Transcontinental Credit Corp. (Ill.) v. Simkin, 371A55

• Decision Date: 13 January 1972
• Docket Number: No. 371A55,371A55
• Citation: 150 Ind.App. 666,277 N.E.2d 374
• Parties: TRANSCONTINENTAL CREDIT CORPORATION (ILLINOIS), Appellant, v. James SIMKIN, Appellee.
• Court: Indiana Appellate Court

Page 374

277 N.E.2d 374

150 Ind.App. 666

TRANSCONTINENTAL CREDIT CORPORATION (ILLINOIS), Appellant, v. James SIMKIN, Appellee.

No. 371A55.

Court of Appeals of Indiana, Third District.

Jan. 13, 1972.

Rehearing Denied Feb. 22, 1972.

Nathan Nisenbaum, Nisenbaum & Brown, Indianapolis, for appellant.

Ronald S. Lieber, Lieber & Neff, Indianapolis, for appellee.

HOFFMAN, Chief Judge.

The primary issue presented in this appeal is whether the judgment of the trial court sustaining defendant's motion to dismiss for lack of jurisdiction was proper.

On November 4, 1969, plaintiff-appellant, Transcontinental Credit Corporation (Transcontinental), filed its complaint on guaranty, affidavit for writ of attachment and affidavit for publication against defendant-appellee James Simkin, a nonresident of Indiana, as individual guarantor of a loan made by Transcontinental to Kingsland Development Co., Inc.

Also, on November 4, 1969, the trial court ordered a notice of the pendency of such action to be published and ordered Transcontinental to post a $20,000 bond for the possession of personal property and real estate. An attachment was then issued on certain real property of defendant-Simkin.

Subsequently, the Marion County Sheriff executed and returned the writ of attachment, and filed an inventory and appraisement and sheriff's notice of attachment or levy. The plaintiff then filed a notice of suit affecting real estate and caused a notice of pendency of the action to be duly published in Marion County, Indiana.

Simkin then appeared by counsel and filed a motion to dismiss alleging that the trial court has no jurisdiction over the person of the defendant, that the plaintiff has no legal standing or right to institute suit in the State of Indiana, and that the court lacks jurisdiction over the subject-matter. ¹ Such motion was sustained by the trial court thus giving rise to this appeal.

The first question presented for our consideration is whether the rules of civil procedure in effect at the time this action was commenced, or the present rules of civil procedure should be applied to this appeal. Rule TR. 84, Indiana Rules of Procedure, provides:

'These rules will take effect on January 1, 1970. They govern all proceedings in actions brought after they take effect and also all further proceedings in actions then pending, except to the extent that in the opinion of the court their application in a particular action pending when the rules taken effect would not be feasible or would work injustice, in which event the former procedure applies.'

Here, there is no indication that the application of the present rules would not be feasible or would work injustice. The procedures for instituting the instant case and defenses thereto have been provided in the present rules, and such procedures were substantially complied with by both parties. Further, application of the present rules would not prejudice any rights of either the appellant or appellee in the determination of whether an attachment of appellee-Simkin's property should lie. Therefore, the present Indiana Rules of Procedure will be used to resolve the questions raised in this appeal.

IC 1971, 34--1--11--1, Ind.Ann.Stat., § 3--501 (Burns 1968), which sets forth the causes for the issuance of an attachment, is as follows:

'Causes for attachment.--The plaintiff, at the time of filing his complaint, or at any time afterwards, may have an attachment against the property of the defendant, in the cases and in the manner hereinafter stated, where the action is for the recovery of money:

'First. Where the defendant, or one of several defendants, is a foreign corporation or a non-resident of this state;

'Second. Where the defendant, or one of several defendants, is secretly leaving or has left the state, with intent to defraud his creditors; or,

'Third. So conceals himself that a summons can not be served upon him; or,

'Fourth. Is removing or about to remove his property subject to execution, or a material part thereof, out of this state, not leaving enough therein to satisfy the plaintiff's claim; or,

'Fifth. Has sold, conveyed or otherwise disposed of his property subject to execution, or suffered or permitted it to be sold with the fraudulent intent to cheat, hinder or delay his creditors; or,

'Sixth. Is about to sell, convey or otherwise dispose of his property subject to execution, with such intent. Provided, That the plaintiff shall be entitled to an attachment for the causes mentioned in the second, fourth, fifth and sixth specifications of this section, whether his cause of action be due or not.'

To the same effect Rule TR. 64(B)(1), Indiana Rules of Procedure, provides:

'(B) Attachment or attachment and garnishment. Attachment or attachment and garnishment shall be allowed in the following cases in addition to those where such remedies prior to judgment are now permitted by law:

'(1) It shall be a cause for attachment that the defendant or one of several defendants is a foreign corporation, a nonresident of this state, or a person whose residence and whereabouts are unknown and cannot be determined after reasonable investigation before the commencement of the action.'

In applying the attachment statutes the courts of Indiana have said that because an attachment action is a statutory ex parte proceeding, the statutes providing for such action must be strictly complied with or no rights can be derived thereunder. United States Capsule Co. v. Isaacs (1899), 23 Ind.App. 533, 55 N.E. 832; Marnine v. Murphy (1856), 8 Ind. 272.

It is also true, however, that once the stated grounds for attachment are shown the statute should be liberally construed to effect its remedial nature. Brockhaus v. Allen, et al. (1955), 126 Ind.App. 601, 127 N.E.2d 344, (transfer denied).

Transcontinental's position is that it has expressly complied with the statutory provisions (§ 3--501 et seq., supra) for bringing an attachment action. In both its brief and reply brief, appellant-Transcontinental has sought to persuade this court that the trial court had both jurisdiction of the subject-matter and jurisdiction over the person of defendant-appellee. Appellant contends that jurisdiction over the subject-matter is derived because the pleadings as a whole indicate its intention to file an action for attachment. It also contends that jurisdiction over the person was obtained because an attachment action is an in rem action for which publication of notice is sufficient under Rule TR. 4.13, Indiana Rules of Procedure.

The crux of Simkin's argument is that because an attachment is an auxiliary action, it is conditional upon the obtaining of a valid judgment in the main action. Simkin contends that because appellant's complaint on guaranty is seeking a personal judgment, and because he was not personally served, the trial court has no jurisdiction to render judgment on the complaint and the attachment must fail.

Both the Supreme and Appellate Courts of Indiana have held that an attachment action is an ancillary, not an original, form of action. The subsequent sale of attached property is dependent upon a final judgment in the main action in favor of the attaching party. Whinery, Executrix v. Kozacik (1939), 216 Ind. 136, 22 N.E.2d 829; State ex rel. Mason v. Miller (1878), 63 Ind. 475; Robbins v. Alley, et al. (1872), 38 Ind. 553; Boyer v. Meeks (1929), 88 Ind.App. 450, 164 N.E. 501.

The problem thus raised by the instant case is whether the right to bring an attachment action against the property of a non-resident held within the State of Indiana is conditioned on a valid right to carry on a personal judgment action against the person of the defendant, or whether a complaint for recovery of money filed together with an affidavit for attachment is such a proceeding that a claim may be adjudicated and satisfied against the property of a non-resident held within this State.

This issue was discussed by Professor Harvey in 4 Ind.Prac.--Rules of Civ.Proc., at 356--357, as follows:

'Probably the most important ground for attachment is that which allows proceedings against property of a nonresident. Thus if D has property in Indiana and lives in New York, C can obtain jurisdiction over D to the extent of his property by bringing attachment in Indiana and serving D with notice by publication. Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1878). See Burns' Stat., § 2--807 which provides for notice by publication in such cases. However, unless personal service is given D, D's judgment procured in the attachment action is valid only to the extent of the property attached. Attachment thus is allowed as a means of imparting limited notice of a suit upon the theory that an owner of property will be informed of action affecting his property. Upon this theory a lawyer would be wise to have a non-resident's property attached before notice by publication. Northern Indiana Ry. v. Lincoln Nat'l Bank, 47 Ind.App. 98, 92 N.E. 384 (1910); Dodgem Corp. v. D D. Murphy Shows, Inc., 96 Ind.App. 325, 183 N.E. 699, 185 N.E. 169 (1932). Where the debtor is a nonresident, attachment and garnishment proceedings likewise may be...