1. As a basis for service upon an absent defendant under
Jud.Code, § 57, personal property must be properly localized within
the district of suit. P.
258 U. S.
74.
2. Promissory notes, secured on land in Mississippi and payable
there, were claimed by C as legatee under wills of the payees of
which she had been made executrix by a Mississippi probate court
which had found, upon her representations, that the deceased
were
Page 258 U. S. 67
citizens of that state and that the personal property bequeathed
was located within its jurisdiction. Before qualifying as
executrix, C removed the notes to New York, of which she was
citizen, and there, while the probate proceedings were pending,
brought suit in a federal court to quiet her title to them against
a citizen of Mississippi who claimed under assignment from one of
the decedents.
Held that the notes had not such a status
as personal property in New York as would justify foreign service
under Jud.Code § 57.
Affirmed.
Direct appeal from a Judgment of the district court quashing a
service of process and dismissing the bill of the appellant for
want of jurisdiction.
Page 258 U. S. 69
MR. JUSTICE DAY delivered the opinion of the Court.
Appellant, a citizen of the State of New York and a resident of
the Southern District thereof, brought this suit
Page 258 U. S. 70
in the district court of the United States against the appellee,
a citizen of the State of Mississippi, residing in the City of
Clarksdale, County of Coahoma, in that state. Appellant is the
daughter of Ephraim H. and Eva W. Lombard; appellee is a sister of
Ephraim H. Lombard. From the bill, it appears that a controversy
arose concerning the ownership of certain notes, fourteen in
number, executed by W. D. Corley at Clarksdale, Mississippi, on
January 1, 1917, and made payable to Eva W. and E. H. Lombard, or
bearer at the Bank of Clarksdale, Clarksdale, Mississippi. Seven of
the notes were for $31,480 each, and seven were interest notes
given for sums aggregating $39,664.80. The bill alleges that these
notes were held in the state of New York within the jurisdiction of
the district court. From the bill, it appears that appellant claims
to own the notes by bequests under the wills of Eva W. and E. H.
Lombard, respectively.
The complaint sets forth that E. H. Lombard, when in feeble
health, executed a certain paper assigning one-half of all the
principal notes, numbered from four to nine inclusive, and one-half
of the interest notes, numbered from four to nine inclusive, to the
appellee. The notes are alleged to be deferred payments on the sale
of a plantation in the State of Mississippi. It is set out that, at
the time of the alleged assignment to appellee, E. H. Lombard was
of unsound mind, memory, and understanding, and incapable of
executing the assignment; that the same was obtained by the
appellee by undue influence exercised upon appellant's father, and
that it was without consideration. The assignment is alleged to
constitute a cloud upon appellant's title to the notes in
controversy. The notes are secured by deeds of trust upon real
estate conveyed in Mississippi, which are duly recorded in the
record of mortgages and trust deeds in that state.
The appellee could not be served with process in the Southern
District of New York, and an order was made
Page 258 U. S. 71
under § 57 of the Judicial Code for service. Service was made
upon the appellee at Clarksdale, Mississippi. She thereupon made
special appearance for the purpose of a motion to quash the service
upon the ground that she is a resident, citizen, and inhabitant of
the State of Mississippi, and had not been within the New York
district, and she moved for a dismissal of the bill. Upon hearing,
the district court sustained the motion, set aside the service, and
dismissed the bill.
The question here only concerns the jurisdiction of the district
court. There is much controversy in the record, embodied in
affidavits, as to the manner in which possession of the notes was
obtained by the appellant and the assignment made to the appellee.
So far as we deem them necessary to be considered, the facts are:
the notes are secured by deeds of trust on lands in Mississippi. It
appears without contradiction that Eva W. Lombard, the mother, died
May 25, 1919. Upon petition of appellant, the will was admitted to
probate and she was appointed and qualified as executrix in the
Chancery Court of Mississippi. The decree in the chancery court
finds that the last will and testament was fully and legally
established as the last will of Eva W. Lombard, who at the time of
her death was a resident of Coahoma County, Mississippi; that the
lands devised by the will are situated in Bronxville, New York, and
that the personal property bequeathed by the will is all located in
the Second District of Coahoma County, Mississippi, the place of
residence of the deceased at the time of her death. It was before
the qualification of appellant as executrix under her mother's will
that she took the notes to New York.
After the death of her father, which occurred in New York after
the death of the mother, appellant filed a petition in the Chancery
Court of Mississippi, and a decree was entered upon her petition
establishing the last will and testament of her father. In that
decree, there are
Page 258 U. S. 72
findings like those establishing the will of her mother --
namely, that her father was, at the time of his death, a resident
of Coahoma County Mississippi; that the personal property
bequeathed and devised by the will is located in the second
district of Coahoma County, Mississippi, the place of residence of
decedent at the time of his death. The decree established the last
will and testament of E. H. Lombard, admitted the same to probate,
and appointed the appellant executrix.
It further appears that neither of the estates had been settled
in the Chancery Court of Mississippi, the court of probate, and as
to both administration was pending when this suit was brought. From
these recitals it appears that, by the decrees of probate, invoked
and obtained by the appellant, it was found that the decedents had
been and were residents of Coahoma County, Mississippi, and that
the personal property bequeathed under each will was located in the
second district of that county, and hence subject to the
jurisdiction of the court of probate.
By a law of Mississippi, set forth in the record (§ 2102, Code
of Mississippi), it is provided that an executor or administrator
shall not remove any of the property of the estate out of the
state, and the court is authorized, when it appears that the
property is about to be removed, to issue a precept to the sheriff
commanding him to seize the same and hold it until legally disposed
of, and the letters of such executor or administrator may be
revoked, on due notice, and administration
de bonis non
granted to some other person, and suit may be instituted by
creditors or distributees of the estate on the bond, and judgment
rendered accordingly.
With these facts beyond dispute, did § 57 of the Judicial Code,
authorizing service in Mississippi, call upon the respondent to
answer in the district court in New York, where the notes were
physically held, and there litigate the controversy which had
arisen concerning them?
Page 258 U. S. 73
Section 57 provides:
"When, in any suit commenced in any district court of the United
States to enforce any legal or equitable lien upon or claim to, or
to remove any incumbrance or lien or cloud upon, the title to real
or personal property within the district where such suit is
brought, one or more of the defendants therein shall not be an
inhabitant of or found within the said district, or shall not
voluntarily appear thereto, it shall be lawful for the court to
make an order directing such absent defendant or defendants to
appear, plead, answer, or demur by a day certain to be designated,
which order shall be served on such absent defendant or defendants,
if practicable, wherever found, and also upon the person or persons
in possession or charge of said property, if any there be, or,
where such personal service upon such absent defendant or
defendants is not practicable, such order shall be published in
such manner as the court may direct, not less than once a week for
six consecutive weeks. In case such absent defendant shall not
appear, plead, answer, or demur within the time so limited, or
within some further time to be allowed by the court, in its
discretion, and upon proof of the service or publication of said
order and of the performance of the directions contained in the
same, it shall be lawful for the court to entertain jurisdiction,
and proceed to the hearing and adjudication of such suit in the
same manner as if such absent defendant had been served with
process within the said district, but said adjudication shall, as
regards said absent defendant or defendants, without appearance,
effect only the property which shall have been the subject of the
suit and under the jurisdiction of the court therein, within such
district, and when a part of the said real or personal property
against which such proceedings shall be taken shall be within
another district, but within the same state, such suit may be
brought in either district in said state. . . . "
Page 258 U. S. 74
The purpose of this section is to authorize service of process
in suits to remove clouds upon title, liens, and incumbrances, upon
property within the district, by bringing in adverse claimants who
cannot be reached by the ordinary methods of personal service. The
language used is primarily applicable to titles to realty. It is
true that the statute also embraces personal property. Used in this
connection, personal property undoubtedly refers to such as is
lawfully localized within the district, and there held and enjoyed,
and thus made subject to the court's jurisdiction to clear its
title from clouds and liens, notwithstanding personal service
within the district cannot be obtained upon those setting up
adverse interests. It is the presence of property real or personal
within the district which confers the limited jurisdiction
conferred in § 57 upon the district court.
Chase v.
Wetzlar, 225 U. S. 79.
This Court had occasion to consider the statute in
Jellenik
v. Huron Copper Mining Co., 177 U. S. 1, where
it was held, in a suit involving title to shares of stock, that
foreign service might be obtained in the Circuit Court of the
United States for the District of Michigan on adverse claimants to
bring in certain alleged owners of shares of stock held by
Massachusetts defendants. This was held to be so because the
company was organized under the laws of Michigan, whose statutes
declared that the stock of the company was to be deemed to be
personal property. For the purpose of the suit, it was decided that
the property was within the State of Michigan, as the habitation or
domicile of the company was within that state, which created the
corporation and made the property subject to its laws.
The appellant insists that the principles declared in that case
control here, and cites statutes of New York and Mississippi
defining personal property in terms broad enough to include written
instruments creating pecuniary
Page 258 U. S. 75
obligations. The appellant also relies upon cases decided in
this Court, such as
Wheeler v. Sohmer, 233 U.
S. 434, in which it was held that the New York
inheritance tax, imposed upon the transfer of property within the
state, belonging to a nonresident thereof, was not void under the
due process clause of the federal Constitution as applied to
promissory notes held in a nonresident's safety deposit box in New
York. In discussing the character of such property, we held that
the state might tax such notes as property having a local situs
within its borders. In
De Ganay v. Lederer, 250 U.
S. 376, this Court sustained a federal tax upon the
income from stock, bonds, and mortgages owned by alien
nonresidents, but in the hands of an agent in this county, with
full authority over them. In that case, as in the
Wheeler
case, the previous decisions in this Court were cited, which have
held that notes, bonds, and mortgages may acquire a situs at a
place other than the domicile of the owner, and be reached and
taxed as localized property by the taxing authority.
We have no disposition to depart from the principle of those
cases, but are of opinion that they do not control the present
controversy. In our view, § 57 of the Judicial Code cannot, under
the facts of this case, be made the basis of a departure from
statutory enactments which require personal service within the
district in order to subject a person to the jurisdiction of a
federal court.
In this cause, the appellant derives her title, as she sets
forth in her bill, from the bequests made to her by her father and
mother which, subject to the settlement of the estates, would give
her title to the notes in controversy. Upon her petition, she was
appointed executrix of the wills. Upon her representation as to
residence of decedents, she obtained letters testamentary in each
of the estates. The decree of probate declared the personal
property to be within the jurisdiction of the Mississippi court. A
statute of the state forbade its removal beyond the
Page 258 U. S. 76
borders of the state. These estates, at the time the bill was
filed, remained open and unsettled. Under such circumstances, it
would be doing violence to the purpose and provisions of § 57 to
hold that the mere physical presence of the notes in New York,
complainant having seen fit to take them there, made them personal
property of that localized character lawfully within the Southern
District of New York which would justify foreign service upon a
nonresident and bring him or her to the local jurisdiction to
contest title to the notes.
While the district court put its decision upon different
grounds, we are of opinion that it rightly held that a case for
foreign service was not made out, and did not err in setting aside
the service, and dismissing the bill.
Affirmed.
MR. JUSTICE PITNEY concurs in the result.