Opinion
No. 35455.
September 27, 1943. ON THE MOTION.
APPEAL AND ERROR.
Where automobile seized in attachment was ordered sold for payment of mechanic's lien, and neither of parties had given bond, credit company appealing from decree in attachment would be permitted, pending final decision, to execute forthcoming bond in amount sufficient to protect rights of all parties and receive the automobile from the sheriff (Code 1930, secs. 410, 414).
ON THE MERITS. (In Banc. Nov. 22, 1943.) [15 So.2d 694. No. 35455.]1. APPEAL AND ERROR.
In suit to enforce a mechanic's lien, where complaint named credit company as claiming an interest in automobile involved, sheriff was commanded to summon the credit company and decree pro confesso was taken against it, and on appeal the credit company had been permitted to give forthcoming bond, appeal of credit company could not be opposed on ground that it was not a "party" in the court below (Code 1930, secs. 414, 2263).
2. ATTACHMENT.
Attachment proceeding cannot be sustained where nonresident debtor has no lands in state and no effects in hands of some resident third person and where no resident third person is alleged to be indebted to him, although he may have personalty in the state (Code 1930, secs. 173, 176).
3. SEQUESTRATION.
Personalty of a nonresident may be seized under an attachment in chancery, to await final decree, upon filing of proper affidavit and sequestration bond (Code 1930, secs. 173, 176, 409).
4. EQUITY.
In suit, as an attachment in chancery, to enforce a mechanic's lien for repairs to automobile against nonresident owner and credit company, where affidavit regarding threatened removal had not been filed, refusing to permit credit company, which appeared in court two days after decree pro confesso and final decree were entered, to make defense on merits was error (Code 1930, sec. 470).
5. AUTOMOBILES.
In suit, as an attachment in chancery, to enforce mechanic's lien for repairs to automobile against nonresident owner, lien claimant was not entitled to have automobile sold without having given security for abiding such further orders as might have been made for restoring property to nonresident owner on his appearing and answering bill within two years (Code 1930, secs. 178, 470).
6. AUTOMOBILES.
In suit to enforce mechanic's lien for repairs to automobile against nonresident owner and credit company, where lien claimant did not file affidavit regarding threatened removal of automobile from beyond limits of state and did not file sequestration bond and did not give security for abiding such further orders as might be made for restoring automobile to nonresident owner on his appearing and answering bill within two years, seizure of automobile under writ of sequestration was void and court did not have jurisdiction to order sale of automobile (Code 1930, secs. 173, 176, 178, 408, 409, 470).
APPEAL from chancery court of Chickasaw county, HON. ALVIS MITCHELL, Special Chancellor.
Wm. Harold Cox, for appellant, on the motion.
Neither party has yet bonded the car and it has not been sold. The appellant as a party to this suit is entitled to bond this automobile under the provisions of Section 414, Code of 1930. A solvent surety bond is tendered this court in such penalty as the court may fix and conditioned according to statute for the possession of this automobile.
Wm. Harold Cox, of Jackson, for appellant.
The appellee instituted this suit in the chancery court of Chickasaw County, Mississippi, by way of sequestration to impress a mechanic's lien on an automobile in the possession of appellee. The appellant, as a finance company, having an interest in the property and being a nonresident of the state, was made a party thereto. Process was served on both defendants only by publication. A decree pro confesso and a final decree were entered by the court on the second day of the term of May 25, 1943. On the same day these decrees were entered, the appellant sought leave of the court to plead to the action and said application was denied. From these decrees of the trial court, the Universal Credit Company alone has perfected this appeal. The sole questions presented are the propriety and validity of such decrees on this record.
There was no substantial compliance with our publication statute for process on nonresident defendants. The process on appellant is plainly void under the statute and the decree is therefore likewise void.
May Food Products, Inc., v. Gloster Lumber Co., 137 Miss. 691, 102 So. 735; Commercial Credit Co. v. Cook, 164 Miss. 725, 143 So. 863; Shelby v. White, 158 Miss. 880, 131 So. 343; Code of 1930, Sec. 2972.
The court below erred in overruling appellant's motion to set aside such final decree and permit it to plead to said action. The trial court even held that appellant was not a defendant in the cause and that they were guilty of laches.
McCoy v. Watson, 154 Miss. 307, 122 So. 368; Southwestern Surety Ins. Co. v. Treadway, 113 Miss. 189, 74 So. 143; Code of 1930, Secs. 470, 471.
Rush H. Knox and Creekmore Creekmore, all of Jackson, for appellee.
The brief of appellant discloses that there is a wide divergence of opinion between its counsel and us in regard to the nature of the suit in the lower court. This difference of opinion is on a point so vital and so material that upon a proper determination of that question will depend whether this case be reversed or affirmed. Reduced to its simplest terms the position of the appellee is that the Universal Credit Company was never a formal party to this suit, was not a necessary or proper party, has not been aggrieved by the decree that was entered by the lower court and has no standing in this court as an appellant. In considering this brief, we, therefore, request that the court, if it be proper for it so to do, treat it not only as a reply to appellant's brief but also as a brief on our motion to dismiss the appeal, filed concurrently with this brief.
The suit is in the nature of an attachment in chancery to recover of the defendant George Allen, a nonresident of the state, a decree for $413.81, for services rendered in repairing a certain automobile. Bond being given, a writ of sequestration was issued in accordance with the provisions of the statute (Code 1930, Section 176) and the property was levied upon by the sheriff. Process by publication was then made for the defendant Allen which was in all respects legal and proper. On the second day of the term a decree pro confesso was entered and on the same day a final decree was entered fixing a lien upon the automobile for the amount sued for and directing the sheriff to sell the automobile and use the proceeds thereof in discharge of the lien.
The appellant, Universal Credit Company, was not made a party to the suit but the complaint recited in one paragraph thereof that complainant was informed that the Universal Credit Company, Detroit, Michigan, claimed some interest in the automobile. The clerk of the court thereupon evidently considering the Universal Credit Company to be a necessary party, endeavored to have process served upon it by publication; but the provisions of the statute in regard thereto were not observed, as indeed they could not be observed since the complainant had not made Universal Credit Company a party and therefore had made no affidavit setting forth the fact of its nonresidence, and showing its postoffice address and street address. Notwithstanding these facts, however, the record shows that Universal Credit Company received notice of the pendency of the suit and was furnished with copies of the pleadings many days before the decree was entered. Nothing was done by it in the case until after the final decree was entered, at which time a motion was filed praying that the decree pro confesso and the final decree be set aside. This motion was overruled by the court on the ground that Universal Credit Company was not a defendant in the suit and had not filed a claimant's issue.
The appellant's position is grounded on the theory that this is a suit to establish a mechanic's lien and, therefore, all persons claiming liens on the property or an interest therein are necessary parties to the suit, and have the right to appear and be heard; not only to establish their own claim but also to contest with complainant its right to the lien. The statute enumerates those who are entitled to liens of this nature, the property against which they will attach, and the methods of enforcing them (Code 1930, Chapter 44, Sections 2255, 2263-2269). Had complainant been proceeding under those sections of the code, the Universal Credit Company would have been a necessary party to the suit. (Section 2263.) But it immediately appears, even from a casual reading of the bill of complaint, that in this case that remedy was not sought. This suit was not brought in the circuit court, the forum provided by statute for the filing of suits for the establishment of mechanic's liens. (Sections 2264-2266.)
The present suit is in chancery. It is quite similar in its nature to an attachment in chancery, brought under the provisions of Article 2, Chapter 7, of the Code of 1930.
Advance Lumber Co. v. Laurel National Bank, 86 Miss. 419, 38 So. 313.
Being in chancery proceeding, the pleading, practice, and procedure to be followed must necessarily be that of the chancery court except where otherwise specifically provided by statute.
Craig v. Gaddis, 171 Miss. 379, 157 So. 684.
The present suit is founded upon an indebtedness due complainant by Allen, a nonresident of the state. Jurisdiction of the res was acquired through seizure by the sheriff of property of the defendant within the jurisdiction of the court. The defendant was not personally served with process and did not enter an appearance and therefore no personal decree could be rendered against him; but the amount of the debt was established by the decree and the property of the defendant within the jurisdiction of the court was subjected to the payment of that debt.
The Universal Credit Comany was not concerned with the matter of the indebtedness due to complainant. It was not the owner of the property seized, it did not have possession thereof, and was not entitled to possession. Its sole interest in the property arises by virtue of a chattel mortgage thereon to secure an unpaid balance of the purchase price.
Under these circumstances can it be said that the Universal Credit Company was a necessary party to the suit and that no valid decree could have been rendered subjecting the res to payment of complainant's claim unless Universal Credit Company was properly before the court? Or can it be said that this suit is a suit in which the Universal Credit Company would have the right to intervene, merely because it claimed to have a lien upon the property seized by the sheriff under the writ of sequestration and that right being denied, thereby render void the entire proceedings? We think the rights of the Universal Credit Company under the facts of this case are prescribed by statute, and those provisions must be complied with before it can have any standing either in the lower court or in this court.
Code of 1930, Secs. 408-414; Code of 1930, Ch. 67.
See Shoemake v. Federal Credit Co., 188 Miss. 683, 192 So. 561; Delta Ins. Realty Agency v. Fourth National Bank, 137 Miss. 855, 102 So. 846.
Wm. Harold Cox, of Jackson, for appellant, in reply.
As pointed out in the original brief, neither appellant nor the other nonresident defendant was properly served with process by publication as required by statute so as to give the trial court jurisdiction of the subject matter thereof. A decree pro confesso and final decree were entered by the trial court on the second day of the return term. On such second day of the term and within a few hours after entry of the final decree in this case, the appellant requested the court to set such decree aside and grant it leave to plead to the complaint but such leave was denied, in spite of the provisions of Sections 470 and 471, Mississippi Code of 1930, which authorized appellant as a nonresident party to this suit served with process by publication to plead to such action at any time within two years after entry of said final decree. The chancery court cannot make its own procedure to the extent of striking down all of our adjective law on the subject of process, liens, and review of decrees in chancery entered on process by publication. The writ of sequestration was issued without the requisite statutory affidavit and the property was condemned to be sold without any bond being required of the complainant by the final decree to make restitution to the nonresident parties in interest as provided by statute. The appellant was named in the complaint as a party in interest. It was summoned as a party in interest in the automobile. Its interest in the automobile was foreclosed by awarding appellee a lien on such automobile superior to that of the appellant thereon. Still appellee contends that appellant is not a party to this suit and is powerless to complain of such decree which is alleged not to affect its interest in said automobile. With all deference to my friends, that position is untenable and absurd on the face of this record. They virtually concede, as they must, a failure to comply with the applicable statutes if this be a proceeding to enforce a mechanic's lien on the automobile and if appellant is a party to this suit and can complain thereof on this appeal. It was the view of this court on its consideration of the motion of appellant to be allowed to give bond for the automobile that the proceeding was one by appellee to enforce a mechanic's lien on the automobile.
It is therefore submitted that appellee's motion to dismiss this appeal ought to be overruled and that the decree of the trial court in this case is erroneous for the reasons assigned and that this cause should be reversed and remanded.
Advance Lumber Co. v. Laurel National Bank, 86 Miss. 419, 38 So. 313; Ross-Meehan Brake Shoe Foundry Co. v. Pascagoula Ice Co., 72 Miss. 608, 18 So. 364; Parsons v. Foster, 154 Miss. 363, 122 So. 387; Hooks v. Burns, 168 Miss. 723, 152 So. 469; Yates v. Council, 137 Miss. 381, 102 So. 176; Canton v. Ross, 157 Miss. 788, 128 So. 560; Code of 1930, Secs. 173, 176, 178, 408, 409, 470, 471, 2263, 2264, 2972; Griffith's Mississippi Chancery Practice, Sec. 24.
The appellant has filed a motion to be allowed to give the required bond and receive from the sheriff of Chickasaw County the property involved in this suit, the same having been seized under a writ of sequestration in an attachment in chancery and neither of the parties having heretofore given bond therefor. Section 414, Code of 1930, dealing with the right of litigants to enter into bond to receive property seized under a writ of sequestration provides, among other things, that: "If the defendant do not give bond to retain the property within five days from its seizure, and the complainant do not do so within five days after defendant's failure, either party may, before sale of the property, give the required bond and receive the property, or after sale may give such bond and receive the proceeds." There was a decree rendered in favor of the complainant, the Linn Motor Company, whereby the automobile in controversy, which is now in the hands of the sheriff of the county but stored with said motor company, appellee herein, was ordered to be sold for the payment of its mechanic's lien thereon; and before such sale could be made there was an appeal with supersedeas taken by the Universal Credit Company to this court, which is now pending. It appears from the showing made on this motion of the appellant to be allowed to give bond and receive the property that the appellant has offered to give the necessary security but that the sheriff has ignored all inquiries as to whether he would permit the bond to be given and as to the amount of bond that he would require in that behalf; that the amount of bond offered to be made was the sum of $750 for the release of the automobile, which was seized under the writ of sequestration on a bond of the complainant in the sum of $500 given pursuant to Section 410, Code of 1930, requiring that: "Before the writ of sequestration shall issue in any case, the complainant shall enter into bond with sufficient sureties, payable to the defendant, in double the value of the property proposed to be seized, to be fixed by the clerk from affidavit, or such evidence as may satisfy him. . . ." It also appears from the answer to said motion, submitted by the counsel of record for the appellee Linn Motor Company, that the said officer is now willing to surrender said automobile to the appellant upon the execution of a bond in an amount sufficient to protect the rights of all of the parties, including any expenses and storage charges which may be properly and legally chargeable against said property, and the said officer submits that a bond in the sum of $1,000 would be sufficient for said purpose.
The motion is therefore sustained, and the appellant is held to be entitled to execute a good and sufficient bond in the said sum of $1,000 conditioned according to law for the protection of the rights of the appellee, and which said bond is also to serve as security for the payment of any storage charges and other expenses which may be finally held to be proper charges against said automobile, in the event that the said property should not be forthcoming to abide any final decree herein, or should in the meantime become so depreciated in value as not to bring a sufficient price for said purpose if and when sold or held to be subject to sale, to satisfy the lien claimed by the said Linn Motor Company under the final order of the court following the hearing of the appeal herein. Upon the execution of such bond, the appellant shall be entitled to receive the said automobile from the sheriff pending the final determination of this cause.
Motion sustained.
The appellee instituted this suit in the chancery court of Chickasaw County to enforce a mechanic's lien for labor done and materials furnished in connection with the repair of a wrecked automobile belonging to George Allen, a nonresident, and the bill of complaint also alleges that the Universal Credit Company of Detroit, Michigan, "is claiming some interest in said automobile but that the complainant is not advised as to whether or not its claim is just, reasonable or due." The proceeding seems to have been brought as an attachment in chancery under Section 173, Code of 1930, although it is not alleged that any local defendant has in his hands any of the effects of, or is indebted to, the said nonresident defendant George Allen, nor is it alleged that the said automobile is in the possession of any person in particular in this state other than that "the said car is now stored in Houston, Mississippi."
A writ of sequestration was issued for the automobile as provided for under Section 176, Code of 1930, pertaining to attachments against nonresidents, which said writ may be issued in such cases "as in others." Although a sequestration bond was duly furnished by the complainant prior to the issuance of the writ, it appears that no affidavit was filed showing that the complainant had good reason to believe, and did believe, that there was danger of the removal of the property involved in the suit beyond the limits of the state or of its concealment in the state so as to be beyond the process of the court, or of its transfer so as to defeat the rights of the complainant, and that such removal, concealment or transfer was about to occur, as is required by Section 409, Code of 1930, as a condition precedent to the issuance of any writ of sequestration.
The prayer of the bill of complaint asked that the defendant George Allen "and any and all other persons, if there be any, who claim an interest in or lien on said automobile, be made parties to this suit and that they, like the defendant herein, be served with a summons either in person or by publication as required by law." And notwithstanding that it is previously alleged in the bill of complaint that the appellant Universal Credit Company "is claiming some interest in said automobile" it is now contended on this appeal that the said Universal Credit Company was not a party to the suit in the court below and that, therefore, this appeal should be dismissed, or that the decree of the court below in ordering a sale of the automobile for the satisfaction of the mechanic's lien held by the appellee should be affirmed.
On the question of whether the appellant is a party to the suit, it should be further stated that upon the filing of the bill of complaint a summons was caused to be issued by the clerk to the sheriff of the county commanding him "to summon George Allen and Universal Credit Company, Detroit, Michigan, if to be found in your county, to be and appear," etc.; that the sheriff made a return upon the process by stating that a "copy of this summons mailed to each of defendants by registered mail;" that publication was made in the newspaper addressed to the nonresident defendant George Allen, but the record contains no proof of publication of process as to the appellant Universal Credit Company; that there was a decree pro confesso taken under the caption of "Linn Motor Company, Complainant, v. George Allen and The Universal Credit Company," wherein it was recited that it appeared to the court "that due and legal publication of process had been made and completed for the said defendants" and that they "having failed to appear and to answer, plead or demur to the bill of complaint exhibited against them" the motion for a decree pro confesso "should be and the same is hereby sustained;" that the final decree ordering the sale of the automobile for the payment of the indebtedness due under the mechanic's lien, recites that it appears to the court that "the said defendants have been duly served with the process of this court as required by law," refers to the taking of the decree pro confesso against the defendants at a former day of the term, and then declares that "said cause now being before the court upon its merits" it is ordered "that the said automobile . . . described as (describing it) now in the hands of the sheriff of said county be sold in the mode prescribed by law," etc.; and out of the proceeds of said sale it was ordered that the claim of the Linn Motor Company be paid and that "any sums remaining thereafter shall be paid over to the defendants or the one proving his title thereto." Moreover, after the appeal to this court was granted with supersedeas in favor of the Universal Credit Company by the Chief Justice of this court on June 3, 1943, there was a motion filed herein asking that the said appellant be allowed to give bond as provided for under Section 414, Code of 1930, and receive the said automobile from the sheriff, and which motion was sustained, when it appeared from the answer to said motion, submitted by counsel of record for the appellee Linn Motor Company, that the said officer was willing to surrender said automobile under the conditions stated in the opinion of this court rendered on the said motion, as appears from the report thereof in this cause found in 15 So.2d 44. It can not, therefore, be successfully contended that the appellant Universal Credit Company was not a party to the suit in the court below.
Section 2263, Code of 1930, relating to the enforcement of statutory liens, including mechanic's liens and many others, provides that "all persons having an interest in the controversy, and all persons claiming liens on the same property, by virtue of this chapter, shall be made parties to the suit; and should any necessary or proper party be omitted, he may be brought in by amendment, on his own application or that of any other party interested; and claims of several parties having liens on the same property may be joined in the same action." Whether or not this section must be complied with where one of such liens is sought to be enforced under an attachment in chancery, it is unnecessary that we here decide, for the reason that the appellant Universal Credit Company, which claims to hold a purchase money lien on the automobile, was in fact made a party to the suit as claiming an interest in the property involved, and in any event the attachment proceeding can not be sustained where the nonresident debtor George Allen has no lands in this state and no effects in the hands of some resident third person, and where no resident third person is alleged to be indebted to him, although he may have personalty in this state. Advance Lumber Co. v. Laurel Nat. Bank, 86 Miss. 419, 38 So. 313. However, the personal property of a nonresident under such circumstances can be seized under an attachment in chancery, to await final decree, upon the affidavit and bond required by Sections 408 and 409, Code of 1930, but which affidavit was not filed in connection with the sequestration bond given in the present case.
But, if we understand the record correctly when we assume that the automobile in question was in storage and being held at the place of business of the complainant when the suit was filed, it would be difficult to conceive how the complainant could have good cause to believe that there was danger of the removal of the property beyond the limits of the state or of its concealment in the state so as to be beyond the process of the court, or of its transfer so as to defeat the rights of the complainant, and that such removal, concealment or transfer was about to occur, since the possession by the complainant of the automobile when it was being held awaiting the payment of the repair charges would ordinarily be notice to a wouldbe purchaser or transferee as to the rights of the complainant therein. But, be that as it may, such affidavit was not made, and the appellant should not have been denied the right when it appeared in court two days after the decree pro confesso and final decree were rendered, to make defense on the merits, either on the alleged ground that it was not a party to the suit or that it had actual notice thereof prior to the rendition of such decrees, since Section 470, Code of 1930, provides that decrees against nonresident, absent or unknown defendants, rendered upon proof of publication only, without such defendant having appeared, shall not be final and conclusive from the date of rendition, if a rehearing is applied for within two years thereafter, and except under the other conditions therein stated. Again the complainant was not entitled to have the property sold to satisfy its demand without having given security for abiding such further orders as may have been made, for restoring the property to the absent defendant on his appearing and answering the bill within two years. In other words, if this proceeding be dealt with as an attachment in chancery, then Section 178, Code of 1930, was not complied with in the particular last above mentioned.
From what we have said it follows that the seizure of the automobile under the writ of sequestration herein was void, that the court below was without jurisdiction to order a sale of said property in this proceeding, and that the cause must be reversed and the bill of complaint dismissed, without prejudice to the rights of the parties to take such steps as they may deem appropriate for the protection of their respective rights or liens against the automobile in controversy, not inconsistent with the principles announced herein.
Reversed and bill of complaint dismissed.