Balcon, Inc. v. Sadler

Decision Date16 May 1978
Docket NumberNo. 771SC397,771SC397
Citation244 S.E.2d 164,36 N.C.App. 322
CourtNorth Carolina Court of Appeals
PartiesBALCON, INC. v. Allen A. SADLER, d/b/a Sadler Construction Company.

LeRoy, Wells, Shaw, Hornthal, Riley & Shearin by Terrence W. Boyle, Elizabeth City, for plaintiff-appellant.

Pritchett, Cooke & Burch by W. W. Pritchett, Jr., Windsor, for defendant-appellee.

CLARK, Judge.

The defendant moved to dismiss on the grounds that the Superior Court of Chowan County lacked jurisdiction over both the subject matter and the person. Though the findings in the judgment relate primarily to the issue of jurisdiction over the person, the trial court concluded that it had no jurisdiction over the subject matter.

A court has jurisdiction over the subject matter if it has the power to hear and determine cases of the general class to which the action in question belongs. A court has jurisdiction over the person if it has the power to bring the person to be affected by the judgment before the court so as to give him an opportunity to be heard. 21 C.J.S. Courts § 23, pp. 36-37.

The Superior Court of Chowan County is a court of general jurisdiction. N.C.Const., Art. IV, §§ 1, 2, 12. The subject matter of the case sub judice is an account, which is a transitory action, as are contract actions in general. A court of general jurisdiction has jurisdiction over actions transitory in nature. Clearly, the trial court had jurisdiction over the subject matter. Gibbs v. Heavlin, 22 N.C.App. 482, 206 S.E.2d 814 (1974).

But the trial court could not exercise its subject matter jurisdiction to adjudicate the case if it did not have jurisdiction over the person of the defendant, and without such jurisdiction the action should have been dismissed.

The plaintiff and defendant were nonresidents of this State, and the action arose in Maryland. Defendant owned real estate in Chowan County; his ownership of this realty did not give the court jurisdiction over the defendant's person. The basis of the court's jurisdiction must rest on plaintiff's proceeding to attach defendant's realty under G.S. 1-440.1. The realty had no relation to the account which is the subject matter of the action. The attachment is a quasi in rem proceeding, instituted by plaintiff for the purpose of bringing the realty of the nonresident defendant under the jurisdiction of, and subject to the judgment of, the court. The attachment proceeding is ancillary and does not give the court in personam jurisdiction over the defendant. But G.S. 1-75.8(4) gives the court jurisdiction quasi in rem when "the defendant has property within this State which has been attached or has a debtor within the State who has been garnished."

The opening sentence of G.S. 1-75.8 is as follows: "A court of this State having jurisdiction of the subject matter may exercise jurisdiction in rem or quasi in rem on the grounds stated in this section. . . ." (Emphasis added.) Thus, it appears that the exercise of such jurisdiction is a matter for the discretion of the court. See Anno. 90 A.L.R.2d 1109; 20 Am.Jur.2d, Courts, §§ 93, 172; 21 C.J.S. Courts § 77(b), pp. 116-118. It is clear, however, in the case before us that the trial court found that it did not have jurisdiction, and not that it in its discretion refused to exercise it.

The foregoing statute and the case law relating to in rem jurisdiction has been based on the decisions in Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1878), which for a hundred years has provided the conceptual framework for jurisdictional matters in the United States. Pennoyer asserted that jurisdiction was defined by two principles: (1) that every state possesses exclusive jurisdiction and sovereignty over persons and property within its territory, and (2) that a state cannot exercise direct jurisdiction over persons or property without its territory. The decision recognized that the states must comply with the standards of due process but perceived the requirements for jurisdiction over property as conceptually distinct from those applicable to personal jurisdiction. The mere presence of property was sufficient for in rem jurisdiction, whereas the presence of the defendant's person within the state was essential for in personam jurisdiction. These bifurcated jurisdictional standards have been maintained over the years, with the state courts exercising jurisdiction based on the presence of property in actions in rem and quasi in rem and exercising personal jurisdiction based on the presence of the person.

The concept of in personam jurisdiction has been adjusted by the courts during the past century to meet the needs of a mobile society by judicially circumventing the presence of the person as the basis for jurisdiction with the fictions of implied consent and constructive presence, based on activities in the state, i.e., operating a motor vehicle or doing business.

But the fiction-eroded standards for in personam jurisdiction were supported two decades ago by International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, 161 A.L.R. 1057 (1945), which held that "due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' "

Recently, in Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (June 1977), the Supreme Court held for the first time that the standards of fairness, reasonableness and substantial justice and the minimum contacts required by International Shoe should govern actions in rem as well as in personam. The court suggested that all of the circumstances relating to the controversy should be considered in determining reasonableness.

In Shaffer, the asserted basis...

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  • Posey v. Proper Mold & Engineering, Inc.
    • United States
    • South Carolina Court of Appeals
    • April 29, 2008
    ...238, 442 S.E.2d 598, 600 (1994); Bank of Babylon v. Quirk, 192 Conn. 447, 449, 472 A.2d 21, 22 (1984); accord Balcon, Inc. v. Sadler, 36 N.C.App. 322, 244 S.E.2d 164 (1978) (citing 21 C.J.S. Courts § 23, pp. The Poseys' tort action clearly falls into general cases which a court of common pl......
  • Skinner v. Preferred Credit
    • United States
    • North Carolina Supreme Court
    • August 16, 2005
    ...and the controversy between the parties. The Court referenced three cases to support its holding: Shaffer; Balcon, Inc. v. Sadler, 36 N.C.App. 322, 244 S.E.2d 164 (1978); and Holt v. Holt, 41 N.C.App. 344, 255 S.E.2d 407 In Shaffer, the Court held "the fact that the defendants relied on Del......
  • Fraser v. Littlejohn
    • United States
    • North Carolina Court of Appeals
    • December 5, 1989
    ...306 N.C. 385, 294 S.E.2d 209 (1982); see Canterbury v. Hardwood Imports, 48 N.C.App. 90, 268 S.E.2d 868 (1980); Balcon, Inc. v. Sadler, 36 N.C.App. 322, 244 S.E.2d 164 (1978); Holt, 41 N.C.App. 344, 255 S.E.2d 407; Pope v. Pope, 38 N.C.App. 328, 248 S.E.2d 260 (1978). As in the case before ......
  • Dep't of Transp. v. Adams Outdoor Adver. of Charlotte Ltd.
    • United States
    • North Carolina Court of Appeals
    • April 19, 2016
    ...in question belongs." Dep't of Transp. v. Tilley, 136 N.C.App. 370, 373, 524 S.E.2d 83, 86 (2000) (quoting Balcon, Inc. v. Sadler, 36 N.C.App. 322, 324, 244 S.E.2d 164, 165 (1978) ). In Tilley, this Court, citing N.C. Gen.Stat. § 136–103(a) of Article 9, stated that "[o]ur legislature has e......
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