Quarl v. Abbott

• Decision Date: 09 June 1885
• Citation: 1 N.E. 476,102 Ind. 233
• Parties: Quarl v. Abbott.
• Court: Indiana Supreme Court

102 Ind. 233

1 N.E. 476

Quarl

v.Abbott.

Supreme Court of Indiana.

Filed June 9, 1885.

Appeal from Marion superior court.

A. B. Young, for appellant.

R. Hill, for appellee.

Elliott, J.

The material facts stated in the complaint of the appellee are these: Vincent A. Quarl and Samuel Lefever are non-residents of the state, and the latter indorsed to the appellee two promissory notes, executed by Bledsoe and others. At the time the notes matured the makers were insolvent, and so remained. At the time of the indorsement made by him, Lefever owed debts amounting to $10,000, and was the owner of 24 shares of the capital stock of a corporation known as the Indiana Chair Manufacturing Company; and, to cheat and defraud his creditors, entered into a conspiracy with Quarl, and, pursuant to the fraudulent purpose, did transfer and assign all of the stock to Quarl on the books of the company, which transfer was accepted with full knowledge of the assignor's fraudulent intent. Nothing was paid by Quarl for the stock, and he appears on the books of the corporation to be the owner. The prayer is that the court will ascertain the amount due the plaintiff, adjudge the transfer of the stock to be fraudulent, and decree that the property be sold as on execution to satisfy appellee's claim.

Concurrently with the complaint the appellee filed an affidavit reading thus: “Said plaintiff says he has a good and valid cause of action against Samuel Lefever and Vincent A. Quarl, which, as to said Lefever, is founded upon the indorsement to this plaintiff of certain promissory notes, and, as to said Lefever and Quarl jointly, is founded upon the frandulent transfer to said Lefever of certain property more particularly described in the complaint in this cause, which transfer grows out of and is connected with the indorsement of said notes by the said Lefever to this plaintiff; and he further says that said defendants, Lefever and Quarl, are non-residents of the state of Indiana.”

An affidavit and undertaking in attachment were also filed, and the writ, issued at the suit of the appellee, was levied on the stock standing in the name of Quarl on the books of the company. The complaint and affidavit for publication were filed on the seventh day of April, 1878. On the eleventh day of June, 1878, proof of publication of notices was made. The notice reads as follows:

“ Oliver H. P. Abbott v. Samuel L. Lefevre, V. Augustus Quarl, Indianapolis Chair Manufacturing Company. No. 21,993.

Room 4. April term, 1878.

Be it known, that on the seventh day of April, 1878, the above-named plaintiff, by his attorneys, filed in the office of the clerk of the superior court of Marion county, in the state of Indiana, his complaint against the above-named defendants for attachment; and that on the said seventh day of April, 1878, the said plaintiff filed in the said clerk's office the affidavit of a competent person showing that said defendants Samuel L. Lefever and V. Augustus Quarl are not residents of the state of Indiana. Now, therefore, by order of said court, said defendants last above named are hereby notified of the filing and pending of said complaint against them. And that unless they appear and answer or demur thereto at the calling of said cause on the second day of the term of said court, to be begun and held at the court-house in the city of Indianapolis on the first Monday in June, 1878, said complaint and the matter and things therein contained and alleged will be heard and determined in their absence. Austin H. Brown, Clerk.”

On the day last named the cause was submitted to the court, and a finding and judgment entered in favor of the appellee. In December, 1879, Quarl appeared and filed a motion to open the judgment, and his motion was sustained. On the third day of January, 1880, he filed an answer of general denial, and on the first day of the following July the cause was, by agreement, submitted to the court for trial. The trial resulted in a finding and judgment for the appellee. In September, 1880, a motion for a new trial was overruled, appeal was taken to the general term, and the judgment of the special term affirmed on the second day of May, 1881.

The appellant contends that no jurisdiction of the person of the defendants was obtained, and therefore no personal judgment could be rendered. We concur with counsel that no personal judgment can be rendered in a case where there is constructive service, but we cannot concur in the conclusion which is deduced from this proposition. It does not follow that property fraudulently transferred may not be reached and subjected to sale in an action commenced by publication.

A personal judgment is one which binds the defendant, while a judgment which operates upon property is, in its essential features, a judgment in rem. Such a judgment creates no personal liability, but operates upon the particular property which constitutes the subject of litigation. A judgment operating solely upon property cannot be made the foundation of an action against the defendant; nevertheless it may effectively operate upon the particular property within the jurisdiction of the court. If the appellant is right, then a citizen of Indiana can never reach property within our jurisdiction if it is claimed by a non-resident. If the appellant is correct, then our statutory provisions providing for attachments against non-resident debtors is absolutely null, for in every case it is necessary to ascertain the amount of the debt in order to make a proper order of sale; and this proves his argument to be unsound.

It is a general principle that the process of the courts may reach and seize property within their jurisdiction. A man who brings property within the territorial jurisdiction of a state subjects it to the laws of that state. “If a foreigner, or citizen of another state,” says an able court, “send his property within a jurisdiction different from that where he resides, he impliedly submits it to the rules and regulations in force in the country where he places it. What the law protects it has the right to regulate.” Clark v. Tarbell, 58 N. H. 88. This general doctrine has been declared by other courts, among them our own. Ames Iron-works v. Warren, 76 Ind. 512;Green v. Van Buskirk, 7 Wall. 139;Rice v. Courtis, 32 Vt. 460. It is upon this general principle that our statutory provisions relative to notice by publication are founded. If property of a non-resident cannot be reached by legal process upon constructive notice, then our statutes were passed in vain, and are mere empty legislative declarations, without either force or meaning; for, if the person is not within the jurisdiction of the court, no personal judgment can be rendered, and if the judgment cannot operate upon the property, then no effective judgment at all can be rendered; so that the result would be that the courts would be powerless to assist a citizen against a non-resident. Such a result would be a deplorable one. If the rule were that which appellant's argument asserts, a citizen with a chattel mortgage could not enforce it on property within our borders against a non-resident, nor could a creditor enforce a claim against a man who had fled to Canada and made it his residence, although he had abundance of property within the state. Nor, if the rule were as asserted, could property of non-resident corporations within our limits be reached. But the rule is not as contended for; property within our jurisdiction may be seized upon process issued upon constructive notice. This has been often decided with respect to attachment proceedings. Judge Story says: “Sometimes the seizure or attachment is purely nominal, as, for example, of a chip, or of a cane or a hat. In other cases the seizure or attachment is bona fide, of real or personal property within the territory, or of debts due to non-resident persons, in the hands of their debtors who live within the country. In such cases, for all the purposes of the suit, the existence of the property so seized or attached constitutes a just ground of proceeding to enforce the rights of the plaintiff to the extent of subjecting such property to execution upon the decree or judgment.” Story, Confl. Laws, § 549. Wharton says: “But when the thing is situate within the jurisdiction of the court, then proceedings in rem give title to it against all the world.” Whart. Confl. Laws, § 829. He applies this doctrine to the seizure of goods under a writ of attachment, and cites Ewer v. Coffin, 1 Cush. 23;Phelps v. Holker, 1 Dall. 261;Pawling v. Willson, 13 Johns. 192;Arndt v. Arndt, 15 Ohio, 33;McVicker v. Beedy, 31 Me. 316;Bissell v. Briggs, 9 Mass. 468. Freeman says: “Proceedings by attachment are not, strictly speaking, in rem, and yet they are sometimes so spoken of, and in some respects their effect is more, and in other respects less, comprehensive than the effect of proceedings in personam. Thus by the seizure of property, as where moneys are garnished, jurisdiction is acquired over the fund, so that an order may be made which will bind the owner, although he has not appeared, nor been personally summoned in the case, provided such owner is in law or in fact a defendant in the case.” Freem. Judgm. § 607 a.

The supreme court of the United States, in speaking of notice by publication, says: “Such service may always be sufficient where the object of the action is to reach and dispose of property in the state, or of some interest therein, by enforcing a lien or contract respecting the same, or to partition it among owners, or when the public is a party to condemn and appropriate private property for a public purpose. In other words, such service may answer in all actions which are substantially proceedings in rem.” Pennoyer v. Neff, 95 U. S. 727.

The issuing of the writ and the levy by the sheriff brought the property within the jurisdiction of the court. But we need not stop at this point, for the power...