Freeman v. Smith
| Decision Date | 13 June 1957 |
| Docket Number | No. 7595,7595 |
| Citation | 83 N.W.2d 834 |
| Parties | Andrew L. FREEMAN, Plaintiff and Respondent, v. H. E. SMITH, Jr., Defendant and Appellant, and W. S. Kincade, and Five Star Manufacturing Company, a corporation, Defendants. |
| Court | North Dakota Supreme Court |
Syllabus by the Court.
1. In an action against several nonresident joint debtors to recover upon a joint contractual liability, the district court acquires provisional jurisdiction in personam over the joint debtor defendants by virtue of substituted service of the summons upon only one of the joint debtors, and an attachment of their joint property serves to secure the plaintiff's claim and brings the joint property within the control of the court so that the court may enter a default judgment in rem to be enforced by execution sale of the joint property to the extent necessary to satisfy the joint liability in personam.
2. The term 'joint debtors' as used in Sec. 32-3001, NDRC 1943, means and includes all persons having a joint liability and is not limited to partners.
3. The term 'joint property' as used in Sec. 32-3001, NDRC 1943, includes property owned and shared in undivided interests by joint debtors as tenants in common where the property is devoted to the furtherance of the adventure out of which the joint liability arose.
4. The time within which an appeal may be taken from an appealable order does not commence to run until written notice of the same shall have been given to the party appealing. Sec. 28-2704, NDRC 1943.
5. During the time in which an appeal may be taken from an appealable order, the district court, in the absence of an appeal, retains jurisdiction of the action and may, upon motion of an aggrieved party, vacate or modify its erroneous order.
Johnson & Hoghaug, Lakota, for plaintiff and respondent.
Harold D. Shaft and Philip R. Bangs, Grand Forks, attorneys for defendant and appellant, H. E. Smith, Jr.
This is a civil action on a contract brought by the plaintiff, Andrew L. Freeman, to recover a judgment for the balance due upon the sale of certain patent rights for the manufacture of the Freeman Head Bolt Heater under a patent license agreement executed by the plaintiff as licensor and defendants H. E. Smith, Jr., and W. S. Kincade as licensees. Pursuant to this agreement, the defendants became jointly obligated to the plaintiff to pay certain royalties computed upon all sales of this device. While defendants Smith and Kincade launched a common enterprise, there is nothing in the record to indicate that they became general partners. In furtherance of the agreement, it appears that the defendants acquired, as tenants in common, certain lots or tracts of real estate situated in the City of Grand Forks, in Grand Forks County. The defendants, without having actually entered upon the business of manufacturing and selling head bolt heaters under the patent license agreement, assigned their interest in the agreement to defendant Five Star Manufacturing Co., a Minnesota corporation, having authority to do business in the State of North Dakota. The real property, however, appears to have been leased by defendants Smith and Kincade to the corporation for the warehousing of parts and equipment used in connection with the manufacture and sale of head bolt heaters under the assignment of the patent license agreement. All of the defendants defaulted in the payment of royalties under the agreement and thereupon this action was instituted.
The summons and complaint in this action were issued and filed in the office of the clerk of the district court of Grand Forks County on April 14, 1954. At that time defendant Smith was a resident of Miami, Florida, and defendant Kincade was a resident of Clarksdale, Mississippi. Plaintiff proceeded to obtain substituted service of process by publication. When filed, the summons and complaint were accompanied by an affidavit for publication, an affidavit for attachment, and an undertaking for attachment. Thereupon, the clerk of the district court issued a warrant of attachment to the sheriff and the sheriff levied the attachment upon the above mentioned real estate by issuing and filing for record a notice of attachment in the office of the Register of Deeds of Grand Forks County. The sheriff also levied upon a large quantity of rubber electric appliance cords owned by the defendant corporation and situated in the warehouse leased from defendants Smith and Kincade. No challenge is made as to the grounds for attachment or as to the sufficiency of any of these instruments. Thereafter and within 60 days after the filing of the affidavit for publication, as required by Sec. 28-0625, NDRC 1943, the summons and complaint, the affidavit for publication, the affidavit for attachment, the undertaking for attachment, the warrant of attachment and the notice of attachment, in lieu of publication and mailing of the summons, were duly served personally upon one F. R. Clark, an authorized officer for service of process upon defendant Five Star Manufacturing Co., in the State of North Dakota, and upon defendant Kincade in the State of Mississippi. Similar service was attempted on defendant Smith in the State of Florida but the process server made a 'dwelling house service' by delivering the several papers to and leaving them with the wife of defendant Smith. Smith himself was not served personally in this action.
None of the defendants answered the complaint or made a general appearance in this action. Upon a proper showing of the failure of the defendants so to appear or answer, the district court, on July 28, 1954, made findings of fact, conclusions of law and ordered the entry of judgment for the plaintiff and against all of the defendants. The judgment was rendered separately against defendant Fire Star Manufacturing Co., a corporation, for the sum of $44,332.85 and against defendants Smith and Kincade for the sum of $18,661.46 and directed an execution sale of the attached real estate to satisfy the judgment. Defendant Five Star Manufacturing Co. forthwith paid the judgment liability entered against it and procured from the plaintiff a partial satisfaction of the judgment.
On May 18, 1954, subsequent to the filing and recording of the notice of attachment but prior to the entry of the judgment, defendant Smith executed and delivered to one Leora G. Smith a warranty deed covering his undivided one-half interest in the real estate which he and defendant Kincade owned in common.
Following the entry of the judgment, defendant Smith noticed a motion for an order setting aside the service of the summons and vacating the judgment as to him and vacating the attachment of his undivided interest in the real estate. For this purpose the defendant appeared specially and upon the hearing of this motion, the court, deeming the defective dwelling house service to be controlling under the decision of First Nat. Bank of Casselton v. Holmes, 12 N.D. 38, 94 N.W. 764, made an order dated December 20, 1954, setting aside the service of the summons upon defendant Smith and vacating the attachment proceedings with respect to his undivided one-half interest in the real estate and vacating the judgment entered against him. This order was filed in the office of the clerk of the district court on December 22, 1954. The record does not show that any written notice of the entry of this order was ever served upon the plaintiff or his attorney.
On April 1, 1955, counsel for plaintiff served upon counsel for defendant Smith, a notice of motion for a rehearing on the order made by the court on December 20, 1954, and to vacate said order and reinstate the judgment and the attachment proceedings. Again counsel for defendant Smith appeared specially to object to the jurisdiction of the court to vacate or modify this order. After considering extensive briefs by counsel, the court, deeming its initial order to be erroneous, made an order dated November 5, 1955, vacating its previous order and reinstating the judgment and the attachment proceedings ab initio. Notice of entry of this order was served November 28, 1955. Defendant Smith perfected the instant appeal from the subsequent order of the district court.
Defendant Smith contends (1) That the district court erred in granting plaintiff's motion to reinstate the judgment and attachment proceedings; (2) that the district court erred in holding that the real property was 'joint property'; (3) that the district court erred in sustaining the attachment of the real property; and, (4) that the district court was acting in excess of its jurisdiction when it granted the motion to reinstate the judgment and attachment proceedings.
The foregoing contentions of counsel suggests the following pertinent queries: (1) Did the district court acquire jurisdiction in rem over the property interest of defendant Smith; (2) did the district court have power to correct its erroneous order; and, (3) was timely application made to the district court to correct its erroneous order.
Sec. 32-3001, NDRC 1943, reads as follows
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