Patrick-Mosteller Co. v. James R. Baker & Co.
105 S.E. 271
N.C.
1920
Check Treatment
Walker, J.,

after stating tie’ case: It will be impossible to decide this case upon its true merits, at this time, because it has been-tried witi slight regard to correct procedure, and the court has been misled into giving judgment without ascertaining all of the pertinent facts.

When tie plaintiff brought this action and caused an attachment to be issued and levied on tie funds in tie Bank of Hickory, because, as he alleged, tiey belonged to tie defendant Wakefield & Company, who *591 drew tbe draft payable to the order of the Bank of California, it became the first duty of the court to ascertain its own jurisdiction to try and determine the case, as it was admitted that the defendants were nonresidents, and the defendants denied, under a special appearance, that such jurisdiction existed. Again (when the funds in the Bank of Hickory were attached, it was required of any one claiming those funds, as does the Bank of California in this case, to intervene and assert its claim, setting forth the facts upon which it based its right to them in its affidavit or petition for intervention, which could be answered by the plaintiff, and thus the facts could be found, and the court could determine as to the ownership of the funds. If there is no intervention and claim of the funds by a third party, or if there is such, and the question of ownership is finally decided in favor of the plaintiff and against the claim of such third party, the court would acquire jurisdiction to the extent of the property attached, but not beyond this, so that a personal judgment could not be rendered against the defendant for any sum in excess of the amount the property brings at a sale thereof by the sheriff under the attachment and the judgment, or order, of the court. The property represents and defines the jurisdiction of the court, and the extent thereof. Winfree v. Bagley, 102 N. C., 515; Cooper v. Reynolds, 10 Wallace (U. S.), 308 (19 L. Ed., 931); Pennoyer v. Neff, 95 U. S., 714 (24 L. Ed., 565). In the case last cited, the Court held that except in cases affecting the personal status of the plaintiff, and cases in which that mode of service may be considered to have been assented to in advance, the substituted service of process by publication, allowed by the law of Oregon, and by similar laws in other States where actions are brought against nonresidents, is effectual only where, in connection with process against the person for commencing the action, property in the State is brought under the control of the court, and subjected to its disposition by process adapted to that purpose, or where the judgment is sought as a means of reaching such property, or affecting some interest therein; in other words, where the action is in the nature of a proceeding in rem. There is in that case a clear and concise statement of the purpose and nature of attachment proceedings, and their effect upon the jurisdiction of the particular court wherein they are pending, by Justice Miller, which was quoted from Cooper v. Reynolds, supra, in which the opinion of the Court was delivered by Justice Field. In Winfree v. Bagley, supra, this Court adopts the law as declared in those two cases, and quotes from Pennoyer v. Neff, supra, as follows: “The substituted service of process by publication allowed by the laws of Oregon (which is the same as in North Carolina), and by similar laws in other States, where actions are brought against nonresidents, is effectual only where, in connection with process against the person for commencing the action, property in the State is *592 brought under the conctrol of the court, and subject to its disposition by process adapted for that purpose, or where the judgment is sought as a means of reaching such property or affecting some interest therein. See, also, Evans v. Alridge, 133 N. C., 378. The same doctrine was thus stated, in accordance with the above cited cases, in Goodwin v. Claytor, 137 N. C., at p. 230: “The judgment against the garnishee seems to be expressly warranted and contemplated by the statute (The Code, sec. 364), and that against the defendant is void as a personal judgment, as the court could acquire no jurisdiction to proceed against him except in so far as it could by its process levy upon or seize his property, and in this respect the suit is to all intents and purposes in the nature of a proceeding in rem and not one in personam ” citing Cooper v. Reynolds, supra; Pennoyer v. Neff, supra; Winfree v. Bagley, supra; Fisher v. Ins. Co., 136 N. C., 217; Ins. Co. v. Stratley, 172 U. S., 602. See, also, Lemly v. Ellis, 143 N. C., 200, a case having some features in common with this one.

But we conclude that the plaintiff’s judgment in the case is valid, as to Wakefield & Company, and Baker & Company, and enforceable, against them as a personal one, because the ground of the said defendants1 motion to dismiss is that “jurisdiction was obtained by the attachment of the proceeds of a draft payable to the Bank of California, N. A., which was in no way connected with the contract, for the breach of which the plaintiff claimed damages.” It did not have to be connected with the contract or its breach. The only question was whether the property, or funds, attached belonged to that bank or to the defendants, against whom the judgment was rendered, and an issue as to the true ownership of this property was neither raised by proper pleading or procedure of the bank, nor was any such issue tendered by it. The bank could have intervened in the attachment proceedings and set up its title to the funds, and have had its ownership of them determined. Wallace Bros. v. Robeson, 100 N. C., 206; Blair v. Puryear, 87 N. C., 101. But the Bank of California did not formally proceed, and no trial was had with reference to its ownership. The court dismissed the action as to the defendants J. L. Smiley & Company, Alaska Herring & Sardine Company, and the Bank of California. This was right, as the bank was not a proper party to the principal action, having no, connection with the contract sued on, or its breach, and the jury found in favor of the other two defendants. The court further dissolved the-attachment and ordered the funds in the Hickory Bank, which had been attached, to be turned over to the Bank of California, upon its giving bond, to be approved by the clerk of the court, in the sum of $2,300. Plaintiff excepted to this judgment and appealed. We do not know why the court vacated the attachment, as it was regularly issued. If it1 *593 did so, because it supposed that the Bank of California was the owner of the funds which had been attached, and not because of any irregularity, or defect, in issuing the attachment, it was error, because there had been no trial or hearing as to the bank’s title to the funds, and the order vacating the attachment was erroneous.

The ruling of the court vacating the attachment is reversed, but it is directed that the California Bank be allowed to file an affidavit, or petition, for intervention to try its said title, the plaintiff being allowed to answer, and then, that further proceedings be had in that matter according to the course and practice of the Court. The Bank of California may raise any other question touching the validity of the attachment. As Wakefield & Company and James R. Baker & Company answered, and the issues raised thereby were tried to a verdict, which was in favor of plaintiff, the judgment upon said verdict is affirmed, and plaintiff may enforce his judgment, as he may be advised, except that no part of the funds in the possession of the Bank of Hickory shall be applied thereto, or to any execution issued thereon, until the question as to the ownership of that fund, and the validity of the attachment, is finally determined, as hereinbefore indicated. If it is found that these funds, for any reason, belong to the Bank of California, or that it is entitled to have the same turned over to it, they will be paid or delivered to it, but if found not to belong to that bank, or that it is not entitled to the same, and that the defendants named in the final judgment, at last May term, to wit: Wakefield & Company, and Baker & Company, are the owners thereof, or are entitled to the fund, the plaintiff may proceed and have the funds in the Hickory Bank applied in payment off its judgment, or, if the funds have been delivered or paid to the Bank of California, it may have judgment upon the bond filed in lieu thereof by that bank, upon reasonable notice to the parties thereto, and if, after exhausting the fund or the bond, its judgment is not fully paid, it may have execution for the balance, or proceed to collect the same as the law allows. The final judgment of May term against Wakefield & Company, and Baker & Company, is held to be valid against them, upon the ground that their action in the case and their answer were equivalent to a general appearance, and besides their motion to dismiss upon the special appearance was properly denied, because the ground of the motion, as stated therein, was, and is, insufficient for vacating the attachment, but is sufficient ground for the nonsuit as to the Bank of California, it having been no party to the contract, and not implicated in its breach.

One-half of the costs of this Court, in plaintiffs’ appeal, against plaintiff, and the other half against the Bank of California; and in the defendants’ appeal, costs of the Court against them.

Plaintiffs’ appeal, error.

Defendants’ appeal, modified and affirmed.