State ex rel. Mercantile Nat. Bank at Dallas v. Rooney

• Decision Date: 11 April 1966
• Docket Number: No. O,No. 51547,O,51547
• Court: Missouri Supreme Court
• Parties: STATE ex rel. MERCANTILE NATIONAL BANK AT DALLAS, Dallas, Texas, Relator, v. James S. ROONEY, Judge of Divisionne of the Circuit Court of Clay County, Missouri, and Charles F. Curry & Company, a Corporation, Respondents.

Page 354

402 S.W.2d 354

STATE ex rel. MERCANTILE NATIONAL BANK AT DALLAS, Dallas Texas, Relator, v. James S. ROONEY, Judge of Division No. One of the Circuit Court of Clay County, Missouri, and Charles F Curry & Company, a Corporation, Respondents.

No. 51547.

Supreme Court of Missouri, En Banc.

April 11, 1966.

Opinion Modified on Courts' Own Motion and Motion for

Rehearing Denied May 9,

1966.

Arthur R. Kincaid, Hale, Coleberd, Kincaid & Waters, Liberty, for relator.

David R. Hardy, Frank P. Sebree, William W. Shinn, Mari W. Privette, Shook, Hardy, Ottman, Mitchell & Bacon, Kansas City, S. Preston Williams, Williams, Norton & Pollard, North Kansas City, for respondents.

STORCKMAN, Chief Justice.

This is an original proceeding in prohibition to prevent the respondent circuit judge from substituting the relator, a foreign executor, as the defendant in an action pending in Missouri at the time the original nonresident defendant died. The parties filed a stipulation of facts in which they agreed inter alia that all prior proceedings were incorporated by reference for the consideration of the court. From these sources we state the facts.

On December 30, 1960, Charles F. Curry & Company, herein sometimes referred to as Curry Company, filed in the Circuit Court of Clay County an action for damages in the aggregate amount of $212,250 against Wyatt C. Hedrick, a resident of the State of Texas. The suit was started by an attachment which was dissolved after defendant Hedrick entered his general appearance on February 26, 1961. Plaintiff's petition sought damages for the conversion of an airplane which was alleged to have occurred in the State of Texas, damages for breach of warranty growing out of the defendant's sale of the airplane to the plaintiff, and punitive damages arising out of the alleged conversion.

The trial before a jury resulted in a verdict for the defendant on both counts submitted. The plaintiff Curry Company appealed to the Supreme Court which reversed the judgment and remanded the cause for a new trial. See Curry & Co. v. Hedrick, Mo., 378 S.W.2d 522. The plaintiff was awarded a new trial on all issues of Count I, its claim for damages for breach of warranty. The new trial on Count III was limited to the issue of damages only since the Supreme Court found that the evidence was sufficient to establish that the defendant was guilty of conversion as a matter of law.

The decision of the Supreme Court was rendered on May 1, 1964, and four days later, on May 5, 1964, the defendant Hedrick died while a resident of the State of Texas. The relator Mercantile National Bank at Dallas, Texas, also a resident of Texas, was appointed in Texas and under the authority of the laws of that State as the executor of the last will and testament of Mr. Hedrick. On November 13, 1964, the plaintiff Curry Company filed in the Circuit Court of Clay County its motion to substitute the executor Mercantile National Bank at Dallas as party defendant in the place of Mr. Hedrick and undertook to serve notice of the motion by publication in a newspaper of general circulation in Clay County, Missouri. On January 6, 1965, the executor, appearing specially, filed its motion to quash the pretended service by publication and to deny the plaintiff's motion for substitution. The matter was presented on the agreed statement of facts and thereafter on May 14, 1965, the respondent judge filed a notice that he would on June 10, 1965, enter an order substituting the executor Mercantile National Bank at Dallas as the party defendant and would overrule the motion of the executor to quash service of process on it. Thereupon, the executor as relator filed its petition for a writ of prohibition and this court issued its preliminary writ upon which the issues were joined.

The statement of facts in paragraph 7 states that the publication of the notice of the motion to substitute was 'in all respects, in accordance with applicable legal provisions save for the contention of said executor that any service under the facts and circumstances is void and of no force and effect.'

The relator asserts (1) the common-law rule is that an out-of-state legal representative cannot be substituted in the place of a deceased defendant; (2) in any event the substitution of a nonresident legal representative requires specific legislative authority and the Missouri statute does not so provide; (3) in the circumstances of this case a statutory enactment is not warranted and such a construction of existing statutes would violate provisions of the Constitution of the United States and of the State of Missouri; (4) statutes permitting such substitution are based on the police power of the state and other factors not present in this case; and (5) a judgment rendered in Missouri against the Texas executor would not be entitled to recognition in Texas.

The respondents contend that (1) Mr. Hedrick, by submitting to the jurisdiction of Missouri courts, bestowed on the state jurisdiction to conclude the litigation by substituting his nonresident executor as the party defendant; (2) Missouri statutes provide that the lawsuit can proceed to a conclusion by substituting the relator as defendant; and (3) relator's argument based on the common law and its speculation as to what a Texas court might do are irrelevant and its arguments about constitutionality and statutory construction should not prevent this court holding that the relator may properly be substituted.

The statutes upon which the respondents chiefly rely are § 507.100, RSMo 1959, V.A.M.S., relating to substitution of parties upon death, incompetency, or transfer of interest, and § 506.160, relating to service by mail or publication. Supreme Court Rules 52.12 and 54.08 deal with substitution and publication respectively, and in substantially the same language the statutes employ. The respondents do not contend that the court rules are more favorable to them or that the power of state courts to acquire jurisdiction of a nonresident executor is not dependent on statutory enactment; therefore, we will limit our discussion to the statutory law. See Mennemeyer v. Hart, 359 Mo. 423, 221 S.W.2d 960, 963(8, 9).

In the view we take of the case before us, the writ of prohibition must be made permanent because in any event statutory authority is necessary to substitute the foreign executor as the party defendant in the pending action and to acquire jurisdiction over such executor, and no such statutory authority exists. It will, therefore, be unnecessary to discuss the power of the state to enact valid statutes so providing and other questions not relevant to the determinative issues.

As previously indicated, this is an action for the recovery of a personal judgment and the Curry Company now seeks to substitute the relator in order to obtain a money judgment against the relator as executor of Mr. Hedrick's estate. Generally, a court's jurisdiction in personam is confined to persons within the territorial jurisdiction of the court and service of process beyond such limits is ineffective to confer jurisdiction over the person served. State ex rel. Minihan v. Aronson, 350 Mo. 309, 165 S.W.2d 404, 407(9).

Any change in the rule that service of process beyond the territorial jurisdiction of the court is ineffective to confer jurisdiction in personam over the person served is dependent on valid legislative action. State ex rel. Minihan v. Aronson, 350 Mo. 309, 165 S.W.2d 404, 407(10); State ex rel. Kissinger v. Allison, Mo.App., 328 S.W.2d 952, 958(3); State ex rel. Ballew v. Hawkins, Mo.App., 361 S.W.2d 852, 857(7); State ex rel. Public Service Commission v. Thompson, Mo.App., 379 S.W.2d 824, 826; Restatement of the Law, Judgments §§ 22 and 23, pp. 103 and 109; Annotation: 78 A.L.R.2d 398, § 1; 72 C.J.S. Process §§ 25 and 54, pp. 1022 and 1067; 42 Am.Jur., Process § 52, p. 43.

The authorities relied on by the respondents fall short of demonstrating that the Circuit Court of Clay County is empowered to acquire jurisdiction over the executor of the estate of Wyatt C. Hedrick, deceased. The respondents contend the nonresident Hedrick in his lifetime had sufficient 'contacts' with the State of Missouri to subject his executor to the jurisdiction of its courts under the 'minimum contacts' rule declared by the United States Supreme Court. They say he consented to the litigation and participated in it over an extended period of time and assert this is sufficient basis for jurisdiction.

Typical of the cases cited on the question of 'minimum contacts' are International Shoe Co. v. State of Washington, etc., 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, and McGee v. International Life Insurance Company, 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223. Both of these cases involve the validity of service on a nonresident corporation under specific provisions of a state statute when the foreign corporation was not admitted or licensed to do business in the state. Both were original actions and the substitution of a 'proper party' was not an issue. The International Shoe case involved the collection by suit of contributions to the state unemployment compensation fund. There was a specific statute of the State of Washington as well as a federal statute declaring that no person would be relieved from making payments to a state unemployment fund on the ground that it was engaged in interstate commerce. The present Washington statute appears to be § 50.24.120 of the Revised Code of Washington Annotated, which makes the liability to suit depend upon the nonresident exercising 'the privilege of having one or more individuals perform service for it within this state' and providing for service upon the secretary of state. The case held that the nonresident corporation was sufficiently present in the state to justify constructive service. In McGee v. International Life Insurance Company, a California statute specifically provided that certain...