American Institute of Marketing Systems, Inc. v. Willard Realty Co.

176 S.E.2d 775 (1970) 277 N.C. 230

AMERICAN INSTITUTE OF MARKETING SYSTEMS, INC.
v.
WILLARD REALTY COMPANY, INC. OF RALEIGH.

No. 20.

Supreme Court of North Carolina.

October 14, 1970.

Boyce, Mitchell, Burns & Smith, Raleigh, for defendant appellant.

Jordan, Morris & Hoke, Raleigh, for plaintiff appellee.

LAKE, Justice.

The appellant contended, in the Court of Appeals and before this Court, that the provision in the contract between the parties hereto for the appointment of George M. Kinder as agent of the defendant, "for the receipt of any legal documents including process" required for the enforcement of the contract, was not sufficient to enable the Missouri court to acquire jurisdiction, so as to render a judgment in personam against the defendant, by the service of summons upon Kinder. The briefs and arguments of the parties in the Court of Appeals and before us were directed to this question alone. The Court of Appeals determined it in favor of the plaintiff. It held this provision in the contract is a sufficiently clear and definite announcement to the defendant that, by entering into such contract, he consented to being sued in Missouri in an action in which summons was served upon Kinder as the defendant's agent. Accordingly, the Court of Appeals affirmed the judgment of the District Court of Wake County in favor of the plaintiff. We reverse without reaching this question and without expressing any opinion thereon.

Article IV, § 1, of the Constitution of the United States, provides, "Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State." Nevertheless, if the Missouri court, which rendered this judgment in personam against the defendant, did not have jurisdiction over the person of the defendant, the judgment is void even in Missouri. Hanson v. Denckla, 357 U.S. 235, 78 S. Ct. 1228, 2 L. Ed. 2d 1283, reh. den., 358 U.S. 858, 79 S. Ct. 10, 3 L. Ed. 2d 92; Pennoyer v. Neff, 95 U.S. 714, 24 L. Ed. 565. In the Hanson case, the Court said:

"* * * With the adoption of that [Fourteenth] Amendment, any judgment purporting to bind the person of a defendant over whom the court had not acquired in personam jurisdiction was void within the State as well as without. * * *

"* * * Delaware is under no obligation to give full faith and credit to a Florida judgment invalid in Florida because offensive to the Due Process Clause of the Fourteenth Amendment. 28 U.S.C. § 1738. Even before passage of the Fourteenth Amendment this Court sustained state courts in refusing full faith and credit to judgments entered by courts that were without jurisdiction over nonresident defendants. D'Arcy v. Ketchum, 11 How. 165, 13 L. Ed. 648; Hall v. Lanning, 91 U.S. 160, 23 L. Ed. 271. See Baker v. Baker, Eccles & Co., 242 U.S. 394, 37 S. Ct. 152, 61 L. Ed. 386; Riley v. New York Trust Co., 315 U.S. 343, 62 S. Ct. 608, 86 L. Ed. 885."

When suit is brought in a court of this State upon a judgment rendered by a court of another state, before reaching any question as to the validity of a statute of such other state purporting to provide a substitute for personal service of process upon a nonresident thereof, or any question as to the validity and effect of a purported appointment by the defendant of an agent for the service of process upon him in the other state, the courts of this State must first determine whether summons was served in accordance with the law of the state in which the judgment was rendered. "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." Thomas v. Frosty Morn Meats, Inc., 266 N.C. 523, 146 S.E.2d 397; Powell v. Turpin, 224 N.C. 67, 29 S.E.2d 26.

Assuming, without deciding, that Kinder was the duly appointed agent of the defendant for service of summons in Missouri, it appears upon the face of the transcript of the Missouri judgment that the purported service was "by leaving a true copy hereof [i. e., the summons] at the regular business office of the within named appointed agent, George M. Kinder." The return does not purport to show a delivery of the summons to Kinder or to any other person in the office. It does not purport to show that anyone was present in the office when the constable left the summons therein. For all that appears upon the transcript, the summons may have been deposited by the constable in the wastebasket in the office of Mr. Kinder.

Since the validity and effect of a judgment of another state must be determined by reference to the laws of the state wherein the judgment was rendered, it is necessary for us to examine the statutes of the State of Missouri. Dansby v. North Carolina Mut. Life Insurance Co., 209 N.C. 127, 183 S.E. 521. We are required by G.S. § 8-4 to take judicial notice of the Missouri law. Stansbury, North Carolina Evidence, 2d ed, § 12.

Vernon's Annotated Missouri Statutes, § 506.150 reads as follows:

"Summons and petition shall be served together—how service shall be made.

"The summons and petition shall be served together. Service shall be made as follows:

* * * * * *

"(3) Upon a domestic or foreign corporation or upon a partnership, or other unincorporated association, when by law it may be sued as such, by delivering a copy of the summons and of the petition to an officer, partner, a managing or general agent, or by leaving the copies at any business office of the defendant with the person having charge thereof, or to any other agent authorized by appointment or required by law to receive service of process and, if the agent is one authorized by statute to receive service and the statute so requires, by also mailing a copy to the defendant." (Emphasis added.)

Rule 54.06 of the Missouri Rules of Court, Rules of Civil Procedure, 1970 edition, Vernon Annotated Missouri Rules, provides:

"Summons and Petition—How Served.

"The summons and petition shall be served together. Service within the state shall be made as follows:

"* * * (c) Service—On Corporation. (1) Upon a domestic or foreign corporation or upon a partnership or other unincorporated association, when by law it may be sued as such, by delivering a copy of the summons and of the petition to an officer, partner, or a managing or general agent, or by leaving the copies at any business office of the defendant with the person having charge thereof or by delivering copies to any other agent authorized by appointment or required by law to receive service of process, and if the agent is one authorized by law to receive service and the law so requires, by also mailing a copy to the defendant." (Emphasis added.)

Since it appears upon the face of the transcript of the Missouri judgment that service of summons upon the defendant was attempted by a method not authorized by the Missouri statute or by the rules of court in that state, it follows that the Missouri judgment is void. Consequently, the judgment of the District Court of Wake County giving it full faith and credit as a valid judgment was erroneous.

The judgment of the Court of Appeals is reversed and the matter is remanded to the Court of Appeals for the entry of a proper judgment by it reversing the judgment of the District Court of Wake County.

Reversed.