Miller v. Maryland Casualty Co.
Decision Date | 22 May 1944 |
Docket Number | 4-7351 |
Citation | 180 S.W.2d 581,207 Ark. 312 |
Parties | Miller, Trustee, v. Maryland Casualty Company |
Court | Arkansas Supreme Court |
Appeal from Crawford Chancery Court; C. M. Wofford, Chancellor.
Affirmed.
Hill Fitzhugh & Brizzolara, for appellant.
Daily & Woods, for appellee.
OPINION
This appeal presents questions concerning foreign judgments, creditors' suits, and trusts.
The Maryland Casualty Company recovered judgment in personam in the United States District Court for the Southern District of Texas against Mrs. Anne Wood Locher for $ 13,000, and a nulla bona return was made on the execution issued on that judgment. The judgment and return were duly authenticated under the United States statutes. (U.S.C.A. Title 28, § 687.) Thereafter, this present suit was filed by the Maryland Casualty Company in the nature of a creditors' suit, or equitable execution, in the chancery court of Crawford county, Arkansas, based on the unsatisfied Texas Federal judgment and return evidenced by the authentication previously mentioned. The defendants named in this Arkansas suit were Mrs. Locher, individually, and Dell Miller, Harry Wood and D. L. Hodges, as Trustees under the wills of Norma Wood, deceased, and Margaret Wood, deceased. The complaint alleged that the administration of each of the estates had long been closed and Mrs. Locher was beneficiary of one share in each trust estate for and during her natural life and that the trustees of the two wills were handling the trust funds of the estates and were making annual payments to Mrs. Locher of all of her share of income; and the complaint prayed that the annual payments going to Mrs. Locher should be paid to the Maryland Casualty Company during the life of Mrs. Locher until the Texas judgment should be satisfied. The complaint alleged the nonresidency of Mrs. Locher and her insolvency and the absence of any property belonging to her in the State of Arkansas. Mrs. Locher was served with summons in the State of Texas under the provisions of § 1374 of Pope's Digest. She made no appearance or defense in this case. The three trustees were personally summoned and made the defenses which we will discuss herein. Mrs. Locher testified by deposition taken on behalf of the trustees.
The Crawford Chancery Court found that the balance due on the Texas judgment was $ 12,042 with interest at 6 per cent. from October, 1940; and that Mrs. Locher was a citizen of Texas and had no property in Texas or elsewhere subject to execution or attachment except her equitable interest in the trust here involved; and that under the wills involved Mrs. Locher was entitled to receive for her life the income from one share in the trust; and that this was not a spendthrift trust. Accordingly the chancery court enjoined the trustees from paying to Mrs. Locher any of the future net income of her share of the trust and decreed that the trustees should pay the future income of Mrs. Locher's share of the trust, during the lifetime of Mrs. Locher to the Maryland Casualty Company until the said judgment of $ 12,042 should have been paid in full. From this decree the trustees (appellants) have brought this appeal. Six questions are presented either directly or inferentially; and we proceed to state and discuss them.
At the outset we have a creditor's suit based on a foreign judgment. Does the foreign judgment have to be domesticated before a creditor's suit can be maintained? In 14 Am. J. 689 in the discussion of creditors' suits the general rule is recognized: "The prevailing rule is that a foreign judgment is not sufficient to support a creditor's bill to reach assets of the defendant which cannot be reached in proceedings at law, and that, in the absence of statute to the contrary, the creditor is required to set forth in his bill a judgment in the jurisdiction where the suit in equity is brought or to show that it is impossible to obtain such a judgment in any court within such jurisdiction."
But in continuing the discussion of the same subject there are mentioned, in the same authority, several recognized exceptions and some of these exceptions are (1) impossibility or impracticability, (2) where judgment dispensed with by statute, and (3) nonresidence or absence of the debtor. On the first of these exceptions it is stated in 14 Am. J. 695:
The second exception to the rule is stated in 14 Am. J. 695 as follows: Our own case of Riggin v. Hillard, 56 Ark. 476, 20 S.W. 402, 35 A. S. R. 113 is cited to sustain the text.
On the third exception (nonresidence of defendant), the rule is stated in 14 Am. J. 697 as follows:
Among other authorities cited to sustain the text there is the annotation in 38 A. L. R. 272. See, also, 21 C. J. S. "Creditors' Suits," § 45. We think that the case at bar comes within one if not all of the three exceptions to the general rule as has been pointed out. These exceptions would dispense with the necessity of first obtaining any judgment. So even if we consider the Texas judgment as mere evidence of indebtedness, we reach the conclusion that the Texas judgment and the nulla bona return thereon and the proof of Mrs. Locher's insolvency and absence from this state dispense with the necessity of a domestic judgment; and to that extent a cause of action was stated.
Since Mrs. Locher was not in Arkansas to be served and did not enter her appearance, there was therefore no personal service on her in this state. Neither did plaintiff have a warning order published, nor attorney ad litem appointed, nor statutory writ of attachment or garnishment issued against the res (the trust); and so appellants argue that there is no semblance of service to support judgment.
But it must be remembered that the plaintiff did name Mrs. Locher as defendant in this case and did cause a copy of the complaint to be served on her in Texas, as provided by § 1374 of Pope's Digest. Because of § 8226 of Pope's Digest, this service under § 1374 of Pope's Digest did not support a personal judgment against Mrs. Locher, but this service under § 1374 of Pope's Digest notified Mrs. Locher of this suit just as effectively -- perhaps even more effectively -- than would publication of warning order and appointment and report of attorney ad litem. See Martin v. Gwynn, 90 Ark. 44, 117 S.W. 754; Sinclair Refining Co. v. Bounds, 198 Ark. 149, 127 S.W.2d 629; Bank of Dover v. Jones, 192 Ark. 740, 95 S.W.2d 92. While § 5378 ff of Pope's Digest seems to envision proceedings on local judgments against local defendants, still § 5381 says that even in those cases there need be no attachment, affidavit, or bond. We, therefore, hold that since personal service could not be obtained on Mrs. Locher in Arkansas the nonresidence service under § 1374 and § 1379 of Pope's Digest amply dispensed with any further constructive service, and that the service under § 1374 was sufficient to support any judgment in this case except one in personam. The judgment of the Crawford Chancery Court does not purport to be in personam against Mrs. Locher, but merely to fix the amount of the balance of the indebtedness due by her on the Texas Federal judgment, and to direct the trustees to make payments to the plaintiff instead of to Mrs. Locher. Section 8225 of Pope's Digest invoked by appellants affords them no support, because, here, there was a lien created by the judgment of the Crawford Chancery Court and an order to pay made in the same judgment.
Appellants cite Norman v. Pool, 70 Ark. 127, 66 S.W 433; St. Louis Ry. Co. v. McDemitt, 91 Ark. 112, 120...
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