Courtney v. Courtney

• Decision Date: 20 March 1979
• Docket Number: No. 7812DC403,7812DC403
• Citation: 40 N.C.App. 291,253 S.E.2d 2
• Parties: . Court of Appeals of North Carolina
• Court: North Carolina Court of Appeals

Page 2

253 S.E.2d 2

40 N.C.App. 291

Ngoc Ming Thi COURTNEY v. Philip Gerald COURTNEY.

No. 7812DC403.

Court of Appeals of North Carolina.

March 20, 1979.

Barrington, Jones, Witcover & Carter, by Jack E. Carter, Fayetteville, for plaintiff appellee.

Clark, Shaw, Clark & Bartelt, by Robert H. Bartelt, Fayetteville, for defendant appellant.

CARLTON, Judge.

Defendant's primary contention is that the judgment of the Texas court is not entitled, as a matter of law, to full faith and credit in the courts of North Carolina. He argues that the Texas court had no jurisdiction to affect title to realty located in North Carolina, that the judgment is in contravention of the laws and policies of North Carolina and Texas, and that there was fraud in the procurement of the judgment.

Under the provisions of Article IV, § 1 of the United States Constitution it is required that full faith and credit be given to a judgment of a court of another state. Thrasher v. Thrasher, 4 N.C.App. 534, 167 S.E.2d 549 (1969), Cert. denied 275 N.C. 501 (1969); Thomas v. Frosty Morn Meats, 266 N.C. 523, 146 S.E.2d 397 (1965).

A judgment of a court of another state, however, may be attacked in North Carolina, but only upon the grounds of lack of jurisdiction, fraud in the procurement, or as being against public policy. 2 Strong, N.C.Index 3d, Constitutional Law, § 26, p. 247; In re Blalock, 233 N.C. 493, 64 S.E.2d 848 (1951); Howland v. Stitzer, 231 N.C. 528, 58 S.E.2d 104 (1950). There is a presumption in favor of the validity of the judgment of a court of another state, and therefore the burden to overcome such presumption rests upon the party attacking the judgment. 1 Lee, N.C.Family Law 3d, § 92, p. 353.

It is a well-established principle that a local sovereignty by itself, or its judicial agencies, can alone adjudicate upon and determine the status of land within its borders, including its title and incidents and the mode in which it may be conveyed. McRary v. v. McRary, 228 N.C. 714, 47 S.E.2d 27 (1948); Davenport v. Gannon, 123 N.C. 362, 31 S.E. 858 (1898). The absence of jurisdiction of the Res is responsible for the principle, as a court not having jurisdiction of the Res cannot affect it by its decree. McRary v. McRary, supra; see also Fall v. Eastin, 215 U.S. 1, 30 S.Ct. 3, 54 L.Ed. 65 (1909).

The distinction between In personam judgments ordering the conveyance of non-local realty and strictly In rem actions to partition or divest title in realty was drawn in McRary. Justice Barnhill referred to the familiar principle that a court having jurisdiction of the parties may, in a proper case, by a decree In personam, require the execution of a conveyance of real property in another state.

In McRary, an Ohio divorce decree attempted to vest title to jointly-held North Carolina realty in the plaintiff-wife free from any claim by her husband. The Ohio order provided that the wife "have and possess . . . (the North Carolina) said entire premises . . ." free from any claims of her husband. It further provided that if the defendant did not convey the property within 5 days from the judgment, "this decree shall operate as said conveyance." Our Supreme Court held that such vesting of title was, in fact, a Muniment of title, and the Ohio judgment, insofar as it attempted to affect title to the Locus in North Carolina, was a nullity. Being a proceeding strictly In rem, the Ohio court was without jurisdiction to convey title to North Carolina realty.

The judgment in McRary and the case at bar are distinguishable. In the instant case, the Texas court specifically provided:

It is further ORDERED, ADJUDGED AND DECREED that Philip Gerald Courtney CONVEY, TRANSFER, QUITCLAIM and DEED to Ngoc Ming Thi Courtney the following described properties:

Lot 159, Portion 158, revised lot K & F of KNOWNVOW (sic) Lake Subdivision, Cumberland County, North Carolina . . . . (Emphasis added.)

Unlike the Ohio decree, the Texas judgment here merely ordered the defendant to convey the North Carolina realty. It did not purport to award or vest title consonant with the nature of an In rem proceeding, but operated strictly In personam and attempted to affect the realty only indirectly.

In personam decrees affecting non-local realty are neither against the laws or policies of this State, nor the laws and policies of the State of Texas. In McElreath v. McElreath, 162 Tex. 190, 345 S.W.2d 722 (1961), the court held that the provisions of an Oklahoma divorce decree dealing with Texas realty were in the nature of an In personam decree and did not directly affect title to the Texas land. The court further found that the Oklahoma decree operated as an estoppel in the nature of Res judicata and that the Oklahoma order created certain equitable rights which were not precluded on public policy grounds in Texas. Other Texas cases clearly recognized the right of the sister states to issue In personam judgments directing the parties, properly before the court, to make dispositions of non-local realty. Milner v. Schaefer, Texas Civ.App., 1948, 211 S.W.2d 600; Greer v. Greer, Texas Civ.App., 1945, 189 S.W.2d 104 Reversed on other grounds, 144 Tex. 528, 191 S.W.2d 848 (1946). In North Carolina, Lea v. Dudley, 20 N.C.App. 702, 202 S.E.2d 799 (1974) reiterated, citing McRary, supra, that any part of a foreign decree which attempted to determine ultimate title to North Carolina realty was void. The operative effect of In personam decrees, however, was recognized. Judge Campbell stated:

However, a court of competent jurisdiction in the state of incorporation with all necessary parties properly before it in an action for the dissolution of a corporation generally has the power and authority to render a decree ordering the EXECUTION AND DELIVERY OF A DEED TO PROPERTY IN ANOTHER STATE to the shareholders of the corporation as successors in title to the assets of the corporation. Such an order must be considered to be In personam in character as the Virginia Court could not have In rem jurisdiction over a Res located in North Carolina. As between the parties to the Virginia litigation, the decree is Res judicata. . . . Lea v. Dudley, supra, at page 704, 202 S.E.2d at page 800. (Emphasis added.)

In the instant case, the Texas court has not exceeded its jurisdictional powers nor contravened any law or public policy of North Carolina or Texas. Apparently recognizing its limited jurisdiction, it never attempted to vest any muniment of title in North Carolina realty, as did the Ohio court in McRary. Therefore, the In personam judgment directing the conveyance of North Carolina realty is entitled to full faith and credit in this State.

Defendant next contends that the judgment of the Texas court was subject to collateral attack in the courts of North Carolina because it was procured fraudulently. This contention is also without merit.

It is true that fraud may present a proper basis for a court's refusal to extend full faith and credit to the judgment of a sister state. Thrasher v. Thrasher, supra, Donnell v. Howell, 257 N.C. 175, 125 S.E.2d 448 (1962). In Donnell, the plaintiff and defendant stipulated that they perpetrated a fraud upon the Alabama court by making false representations as to the true residence of the plaintiff. The Alabama judgment was not entitled to full faith and credit in this State, as a consequence of this fraud.

In the present case, defendant asserts that triable issues of fact, concerning fraud, exist. He alleges in his answer misrepresentations of fact by the plaintiff, lack of evidence, and non-possession of the gold chain.

To make a successful attack upon a foreign judgment on the basis of fraud, it is necessary that extrinsic fraud be alleged. In Horne v. Edwards, 215 N.C. 622, 624, 3 S.E.2d 1 (1939) Judge Seawell stated the general rule:

It has been held by much the greater weight of authority in American courts that equity...