or

mutual fire insurance company in pursuance of Laws 1881, c. 91. On the 8th day of September, 1887, the plaintiff, Taylor, in behalf of himself and other creditors, brought this action, alleging the insolvency of the company, for an injunction restraining the corporation from exercising any of its corporate rights, privileges, or franchises, and from receiving or pay ing out any moneys, and for the appointment of a receiver to wind up its affairs. On the 9th day of September the defendant answered, admitting its insolvency, and expressly consenting to such order in the premises as the court might deem just and proper to protect the interests of all persons concerned in the business affairs of the company; and thereupon, on the same day, an order was made by the court appointing a receiver, and an injunction issued. The party named as receiver in such order having refused to serve, the St. Paul Trust Company was thereafter, on the 10th day of September, duly appointed such receiver, and subsequently qualified and accepted the trust. Subsequent to such appointment, and in the evening of the same day, Messrs. C. A. Smith & Co., who held a policy issued by the company, and who have been joined as parties to this proceeding, suffered a loss by fire of the property covered by their policy, and now ask an adjudication of their claim. Under the act referred to and the policies issued by the company all the policy-holders became and were members of the company during the period of insurance. They were therefore bound by the appearance and answer of the company, and the order of the court thereon was equivalent to an adjudication of its insolvency at that date, and placed its affairs and assets in the hands of the receiver, who was invested with the usual powers of receivers in such cases. The result is, the business and corporate functions of the company were suspended, and its property and assets had been taken possession of by the court, to be administered as in the case of an insolvent corporation, before the loss in question occurred. The question here presented is the effect of these proceedings upon outstanding policies. The affairs of the company were as completely in the hands of the court for settlement as if there had been a formal judgment dissolving the corporation. No issues remained to be determined, and the receiver was obliged to wind up its business under the direction of the court. Each member of the company was liable for losses in proportion to the amount of his premium note, which was the limit of his liability; and the aggregate cash premiums, investments, and interest, with the premium notes, constituted the capital of the corporation. There is no stock or stockholders, and no other fund for the payment of claims. Mygatt v. Insurance Co., 21 N. Y. 65. The only remedy available for creditors is to reach these assets. But in this instance the association, representing all the men. bers, had ceased to control its assets, and had been put into liquidation before the loss occurred. It exists, and the membership of the policy-holders is continued,

solely for the purpose of settling up its affairs. The effect was to terminate all contracts of insurance at the date of the appointment of the receiver. These contracts were not debts or fixed liabilities of the company. In respect to them its liability depended upon the contingency of losses by the assured during the life of the policies; and when losses have not occurred before the adjudication of insolven. cy the only liability to the policy-holder is for the breach or cancellation of the contracts by the adjudication of insolvency and consequent suspension of business by the company, and its disability to fulfill its contracts of indemnity, (People v. Insurance, etc., Co., 78 N. Y. 125.) and the measure of damages is the surrender value of the policies, (Carr v. Insurance Co.. 33 Mo. App. 296.) The loss in this case had not occurred until after the adjudication of insolvency. The policy of the claimants must therefore be determined to stand on the same footing as those of other members of the company not yet matured. Com. v. Insurance Co., 119 Mass.51; Mayer v. Attorney General, 32 N. J. Eq. 824. Order affirmed.

SHEPHERD V. WARE et al. (Supreme Court of Minnesota. May 12, 1891.) ADVERSE CLAIMS-SERVICE BY PUBLICATION— CONSTITUTIONAL LAW.

1. The state may clothe the district court with power to adjudicate the title and ownership of real property upon constructive service of process on adverse claimants.

2. In such cases the judgment is to be limited in its effect to the property described in the complaint, and the action is in the nature of a pro

ceeding in rem.

3. The legislature may therefore provide for constructive or substituted service of process in actions to determine adverse claims to land, in cases of necessity or where personal service is impracticable, and with a reasonble exercise of such legislative discretion the courts will not interfere.

4. Laws 1881, Ex. Sess. c. 81, providing for the service of process upon unknown claimants in that class of actions, held constitutional.

(Syllabus by the Court.)

Appeal from district court, Mower county; FARMER, Judge.

French & Wright, (Williams, Goodenow & Stanton, of counsel,) for appellants. Kingsley & Shepherd, for respondent.

VANDERBURGH, J. This is an action to recover the possession of certain land described in the complaint, alleged and admitted to be in defendants' possession. Upon the evidence disclosing the claim and title of each party to the premises, the court found in favor of the plaintiff. It appeared that the plaintiff claims title under one Daniels, from whom he received a conveyance of the premises in 1889. It is found by the court that Daniels, in 1882, by virtue of certain tax-sales, had color of title to the land, and in November of that year commenced an action to quiet the title and determine adverse claims under the statute, in which action one "Benjamin Homan and all other persons or parties unknown, claiming any right, title, or interest in the real property described in

the complaint, on file in the action, and their unknown heirs, were defendants." The action proceeded against the parties defendant as above described, and the summons was served by publication, in pursuance of the provisions of Gen. St. 1878, c. 75, § 2, as amended, (Gen. Laws 1881, Ex. Sess. c. 81.) The court found that the provisions of that chapter were in all things complied with as to the parties and procedure, and that judgment was rendered by default in Daniels' favor in March, 1888, whereby, among other things, it was adjudged that Daniels was the owner and entitled to the quiet and peaceable possession of the premises. The original patentee was Benjamin Homan, who entered the land at the United States land-office in 1856, and to whom a patent was issued in 1857, and the land was certified for taxation by the register of the land-office, as entered by Benjamin Human, and the certificate duly filed in the office of register of deeds of the proper county prior to October 31, 1857. No question is raised here upon the mistake in the name of the patentee, recorded as "Human" instead of "Homan." The patent to Homan was not recorded till 1885. The defendant Ware claims title by deed dated in 1885, under mesne conveyances from the patentee, none of which were recorded until 1883. The trial court held that the judgment in the action brought by Daniels against “Human and unknown claimants" bound the defendants, and ordered judgment for the plaintiff herein. At the time the former action was commenced the title appeared of record in Homan, that is to say, no grantee had recorded his deed; but the title had in fact passed to one Bragg, who acquired title through intermediate conveyances in 1879, all of which were recorded with his in 1883. It was necessary, therefore, that Bragg should have been made a party to the suit brought by Daniels in 1882, when the lis pendens was filed, in order to make his judgment effectual. But if the suit in form against Homan, in whom the title appeared of record, and the unknown claimants, was sufficient to conclude Bragg, then the record of this notice of lis pendens, filed when that suit was commenced, would also bind his grantee in a subsequent deed; that is to say, if the summons, in the form published in that action, was sufficient notice to Bragg, the judgment therein is valid and binding on Ware, It being conceded that the statute in question providing for this mode of service upon unknown claimants, in the manner therein provided, was complied with, the only question to determine is whether the act in question is constitutional. The defendant claims that the procedure is not due process of law, and that the judgment is void. The question, then, is whether the legislature has the power, in actions to determine adverse claims to real property, to authorize proceedings by action against unknown claimants, and bind them by constructive notice thereof. It is conceded that constructive or substituted service may be authorized by the state, and resorted to in all actions or proceedings touching real

Ac

property, which are properly denominated actions or proceedings "in rem." Such are actions to partition real estate, proceedings to enforce the collection of taxes against lands, and for the condemnation of land. Pennoyer v. Neff, 95 U. S. 727. tions quia timet in respect to land, to remove a cloud, or to determine adverse claims, are equitable in their nature, and, strictly speaking, equity acts upon the person, and not upon property; and in these actions the judgment affects the claim or title to the land, and they are not strictly actions in rem, but they concern real estate lying within the jurisdiction of the court. And the state may clothe the court with full power to inquire and adjudicate as to its status, title, and ownership, and it is now well settled that, as respects the procedure provided, and the constructive service of notice by publication upon non-resident defendants, at least, actions of this kind are to be classed with actions in rem. Arndt v. Griggs, 134 U. S. 322-326, 10 Sup. Ct. Rep. 557; Lane v. Innes, 48 Minn. 137, 45 N. W Rep. 4.

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The question is not what a court of equity, under its general powers as such, may do, but what the state may authorize in actions to adjudicate the title to real estate. Thus it is said in Boswell's Lessee v. Otis, 9 How. 348, 350: "It is immaterial whether the proceeding against the property be by attachment or by bill in chancery. It must be substantially a proceeding in rem. A bill for the specific execution of a contract to convey real estate is not strictly a proceeding in rem, in ordinary cases, but when such a proceeding is authorized by statute, on publication, without personal service of process, it is substantially of that character. And the inquiry should be, have the requisites of the statute been complied with, so as to subject the property in controversy to the judgment of the court, and is such judgment limited to the property named in the bill?" The judgment can affect the property only, and the defendant is not personally bound beyond it. And such, in substance, is the character of this action. Its object is an adjudication of the state of the title, and the judgment goes no further. And by the procedure under consideration, the proceedings are instituted by filing the complaint, and recording the lis pendens against the property, and followed by the publication provided for. This aspect of the question was not considered by this court in its reference to this class of actions in Bardwell v. Collius, 44 Minn. 97, 46 N. W. Rep. 315.

It is a case, then, where constructive or substituted service of notice upon adverse claimants may be made. Under the constitution, legal proceedings in the courts are under the direction of the legislature, subject, of course, to the fundamental provisions of the bill of rights. But the guaranty of "due process of law" does not necessarily require personal service of notice upon parties resident or non-resident. The legislature may, in its discretion, provide for substituted service in case of necessity, or where personal notice is for any reason impracticable, in an action where

the controversy relates to property which is within the jurisdiction of the court, and with a reasonable exercise of such legislative discretion the courts will not assume to interfere. Thus attachments are allowed against the property of absconding or concealed debtors within the state, and judgments rendered and their property sold after notice by publication. Other familiar examples might be cited. "The right of the legislature to make such provision, in proper cases, has never been doubted, but has long been recognized and acted on." Cooley, Const. Lim. *404; In re Empire City Bank, 18 N. Y. 215; Burnam v.Com., 1 Duv. 210. Clearly within the rule stated are statutory regulations providing for the service of notice by publication upon unknown heirs and claimants, in cases involving the settlement of estates or the title to lands. As in other cases, "where actual notice cannot be given, there must either be no remedy, or constructive notice must be substituted as sufficient, and what constructive notice shall be given is a question of legislative discretion rather than of power." Burnam v. Com., supra. Ordinary civil actions against known residents of the state do not fall within this rule. Bardwell v. Collins, supra. Similar provisions are found in the statutes of several of the states, and their validity is upheld by the courts. Rev. St. Wis. 1878, §§ 1208, 2639, 3196; Truesdell v. Rhodes, 26 Wis. 215; Gray v. Gates, 37 Wis. 614; Hynes v. Oldham, 3 T. B. Mon. 267. In the case of Hollingsworth v. Barbour, 4 Pet. 475, cited by defendant, there was no statute authorizing constructive service by publication, and the decision rests upon that ground. The act in question here provides that, in actions to determine adverse claims, the plaintiff may include as defendants in such actions, and insert in the title thereof, in addition to the names of such persons or parties as appear of record to have, and other persons or parties who are known to have, some title, claim, estate, lien, or interest in the lands in controversy, the following, viz.: "Also all other persons or parties unknown, claiming any right, title, estate, lien, or interest in the real estate described in the complaint herein." And service of the sunmons may be had upon all such unknown persons or parties defendant, by publication, as provided by law in case of nonresident defendants. The statute further provides that such unknown defendants should have the same rights as defendants named, who are served by publication; that is to say, the same right to appear and defend, before and after judginent. The provisions of a statute, upon a subject of so great importance, might well have been more complete and definite as respects the procedure to be followed; but this was a matter fairly within the legislative discretion, and the statute is operative and sufficient to authorize the constructive service by publication upon claimants or interested parties who are in fact unknown. But its provisions must be strictly construed and followed. The published suminons must contain the names of parties who are known, and

those whom the record shows to have some claim, interest, or lien, so as to preserve the distinction between known and unknown parties; and to this end reasonable diligence will be required to ascertain such as are known, in order to comply with the directions of the statute, and effectuate its purpose in the publication of the notice. We think the statutory provisions are sufficient for the purposes intended, and, as they were complied with in this case, we must assume that the court had jurisdiction, and the judgment in question was valid. Judgment affirmed. lid.

WARE V. EASTON.

(Supreme Court of Minnesota. May 12, 1891.) ADVERSE CLAIMS - UNKNOWN CLAIMANTS-SERVICE BY PUBLICATION.

1. The provisions of Gen. Laws 1881, Ex. Sess. c. 81, for the service of process upon unknown claimants by publication, in actions to determine adverse claims to real property, must be strictly construed and complied with; and, if it is sought in such an action to bar unknown persons claiming under the patent title, the party in whose name that title appears of record must be named as a defendant in the proceedings.

2. Where it appeared that the land in controversy had been patented to H., and that K. and D. were holders of tax-titles, and the latter only were named in the complaint and summons, together "with all other persons or parties unknown claiming any right, " etc., notice held insufficient, as against unknown persons claiming title under H.

Appeal from district court, Mower county; FARMER, Judge.

Kingsley & Shepherd, for appellant. French & Wright, (Williams, Goodenow & Stanton, of counsel,) for respondent.

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VANDERBURGH, J. In the year 1883 the defendant, having a tax-title of the land in dispute, brought an action to determine adverse claims thereto, under Gen. St. 1878, c. 75, § 2, as amended by chapter 81, Laws 1881, Ex. Sess., and named, as parties defendant, Benjamin Keenan, E. Daniels, also all other persons or parties unknown, claiming any right, title, estate, lien, or interest in the real estate described in the complaint on file in the above entitled action, and their unknown heirs;" and caused the summons therein, as so entitled, to be published as in ordinary cases of non-resident defendants, together with a notice of lis pendens, containing the proper description of the land, which notice had been duly recorded. Neither Keenan nor Daniels, the only defendants who were specifically designated by name, claimed under the patent title, or are shown by the records to have had any interest in the land, except by virtue of tax-sales. The land was entered at the United States land-office in the year 1856, by Benjamin Homan, who received a patent therefor October 31, 1857. After the entry, and prior to the patent, the land was certified for taxation as having been entered by Benjamin Human, and the certificate was duly filed in the office of the register of deeds of the proper county. The dates and description in the certificate sufficiently identify the purchaser of this land with the patentee, so that the variance or mistake in the spelling is not ma

In

terial. The patent was not recorded until after defendant recovered judgment in the action referred to, which was in 1883. 1863 the patentee Homan conveyed the premises to one Woods, and in 1879 the title acquired by him passed, through mesne conveyances, to one Bragg, who held the original title when this action was brought, and the plaintiff derives title from him. But the patent and all the conveyances of the patent title were not recorded until 1885. It is claimed that the summons was defective in not naming Homan, the patentee of the land, as one of the defendants; and we think this objection well taken. In so far as the records disclosed, he was the owner of the government title. The defendant was bound to take notice that Homan was the patentee of the land, as well from the government records as those of the coun- | ty. The important provisions of this statute, as a means of notice to the unknown claimants, are the designation of the names of interested parties who are known and those who appear such by the records, together with the publication of the notice of lis pendens containing a description of the land, and the record of the same. If the land appears to have been entered by Homan and his grantees, if any, are unknown, and not disclosed by the records, the most effectual notice to those claiming under him would be to name him, in connection with the general designation of such unknown claimants. The statute must be strictly construed and followed, and it is enough that it requires such parties to be specially named. If any one appearing by the record to be the owner of the patent title under the original owner is designated, of course it would not be necessary to name any preceding owner under whom he claimed; but he who appears to be the owner of record must be named, unless the actual holder of the title can be discovered and named; that is to say, if it be desired to bind un known parties claiming some right or interest derived from or under the original patentee of the United States. The same rule would apply mutatis mutandis to parties claiming a separate title under the state through tax-sales. The statute was not complied with in the case under consideration here. The notice was insufficient to bind Bragg, the owner of the patent title at that time, and the judgment is void as to him and those claiming under him. Judgment affirmed.

RACHELMAN V. SKINNER et al. (Supreme Court of Minnesota. May 12, 1891.) DISSOLUTION OF ATTACHMENT-WAIVER OF RIGHT -ACTION FOR WRONGFUL ATTACHMENT.

1. Where the defendant in an attachment voluntarily procures its discharge ex parte by executing the statutory bond provided for by Gen. St. c. 66, § 157, he waives his right to move to dissolve the attachment under section 158.

2. Where the attachment is dissolved in this way by the voluntary action of such defendant, and without an opportunity to the opposite party to test its validity in the same proceeding, an action for wrongfully procuring it to issue cannot ordinarily be maintained.

(Syllabus by the Court.)

|

Appeal from district court, Ramsey county; SEARLE, Judge.

S. L. Pierce and Henry B. Farwell, for appellant. C. D. & Thos. D. O'Brien, for respondents.

He

VANDERBURGH, J. The action is brought to recover damages for the issuance of an attachment against the property of the plaintiff, alleged to have been maliciously sued out by the defendants. Shortly after the issuance thereof the plaintiff voluntarily executed the hond provided for by section 157, c. 66. Gen. St., and procured an order discharging the attachment. also afterwards moved to set aside the attachment upon affidavit and notice, and the court, after hearing the parties, granted the motion, and made an order setting the same aside, together with the bond previously given by the defendant to procure the discharge thereof. Upon the trial of this action the court held that the plaintiff had waived his objection to the validity of the attachment by procuring the first order, and accordingly dismissed the case. We think the better opinion is that by the execution of the bond the plaintiff waives his right to proceed by motion under section 158, and that, as the bond has the effect to discharge the attachment, the case stands as if no attachment had been issued. It was not intended to preserve to the defendant in the attachment suit the right to both remedies. Dierolf v. Winterfield, 24 Wis. 143; Shevlin v. Whelen, 41 Wis. 93; Hazelrigg v. Donaldson, 2 Metc. (Ky.) 447; Inman v. Strattan, 4 Bush, 445; Kennedy v. Morrison, 31 Tex. 221. In New York the right to move to set aside the attachment in all cases is expressly saved by the statute. As the attachment had already been discharged, the plaintiff gained nothing by the inotion, for, unless the motion was legally authorized, the order made thereon would not have the effect to restore any legal rights previously waived. The attachment proceedings were therefore terminated by the voluntary act of the defendant therein in executing the statutory bond and procuring the order for the discharge of the attachment. The plaintiffs in that action had no opportunity to oppose or be heard on the question of the validity of the attachment before discharge. The propriety of issuing it was not legally tried. For aught that appears this plaintiff could have had it tried in the same proceeding by making the ordinary motion, and so have caused such proceeding to be determined. It was held in Pixley v. Reed, 26 Minn. 81, 1 N. W. Rep. 800, that the propriety of issuing the writ should ordinarily be thus tried before an action can be brought for procuring its issue. Rossiter v. Paper Co., 37 Minn. 297, 33 N. W. Rep. 855; Cooley, Torts, 188; Marbourg v. Smith, 11 Kan. 554. The cases first cited proceed upon the theory that the effect of the execution of the bond and procuring the discharge by the defendant in the attachment proceeding is a waiver of any objection to the validity of the prior proceedings in issuing it. At all events the validity of the attachment was not tested in that proceeding, and no reason ap

pears why it could not have been done. The case falls within the rule of Pixley v. Reed, and the order denying a new trial is affirmed.

COPLEY V. HYLAND.

(Supreme Court of Minnesota. May 12, 1891.) SETTING ASIDE ACCORD-FRAUD.

Plaintiff, by an instrument under seal, assigned and conveyed to the defendant one-third of the estate acquired by him under the will of their ancestor in settlement of a dispute and threatened lawsuit respecting the validity of his will. Held that, being an executed transfer, it would be set aside for fraud only, and that the evidence in the case was insufficient to show that it was procured by fraud.

(Syllabus by the Court.)

Appeal from district court, Hennepin County; SMITH, Judge.

E. A. Campbell, for appellant. Rea, Miller & Torrance, for respondent.

VANDERBURGH, J. The plaintiff and defendant are children and heirs at law of John Copley, late of Hennepin county, deceased, who left a will, by which, after the payment of divers small legacies, including one of $50 to the defendant, he devised and bequeathed to the plaintiff onehalf of all the residue of his estate, amounting in value to the sum of $25,000, and to two other legatees each one-quarter thereof. The will was admitted to pro. bate June 19, 1885, but defendant, who was a non-resident, did not learn the fact, and had no notice thereof until in Octo. ber following, when she immediately came to Minnesota, and, after inquiry into the circumstances of the execution of the will and the mental conditon of her father, who was at the time of the age of 80 years or upwards, determined to contest its validity in the courts. She thereupon informed the plaintiff of her intentions, and that the grounds of her proposed contest were that the instrument in question was not the will of John Copley, and that at the time of its execution he was not of sound mind and memory, and was subjected to undue influence. Thereupon the parties entered into negotiations for a settlement, which resulted in the execution of the instrument in question here, which the plaintiff now seeks by this action to set aside, on the ground that the same was procured by fraud, and was without consideration. This instrument is an executed agreement under seal, whereby, for the nominal consideration of one dollar, the plaintiff assigned and granted to the defendant one-third of all the estate vested or to be vested in him under the will of the deceased. It will not therefore be set aside for want of consideration merely. Lamprey v. Lamprey, 29 Minn. 151-155, 12 N. W. Rep. 514; Houghton v. Lees, 1 Jur. (N. S.) 862; Pom. Cont. p. 81. Upon the issue of fraud the court finds in defendant's favor, and the record supports the finding. There is evidence tending to show grounds for her belief and statements in respect to the execution of the will, and there is nothing in

the case to show that he had not equal or better opportunities of knowing the facts than she, or that he was deceived or misled by her statements. It was evidently a voluntary and not inequitable settlement of their controversy over the division of the property. There is no ground for disturbing the decision of the trial court. Order affirmed.

ANDERSON v. REARDON. (Supreme Court of Minnesota. May 12, 1891.) ACTIONS BY ASSIGNEES.

Where the owner of a chose in action executes to another an assignment of it, absolute in terms, such assignee is the party in legal interest, and may maintain an action on the demand agreement between the assignor and assignee that in his own name, although there be a verbal the latter, when he collects the money, shall hold it as trustee for the former.

(Syllabus by the Court.)

Appeal from municipal court of St. Paul; CORY, Judge.

Samuel A. Anderson, for appellant. Lawler & Durment, for respondent.

MITCHELL, J. One Mrs. Scherer executed to plaintiff a written assignment of the demand upon which this action was brought. It appeared from the evidence that, although the written assignment was unqualified and unrestricted in its terms, yet there was a verbal understanding between the assignor and assignee that out of the proceeds of the claim, when collected, the latter was to retain the amount due him for services already rendered, and to be thereafter rendered, by him to the former, and also pay certain debts owed by her to third parties, and then remit the balance, if any, to her. It also appeared that, when this action was commenced, the plaintiff had already collected on the demand enough to pay his own claim for services up to that time. When the plaintiff rested, the trial court dismissed the action, on the ground that the plaintiff was not the real party in interest. This was error. By virtue of the assignment the plaintiff became the legal owner of the claim, and as such could maintain the action. It is no concern of the defendant whether the assignee of a claim receives the money on it in his own right or as trustee of the assignor. It is enough for him to know that the plaintiff is the party in legal interest, and that a recovery by him will be full protection against another suit by the assignor. There is no room for the distinction in this respect sought to be made by defendant between negotiable paper and other choses in action. Castner v. Austin, 2 Minn. 44, (Gil. 32;) Vanstrum v. Liljengren, 37 Minn. 191, 33 N. W. Rep. 555; Elmquist v. Markoe, (Minn.) 47 N. W. Rep. 970. It is suggested that certain exhibits which were introduced in evidence are not made a part of the settled case. This is true, but we think that their nature and contents sufficiently appear from the "case." Order reversed.