Irons v. American Nat. Bank

• Decision Date: 09 August 1932
• Docket Number: 8583.
• Citation: 165 S.E. 738,175 Ga. 552
• Parties: IRONS v. AMERICAN NAT. BANK et al.
• Court: Georgia Supreme Court

165 S.E. 738

175 Ga. 552

IRONS v. AMERICAN NAT. BANK et al.

No. 8583.

Supreme Court of Georgia

August 9, 1932

Judgment Adhered to After Rehearing September 27, 1932.

Syllabus by Editorial Staff.

Georgia courts have no extraterritorial jurisdiction, and cannot hold citizens of other states amenable to their process, or bind them by judgment in personam, without their consent.

Demurrer to petition seeking to restrain resident maker from paying on note to nonresident national bank and to set aside conveyances to bank, filed by bank on special appearance and attacking solely court's jurisdiction, held properly sustained as to bank (12 USCA §§ 84, 91, 94; Const. U.S. Amend. 14, § 1).

Court's failure to designate ground of demurrer attacking its jurisdiction on which it based decision for demurrant held not error.

Nonresident's demurrer on ground that court's taking of jurisdiction would subject demurrant to multiplicity of suits and require local courts to settle controversies piecemeal held not to challenge petition on its merits, so as to waive service and submit demurrant to court's jurisdiction.

Error from Superior Court, Fulton County; John D. Humphries, Judge.

Petition by Lewis A. Irons, Deputy Insurance Commissioner of Georgia as ancillary receiver of the Citizens' Life Insurance Company, against the American National Bank and others. Case was dismissed as to defendant American National Bank, and plaintiff brings error.

Affirmed.

RUSSELL C.J., and ATKINSON, J., dissenting.

Court's failure to designate ground of demurrer attacking its jurisdiction on which it based decision for demurrant held not error.

Lewis A. Irons, deputy insurance commissioner of the state of Georgia, who was appointed ancillary receiver of the Citizens' Life Insurance Company by the United States District Court for the Northern District of Georgia, filed a petition in behalf of policyholders, residing in Georgia, in the Masons Annuity, a fraternal insurance company, organized and formerly doing business in the state of Georgia. The Masons Annuity was placed in the hands of a receiver by the superior court of Fulton county. Upon the insolvency of the Masons Annuity, its policyholders were reinsured, under order of the superior court of Fulton county, with the Southern Insurance Company, a corporation under the laws of Tennessee with its principal office in Nashville. Subsequently the same policyholders of insurance originally issued by the Masons Annuity were reinsured by the Citizens' Life Insurance Company, a corporation of Alabama. The petition in the present case was brought against C. C. Cater, a resident of Fulton county, the Standard Life Insurance Company, a corporation under the laws of the state of Georgia, but at present a dormant corporation, Southern Insurance Company, a corporation under the laws of Tennessee, but qualified to do business in the state of Georgia, and having an office and agent within the limits of Georgia, and the American National Bank of Nashville, Tenn., incorporated under the National Banking Act of Congress. By the security deed was conveyed a tract of realty situate in Atlanta, Fulton county, Ga. The indebtedness arose as follows: On May 6, 1921, C. C. Cater borrowed from the Standard Life Insurance Company the sum of $7,000, executing his promissory note therefor, bearing interest at the rate of 6 1/2 per cent. per annum, and secured the same by conveying by security deed the realty therein described. Later the Standard Life Insurance Company transferred and assigned the indebtedness to the Southern Insurance Company, but did not quitclaim the realty conveyed by the security deed; the Standard Life Insurance Company remaining the holder of the legal title to the property, and so remaining at all times involved in this cause. On October 6, 1925, the indebtedness was renewed. C. C. Cater executed a new promissory note for the sum of $7,000, payable to the Southern Insurance Company, due in five years, and also executed two interest notes in the sum of $227.50 each, of even date with the principal note, maturing semiannually thereafter. On July 25, 1929, the Southern Insurance Company transferred these notes by delivery to the Citizens' Life Insurance Company. Immediately thereafter the then president of the Citizens' Life Insurance Company, without authority as it is alleged, delivered the principal note for $7,000 to the American National Bank of Nashville, Tenn., along with other notes and mortgages.

The prayers were for service on the nonresident defendant, American National Bank, by publication; "that a temporary receiver be appointed to take charge of the premises described in the petition, to collect the rents and profits arising therefrom and hold them pending the further order of the court; that the receiver be authorized and directed to collect from C. C. Cater the indebtedness described in the petition, both principal and interest; that C. C. Cater be restrained and enjoined from making further payments on said indebtedness to the American National Bank, and that he be directed to make such payments to the receiver; (f) that the court enter a decree finding the indebtedness described herein, together with the property which secured it, to be the property of the plaintiff, and further finding that the American National Bank has no right, title, or interest in the same, and that the transfers or conveyances to the said American National Bank be cancelled and set aside as fraudulent and void;" for judgment against C. C. Cater for the indebtedness described in the petition; and for general relief.

The American National Bank filed a demurrer as follows:

"1. The American National Bank, appearing for the sole purpose of objecting to the jurisdiction of this court, demurs to the plaintiff's petition and to the rule nisi issued in this cause, and for cause of demurrer says the superior court of Fulton County, Georgia, has no jurisdiction of this defendant and no jurisdiction of this case, for the reason that no act of Congress has conferred such jurisdiction on said court, and for the reason that the controlling act of Congress on that subject, appearing in section 84, title 12, c. 2, of the United States Code (12 USCA § 84), and in title 12 USCA, § 94, provides that actions and proceedings against a national bank may be had in any district or territorial court of the United States held within the district in which such association may be established, or in any State court in the county or city in which said association is located having jurisdiction in similar cases, and plaintiff's petition shows that this defendant is located in Nashville, Davidson County, Tennessee, and fails to show that defendant is now, or at any time in the past, has been engaged in business in the State of Georgia.

"2. And defendant further says the action made by plaintiff's petition is a transitory action and an action in personam; and whether transitory or local, no law of Georgia confers jurisdiction of said case on this court.

"3. And defendant further demurs and says that this court has no jurisdiction of this case, because the act of Congress now appearing in section 91, title 12, c. 2, of the United States Code (12 USCA § 91) forbids the issuance of any attachment, injunction, or execution against a national bank or its property before final judgment in any suit, action, or proceeding in any State, county, or municipal court, also prohibits the seizure of property belonging to a national bank before final judgment, and hence to grant and issue a temporary injunction and restraining order as prayed for is not within the jurisdiction of this honorable court, and this court can in no way lawfully cause this defendant's property to be seized as prayed for by plaintiff, and hence this court has no jurisdiction of this case.

"4. And defendant demurs further and says this honorable court has no jurisdiction of this case, for the reason that it appears from the petition that the plaintiff is ancillary receiver of an Alabama corporation appointed by the United States District Court for the Northern District of Georgia, and defendant is a national bank incorporated under the laws of the United States and located in Nashville,

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