Kemper-Thomas Paper Co. v. Shyer

• Decision Date: 22 March 1902
• Citation: 67 S.W. 856,108 Tenn. 444
• Parties: KEMPER-THOMAS PAPER CO. v. SHYER et al.
• Court: Tennessee Supreme Court

67 S.W. 856

108 Tenn. 444

KEMPER-THOMAS PAPER CO. v. SHYER et al.

Supreme Court of Tennessee.

March 22, 1902

Appeal from chancery court, Davidson county; H. H. Cook, Chancellor.

Suit by the Kemper-Thomas Paper Company against A. W. Shyer and others. From a decree of the court of chancery appeals reversing a decree in favor of defendants, they appeal. Decree on appeal affirmed.

Maurice Glick, for appellants.

Stokes & Stokes, for appellee.

CALDWELL J.

A. W Shyer, of Nashville, Tenn., claimed that the Kemper-Thomas Paper Company, of Ohio, was indebted to him, and that Lebeck Bros., also of Nashville, were indebted to the paper company. He brought his statutory attachment and garnishment suit before a justice of the peace in Nashville, and obtained a judgment against the paper company, his debtor, for $299.38 and against its debtors, Lebeck Bros., as garnishees, for $85.44. As to the paper company, which was sued as a nonresident, and failed to appear, the proceeding was by attachment and publication; as to Lebeck Bros., it was by attachment and personal services of garnishment process, the indebtedness from Lebeck Bros. to the paper company being the only property attached. Some two years after crediting his judgment against the paper company by the amount of the garnishment judgment, which was promptly paid, Shyer took out an execution for the balance of his judgment against the paper company, and caused garnishment process to be issued thereon against other Nashville debtors of the paper company. These latter garnishees, Cline & Gordon, after judgment had been rendered against them for $90, notified the paper company of the fact, and some days later they paid that judgment, over the protest and warning of the paper company. Thereupon the paper company filed the present bill in equity challenging the judgment for $299.38, so far as it exceeded the indebtedness of Lebeck Bros., the property attached, and also the execution for that excess and the garnishment proceedings thereon, as void ab initio, for lack of jurisdiction to adjudge that excess, and seeking appropriate relief against them. The chancellor dismissed the bill on demurrer, the court of chancery appeals reversed his decree and the defendants appealed to this court.

The determinative question is this: Did the magistrate have jurisdiction to render judgment for $299.38 against a nonresident, in court by publication and attachment only, when the debt garnished, the sole property attached, amounted to only $85.44; or was his jurisdiction limited to the latter sum? The larger jurisdiction undoubtedly existed, if our state statutes are to be regarded as a controlling criterion. This readily appears when some of the provisions of those statutes which prescribe the mode of suing nonresidents without personal service are quoted. For instance: "The attachment and publication are in lieu of personal service upon the defendant, and the plaintiff may proceed upon return of the attachment, duly levied as if the suit had been commenced by summons." Shannon's Code, § 5284. "Should the defendant appear in time he will make defense, and the cause proceed as if the suit had been commenced by personal service of process. If he fail to appear or make defense, the plaintiff may take judgment at law, or obtain a decree in equity, in like manner as if the defendant had failed to appear and defend upon personal service of process." Id. § 5286. "Where the property, choses in action, or effects of the debtor are in the hands of third persons, or third persons are indebted to such debtor, the attachment may be by garnishment." Id. § 5238. And, "When the property attached is not sufficient to satisfy the recovery, execution may issue for the residue as in other cases." Id. § 5298. Here, then, is the amplest statutory authority for a creditor to sue his nonresident debtor by attachment and publication and obtain a recovery for the full amount of indebtedness shown, and for the issuance of an execution for the residue thereof after the application of the property attached; and that is exactly the course pursued by the present defendant, Shyer. Moreover, that authority has been recognized and applied more than once by this court. In Kyle v. Philips, 6 Baxt. 43, a vendor of land in this state was permitted, not only to enforce his lien by judicial sale of the land, but also to have a decree for the balance of his debt against his vendee, who was a nonresident, and in court by publication only; and his decree for such balance was enforced by supplemental attachment bill against other land of the defendant. The publication in the first instance, without valid attachment, was said to have given the court jurisdiction of the person of the defendant, and authorized a decree for the whole debt. Id. 45. And, though not a question under direct consideration at the time, the court, in the course of the opinion delivered in Walker v. Cottrell, 6 Baxt., at page 269, said, "So when the property [attached] is not sufficient to satisfy the recovery, execution may issue for the balance due, as in other cases;" citing the provision of the statute last quoted herein. Again, in Taylor v. Rountree, 15 Lea, 725, a decree of foreclosure and for the full amount of the mortgage debt was rendered against all the defendants, including some nonresidents, who were in court by publication only; and, after the land had been sold for less than half the recovery, a bill of review brought by the nonresidents for relief against the balance, on the ground that they were not in court as to that, was dismissed on the authority of Kyle v. Philips, supra, and the statutes heretofore mentioned. But the paper company takes the position, in effect, that those statutes and decisions are in the face of the federal constitution, in so far as they would authorize a personal, or mere money, recovery against a nonresident on publication only, or on publication and attachment, for an amount in excess of the salable value of the property impounded. If that be true, those statutes and decisions are in reality no authority at all for such recovery; for that instrument, when applicable, as it is in every such case, is the supreme law.

Although largely so, the different states of the Union are not entirely independent. Having surrendered some of their powers of sovereignty to the general government by the constitution, they are subject to that instrument, properly interpreted and applied. With that exception, however, "every state possesses exclusive jurisdiction and sovereignty over persons and property within its territory," and, as a consequence, "no state can exercise direct jurisdiction and authority over persons or property" in any other state. Yet a state's exercise of its proper powers of control within its borders may sometimes indirectly affect property or persons beyond its borders; the persons, in the one instance, and the property, in the other, being within its jurisdiction. "Thus the state, through its tribunals, may compel persons domiciled within its limits to execute, in pursuance of their contracts respecting property elsewhere situated, instruments in such form, and with such solemnities, as to transfer the title, so far as such formalities can be complied with; and the exercise of this jurisdiction in no manner interferes with the supreme control over the property by the state within which it is situated. Penn v. Lord Baltimore, 1 Ves. Sr. 444; Massie v. Watts, 6 Cranch, 148, 3 L.Ed. 181; Watkins v. Holman, 16 Pet. 25, 10 L.Ed. 873; Corbett v. Nutt, 10 Wall. 464, 19 L.Ed. 976. So the state, through its tribunals, may subject property situated within its limits [and] owned by nonresidents to the payment of the demand of its own citizens against them; and the exercise of this jurisdiction in no respect infringes upon the sovereignty of the state where the owners are domiciled. Every state owes protection to its own citizens; and when nonresidents deal with them, it is a legitimate and just exercise of authority to hold and appropriate any property owned by such nonresidents to satisfy the claims of its citizens." Pennoyer v. Neff, 95 U.S. 722, 723, 24 L.Ed. 565. The property of the nonresident may be so appropriated by bill in equity on publication only, when the citizen has a lien ready to be enforced (as in Kyle v. Philips, 6 Baxt. 43); or by attachment, creating a lien where none existed before, and publication. Boswell v. Otis, 9 How. 336, 13 L.Ed. 164; Roller v. Holly, 176 U.S. 405, 20 S.Ct. 410, 44 L.Ed. 520. And the debt of a resident to a nonresident is property in the state of the former, in such sense that it may be attached and subjected, by garnishment and publication, to the indebtedness of the nonresident to another citizen, as was done in the present instance. Shannon's Code, §§ 5238, 5239; Railway Co. v. Sturn, 174 U.S. 710, 19 S.Ct. 797, 43 L.Ed. 1144; King v. Cross, 175 U.S. 396, 20 S.Ct. 131, 44 L.Ed. 211.

Nevertheless what has been said thus far does not explicitly solve the question of greatest controversy in this cause: namely, whether or not the legislature of this state may validly grant, and one of its judicial tribunals may validly exercise, the prerogative of rendering a personal judgment against a nonresident without personal service or appearance, for the full amount of his indebtedness, though more than the value of his property seized, and of awarding an execution for so much of the judgment as remains unpaid after a proper appropriation of the property. It is a universal rule, founded on the plainest dictates of justice, that no man's personal rights can be affected by judicial proceeding without his day in court. In actions purely personal he is entitled to personal service on himself, or on...