the present defendants appear as matter of record. But this was evidently based upon the idea that the attachment, as existing under the New York Code of Procedure, was a special statute remedy, in derogation of the common law, subject to a strict rule of 'construction, and in which the jurisdiction of the Court depended upon a return showing property seized under the attachment. This is an entire misconception of the nature of the proceeding. The Supreme Court of New York is a Court of Record of general original jurisdiction, and the proceeding before it being an action in the ordinary form, all the intendments are to be allowed to that Court appropriate to cases in the usual course of law. The fact that the property in dispute was found in the hands of the present defendants, was not a fact at all material to be known as matter of record evidence between the parties to the attachment suits. The present defendants had no control over the record, and no means of placing on it any fact necessary for their protection, and it would violate the principles of justice to make their protection depend upon the existence of a record to which they are strangers. It follows, that the levy and payment of the amount in dispute could not properly appear as matter of record, and that, upon principles of'the common law, should be shown by the best evidence the nature of tbe case admitted of, and that was the testimony of tlie officer who served the writ, and others cognizant of the facts. The Circuit Judge erred in his instructions to the jury, inasmuch as he refused due weight to the parol testimony adduced by the defendants, relative to the facts of the levy of the attachment and the payment of the defendants of the sum in dispute thereunder.

Having considered the question of proofs raised by the rulings of the Circuit Judge, it remains to notice certain objections going to the validity of the attachment proceedings themselves.

The two principal objections are, in substance, as follows: First, that the subject of the attachments was not a debt due in the State of New York, but was a contract made in South Carolina, contingent and immature, and, therefore, not the subject of attachment proceedings in the former State; and, second, that the record produced does not disclose such a proceeding, by foreign attachment, as can be recognized in the Courts of this State.

The duty of enforcing obligations rests, primarily, on the Court having jurisdiction of the person bound by such obligations. The superior efficacy of the remedy, when the person of the defendant is actually subjected to the jurisdiction of the Court, instead of being reached, indirectly, by. means of duress laid upon his property, and the manifest justice of putting a defendant to answer where a defence can, ordinarily, be most conveniently made,.have ascribed to the forum of the domicil, or residence, of the defendant, a peculiar fitness to determine controversies to which he may be' a party. This principle extends itself to corporate as well as natural persons; for, although their appearance is not strictly personal, still the means of compelling corporate action are most abundant in the country under whose laws the corporation has its legal existence. This right, though undoubted, is not, however, exclusive; as, under peculiar conditions, the Courts of States or countries other than that of the defendant’s domicil, or residence, may acquire jurisdiction both of his property and his person. The same may be said of bodies corporate, though, from their intangible character, a personal jurisdiction cannot always be obtained out of the country under whose laws they exist. This defect is remedied by provisions of law, such as were referred to by counsel as existing in this State, in virtue of which certain foreign corporations are required, before being permitted to transact business here, to-subject themselves to local regulations, by which, among other things, liability to be sued' here is secured. — 12 Stat., 563. Such regulations have the effect to place natural persons and corporations on the same footing, in regard to liability to suit, outside the forum of their domicil. This casual liability to suit elsewhere has never created a doubt as to the right and propriety of pursuing the debtor in that forum. The plaintiff had an undoubted right to prosecute the defendants in the Courts of New York, and, under the laws of that State, it was competent for his creditors to intervene, as the plaintiff himself might have intervened, to enforce such obligation, pro tanto, tp the extent of satisfying their claims against him. ^

The cases cited in support of the objection under consideration, so far as it is based on the competeney of the Courts of this State to enforce the obligations of the plaintiff’s policy of insurance, go to this extent only; they hold that, for certain purposes, a corporation may be deemed present in a State foreign to that under which it holds its legal existence, so as to subject it to local laws and jurisdictions within such foreign State; but they do not sustain any propositi&n that will go to limit the forum of domicil in favor of the jurisdiction of such a foreign State.

In reference to the foregoing principles, it makes no difference whether the contract out of which the obligation springs -was made at home‘or abroad. That circumstance may have an influence in shaping the obligation, but none in establishing any superiority of claim to jurisdiction in the country where it was made over the domicil of the contracting party.

The objection that the debt was not due, in consequence of the preliminary proofs not having been duly presented, is untenable. The clause of the policy, demanding preliminary proofs, was intended solely for the benefit of the insurer. The insured had no interest in the performance of that act sufficient to sustain a claim that he had been prejudiced by their waiving such proofs in behalf of his creditors. The cases cited to this point only show that the creditors had no right to compel a waiver of the condition of the contract in their favor; but leave the right of the garnishee to waive those conditions unquestioned.

The second objection is equally untenable. The duty imposed upon the Courts of this State to respect judicial transactions, happening within a competent foreign jurisdiction, does not depend upon any technical peculiarity of the remedy, known as a foreign attachment, but upon the terms of the Constitution of the United States, and in cases to which that instrument does not extend, on the principles of international comity, the bond of civilised national society.

The well settled rule that, to give to a judgment extra territorial efficacy, it must have been pronounced by a Court having jurisdiction of the case, obtained either by personal service of the defendant within the jurisdiction of the Court, or by an actual seizure of his goods, is not in conflict with the present position. That rule rests on a principle of natural justice, and is of vital, rather than of technical application. Had there been no actual seizure of the plaintiff’s property to sustain, on the principles of international law, the claim of the Supreme Court of New York to jurisdiction of the cases, a question might have arisen under the rule just stated; but, in the present case, the property appears to have been actually attached in time to enable the plaintiff, or his agent in New York, to intervene in the suit for their protection. It is not, therefore, a case to apply a rule resting'on abstract .justice, and not on merely technical grounds.

Examining the second ground of appeal in connection with the report of the Circuit Judge, it is left in uncertainty what Avas the precise ruling in reference to the evidence obtained by the examination of counsel as to the laws of New York under the commission. It is not important, hoAvever, to look further into this part of the case, as the vieAV previously presented disposes of the case.

The fifth ground of appeal is unaccompanied by any statement of facts showing that the result of the trial Avas injuriously affected by the alleged error in the decision of the Judge as to the duty of the plaintiff to disclose the grounds on Avhieh he rested his case. We cannot assume that any unfair practice existed on the part of the counsel for the plaintiff, nor that the Judge sanctioned any such course. The matter raised by this ground of appeal being, therefore, immaterial, will not be considered..

A new trial is ordered.

Moses, C. J., concurred.