MPI, INC. v. McCullough

• Decision Date: 14 December 1978
• Docket Number: No. EC 78-226-K-P.,EC 78-226-K-P.
• Citation: 463 F. Supp. 887
• Parties: M P I, INC., Plaintiff, v. Derwood McCULLOUGH, Carl L. Craig and John L. Dupré, Defendants.
• Court: U.S. District Court — Northern District of Mississippi

463 F. Supp. 887

M P I, INC., Plaintiff, v. Derwood McCULLOUGH, Carl L. Craig and John L. Dupré, Defendants.

No. EC 78-226-K-P.

United States District Court, N. D. Mississippi, E. D.

December 14, 1978.

Michael S. Allred, Jackson, Miss., for plaintiff.

Armis Hawkins, Houston, Miss., Lester Sumners, New Albany, Miss., for defendants.

MEMORANDUM OF DECISION

KEADY, Chief Judge.

In this case we are presented with the propriety of enjoining an attachment of realty under Mississippi chancery statutory procedure, Miss.Code Ann. § 11-31-1, et seq., invoked in a pending state chancery court action, upon the ground that the attachment procedure contravenes the Due Process Clause of the fourteenth amendment to the United States Constitution. We hold that the attachment procedure is unconstitutional, and that we, as a federal district court, have the power and authority, and should exercise it, to restrain the enforcement of the constitutionally impermissible procedure, but without otherwise interfering with the prosecution of the state court action.

Invoking federal court jurisdiction under 28 U.S.C. §§ 1331 and 1343, for a cause of action based upon 42 U.S.C. § 1983,¹ M P I, Inc. (M P I) plaintiff, a corporation organized under the laws of Texas, brings this action to redress what it asserts to be a deprivation under the color of state law of rights, privileges and immunities secured to it by the fourteenth amendment which guarantees against the taking of private property without due process of law. The defendants are Derwood McCullough, Chancery Clerk of the First Judicial District of Chickasaw County, Carl L. Craig, the duly elected sheriff of Chickasaw County, and John L. Dupré, the attaching creditor who is a citizen of the State of Texas.

On November 17, 1978, Dupré, as complainant in a state chancery action, sued M P I as defendant in Cause No. 8126 of the Chancery Court of the First Judicial District of Chickasaw County. In that action, Dupré alleged that upon the termination of an employment agreement which he had with M P I (formerly known as Alleluia Cushion Co., Inc.) in an executive position, Dupré, by virtue of the terms of a written contract, was entitled to a bonus of $38,000 for a five-year period of time ending April 30, 1978, and that he was further entitled to have M P I issue to him 20,000 shares of M P I stock at $3.25 per share, which M P I was contractually obligated to repurchase at a higher book value figure under an arrangement for M P I to pay one-fourth of the cash difference immediately and the balance in three equal annual installments.² In addition, Dupré in his chancery action demanded interest, reasonable attorney fees and all costs. Dupré alleged in his bill of complaint that M P I was a nonresident of the State of Mississippi owning certain real property located in the Town of Houston on which its manufacturing plant was situated, and invoked the Mississippi chancery attachment procedure. Simultaneously with the filing of the chancery action, the defendant McCullough issued a writ of attachment against the real property and handed it to the defendant Sheriff Craig who caused the writ to be executed by posting it upon plaintiff's real property at Houston, § 11-31-5, see n. 5, infra, and by filing with the chancery clerk notice of the levy, pursuant to § 11-47-5, see n. 7, infra. In addition, the writ of attachment was personally served upon an employee of M P I which was qualified to do business in Mississippi and had a resident agent for service of process.

On December 14, 1978, M P I applied to this court for a preliminary injunction restraining the defendant officials from issuing and serving the state chancery attachment, restraining Dupré from applying for any writ of attachment under the state chancery procedure, and enjoining Dupré from prosecuting his action for damages in the chancery court of Chickasaw County. In addition, M P I sought a declaratory judgment that the Mississippi chancery attachment procedure was unconstitutional and void, and that it was entitled to recover damages, attorney fees and expenses and costs from Dupré for having resorted to an unconstitutional taking of its property by suing out an attachment against its realty. At our hearing, the defendants resisted the granting of injunctive relief, and the parties advised the court that on the preceding day the issue of the constitutionality vel non of Mississippi's chancery attachment procedure had been raised in argument before the Honorable Woodrow W. Brand, Jr., Chancellor of the 14th Chancery Court District, which encompasses Chickasaw County, and that Chancellor Brand was awaiting action by this court before proceeding further. The next term of chancery court for the First Judicial District of Chickasaw County convenes the fourth Monday of February, 1979. It appeared from the state court file that M P I had filed a motion to dismiss the action for lack of venue, lack of jurisdiction and lack of any ground for relief. After receiving oral argument, this court made a bench ruling declaring the Mississippi chancery attachment procedure, on its face and as here applied, void and unconstitutional and issued an injunction to restrain and quash the attachment proceeding, but without otherwise interfering with the action for money and/or specific performance pending in the chancery court. Because of the importance of the issue, our remarks made at the conclusion of the hearing are withdrawn and this memorandum is substituted in lieu thereof.

1. The nature of Dupré's claim.

Dupré sues in state court for a particular sum of money and for specific performance of an employment contract which he made with M P I in the State of Texas and which was entirely performed outside the State of Mississippi. His suit thereon was a transitory cause of action which asserted breach of contract and had no connection whatever with M P I's real property at Houston, Mississippi, which was attached in chancery upon his application therefor. Located upon the attached real property is a plant which M P I operates for the manufacture of carpet padding and related products. At no time during his contract of employment was Dupré ever employed at M P I's Houston plant.

2. Mississippi's chancery attachment procedure.

The chancery attachment procedure was first enacted into Mississippi statutory law in 1821 as a part of the original Act creating the Superior Court of Chancery in the state. V. Griffith, Mississippi Chancery Practice § 483, at 488 (2d ed. 1950). Jurisdiction was lodged within the chancery court for any kind of claims, contractual, ex delicto or otherwise, against any nonresident debtor owning lands and tenements within Mississippi.³ It was early decided that nonresident complainants may invoke the attachment statute, Comstock v. Rayford, 1 Smedes & M. 423 (Miss.1843); Freeman v. Guion, 11 Smedes & M. 58 (Miss. 1848), and a foreign corporation, though qualified to do business within the state, was nevertheless a "nonresident" within the chancery statute, Clark v. Louisville & N. R. R. Co., 158 Miss. 287, 130 So. 302 (1930), and it was immaterial to the validity of the attachment that personal judgment could be obtained against the "nonresident" foreign corporation having a resident agent for service of process. Aetna Ins. Co. v. Robertson, 126 Miss. 387, 88 So. 883 (1921). It was decided more than fifty years ago that a complainant seeking a chancery attachment is not required to give bond for issuance of the writ. I. B. Rowell & Co. v. Sandifer, 129 Miss. 167, 91 So. 899 (1922). Emphasizing that the basis of chancery attachment jurisdiction is statutory and a complainant's bill need not show an independent equity, Scruggs v. Blair, 44 Miss. 406 (1870); Statham v. New York Life Ins. Co., 45 Miss. 581 (1871), and T. H. & J. M. Allen & Co. v. Montgomery, 48 Miss. 101 (1873), the supreme court has denominated the chancery attachment as primarily a proceeding in rem. Mid-South Paving Co. v. Trinidad Asphalt Mfg. Co., 197 Miss. 751, 21 So.2d 646, 649 (1945). Although the present case involves only real property, the procedure also contemplates the attachment of personalty, including choses in action. Section 11-31-3 provides that, upon the filing of a bill for an attachment, where the property to be attached consists of the effects or personal property of a nonresident debtor or of an indebtedness of a resident of this state owed to such nonresident, the summons upon the resident defendant shall be sufficient to "bind" such effects or indebtedness.⁴Mid-South Paving, supra, held the only duty of a resident garnishee-defendant in a chancery attachment of personalty, tangible or intangible, is to answer as to the facts and to deliver such property to the court, if the court finally so orders. Real estate is expressly covered by § 11-31-5, which provides that a writ of attachment shall be issued by the clerk of the chancery court and levied by the county sheriff "as such writs of law are required to be levied on land, and shall have like effect".⁵ Seizure of attached real estate is achieved by compliance with the mandatory provisions of § 13-3-123, which provides that the county sheriff, by going upon the real estate attaches it at the suit of the plaintiff,⁶ and with § 11-47-5 which requires the sheriff to file with the clerk of the chancery court a notice of his levy.⁷ Compliance with these two statutory provisions perfects seizure of attached real property. The property remains subject to the attachment unless and until the nonresident debtor may appear and give "satisfactory security for performing the decree, and thereby discharging the lien . . . ; but if such debtor fail to appear, or fail to give security, the court shall have power to make any necessary orders . . .." § 11-31-9.⁸ Where a decree is rendered without an appearance of the absent debtor, the chancery court, before proceeding to satisfy its decree,...