W.K. Terry Co. v. Hyde County , 33 Ohio App. 118 ( 1929 )

W.K. Terry Co., plaintiff, brought an action in the court of common pleas of Lucas county to recover $11,559, which it claimed to be due under and by virtue of a written agreement whereby plaintiff agreed to furnish to the defendant, Hyde county, North Carolina, certain financial and other services and to conduct the sale of an issue of certain of defendant's bonds of the par value of $275,000. Coincident with the filing of the petition, plaintiff filed an affidavit setting out, among other things, that the defendant was not a resident of this state, and averred that the defendant had money in the possession of the Toledo Trust Company of Toledo, Ohio. A summons for the defendant was issued to the sheriff of Lucas county, together with an order of attachment and notice to garnishee. The return of the summons recites that the defendant could not be found in Lucas county. The order of attachment was returned "no money made, not satisfied." The notice to the garnishee commanded the sheriff to notify the Toledo Trust Company to appear and answer questions touching the property of the defendant in its possession or under its control, and the return of the sheriff shows that such notice to garnishee was duly served upon the Toledo Trust Company. The steps to effect service by publication as against a defendant nonresident of the state of Ohio were taken by the plaintiff.

Thereupon the defendant filed a motion to quash the service by publication and dismiss the action upon the ground that the court had no jurisdiction of the person of the defendant and also filed a motion to dissolve the attachment for the reason that the affidavit was insufficient, that the property and credit sought to be attached and garnisheed were exempt from execution, attachment, and garnishment, and that the court had no jurisdiction of the person of the defendant. Each of these motions recited that the defendant appeared solely for the purpose of the motion and that it did not enter appearance or submit itself to the jurisdiction of the court for any other purpose.

It appears from the bill of exceptions that Section 1291 of Article 2 of Chapter 24 of the Consolidated Statutes of North Carolina, 1919 issue, contains the following provision:

"Corporate power of counties. A county is authorized —

"1. To sue and be sued in the name of the county.

"2. To purchase and hold lands within its limits and for the use of its inhabitants, subject to the supervision of the general assembly.

"3. To make such contracts, and to purchase and hold such personal property, as may be necessary to the exercise of its powers.

"4. To make such orders for the disposition or use of its property as the interest of its inhabitants require."

It further appears therefrom that the money in the hands of the Toledo Trust Company is the proceeds of the sale of bonds of said Hyde county, issued for the purpose of providing funds for the payment of indebtedness of said county in maintaining schools. The court below sustained both of said motions, and entered judgment dismissing the petition of the plaintiff and discharging the attachment. Plaintiff below brings this proceeding in error, as plaintiff in error here, and seeks a reversal of that judgment.

The first question for our determination is whether Hyde county, North Carolina, can be sued in the state courts of Ohio, its funds be tied up under attachment by notice to garnishee, and jurisdiction of the person obtained through service by publication. At common law a county could neither sue nor be sued, and the authority for the action by or against a county must be found in statutory enactments. 15 Corpus Juris, page 663, Section 376. The statute of North Carolina quoted above provides that the county is authorized to sue and be sued in the name of the county. The Supreme Court of North Carolina has held that, under the law of that state at that time, an action against a county must be brought in the county sued. Jones v. Town ofStatesville, 97 N.C. 86, 88, 2 S.E. 346; Cecil v. City of HighPoint, 165 N.C. 431, 81 S.E. 616. It has generally been held that enabling statutes of this character only authorize suit against a county to be brought within the county. 15 Corpus Juris, page 666, Section 380; Shaver, Commissioner, v. LawrenceCounty, 44 Ark. 225, 229; Lehigh County v. Kleckner, 5 Watts S. (Pa.), 181, 182; Board of Supervisors of Kane County v. Young,31 Ill. 194; McBane, Judge, v. People, ex rel. Stout, 50 Ill. 503; SchuylerCounty v. Mercer County, 9 Ill. (4 Gilman), 20.

It has even been held that, where the statute authorizes a suit against a county "in any of the courts of this state," such a provision was not intended to change the rule that suits against the county must be brought in the courts of the defendant county.Cullman County v. Blount County, 160 Ala. 319, 49 So. 315, 18 Ann. Cas., 322.

We think that the statutes which authorize a suit to be brought against a county situated within the state only change the common-law rule, which forbade such an action entirely, so as to permit an action to be brought against the defendant county within that state, and cannot be construed to authorize a suit in a foreign state. Such statutes have no extraterritorial force or effect.

There are other salutary reasons why in the instant case the attachment should be dissolved and the service quashed. These reasons are well stated in the opinion in Parks Co. v. City ofDecatur (C.C.A.), 138 F., 550. In that case the plaintiff brought a suit in the federal court in Kentucky and attached a fund in a bank in Louisville owned by the defendant, a municipal corporation in Illinois. In the opinion, at page 553, this language is employed:

"But the difficulty here lies in the local and restricted legal habitation of the defendant. In order to maintain the attachment, the plaintiff must obtain a judgment, and his cause of action must be justiciable in Kentucky. The personal presence of the defendant may be dispensed with, but the case must be such that upon actual service of process the court would be authorized to proceed to render a judgment binding the defendant conclusively for all the purposes of a judgment. All defenses are open to the defendant which would be if there were no attachment, and, if the defendant prevails in the principal suit, the attachment fails. The remedy is ancillary merely. 4 Cyc., 398. As elsewhere, the municipalities of Illinois are localized in their sphere of operations. They have no legal presence elsewhere, and its officials do not and cannot ordinarily represent it abroad, certainly not for the purpose of receiving service of process against it, or giving jurisdiction over it, in foreign courts. For this reason, and because of the public inconvenience resulting from carrying on a litigation in a distant forum, the rule has become quite generally recognized that such corporations cannot be sued elsewhere than in the venue of their location; and because the venue of the courts in the counties of England and in the states of the Union is usually, if not universally, coextensive with the boundaries of such counties, the rule is stated in the terms that a suit against a city or town or other limited municipal district must be brought in the courts of the county, and the county itself is only suable there."

The doctrine announced in the language quoted is germane to the inquiry at hand, and in our judgment is sound.

Are school funds subject to levy, attachment or garnishment?

Counsel for plaintiff in error rely upon Van Horn v. KittitasCounty, 28 Misc. Rep., 333, 59 N.Y.S., 883. It will be observed that in that case the money attached and held under levy after judgment was released, and the levy vacated, for the reason that the fund was held by the bank as the agent of the defendant county, and was, in contemplation of law, in the treasury of the county, and came within the protection of the principle that taxes and revenues of a corporation cannot be seized under execution either in the treasury or when in transit to it. If the property was not subject to levy, it would not be subject to attachment or garnishment.

A careful reading of the opinion in that case shows that it is an authority for the conclusion which we reach. A good ground for dissolving the attachment in the instant case is that the funds were school funds in transit to the treasury of the defendant county and were not subject to execution, attachment, or garnishment. 15 Corpus Juris, page 669, Section 386, and cases cited.

It is further claimed by plaintiff in error that the defendant county entered its appearance. Where a person files a motion to dissolve an attachment and by the terms of the motion itself enters his presence only for the purpose of objecting to the jurisdiction of the court, such action does not constitute an entry of appearance in the cause of action upon its merits. Adams v. Trepanier Lumber Co., 117 Ohio St. 298, 158 N.E. 541, 55 A.L.R., 1118. The same rule would apply to the motion to quash service. The court below properly dissolved the attachment, and, as the court had no jurisdiction through service by publication, if the attachment was invalid, the service fell of its own weight, and the court properly quashed service. It is clear that the defendant did not enter its appearance in the court below, except for the purposes specified in its motions.

For the reasons given, the judgment of the court below will be affirmed.

Judgment affirmed.

LLOYD and RICHARDS, JJ., concur.