FIRST-CITIZENS BANK AND TRUST COMPANY v. McDaniel

197 S.E.2d 556, 18 N.C. App. 644, 1973 N.C. App. LEXIS 1965

• Court: Court of Appeals of North Carolina
• Decided: July 11, 1973
• Docket: 7310SC439
• Status: Published

Opinion

CAMPBELL, Judge.

In International Shoe Co. v. Washington, 326 U.S. 310, 90 L.Ed. 95, 66 S.Ct. 154 (1945), the United States Supreme Court defined the outer limits of in personam jurisdiction over nonresident defendants: “ [D] ue process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ”

In McGee v. International Life Ins. Co., 355 U.S. 220, 2 L.Ed. 2d 223, 78 S.Ct. 199 (1957), the Court upheld jurisdiction over a nonresident defendant based only upon one contract to be performed in the forum state.

And in Hanson v. Denckla, 357 U.S. 235, 2 L.Ed. 2d 1283, 78 S.Ct. 1228 (1958), the court indicated that “longarm” jurisdiction was not unlimited. A trust had been created in Delaware, the trustee being located in that State. Some ten years thereafter the settlor of the trust moved to Florida. That State attempted to exercise in personam jurisdiction over the Delaware trustee. The court found that the trustee had no contacts with the State of Florida and could not be forced to defend a lawsuit in that State. The trustee had not engaged in “ . . . some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protection of its laws.”

Thus, under International Shoe, McGee, and Hanson a single contract executed in North Carolina or to be performed in North Carolina may be a sufficient minimal contact in this State upon which to base in personam jurisdiction, with respect to the parties so contracting.

The above premise is codified in the North Carolina “long-arm” statutes, G.S. 1-75.4(1) through (10), which statutory provisions are a legislative attempt to assert in personam jurisdiction over nonresident defendants to the full extent permitted by the Due Process Clause of the United States Constitution.

G.S. 1-75.4(5) (a) confers personal jurisdiction over foreign defendants in any action which

“Arises out of a promise, made anywhere to the plaintiff or to some third party for the plaintiff’s benefit, by the defendant to perform services within this State or to pay for services to be performed in this State by the plaintiff; ...”

Where the nonresident defendant promises to pay the debt of another, which debt is owed to North Carolina creditors, such promise is a contract to be performed in North Carolina and is sufficient minimal contact upon which this State may assert personal jurisdiction over the defendant. Hoppers Co., Inc. v. Chemical Corp., 9 N.C. App. 118, 175 S.E. 2d 761 (1970).

We are of the opinion that clearly the lending of money to be repaid by the borrower is the rendering of a service by the lender to that borrower. It clearly follows therefrom that defendant’s promise to pay the loan made by plaintiff to defendant’s corporation is the promise to pay for a service rendered in this State, which payment also is to be made in this State.

Defendant’s contract within this State comes within the provision of G.S. 1-75.4, and his connection with this State is sufficient to justify his being subjected to the jurisdiction of this State’s courts.

No error.

Judges Morris and Parker concur.