Leek v. Wieand

• Decision Date: 07 March 1950
• Docket Number: No. 158,158
• Citation: 71 A.2d 911,7 N.J.Super. 501
• Parties: LEEK v. WIEAND et al. /501.
• Court: New Jersey Superior Court

Page 501

7 N.J.Super. 501

71 A.2d 911

LEEK v. WIEAND et al.

No. 158/501.

Superior Court of New Jersey Chancery Division.

March 7, 1950.

Kirkman, Mulligan & Harris, Atlantic City, by Frank P. Mulligan, Atlantic City, for plaintiff.

Samuel P. Hagerman, Blackwood, for defendant Franklin D. Wieand, III.

Moore, Butler & McGee, Atlantic City, by Albert A. F. McGee, Atlantic City, for defendant Bessie M. Wieand.

Endicott, Dowling & Endicott, Atlantic City, by Allen B. Endicott, 3d, Atlantic City, for defendant Fidelity-Philadelphia Trust Co.

Edison Hedges, Atlantic City, for defendant Bioren & Co.

Frank S. Farley, Atlantic City, by John W. Keogh, Atlantic City, for defendant Franklin D. Wieand, Jr.

HANEMAN, J.S.C.

This is an application by Franklin D. Wieand, III, one of the defendants in the above entitled action, seeking (1) to set aside an entry of default heretofore entered against him; (2) to reopen and vacate that portion of a judgment entered March 21, 1949, designated as paragraphs 3 and 6; (3) to obtain permission to file an answer and defend on the merits; (4) to obtain an immediate refund of the payment of $6,266 heretofore made to Bioren & Co.

The principal basis upon which he seeks such relief is that since service was made upon him as an absent defendant in the State of Pennsylvania, under an order of the Court of Chancery, which he alleges was improvidently or improperly entered, this court has no jurisdiction over him, and the default and resulting judgment as entered were void. Reduced further to its salient aspects, his argument finds its expression as follows: The suit is commenced, insofar as the result of which he now complains is concerned, is an action in personam, and service not having been personally made upon him within the State of New Jersey, is insufficient to subject him to the jurisdiction of our courts.

The pivotal question is,--Is the action sub judice an action in personam or in rem or quasi in rem?

In order to intelligently resolve the propounded question it becomes necessary to analyze the allegata of the complaint, the relief demanded in the complaint and the relief granted by the judgment.

The bill of complaint as filed in the then Court of Chancery, which was filed on March 1, 1948, contains the following allegations: '6. Complainant also finds from the books and records of said decedent that decedent opened a trading account with Bioren & Co. in the name of Franklin D. Wieand, III, on which there was an indebtedness to Bioren & Co. of $2,436.85, as of November 16, 1947 and there are at the present time certain securities securing said account which were paid for by the decedent and for which said Franklin D. Wieand, III owed decedent as of November 16, 1947 the sum of $6,266.00. Complainant is informed, believes and therefore avers the fact to be that the securities in said account were intended to secure the payment of said indebtedness of $6,266.00 owed to decedent. A list of said securities is hereunto annexed, made a part hereof as though fully herein set forth and marked Exhibit 'N'.'

The bill of complaint prays for the following relief: '5. That this court may declare the complainant's rights with respect to the securities carried by the decedent, Henry D. Wieand, with Bioren & Co. under the name of Franklin D. Wieand, III.'

Paragraphs 3 and 6 of the Judgment read as follows:

'III. It is further ordered and adjudged that the plaintiff, J. Raymond Leek, Executor of the last Will and Testament of Henry D. Wieand, deceased, and all of the other parties to this suit, particularly Bioren & Co., and Franklin D. Wieand, III, Defendants, be instructed, and it is hereby ordered and adjudged that the securities and cash described in the Complaint, and standing in the name of the defendant, Franklin D. Wieand, III in the possession of the defendant, Bioren & Co., be turned over, delivered, assigned and transferred forthwith to the plaintiff, J. Raymond Leek, Executor as aforesaid, and that he, J. Raymond Leek, Executor, pay over to said Franklin D. Wieand, III from the proceeds of said securities when sold the excess, if any, over and above the indebtedness of Franklin D. Wieand, III to Bioren & Co., and to J. Raymond Leek, Executor secured thereby, as stated in the Bill of Complaint.'

'VI. And it is further ordered and adjudged that the plaintiff be instructed, and it is hereby ordered and adjudged that the plaintiff upon recovering the sum of $6,266.00, without interest, for this estate out of the securities referred to in Paragraph III hereof shall thereupon cancel the indebtedness of Franklin D. Wieand, III in the sum of $6,266.00 being a loan under date of November 16, 1947, there being no further moneys due thereon.'

By order dated March 22, 1948, service upon Franklin D. Wieand, III was directed to be made upon him as an absent defendant by either personal service of the order to plead or by publication and mailing. Such service was made on him in Pennsylvania on April 2, 1948. He did not file an answer to the complaint.

Bioren & Co., who had acknowledged service of subpoena through its New Jersey counsel, filed its answer on March 25, 1948, admitting that it had a trading account in the name of Franklin D. Wieand, III upon which there was due it the sum of $2,436.85, but disclaiming any knowledge concerning the other allegations of paragraph 6 of the complaint.

The relief sought by the plaintiff was dual in nature. It sought first, a construction of the will of Henry D. Wieand in order to ascertain whether by virtue thereof the debts of the life tenants and remaindermen were chargeable against their interest in the estate (with which phase we are not now concerned) and second, a determination of the title to the Bioren & Co. trading or margin account.

The question is the efficacy of the process to bring Franklin D. Wieand, III into this court for a determination of the second issue.

It must be conceded at the outset that if the present action is to be deemed an action in personam, personal service must be had upon the defendant within the jurisdiction in order to comply with the due process provision of the Fourteenth Amendment of the United States Constitution.

Originally, all equity jurisdiction operated in personam. In the development of equity jurisdiction, however, the great bulk of litigation became what might be classified as quasi in rem. Buchman v. Smith, 136 N.J.Eq. 246, 41 A.2d 262; Wilentz v. Edwards, 134 N.J.Eq. 522, 36 A.2d 423.

Generally stated, it must be recognized that substituted service as distinguished from personal service within the jurisdiction, may be resorted to, in all actions that may be denominated in rem or quasi in rem.

In Buchman v. Smith, supra, the court said, 136 N.J.Eq. at page 249, 41 A.2d at page 264, as follows: 'An action quasi in rem is one in which substituted service by publication is permissible. Our statute, R.S. 2:29--28, N.J.S.A., authorizes this procedure without any limitation based on the character of the suit. Kirkpatrick v. Post, 53 N.J.Eq. 591, 32 A. 267; Post v. Kirkpatrick, 53 N.J.Eq. 641, 33 A. 1059. But the operation of the statute is limited by the due process clause of the Fourteenth Amendment.' And 136 N.J.Eq. at page 250, 41 A.2d at page 265: 'Fundamentally, jurisdiction depends upon physical power. Jurisdiction in rem rests upon a res within the control of the court and subject to the exercise of its power. The res need not be in the custody of the court, as it is, for example, when seized on a writ of sequestration. It is enough that the res be within the state and in the possession of the complainant, or a resident defendant who has been brought into court by service within the state and through whom the court can exercise power over the res. The scope and variety of actions quasi in rem have been growing rather steadily for many years as a natural result of narrow territorial bounds of the jurisdiction of American courts, coupled with a diversity of residence of persons holding interests in the same property.' (Underlining mine.) See also 42 Am.Jur. 71, et seq.

The rule, although simple of statement, is ofttimes not too simple of application. The keystone of this theoretical structure are the words 'in rem' or 'quasi in rem.'

Strictly speaking, there are few actions in rem but the expression has been loosely employed to encompass actions quasi in rem as well.

A proceeding in rem is one taken directly against property, and has for its object the disposition of the property, without reference to the title of individual claimants. 42 Am.Jur. p. 72; 3 Freeman on Judgments, p. 3110, et seq.

In Elgart v. Mintz, 123 N.J.Eq. 404, at page 412, 197 A. 747, at page 752, the Court said "Quasi in rem' is a term applied to proceedings which are not strictly and purely in rem, but are brought against the defendant personally, although the real object is to deal with particular property. They are so far in rem that jurisdiction may be acquired by the seizure or control by the court of the res. The question whether a proceeding can be sustained as one quasi in rem depends upon whether there is a res in this state upon which the decree can operate. The judgment in such an action is not conclusive upon the whole world, but is binding only upon the parties. Cameron v. Penn. Mutual Life Insurance Co., 111 N.J.Eq. 24, 161 A. 55, (supra).'

A suit quasi in rem as distinguished from one strictly in rem has been defined as follows in Hill v. Henry, 66 N.J.Eq. 150, at page 154, 57 A. 554, at page 555: 'Fourth. In suits strictly in rem, that is, where the property itself, conceived of as having done the wrong or as having been the instrument of its commission, is being proceeded against, and in suits quasi in rem, that is, where the suit is against the person in respect of the res--where, for example, it has for its object partition or the sale or other disposition of defendant's property within...