New York Life Insurance Co. v. Dunlevy

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New York Life Ins. Co. v. Dunlevy
Seal of the United States Supreme Court.svg
Argued May 14, 15, 1916
Decided June 5, 1916
Full case nameNew York Life Insurance Company v. Effie J. Gould Dunlevy
Citations241 U.S. 518 ( more )
36 S. Ct. 613; 60 L. Ed. 1140
Case history
Prior204 F. 670 (N.D. Cal. 1913); affirmed, 214 F. 1 (9th Cir. 1914); cert. granted, 235 U.S. 705(1914).
Holding
No personal jurisdiction can be had over claimants in an interpleader who are physically absent from the state or have not consented to the court's jurisdiction.
Court membership
Chief Justice
Edward D. White
Associate Justices
Joseph McKenna  · Oliver W. Holmes Jr.
William R. Day  · Charles E. Hughes
Willis Van Devanter  · Mahlon Pitney
James C. McReynolds  · Louis Brandeis
Case opinion
MajorityMcReynolds
Laws applied
U.S. Const. Amend. XIV

New York Life Ins. Co. v. Dunlevy, 241 U.S. 518 (1916), was a decision by the Supreme Court of the United States in which the Court held that a court can exert personal jurisdiction over a nonresident party in an interpleader if that party is served with process while physically present within the state. [1]

Supreme Court of the United States Highest court in the United States

The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all federal and state court cases that involve a point of federal law, and original jurisdiction over a narrow range of cases, specifically "all Cases affecting Ambassadors, other public Ministers and Consuls, and those in which a State shall be Party". The Court holds the power of judicial review, the ability to invalidate a statute for violating a provision of the U.S. Constitution. It is also able to strike down presidential directives for violating either the Constitution or statutory law. However, it may act only within the context of a case in an area of law over which it has jurisdiction. The Court may decide cases having political overtones, but it has ruled that it does not have power to decide non-justiciable political questions.

Personal jurisdiction is a court's jurisdiction over the parties to a lawsuit, as opposed to subject-matter jurisdiction, which is jurisdiction over the law and facts involved in the suit. If a court does not have personal jurisdiction over a party, its rulings or decrees cannot be enforced upon that party, except by comity; i.e., to the extent that the sovereign which has jurisdiction over the party allows the court to enforce them upon that party. A court that has personal jurisdiction has both the authority to rule on the law and facts of a suit and the power to enforce its decision upon a party to the suit. In some cases, territorial jurisdiction may also constrain a court's reach, such as preventing hearing of a case concerning events occurring on foreign territory between two citizens of the home jurisdiction.

Interpleader is civil procedure that allows a plaintiff or a defendant to initiate a lawsuit in order to compel two or more other parties to litigate a dispute. An interpleader action originates when the plaintiff holds property on behalf of another, but does not know to whom the property should be transferred. It is often used to resolve disputes arising under insurance contracts.

Contents

Factual and procedural background

Joseph W. Gould, obtained a life insurance policy on his life from New York Life Insurance Company which his daughter, Effie J. Gould Dunlevy, claimed had been assigned to her in 1893. At that time both Mr Gould and his daughter were citizens and domiciliaries of Pennsylvania. In 1907, Boggs & Buhl, a law firm, recovered a valid default judgment against Mrs. Dunlevy, in the Common Pleas Court at Pittsburgh here she then resided, after obtaining personal jurisdiction domiciliary service, During 1909, "the tontine dividend period" of the life insurance policy having expired, the insurance company became liable for $2,479.70, and this sum was claimed both by Gould, and his daughter, Mrs. Dunlevy, who had moved to California and became a domiciliary there. In November, 1909, Boggs & Buhl caused issue of an execution attachment on their judgment in Court of Common Pleas at Pittsburgh and both the insurance company and Gould were summoned as garnishees. He appeared, denied assignment of the policy, and claimed the full amount due thereon. On January 14, 1910 Mrs. Dunlevy instituted this suit in the Superior Court, Marin County, California, against the insurance company and to recover $2,479.70, the surrender value of a policy on his life which she claimed had been assigned to her, and both were duly served with process while in that state. On February 5, 1910, after this suit was begun in California, the company answered, admitted its indebtedness, set up the conflicting claims to the fund, and prayed to be advised as to its rights. At the same time it filed a petition asking for an interpleader, and thereby ascertain who was lawfully entitled to the proceeds, and, further, that it might be allowed to pay amount due into court for benefit of proper party.on March 21, 1910 an order granted the requested, and directed that notice be given to Mrs. Dunlevy in California. This was done, but she made no answer and did not appear. Later, the insurance company filed a second petition, and, upon leave obtained thereunder, paid $2,479.70 into court, . All parties except Mrs. Dunlevy having appeared, the suit was tried on a feigned issue to determine validity of alleged transfer of the policy. The jury found, October 1, 1910, there was no valid assignment, and thereupon, under a court order the fund was paid over to Gould. The California suit was removed to the United States district court, February 16, 1910, and tried there by the judge in May, 1912, a jury having been expressly waived. [2] The judgment for Mrs. Dunlevy in amount claimed was affirmed by the Circuit Court of Appeals, Ninth Circuit. [3]

New York Life Insurance Company American life insurance company

New York Life Insurance Company (NYLIC) is the third-largest life insurance company in the United States, the largest mutual life insurance company in the United States and is ranked #69 on the 2018 Fortune 500 list of the largest United States corporations by total revenue. NYLIC has about $570 billion in total assets under management, and more than $25 billion in surplus and AVR. In 2007, NYLIC achieved the best possible ratings by the four independent rating companies. Other New York Life affiliates provide an array of securities products and services, as well as institutional and retail mutual funds.

An assignment is a legal term used in the context of the law of contract and of property. In both instances, assignment is the process whereby a person, the assignor, transfers rights or benefits to another, the assignee. An assignment may not transfer a duty, burden or detriment without the express agreement of the assignee. The right or benefit being assigned may be a gift or it may be paid for with a contractual consideration such as money.

In law, domicile is the status or attribution of being a lawful permanent resident in a particular jurisdiction. A person can remain domiciled in a jurisdiction even after he has left it, if he has maintained sufficient links with that jurisdiction or has not displayed an intention to leave permanently.

In 1909 under Pennsylvania law, a judgment debtor is not a party to a garnishment proceeding to condemn a claim due the judgment debtor from a third person, nor is the judgment debtor bound by a judgment discharging the garnishee. [4]

In English and American law, a judgment debtor is a person against whom a judgment ordering him to pay a sum of money has been obtained and remains unsatisfied. Such a person may be examined as to their assets, and if the judgment debt is of the necessary amount he may be made bankrupt if he fails to comply with a bankruptcy notice served on him by the judgment creditors.

A party is a person or group of persons that compose a single entity which can be identified as one for the purposes of the law. Parties include: plaintiff, defendant, petitioner, respondent, cross-complainant, or cross-defendant. A person who only appears in the case as a witness is not considered a party.

Issue and result

The Supreme Court was asked to determine whether the Pennsylvania proceeding was a bar to the action in California. The Supreme Court found for Dunlevy; holding A party to an action does not, after final judgment, still remain in court and subject, without further personal service, to whatsoever orders may be entered under the title of that cause. Interpleader proceedings brought by a garnishee are not essential concomitants of the original action in which the judgment was rendered on which the garnishment is based, but are collateral, and require personal service on the judgment debtor. Smith v. Woolfolk , 115 U.S. 143; Reynolds v. Stockton , 140 U.S. 254; Owens v. Henry , 161 U.S. 642; Hovey v. Elliott , 167 U.S. 409; Freeman on Judgments, 4th ed., § 143. Any personal judgment which a state court may render against one not voluntarily submitting to its jurisdiction, nor a domiciliary of the state nor served with process within its border, no matter what the mode of service, is void because the court has no personal jurisdiction. Pennoyer v. Neff , 95 U.S. 714.

<i>Res judicata</i> Claim preclusion in law

Res judicata (RJ) or res iudicata, also known as claim preclusion, is the Latin term for "a matter [already] judged" and refers to either of two concepts: in both civil law and common law legal systems, a case in which there has been a final judgment and is no longer subject to appeal; and the legal doctrine meant to bar continued litigation of a case on same issues between the same parties. In this latter usage, the term is synonymous with "issue preclusion".

In law, a judgment is a decision of a court regarding the rights and liabilities of parties in a legal action or proceeding. Judgments also generally provide the court's explanation of why it has chosen to make a particular court order.

Garnishment is a legal process for collecting a monetary judgment on behalf of a plaintiff from a defendant. Garnishment allows the plaintiff to take the money or property of the debtor from the person or institution that holds that property. A similar legal mechanism called execution allows the seizure of money or property held directly by the debtor.

Subsequent history

The Federal Interpleader Act of 1917 39  Stat.   929 was enacted by the 64th United States Congress approved February 22, 1917 to over come this problem in this case for insurance companies to bring an interpleader against beneficiaries in different states. Federal Interpleader Act of 1917 allowed an insurance company, or fraternal benefit society subject to multiple claims on the same policy to file a suit in equity by a bill of interpleader in United States District Courts and providing nationwide service of process, minimal diversity jurisdiction of two or more of the beneficiaries must live in different states and a lower amount in controversy of at least $500. [5]

The Federal Interpleader Act of 1917 39 Stat. 929 was United States federal legislation enacted by the 64th United States Congress approved February 22, 1917. In 1925 it was codified in the United States Code as 28 U.S.C. 41(26) (1925).

<i>United States Statutes at Large</i> An official record of Acts of Congress and concurrent resolutions

The United States Statutes at Large, commonly referred to as the Statutes at Large and abbreviated Stat., are an official record of Acts of Congress and concurrent resolutions passed by the United States Congress. Each act and resolution of Congress is originally published as a slip law, which is classified as either public law or private law (Pvt.L.), and designated and numbered accordingly. At the end of a Congressional session, the statutes enacted during that session are compiled into bound books, known as "session law" publications. The session law publication for U.S. Federal statutes is called the United States Statutes at Large. In that publication, the public laws and private laws are numbered and organized in chronological order. U.S. Federal statutes are published in a three-part process, consisting of slip laws, session laws, and codification.

64th United States Congress

The Sixty-fourth United States Congress was a meeting of the legislative branch of the United States federal government, composed of the United States Senate and the United States House of Representatives. It met in Washington, DC from March 4, 1915, to March 4, 1917, during the third and fourth years of Woodrow Wilson's presidency. The apportionment of seats in the House of Representatives was based on the Thirteenth Census of the United States in 1910. Both chambers had a Democratic majority.

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References

  1. ↑ N.Y. Life Ins. Co. v. Dunlevy, 241 U.S. 518 (1916).
  2. ↑ Dunlevy v. New York Life Ins. Co.,204F.670( N.D. Cal. 1913).
  3. ↑ N.Y. Life Ins. Co. v. Dunlevy, 214F.1( 9th Cir. 1914).
  4. ↑ Ruff v. Ruff,85Pa.333(1878).
  5. ↑ Cleary, James T. "Federal Interpleader and Some Recent Cases". Georgetown Law Journal. 26: 1017.
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