Foster v. Allison Corp.

191 N.C. 166
CourtSupreme Court of North Carolina
DecidedFebruary 17, 1926
StatusPublished
Cited by9 cases

This text of 191 N.C. 166 (Foster v. Allison Corp.) is published on Counsel Stack Legal Research, covering Supreme Court of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Foster v. Allison Corp., 191 N.C. 166 (N.C. 1926).

Opinions

Clarkson, J.

Tbe defendants contend: “The court should have set aside this judgment for excusable neglect, under C. S., 600. That any party to a suit, in tbe courts of North Carolina, whether personal or corporate, whether resident or nonresident, who has a judgment entered against him by default bad a right, when be has a meritorious defense and has been guilty of no inexcusable neglect, to have said verdict set aside if such motion is made in apt timé.”

This brings us to consider C. S., 492 and O. S., 600. Under C. S., Art. 8, “Civil Procedure,” -the procedure of obtaining service on foreign corporations by publication, manner, etc., is fully set forth. Then tbe manner of personal service on nonresidents, then C. S., 492, which is as follows: “Tbe defendant against whom publication is ordered, or who is [170]*170served under the provisions of the preceding section, or bis representatives, on application and sufficient cause shown at any time before judgment, must be allowed to defend the action; and, except in an action for divorce, the defendant against whom publication is ordered, or bis representatives, may in like manner, upon good cause shown, 'be allowed to defend after judgment, or at any time within one year after notice thereof, and within five years after its rendition, on such terms as are just; and if the defense is successful and the judgment or any part thereof has been collected or otherwise enforced, such restitution may be compelled as the court directs. Title to property sold under such judgment to a purchaser in good faith is not thereby affected. No fiduciary officer or trustee who has made distribution of a fund under such judgment in good faith is personally liable if the judgment is changed by reason of such defense made after its rendition; nor in case the judgment was rendered for the partition of land, and any persons receiving any of the land in such partition sell it to a third person; the title of such third person is not affected if such defense is successful, but the redress of the person so defending after judgment shall be had by proper judgment against the parties to the original judgment and their heirs and personal representatives, and in no case affects persons who in good faith have dealt with such parties or their heirs or personal representatives on the basis of such judgment being j>ermanent.” It will be noted that in C. S., 492, is the following: “Title to property sold under such judgment to a purchaser in good faith is not hereby affected.”

Counsel for defendants earnestly contends that in setting aside a judgment under O. S., 492, a bona fide purchaser may obtain title and property be taken without due process of law or a day in court, and argues that this would not be the case under C. S., 600. The contention is not tenable as to due process. When defendant, Allison Corporation, acquired land in this State and when the Newton Trust Company took a mortgage on the land, they took it with the law in force at the time in reference to foreign corporations.

It is said in 6 R. C. L., part sec. 445: “It is the duty of the owner of real estate, who is a nonresident, to take measures that in some way he shall be represented when his property is called into requisition, and if he fails to do this, and fails to get notice by the ordinary publications which have usually been required in such cases, it is his misfortune, and he must abide the consequences. Such publication is due process of law as applied to this class of cases.” The same principle is laid down in Freeman on Judgments, 3d vol., 5 ed., p. 2840.

In Cooley Const. Lim., 7 ed., p. 583, it is said: ‘“Where a party has property in a State, and resides elsewhere, his property is justly subject [171]*171to all valid claims that may exist against him there; but beyond this, due process of law would require appearance or personal service before the defendant could be personally bound by any judgment rendered.” Statutes providing for service by publication in actions in rem is due process. See note 87 Am. St. Rep., 360.

In Bernhardt v. Brown, 118 N. C., p. 706, Clark, J., said: “In proceedings under this class — proceedings in rem — it is not necessary, as in proceedings quasi in rem, to acquire jurisdiction by actual seizure or attachment of the property, but ‘it may be done by the mere bringing of the suit in which the claim is sought to be enforced, which in law (in such cases) is equivalent to a seizure, being the open and public exercise of dominion over it for the purpose of the suit.’ Heidritter v. Elizabeth Oil Co., 112 U. S., 294. And as to this class of cases, the statute prescribes publication of the summons whether the defendant is a nonresident or a resident whenever, ‘after due diligence he cannot be found in the State.’ The Code, sec. 218 (4); Claflin v. Harrison, 108 N. C., 157.”

In Bynum v. Bynum, 179 N. C., p. 16, this Court said: “The power of a court having jurisdiction, by proceedings, quasi in rem, and observing the statutory methods as to service of process, to make valid decrees affecting the status, condition, and ownership of real property, situate within the State, is fully recognized with us, and, in proper instances, the same may be made effective both against nonresidents and persons unknown. Lawrence v. Hardy, 151 N. C., 123; Vick v. Flourney, 147 N. C., 209; Bernhardt v. Brown, 118 N. C., 701.” White v. White, 179 N. C., 592; Bridger v. Mitchell, 187 N. C., 374.

In the Heidritter case, supra, Mr. Justice Matthews says: “In Cooper v. Reynolds, 10 Wall., 308-318 (77 U. S., XIX, 931, 933), it 'is said by Mr. Justice Miller, delivering the opinion of the Court, that, in such cases, where there is no appearance of the defendant and no service of process on him, ‘The ease becomes, in its essential nature, a process in rem,” and that, p. 317, ‘while the general rule in regard to jurisdiction in rem requires an actual seizure and possession of the res by the officer of the court, such jurisdiction may be acquired by acts which are of equivalent import and which stand for and represent the dominion of the court over the thing and in effect subject it to the control of the court.’ This may be the levy of a writ, or the mere bringing of a suit. ‘It is immaterial,’ said this Court by Mr. Justice McLean, in Boswell v. Otis, 9 How., 336, ‘whether the proceedings against the property be by an attachment or bill in chancery. It must be substantially a proceeding in rem.’ ”

The suit brought by plaintiff is not a proceeding quasi in rem — such as an attachment, etc. — but a proceeding in rem, an equitable proceeding, [172]*172rescission and cancellation, to set aside certain' conveyances for fraud, formerly a bill in chancery. Distinctions between forms of actions at law and suits in equity are abolished undei; our Constitution, but does not destroy equitable rights and remedies, nor does it merge legal and equitable rights. Furst v. Merritt, 190 N. C., 397.

Freeman on Judgments, vol. 3, 5 ed., p.

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Bluebook (online)
191 N.C. 166, Counsel Stack Legal Research, https://law.counselstack.com/opinion/foster-v-allison-corp-nc-1926.