Opinion
No. 30012.
November 21, 1932.
1. BANKS AND BANKING. Writ of attachment, issued and levied at commencement of suit, on realty belonging to defendant national bank, held properly quashed (12 U.S.C.A., sec. 91.)
Rev. St. U.S., sec. 5242 (12 U.S.C.A., sec. 91) provides in part that "no attachment . . . shall be issued against such association (a national bank) or its property before final judgment in any suit, action, or proceeding, in any state, county or municipal court."
2. COURTS.
Court may acquire right to proceed with action at law or suit in equity, if same is within its general jurisdiction, as against person of defendant, by service of process, or by procedure against property of defendant within court's jurisdiction.
3. COURTS.
Jurisdiction of court to proceed with suit to enforce claim against nonresident owner of property, depends on seizure of property, or its equivalent.
4. COURTS. Where realty of nonresident defendant was not seized, court held without jurisdiction of suit against defendant for breach of contract to sell realty ( Const. 1890, sec. 159).
Complainants brought suit against the defendant national bank for damages for breach of contract to sell realty. The bill of complaint prayed for process including a writ of attachment to be levied on described realty owned by the defendant, and to subject such realty to the payment of any judgment that might be obtained. The writ of attachment was issued and levied, but under Rev. St. U.S., sec. 5242 (12 U.S.C.A., sec. 91), was improperly issued and therefore quashed. The defendant was a nonresident national bank, and the court had not acquired personal jurisdiction over it.
APPEAL from chancery court of Sunflower county. HON. J.L. WILLIAMS, Chancellor.
Moody Johnson, of Indianola, and O.S. Cantwell, of Sunflower, for appellants.
The general rule undoubtedly is that a court of equity will not lend its aid to enforce a legal demand until there has been a judgment at law, and in some cases, an execution thereunder, with a return of nulla bona. But the rule never was of universal application, and was limited by the reason upon which it rested. It would be a surprising condition of affairs if a non-resident debtor owning property in this state to resident here could never have been compelled to pay his debts by the courts of this state exercising their common-law jurisdiction. The authorities are numerous that, under such circumstances, resort may be had to equity in the first instance.
Dollman v. Moore, 70 Miss. 267, 12 So. 23; Farrar v. Haselden, 9 Rich. Eq. 331; Gordon v. Warfield, 21 So. 151-152-3.
The attachment in chancery statute did not create any new remedy. As pointed out in Dollman v. Moore, 70 Miss. 267, 12 So. 23, 19 L.R.A. 222, it did no more than give distinct expression to that which had been recognized as being within chancery jurisdiction from the earliest times in this country, namely, when a debtor is absent from this state, and has property or effects here which cannot be effectively reached at law, chancery would give relief. It was never required that a litigant here should go to a foreign jurisdiction to pursue his debtor, nor take the risk that property or effects here would presently be sold or removed by the absent debtor. The rule was based upon that dominant principle that when there is no full, adequate and complete remedy at law, chancery would give relief: but there is no such case as that here, or anything which even approaches it in substance and in fact.
Clark v. Louisville N.R. Co., 130 So. 302, 311.
In the case now before the court, the jurisdiction of the lower court, as a court of equity, was invoked not by virtue of the statute, but by virtue of the constitution as applied in the Dollman case. The prayer for the attachment is not to vest jurisdiction in the court, but merely to create a lien on the property from the time the bill was filed. Hence the attachment could be, as it was, discharged and the jurisdiction in no wise affected.
When a court of equity has, or has conferred on it, jurisdiction of the res, that jurisdiction is acquired by bill in chancery, and not by a preliminary seizure of the res, by attachment or otherwise, unless it is otherwise provided.
Every state owes protection to its own citizens; and when non-residents deal with them, it is a legitimate and just exercise of its authority to hold and appropriate any property owned by such non-residents to satisfy the claims of its citizens.
Pennoyer v. Neff, 24 Law Ed. 565.
The object of attachment as it is now regulated by usage and by statute, is to give the creditor, upon the commencement of his suit, a lien upon the real estate of his debtor. . . . It constitutes a real lien, which can be made available upon condition that he shall recover a judgment in that suit.
Sanders v. Columbus Life, etc., Insurance Company, 43 Miss. 583, 593.
The chancery court, which was established by the Constitution, has, as a court of equity, inherent jurisdiction to subject property in this state belonging to a non-resident to the payment of his debts.
Dollman v. Moore, 70 Miss. 267; Gordon v. Warfield, 74 Miss. 553.
The action being essentially one in rem or quasi in rem, and the courts of the state where the land is situated having jurisdiction of the subject-matter of the suit, the the jurisdiction of defendant, so far as to enable the court to determine the extent of his title to the land, may be acquired by any reasonable method of imparting notice provided by statute.
51 C.J. 204-5.
Suits of this nature are not technically suits in rem, nor are they strictly speaking, in personam, but, being against the person in respect of the res, wherein the decree does not extend beyond the property in controversy, these proceedings acquire a status that may be characterized as suit quasi in rem.
McDaniel v. McElvy, 51 A.L.R. 731, 746; 51 C.J. 141, sec. 12; Louisville N.R. Co. v. Western U. Tel. Co., 58 Law Ed. 1356.
Quasi in rem is a term applied to proceedings which are not strictly and purely in rem, but are brought against defendant personally, although the real object is to deal with particular property or to subject property to the discharge of claims asserted.
1 C.J. 929, sec. 6.
An action to enforce specific performance of a contract to convey land is of this nature, especially against a non-resident, and courts of equity have jurisdiction when there is not an adequate and complete remedy at law.
36 Cyc. 543.
Jurisdiction is acquired in one of two modes; first, as against the person of the defendant, by the service of process; or second, by a procedure against the property of the defendant, within the jurisdiction of the court. In the latter case the defendant is not personally bound by the judgment, beyond the property in question. And it is immaterial whether the proceeding against the property be by an attachment or bill in chancery.
Boswell v. Otis, 13 Law Ed. 164.
While the general rule in regard to jurisdiction in rem requires the actual seizure and possession of the res by the officer of the court, such jurisdiction may be acquired by acts which are of equivalent import, and which stand for and represent the dominion of the court over the thing, and, in effect, subject it to the control of the court.
Cooper v. Reynolds, 19 Law Ed. 932.
The cases in which it has been held that a seizure or its equivalent an attachment or execution upon the property, is necessary to give jurisdiction, are those where a general creditor seeks to establish and foreclose a lien thereby acquired.
Roller v. Holly, 44 Law Ed. 523.
The suit in the instant case is no more an action in rem than is a suit to remove clouds from title to land, or vice versa.
There is a general statute providing for process in suits against a non-resident.
Section 2972, Code of 1930.
Where the statute specifies certain classes of cases which may be brought against nonresidents, such specification doubtless operates as a restriction and limitation upon the power of the court; but where the power is a general one, we know of no principle upon which we can say that it applies to one class of cases, and not to another.
Roller v. Holly, 44 L.Ed. 520.
This is not a suit for the recovery of specific property, or to enforce a lien thereon, but it is a suit to subject specific property of a nonresident, which is located in this state, to payment of the debt owing to the complainant, which suit is authorized and for which process is provided and may be termed a suit quasi in rem as in a suit to enforce specific performance of contracts to convey land, or remove clouds from titles.
As a general rule, jurisdiction of the res is acquired by bill in chancery and not by seizure, by attachment, or otherwise, as in suits to enforce the specific performance of contracts to convey land and remove clouds from the title thereon, even though such suits are in personam, and not in rem. That jurisdiction is acquired in suits against nonresidents under the general statute, providing for process by publication, etc., which is applicable to all suits against nonresidents unless there is a statute applicable to a particular suit, as for instance in suits to confirm tax titles and other titles to real estate, which is a limitation of the general statute as to particular suits. Therefore, as to all suits for which there is no statute specially applicable the general statute applies and, of course, as well to the suit now under consideration, and to suits to remove clouds from titles, etc. Hence the court below acquired jurisdiction by bill in chancery and by process as provided by the general statute, and not by seizure, by attachment or otherwise.
The chancery court is established by the Constitution, and, by that Constitution, given "full jurisdiction in all matters in equity." This jurisdiction includes the power to subject any property owned by a nonresident located in this state to satisfy the claim of a complainant, without a preliminary seizure of the property by attachment and without the complainant having obtained a judgment at law and nulla bona return thereon.
Constitution of 1890, sec. 159; Dollman v. Moore, 70 Miss. 267; Gordon v. Warfield, 74 Miss. 553.
Brewer Brewer, of Clarksdale, for appellee.
The quashing of the attachment was proper.
National City Bank v. Stupp Bros., 113 So. 340.
No attachment shall be issued against any national banking association or its property before final judgment in any suit, action or proceeding in any state, county or municipal court.
U.S.C.A., Title 12, sec. 91.
The language of the latter clause of this section would seem to be too plain to admit of discussion as to its meaning. It in terms forbids the issuing of an attachment, injunction, or execution against a national bank or its property before final judgment in any suit, action, or proceeding in any state, county, or municipal court.
Van Reed v. Peoples National Bank of Lebanon, 198 U.S. 554, 49 L.Ed. 1161.
As a general rule, the jurisdiction of the res or property is obtained by a seizure under process of the court whereby it is held to abide such order as the court may make.
15 C.J. 801; Cooper v. Reynolds, 10 Wall, 308, 19 L.Ed. 931; The Rio Grande v. Otis, 23 Wall, 458, 23 L.Ed. 158; Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565.
As a general principle, notice, either actual or constructive, to the party affected by the judgment of any court, is essential to its validity. But there is an exception to this rule, recognized at the common law, and by the jurisprudence of this state. This exception applies to the class of cases styled proceedings in rem, or suits in the nature of proceedings in rem. In these proceedings or suits, the judgments of the courts are conclusive against all persons interested in the subject-matter of the suit, whether they have had actual notice of the proceeding or not. And their validity and conclusiveness rests upon a principle of public policy. In these cases, it is considered that jurisdiction of the parties in interest is acquired by seizure of the thing which is the subject-matter of the litigation, and on which the judgment is to operate. The seizure of the thing is considered notice to all parties interested.
New Orleans, etc., R. Co. v. Hemphill, 35 Miss. 17.
The mere fact that property is within the jurisdiction of the court is not sufficient to justify an action in personam against defendant where he cannot be served with process; the property itself must be brought before the court.
15 C.J. 802; The Brig. Ann., 9 Cranch 289, 2 L.Ed. 608.
First, a personal judgment is without validity, if it be rendered by a state court in an action upon money demand against a nonresident, proceeded against by publication, but not personally served with process within the state, and not appearing. Second, no validity is imparted to such judgment by the fact that the defendant has, at the time the action is commenced, property within the state, upon which a levy can be made under the judgment.
Hill v. Henry, 66 N.J. Eq. 150, 57 A. 554.
Pennoyer v. Neff, is the leading authority in support of the now well settled proposition that, except as to proceedings affecting the personal status of the plaintiff, or in rem, or as to actions to enforce liens, or to quiet title, or to recover possession of property, or for the partition thereof, or to set aside fraudulent transfer thereof or to obtain judgment enforcement against property seized by attachment or other process, no state can authorize its courts to compel a citizen of another state remaining therein to come before them and submit to their decision a mere claim upon him for a money demand, no matter what the prescribed mode of service of process against him may be. An attempt to do so is not due process of law.
Cabanni v. Graf, 87 Minn. 510.
The generally prevailing rule is that a personal judgment rendered on constructive service is void for all purposes, even within the state where rendered, unless defendant appears, or unless specific property within the state is attached, and thus subjected to jurisdiction of the court.
33 C.J. 1086, par. 47.
If the defendant is a nonresident of the state, and has not entered his appearance in the action, a judgment for the sale of his attached property cannot be maintained where the recovery against him is only upon a cause of action for which no attachment could lawfully issue.
15 R.C.L. 633, par. 75.
The want of authority of the tribunal of a state to adjudicate upon the obligations of nonresidents, where they have no property within its limits, is not denied by the court below, but the position is assumed that, where they have property within the state, it is immaterial whether the property is in the first instance brought under the control of the court by attachment or some other equivalent act, and afterwards applied by its judgment to the satisfaction of demands against the owner; or such demands be first established in a personal action, and the property of the nonresident be afterwards seized and sold on execution. But the answer to this position has already been given in the statement, that the jurisdiction of the court to inquire into and determine his obligations at all is only incidental to its jurisdiction over the property. Its jurisdiction in that respect cannot be made to depend upon facts to be ascertained after it has tried the cause and rendered the judgment.
Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565; First National Bank v. Eastman, 103 A.S.R. 95.
The thing, the res, must first be brought under the control of the court by proper process, then the judgment can only go against the thing under the control of the court the res, is not under the control of the court, and therefore the court has no jurisdiction.
Delta Insurance Realty Co. v. Interstate Fire Ins. Co., 113 Miss. 542, 74 So. 420; Delta Insurance Realty Agency v. Fourth National Bank of Montgomery, Alabama, 137 Miss. 855, 102 So. 846.
J. Morgan Stevens, of Jackson, for appellee.
The statute expressly forbids the issuance of any attachment against a national bank before final judgment in any suit, action, or proceeding, in any state, county, or municipal court. Any proceeding by attachment against a national bank is void, and no lien is thereby acquired on the property of the bank, nor can jurisdiction be conferred either by consent or by waiver of objections.
7 C.J. 836.
The basis of jurisdiction of the chancery court in this case is statutory; and the court has no jurisdiction under the statute unless the following facts, exist, viz., the absence of the debtor, the presence here of effects in the hands of resident persons belonging to him or debts due to him by resident persons, or his having lands or tenements in this state. The above facts, or any one of them, might exist, and still the court would be without jurisdiction to proceed to judgment against the thing unless it be first brought under the control of the courts by proper process, against the land, or against the person having the effects belonging to, or owing the debt to, the nonresident defendant.
The thing, the res, must first be brought under the control of the court by proper process; then the judgment can only go against the thing under the control of the court.
Delta Ins. Realty Co. v. Interstate Fire Ins. Co., 113 Miss. 542.
No lien could be established until the writ was served. It is the seizure of property under attachment proceedings that create the lien on the property.
Slatterly v. R.L. Renoldt Lumber Company, 125 Miss. 229.
A state court cannot acquire jurisdiction against a nonresident in the absence of personal service, or the actual levy upon property within jurisdiction of the court.
Pennoyer v. Neff, 24 L.Ed. 565; Freeman v. Alderson, 30 L.Ed. 372; Cooper v. Reynolds, 19 L.Ed. 933.
The court, in such a suit, cannot proceed unless the officer finds some property of defendant on which to levy the writ of attachment. A return that none can be found is the end of the case, and deprives the court of further jurisdiction, though the publication may have been duly made and proven in court.
Freeman v. Alderson, 30 L.Ed. 372.
Where a writ of attachment has been issued and levied, the preliminary affidavit has served its purpose, and even though it be defective and an appellate court might find in it sufficient error to reverse the judgment this does not deprive the court of the jurisdiction acquired by the levy of the writ.
Stephenson v. Kirtley, 70 L.Ed. 213.
Seizure of the property, or the levy of a writ upon it, is the one essential requisite to jurisdiction.
Ontario Land Co. v. Wilfong, 162 Fed. 999; Campbell v. Farmers Mfg. Co., 203 Fed. 571; Roller v. Holly, 176 U.S. 405, 44 L.Ed. 523; McGillin v. Claffin, 52 Fed. 666; Blanc v. Paymaster Mining Company, 29 Am. St. Rep. 153, 30 P. 766.
Even if the contention of appellant that equity has original jurisdiction regardless of the statute be sound, nevertheless any such proceeding as contended for by opposite counsel would necessarily be an attachment contrary to the federal statute.
Argued orally by C.C. Moody, for appellant, and J. Morgan Stevens, for appellee.
The appellants exhibited an original bill against the appellee, a national bank having its domicile and principal place of business in Birmingham, Alabama, alleging, in substance, that the bank had agreed to sell to the complainants certain described land situated within the territorial jurisdiction of the court; that although the complainants stood ready, and had offered to comply with their part of the contract of sale, the bank refused to sell them the land, but, on the contrary, had sold a part thereof, making it impossible for the contract to be specifically performed, resulting in the appellants being damaged, for which they prayed a recovery, and that that portion of the land still owned by the bank be subjected to the payment of any judgment obtained by the complainants against the bank. The bill prayed for process including "a writ of attachment to be issued and be levied as required by law upon the above described land belonging to and owned by the defendant," and for a judgment for the amount of the complainants' damages for the payment of which that portion of the land agreed by the bank to be sold the complainants, and which it still owned, be subjected. A writ of attachment was issued and levied on the land in accordance with section 175, Code of 1930, and we will assume that the appellee was duly summoned by publication.
The bank appeared and filed a motion (1) to quash the writ of attachment under section 5242 of the Revised Statutes of the United States, being section 91, title 12, U.S.C.A., and (2) to dismiss the bill of complaint. This motion was sustained, the attachment quashed, and the bill dismissed. The federal statute relied on provides, among other things, that "no attachment, injunction or execution, shall be issued against such association (a national bank) or its property before final judgment in any suit, action, or proceeding, in any state, county, or municipal court."
The issuance and service of the writ of attachment is clearly within the prohibition of this statute, National City Bank of St. Louis v. Stupp Bros. Bridge Iron Co., 147 Miss. 747, 113 So. 340; and therefore the court below committed no error in quashing it. This the appellants admit, but say that the bill should have been retained and the case proceeded with under the general equity jurisdiction conferred on the court by section 159 of the state constitution.
It is undoubtedly true that courts of equity have jurisdiction independent of sections 173 et seq., Code of 1930, to subject property owned by a nonresident, situated within its territorial jurisdiction, to the payment of debts due by such nonresidents. Dollman v. Moore, 70 Miss. 269, 12 So. 23, 19 L.R.A. 222. The relation of the statute to the jurisdiction of courts of equity in cases of this character was aptly and succinctly set forth by Judge Griffith in Clark v. L. N.R. Co., 158 Miss. 287, 130 So. 302, 311, in the following statement, which is not in conflict with the main opinion therein, but reinforced the ground of his dissent therefrom: "The attachment in chancery statute did not create any new remedy. As pointed out in Dollman v. Moore, 70 Miss. 267, 12 So. 23, 19 L.R.A. 222, it did no more than give distinct expression to that which had been recognized as being within chancery jurisdiction from the earliest times in this country, namely, when a debtor is absent from this state, and has property or effects here which cannot be effectively reached at law, chancery would give relief. It was never required that a litigant here should go to a foreign jurisdiction to pursue his debtor, nor take the risk that property or effects here would presently be sold or removed by the absent debtor. The rule was based upon that dominant principle that when there is no full, adequate and complete remedy at law, chancery would give relief." See, also, Griffith's Miss. Chan. Prac., sec. 483.
When an action at law or a suit in equity is within the general jurisdiction of a court, it acquires the right to proceed therewith, after the filing of the declaration or bill of complaint, "in one of two modes; first, as against the person of the defendant, by the service of process; or secondly, by a procedure against the property of the defendant, within the jurisdiction of the court. In the latter case the defendant is not personally bound by the judgment, beyond the property in question. And it is immaterial whether the proceeding against the property be by an attachment or bill in chancery. It must be, substantially, a proceeding in rem." Boswell v. Otis, 9 How. 336, 348, 13 L.Ed. 164; Pennoyer v. Neff, 95 U.S. 714, 728, 24 L.Ed. 565; Cooper v. Reynolds, 10 Wall. 308, 19 L.Ed. 931; Pennington v. National Bank, 243 U.S. 269, 37 S.Ct. 282, 61 L.Ed. 713, L.R.A. 1917F, 1159.
The proceeding here is not to enforce a right to, interest in, or lien on, property of the type illustrated by Roller v. Holly, 176 U.S. 398, 20 S.Ct. 410, 44 L.Ed. 520, but is to enforce a claim against the owner of property, which of itself alone confers no right to, interest in, or lien on, the property, and what we shall hereinafter say must be confined thereto. It, this proceeding, is not strictly one in rem — that is, against the property itself, irrespective of its owner — but is substantially such; or, in other words, is quasi — in rem, Pennoyer v. Neff, supra, and the jurisdiction of the court to proceed therewith depends on its bringing the property within its control by seizure, or its equivalent. Authorities, supra, and Brown v. Board of Levee Commissioners, 50 Miss. 468; Delta Ins. Realty Co. v. Interstate Fire Ins. Co., 113 Miss. 542, 74 So. 420; 33 C.J. 1087; 15 R.C.L. 632; 3 Freeman on Judgments (5 Ed.), 1530.
The jurisdiction of the court in such a proceeding to inquire into and determine the defendant's asserted obligation to the complainant, is incidental to, and dependent on, its control over the property. And unless the property is brought within such control, it can be disposed of by its owner before final judgment, and the whole proceeding thereby rendered nugatory. To hold otherwise would not only be contrary to the authorities, but "would introduce a new element of uncertainty in judicial proceedings." Pennoyer v. Neff, supra.
But it is said by counsel for the appellants that in equity no seizure of the property is necessary to bring it within the control of the court; that the mere filing of the bill of complaint, followed by publication of summons for the owner of the property, has that effect, citing Dollman v. Moore, supra, and Gordon v. Warfield, 74 Miss. 553, 21 So. 151, therefor. Dollman v. Moore was a proceeding to subject a debt due by a resident defendant to a nonresident defendant, to the payment of a claim asserted by the complainant against the nonresident defendant, and all of the parties were before the court in person. The jurisdiction of the court, therefore, was complete. In Gordon v. Warfield, the complainant sued the defendant for damages on a cause of action which at law would have been in tort, alleged the nonresidence of the defendant, the ownership of land by her within the jurisdiction of the court, prayed that she be summoned by publication, that the amount of the complainant's damages be ascertained, and the land be subjected to the payment thereof. It is not clear from the case whether there was any seizure of the land, but the original record discloses that no seizure was had or prayed for. The defendant failed to appear, and a decree pro confesso against her was taken, and a final decree against her was thereafter rendered; on the appeal to this court the decree pro confesso was affirmed. The opinion therein does not refer specially to the necessity for bringing the property within the control of the court, and it is impossible to ascertain therefrom exactly what the court intended to hold thereon. If the ground of the decision is that it was not necessary to bring the property within the control of the court, it is contrary to all of the authorities elsewhere, and to Brown v. Board of Levee Commissioners, and Delta Insurance Realty Co. v. Interstate Insurance Co., supra, and would not be followed here. If the ground thereof is that the filing of the bill of complaint itself brought the property within the control of the court, the same result must follow, for if the filing of the bill of complaint in the case at bar brought the property within the control of the court, and effectually prevents the owner from thereafter dealing with it before final decree, the bill of complaint itself constitutes an attachment, within the meaning of the federal statute here invoked.
Under section 173, Code of 1930, an appearance by a nonresident defendant may, under some circumstances, convert the proceeding into one in personam, but there is no contention here that the appellee's appearance was such as to have that effect.
Affirmed.