Burton-Lingo Co. (fire Ass'n of Philadelphia v. Patton

• Decision Date: 28 February 1910
• Citation: 107 P. 679,15 N.M. 304
• Parties: BURTON-LINGO CO. (FIRE ASS'N OF PHILADELPHIA, Intervener)v.PATTON et al.
• Court: New Mexico Supreme Court

15 N.M. 304

107 P. 679

BURTON-LINGO CO. (FIRE ASS'N OF PHILADELPHIA, Intervener)

v.PATTON et al.

Supreme Court of the Territory of New Mexico.

Feb. 28, 1910.

Appeal from District Court, Chaves County; before Justice Wm. H. Pope.

Action by the Burton-Lingo Company against E. E. Patton and others, in which the Fire Association of Philadelphia intervened. From a judgment in favor of defendants and against intervener, it appeals. Affirmed.

The Texas court had jurisdiction of the person of Patton, but not of the real estate in New Mexico. The lien which it attempted to reinstate, declare valid and in effect turn over, was a statutory lien enforceable only in New Mexico.

This suit was begun June 16, 1903, by the appellant Burton-Lingo Company, a New Mexico corporation, to foreclose a mechanic's lien on certain lots in the city of Roswell, county of Chaves, this territory, against Patton and wife as owners, and Haynes and Smith as mortgagees of Patton. Patton took out two insurance policies in the sum of $1,500 each with the appellant the Fire Association of Philadelphia, one dated June 15, 1903, and the other March 16, 1904; each of said policies containing the following clause: “Loss or damage, if any, under this policy, shall be payable to Burton-Lingo Co., as their mortgagee (or trustee) as interest may appear.” May 2, 1904, the improvements on the lots in question, for the construction of which the Burton-Lingo Company claimed a lien, were totally destroyed by fire, and on the same day Patton, in consideration of $300 and the release of said lien, executed an assignment of said policies to the Burton-Lingo Company.

On the 10th day of August, 1904, the Burton-Lingo Company, a Texas corporation, brought suit against the Fire Association of Philadelphia and Patton in the district court of Tarrant county, Tex., to recover on the policies assigned to it by Patton. Personal service on Patton, and he failed to answer. Judgment in favor of the Burton-Lingo Company against the Fire Association, for the amount of the policies, and upon its cross-bill and answer, to which Patton had been made a party, the Fire Association was on the 1st day of March, 1905, by said district court, awarded judgment against said Patton as follows: “It is further ordered, adjudged, and decreed by the court that the said contract (the contract releasing the mechanic's lien in consideration of the assignment of the policies by Patton) is null and void, and that the plaintiff Burton-Lingo Company have a valid and subsisting lien on the lots situated in the territory of New Mexico upon which said buildings stood, covered by the two policies of insurance sued upon, to foreclose which lien a suit is now pending in the courts of New Mexico in the name of Burton-Lingo Company and against said Patton, and that the defendant Fire Association of Philadelphia is hereby subrogated to all the rights of the said Burton-Lingo Company in said litigation pending, and to all of the liens upon said property, to foreclose which said litigation was instituted in the courts of New Mexico as aforesaid; and it is further ordered and decreed that said Patton has no just or valid defense thereto, and that the defendant Fire Association of Philadelphia may continue to prosecute said litigation in the name of the Burton-Lingo Company for its own use and benefit and to take all necessary orders and process therein in the courts of New Mexico-all this to be done at its own cost.”

There was no provision in the above judgment for its enforcement against Patton. The Fire Association satisfied this judgment. On the 11th day of September, 1905, the Fire Association filed its petition as intervener in this suit, in which it set up its judgment obtained in the Texas court as res adjudicata, and further claimed that it was subrogated to the rights of the Burton-Lingo Company to the lien sought to be foreclosed. Issue being duly joined and testimony taken, the court rendered its decree in favor of the appellees, and this appeal was taken.

Reid & Hervey, for appellant. L. O. Fullen, for appellees.

MECHEM, J. (after stating the facts as above).

1. This case falls clearly within that class wherein a court of equity, having jurisdiction of the parties, has decreed in relation to the title to real estate without its territorial jurisdiction, but has not taken the necessary steps to give force and effect to its decree by some process or order compelling obedience to its judgment.

The Texas court had jurisdiction of the person of Patton, but not of the real estate in New Mexico. The lien which it attempted to reinstate, declare valid, and in effect turn over to the Fire Association was a statutory lien enforceable only in New Mexico. In Carpenter v. Strange, 141 U. S. 105, 11 Sup. Ct. 960 (35 L. Ed. 640), it was said: “The real estate was situated in Tennessee and governed by the laws of its situs, and, while by means of its power over the person of a party a court of equity may in a proper case compel him to act in relation to property not within its jurisdiction, its decree does not operate directly upon the property nor affect the title, but is made effectual through the coercion of the defendant, as, for instance, by directing a deed to be executed or canceled by or on behalf of the party. The court ‘has no inherent power, by the mere force of its decree, to annul a deed, or to establish a title.’ Hart v. Sanson, 110 U. S. 151, 155 [3 Sup. Ct. 596, 28 L. Ed. 101]. Hence, although in cases of trust, of contract, and of fraud, the jurisdiction of a court of chancery may be sustained over the person, notwithstanding lands not within the jurisdiction may be affected by the decree (Massie v. Watts, 6 Cranch, 148 ), yet it does not follow that such a decree is in itself necessarily binding upon the courts of the state where the land is situated. To declare the deed of Mrs. Strange null and void, in virtue alone of the decree in New York, would be to attribute to that decree the force and effect of a judgment in rem by a court having no jurisdiction over the res. By its terms no provision whatever was made for its enforcement as against Mrs. Strange in respect of the real estate. No conveyance was directed, nor was there any attempt in any way to exert control over her in view of the conclusion that the court announced. Direct action upon the real estate was certainly not within the power of the court. As it did not order Mrs. Strange to take any action with reference to it, and she took none, the courts of Tennessee were not obliged to surrender jurisdiction to the courts of New York over real estate in Tennessee, exclusively subject to its laws and the jurisdiction of its courts. Story, Confl. Laws, 543; Whart. Confl. Laws, 288, 289; Watkins v. Holman, 16 Pet. 25 ; Northern Indiana Railroad v. Mich. Cent. Railroad, 15 How. 233 ; Davis v. Headley, 22 N. J. Eq. 115; Miller v. Birdsong, 7 Baxt. [Tenn.] 531; Cooley v. Scarlett, 38 Ill. 316 ; Gardner v. Ogden, 22 N. Y. 327 .” And so in this case to declare the mechanic's lien in question valid, that Patton had no defense to it, and that the Fire Association was subrogated to the rights of Burton-Lingo Company to it, and entitled to prosecute this action in the name of Burton-Lingo Company for its own benefit, solely by virtue of the judgment of the Texas court, “would be to attribute to that decree the force and effect of a judgment in rem by a court having no jurisdiction over the res.”

In the late case of Fall v. Eastin, 215 U. S. 1, 30 Sup. Ct. 3, 54 L. Ed. -, the court, after restating with approval the doctrine announced in Carpenter v. Strange, supra, goes on to say that it is a well-recognized principle: “That when the subject-matter of a suit in a court of equity is within another state or country, but the parties within the jurisdiction of the court, the suit may be maintained and remedies granted which may directly affect and operate upon the person of the defendant, and not upon the subject-matter, although the subject-matter is referred to in the decree, and the defendant is ordered to do or refrain from certain acts toward it, and it is thus ultimately but indirectly affected by the relief...