Thomas v. Frosty Morn Meats, Inc.

146 S.E.2d 397 (1966) 266 N.C. 523

Earle L. THOMAS, Individually and d/b/a Thomas Brokerage Company,
v.
FROSTY MORN MEATS, INC.

No. 362.

Supreme Court of North Carolina.

February 4, 1966.

Clifton W. Paderick, Kinston, for plaintiff.

LaRoque, Allen & Cheek, Kinston, for defendant.

MOORE, Justice.

Article IV, section 1, of the Constitution of the United States commands that full faith and credit shall be given in each state to the judicial proceedings of every other state. And the acts of Congress, enacted pursuant to the power granted by that clause of the Constitution, direct that judgments shall have full faith and credit given to them in every court within the United States as they have by law or usage in the courts of the state from which they are taken. Dansby v. North Carolina Mutual Life Insurance Co., 209 N.C. 127, 183 S.E. 521. Judgments of other states are put on the same footing as domestic judgments. Webb v. Friedberg, 189 N.C. 166, 126 S.E. 508; Marsh v. Atlantic Coast Line R. R., 151 N.C. 160, 65 S.E. 911; Miller v. Leach, 95 N.C. 229. When a judgment rendered by a court of one state becomes the cause of action in a court of another state and the transcript made in the state of its rendition, duly authenticated as provided by the act of Congress (Title 28, U.S.C.A., § 1738; General Statutes of North Carolina, Appendix III), is produced, it imports verity and validity. Levin v. Gladstein, 142 N.C. 482, 55 S.E. 371, 32 L.R.A.,N.S., 905.

In challenging a foreign judgment a defendant has the right to interpose proper defenses. He may defeat recovery by showing want of jurisdiction either as to the subject matter or as to the person of defendant. Crescent Hat Co., Inc. v. Chizik, 223 N.C. 371, 26 S.E.2d 871; Casey v. Barker, 219 N.C. 465, 14 S.E.2d 429; Dansby v. North Carolina Mutual Life Insurance Co., supra. However, jurisdiction will be presumed until the contrary is shown. Levin v. Gladstein, supra.

In the case at bar the defense is that the New York court had no jurisdiction of defendant. It is elementary that unless one named as a defendant has been brought into court in some way sanctioned by law, or makes a voluntary appearance in person or by attorney, the court has no jurisdiction of the person and judgment rendered against him is void. Powell v. Turpin, 224 N.C. 67, 29 S.E.2d 26. But want of jurisdiction of the person is an affirmative defense in a suit on a foreign judgment and the burden is on defendant to establish it, unless it affirmatively appears from plaintiff's pleadings or the judgment sued on that the court had no jurisdiction of defendant. Casey v. Barker, supra.

Defendant contends that the New York judgment shows on its face that there was no proper and legal service of summons. The court below adopted this view and nonsuited the action. The court concluded that the New York judgment is not entitled to faith and credit in North Carolina for the reason that it shows on its face "that no personal service of process upon the defendant has ever been made within the territorial jurisdiction of the Supreme Court of the State of New York."

"It is a general rule of constitutional law that no judgment in personam can, consistently with due process, be rendered against a nonresident without personal service of process upon him within the territorial jurisdiction of the court in which the suit is brought, and that a judgment rendered without such service of process is not entitled to recognition in the courts of other states under the full faith and credit clause." 30A Am.Jur., Judgments, § 265, p. 329. But this rule is not absolute. There is a decided trend in favor of in personam jurisdiction based on substituted service or personal service beyond the territorial jurisdiction of the forum state. Most of the states have by statutes so provided in certain circumstances, and the courts have held that such statutes do not violate due process; this is especially true in actions against foreign corporations. The Supreme Court of the United States, in McGee v. International Life Ins. Co., 355 U.S. 220, 78 S. Ct. 199, 2 L. Ed. 2d 223 (1957) stated: "Since Pennoyer v. Neff, 95 U.S. 714, 24 L. Ed. 565, this Court has held that the Due Process Clause of the Fourteenth Amendment places some limit on the power of state courts to enter binding judgments against persons not served with process within their boundaries. But just where this line of limitations falls has been the subject of prolific controversy, particularly with respect to foreign corporations. In a continuing process of evolution this Court accepted and then abandoned `consent,' `doing business,' and `presence' as the standard for measuring the extent of state judicial power over such corporations. See Henderson, the Position of Foreign Corporations in American Constitutional Law, c. V. More recently in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95, the Court decided that `due 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 "the traditional notions of fair play and substantial justice.'" Id., 326 U.S. at page 316, 66 S.Ct. [154] at page 158." In this connection see Byham v. National Cibo House Corp., 265 N.C. 50, 143 S.E.2d 225.

The fact that defendant, a North Carolina corporation, was served with process beyond the territorial jurisdiction of the New York court is not, nothing else appearing, sufficient to establish want of jurisdiction of defendant by the New York court, as against the principle that jurisdiction will be presumed until the contrary is shown. The validity and effect of a judgment of another state must be determined by the laws of that state. Dansby v. North Carolina Mutual Life Insurance Co., supra. It does not appear that the court below had before it the judgment roll and proceedings in the New York case nor that it considered the laws of New York, as interpreted by court decisions of that state, in passing upon the jurisdictional question. The basis upon which decision to nonsuit was placed, the service of summons outside the state of New York, is inconclusive in the light of the record before us. The defendant will have the opportunity, when the cause comes on again for hearing, to show, if it can, from the proceedings had in the New York court and the laws of that state that there was no legal and valid service of process.

Reversed.