Goodwin v. Claytor

• Decision Date: 13 December 1904
• Citation: 49 S.E. 173,137 N.C. 224
• Parties: GOODWIN v. CLAYTOR et al.
• Court: North Carolina Supreme Court

49 S.E. 173

137 N.C. 224

GOODWIN v. CLAYTOR et al.

Supreme Court of North Carolina

December 13, 1904

Appeal from Superior Court, Forsyth County; McNeill, Judge.

Action by G. O. Goodwin against A. B. Claytor; R. J. Reynolds Tobacco Company, garnishee. From a judgment of the superior court affirming a judgment in favor of plaintiff, the defendant and the garnishee appeal. Reversed.

In garnishment proceedings against a nonresident defendant service being had by publication, no jurisdiction is acquired to support a personal judgment against the defendant.

This action was heard in the superior court of Forsyth county at spring term, 1904, by McNeill, J., upon a case agreed as follows:

The action was commenced before a justice of the peace by Goodwin, a resident of the state of Virginia, against Claytor, also a resident of the state of Virginia, for the recovery of $109.67, with interest on $96.01 from January 14 1903, due by judgment. The indebtedness of Claytor to Goodwin is admitted. Service of summons was duly had by publication and by garnishment of a debt due from the R. J. Reynolds Tobacco Company to Claytor. Claytor is an employé of the R.

J Reynolds Tobacco Company in the capacity of traveling salesman, and the money which was attached in the hands of the R. J. Reynolds Tobacco Company was the earnings of Claytor for his personal services; and said earnings accrued within 60 days next preceding the institution of this action service of garnishment, filing of answer, and the order of the justice. These earnings were used for the support of a family dependent upon him. It is admitted that the R. J. Reynolds Tobacco Company is a corporation duly chartered and created under and by virtue of the laws of the state of New Jersey, and is engaged in the manufacture of tobacco, with its principal place of business and bulk of its property in Winston, N. C.; it having no property in New Jersey, save that such office as is required by the laws of New Jersey is located there. The said company has complied with the laws of North Carolina in reference to foreign corporations of the nature and character of this company. The contract between Claytor and the company was signed by Claytor in Virginia, and returned to Winston by mail. The preliminary arrangements, however, and the principle involved in the contract, were agreed upon at the office of the company in Winston. The salary of Claytor is usually paid him by check upon a bank in New York, which is sent to him by mail in Virginia, but occasionally a check is drawn on a bank in Winston and mailed to him in Virginia. These checks are sent from the office of the company in Winston. The contract between the company and Claytor does not fix where or how his salary shall be paid. All services performed and done under and by virtue of this contract are performed and done in the states of Virginia and West Virginia, and no part of said work is done in North Carolina. At the date of the service of the writ of garnishment on the company, it was indebted to Claytor by reason of the contract in the sum of $16.55 for salary and $17.58 expense money, and likewise, since the service of the writ of garnishment, has become indebted to Claytor up to the date of filing the answer in the sum of $86 for salary, and $______ for expense money; the expense money being advanced by Claytor, and the company reimbursing him for the same upon receiving statement thereof.

The laws of Virginia upon the question of exemptions are as follows:

Section 3630 of the Code of 1887 [Code 1904, p. 1935]; "Every householder residing in this state shall be entitled to hold exempt from levy, seizure, garnishment or sale under any execution, order or process issued on any demand for any debt or liability on contract, his personal and real estate, or either, to be selected by him, including money and debts due him, to the value of not exceeding $2,000."

Section 3652 [Code 1904, p. 1949]: "Wages owing to a laboring man being a householder, not exceeding $50 per month, shall also be exempt from distress, liability or garnishment."

Section 3656 [Code 1904, p. 1952]: "An injunction may be awarded to enjoin the sale of any property exempt under the provisions of this property, and to prevent the wages exempted by section 3652 from being garnisheed or otherwise collected by an execution creditor."

It is admitted that Claytor is a householder, or head of a family, within the meaning of the exemption law of the state of Virginia, and it is likewise admitted that he has never had allotted to him any exemption under and by virtue of the laws of that state.

This agreed statement of facts is made and signed without prejudice to any rights of either of the interested parties to make any motion or enter any special appearance as, in its or his judgment, may be deemed advisable.

The court, upon the case agreed, rendered judgment in favor of the plaintiff and against both defendant and garnishee for the full amount of his debt and the costs. Defendant and the garnishee excepted and appealed.

Glenn, Manly & Hendren, for appellants.

A. H. Eller, for appellee.

WALKER, J. (after stating the facts).

The counsel of the defendant and of the garnishee, in their able and exhaustive brief, rely on several grounds to defeat the plaintiff's recovery. For convenience, we will change somewhat the order in which they are stated in the brief. It is contended: (1) That the debt garnished is exempt by the laws of Virginia from garnishment. (2) That, if the debt was subject to garnishment at all, any lien acquired by the service of the writ was waived and the garnishee released by taking a general and personal judgment against the defendant and the garnishee, instead of taking an order condemning the debt to the payment of the plaintiff's claim. (3) That the judgment is erroneous, as it condemned a debt due after the service of the writ. (4) That the court was without jurisdiction to proceed against the garnishee for the purpose of condemning the debt due by him, because it is necessary to the possession and rightful exercise of such jurisdiction that three things should occur: (a) The corporation who is the garnishee in this case must have such a residence and agency within the state as renders it amenable to the process of the court; (b) the principal defendant, who is the plaintiff's debtor, must himself have the right to sue the garnishee, his debtor, in this state, for the recovery of the debt; (c) it must appear that the situs of the debt is in this state. (5) And lastly, they insist that the earnings of a debtor are exempted from condemnation by the laws of this state. We will consider these contentions in the order thus presented.

The right of exemption under the laws of Virginia cannot be enforced here. It is well settled that exemption laws have no extraterritorial effect. They are not, in respect to the question now under discussion, a part of the contract, but relate only to the remedy, and the right to an exemption is therefore subject to the law of the forum. Rood on Garnishment, § 100; Railroad v. Sturn, 174 U.S. 710, 19 S.Ct. 797, 43 L.Ed. 1144; Sexton v. Ins. Co., 132 N.C. 3, 43 S.E. 479. But there is another decisive answer to this claim of exemption. We have concluded, as will appear hereafter, that the domicile of the corporation, the Reynolds Tobacco Company, is, for the purposes of this case, in this state, and it nowhere appears that it has any domicile or even an agency in the state of Virginia. Indeed, the case shows that, while it was created a corporation in the state of New Jersey, it has no property in that state, but the bulk of its property and its principal place of business are here. For this reason, it could not be sued by the defendant Claytor in the state of Virginia for the debt garnished in this action, and Claytor therefore could not avail himself of the exemption laws of that state. It is argued that, as the plaintiff and the defendant Claytor are residents of Virginia, if Claytor is not allowed his exemption under the laws of that state the plaintiff will be enabled thereby to evade or "shove by" the law of the domicile of both of them, and set it at defiance. How can this be, if the plaintiff cannot, by the process of the courts of that state, reach and lay hold of the res, which is the debt due by the tobacco company? An exemption, it would seem, can be allowed only in property actually situated in the state where the claim of exemption is asserted, and where the property in which it is claimed is subject to the jurisdiction and process of its courts. As we will presently show, the tobacco company had no domicile and could not be served with process there; and, besides, as will also appear hereafter, the situs of the debt, if any is required, was here. The argument predicated upon the exemption of the particular debt in Virginia must therefore fail, as no exemption exists.

We do not think that, if the plaintiff acquired any lien on the debt due to the defendant by the tobacco company, he lost it by taking a judgment against the defendant and the garnishee. The judgment against the garnishee seems to be expressly warranted and contemplated by the statute (Code, § 364), and that against the defendant is void as a personal judgment, as the court could acquire no jurisdiction to proceed against him, except in so far as it could by its process levy upon or seize his property; and in this respect the suit is to all intents and purposes in the nature of a proceeding in rem and not of one in personam. Cooper v. Reynolds, 10 Wall. 308, 19 L.Ed. 931; Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565; Winfree v. Bagley, 102 N.C. 515, 9 S.E. 198; Fisher v. Ins. Co. (at this term) 48 S.E. 667; Insurance...