Cory v. Olmstead

• Decision Date: 20 November 1926
• Citation: 290 S.W. 31,154 Tenn. 513
• Parties: CORY ET AL. v. OLMSTEAD ET AL.
• Court: Tennessee Supreme Court

290 S.W. 31

154 Tenn. 513

CORY ET AL. v. OLMSTEAD ET AL.

Supreme Court of Tennessee.

November 20, 1926

Appeal from Chancery Court, Roane County; J. H. Wallace, Chancellor.

Suit by Julia A. Cory and others against R. W. Olmstead and others. From a decree overruling their demurrer, defendants appeal. Reversed and remanded.

Harris & Evans, of Harriman, for defendants Olmstead and others.

CHAMBLISS J.

This is an appeal from a decree overruling demurrers to original and supplemental bills filed by creditors of Indian Head Coal Company, a Tennessee corporation. Insolvency of the corporation and default in payment of interest on its bonds was set up, and it was sought to have the bill declared a general creditors' bill, with all usual and incidental relief. Also, it was shown that the bonds were secured by a deed of trust on lands located wholly in the state of Kentucky, as to which foreclosure was prayed. A receiver was prayed for, and the C. & M. was duly appointed, and appears to have taken possession of the property. Subsequently the corporation was adjudged a bankrupt in the United States court at Knoxville, and a trustee was appointed in that proceeding, who later filed an intervening petition in this cause seeking possession of the property of the bankrupt.

Defendant Olmstead, a creditor holding bonds and past-due coupons, by his demurrer to the original bill challenged the jurisdiction of the chancery court of Roane county to foreclose the lands lying wholly in the state of Kentucky; expressly thus limiting his demurrer. To the amended and supplemental bill he filed an amended demurrer, adding the ground that the amended bill showed the adjudication in bankruptcy and the appointment of a trustee, in whom was vested by law the custody of the property of the bankrupt and the right to administer its estate.

Following the filing of his demurrer to the original bill, limited as already indicated, Olmstead filed an answer to other parts of the bill. In this connection we observe, in reply to the point made, that the answer did not overrule the demurrer. It raised only a question of jurisdiction of the subject-matter. In Baker v. Mitchell, 105 Tenn. 612, 59 S.W. 137, it was directly held that a demurrer to the jurisdiction was not waived by an answer-- that want of jurisdiction could neither be waived nor conferred by consent, appearance, or pleadings.

The point of procedure is also made that the appeal is premature. By section 4889 of Shannon's Code, the chancellor is given a discretion in the matter of granting appeals from decrees or demurrers, and we do not find that this discretion has been abused in the instant case. The question raised by the demurrer was of such a nature and had such a bearing upon the litigation as a whole that the chancellor properly allowed the appeal. It may also here be said, in response to argument of counsel, that no estoppel can effect the consideration of a question of jurisdiction. It must be borne in mind that the demurrer is restricted to the question of territorial jurisdictional power to foreclose the lands in Kentucky, and does not go to questions discussed on the briefs of counsel touching the right to maintain the suit for other purposes.

Two propositions pertinent to the issues here presented are free from difficulty. In the first place, it is well established that a court of one state is without jurisdiction to pass title to lands lying wholly in another state. The local court cannot by its decree bind the land, and a decree of foreclosure, pursuant to pleadings in this cause, as said by Mr. Justice Freeman in Wicks v. Caruthers, 13 Lea (81 Tenn.) at page 365, "would be tristem fulmen, and a useless form." In the second place, it is equally well established that in a proper case, with the necessary parties before the court, a decree in personam may be properly passed requiring a party defendant holding the legal title in trust or otherwise, to transfer such title in accordance with the decree of the court. The rule is thus stated by Mr. Justice McKinney in the early case of Johnson v. Kimbro, 3 Head (40 Tenn.) on page 559 (75 Am. Dec. 781) as follows:

"It is a well established principle of international law 'that a foreign court cannot, by its judgment or decree, pass the title to land situate in another country.' Story's Conflict of Laws, § 543. It is certainly true, that a court of equity may entertain a bill for the specific performance of a contract respecting land situate in a foreign country, if the parties are resident within the territorial jurisdiction of the court. In such case, although the court cannot bind the land itself by the decree, it can bind the conscience of the party in regard to the land, and enforce him, by

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