Lane Trucking Co. v. Haponski, 260 N.C. 514 (1963)

Nov. 20, 1963 · Supreme Court of North Carolina

260 N.C. 514

LANE TRUCKING COMPANY v. EDWARD L. HAPONSKI.

(Filed 20 November 1963.)

1. Injunctions § 1—

Injunction is an equitable remedy exercised in personam -and not in rem.

2. Process § 8—

In- order to a valid sendee of process under G.S. 1-104 it must appear by affidavit or by verified complaint treated -as an affidavit, that the requirements of GjS. 1-98.4 have been met asad that the cause of action is within the purview of G..S. 1-98.2.

3. Judgments § 1—

Service of process on a nonresident under G.S. 1-104 cannot confer jurisdiction of the -person upon our court so as to enable it -to render a valid judgment in personam.

4. Corporations § 4; Process § IS—

G.S. 55-33 (c) has no application to an action against a person who is not a director at 'the time the action is instituted or to an action which seeks recovery against a director for alleged wrongful conduct subsequent to his removal from office as director, and even when the statute is applicable GJS. 55-33 (d) provides the exclusive method of sendee of process.

Appeal by defendant from Latham, J.., March 3963 Civil Session of Wake.

This action was instituted in the Superior Court of Wake County, North Carolina, on February 21, 1963. The summons was addressed to tiie Sheriff of Broward County, Florida. Based on the verified complaint, an ex parte temporary restraining order was issued by Judge Fountain. On February 22, 1963, the Sheriff of Broward County, Florida, in said county, delivered to defendant .a copy of the summons, complaint and order. No. other process has been .issued. No- other service bias been made or attempted.

The .allegations of the complaint, .summarized or quoted, are as follows:

Plaintiff, -a North Carolina corporation, has its principal office and place of business in Raleigh, North Carolina. Defendant formerly resided in Wake County, North Carolina, but now resides in Hollywood (Broward County), Florida. Prior to February 2, 1963, defendant wais an officer ’and director of plaintiff but on that date “defendant was for good cause shown removed ais an officer and as -a director of the plaintiff” .and wais duly notified of his said removal. Thereafter, defendant “made no effort to interfere with the plaintiff’s property or business in the -State of Florida” until shortly before midnight -on February 20, 1963, when defendant “went on plaintiff’s property, took control of all of the plaintiff's trucks, rolling stock and other equipment, removed it from the plainitiff’is property and from the possession .and ■control of the plaintiff’s duly authorized' officers and agents in the State of Florida.” Defendant “holds, or claims possession of, said property and refuses to allow the plaintiff’s officers and .agents to take possession thereof or to operate said property and equipment in the discharge of plaintiff’s •business or to use, operate -and -control the said -property and equipment in and about the normal course of plaintiff’s business ’and in the discharge of plaintiff’.s-contract obligations in the State -of Florida.”

The temporary restraining order provided:

(1) “ . . . that the defendant be, and he is hereby restrained •and enjoined from interfering in any manner with the plaintiff’s control -and possession of the property described in -the complaint and from interfering or attempting to interfere in 'any way or in any maimer whatsoever with the plaintiff’s possession and -use and access to said property or with the exercise by the plaintiff of any ■and all rights and privileges legally incident to the ownership and possession thereof.”

(2) “ . . . that the defendant restore to the plaintiff forthwith Ml possession and control of all property .consisting of ¡trucks, rolling stock and equipment now in the possession of the defendant or in ¡any way held or controlled by him.”

(3) "... that the defendant appear before the Honorable Judge Presiding judge .on the 4th day of March, 1963, at 10:00 o'clock A.M., at -the Wake County Courthouse in Raleigh, North Carolina, .or a© soon .thereafter as tins cause may be heard to. show cause, if any there be, why this order should not be continued until the final determination of this action.”

Defendant, under a special appearance, amoved to dismiss on the ground the attempted service of process was void and the court had mo jurisdiction of the person of defendant or of property in hi® possession.

The matter came on for hearing ¡before Judge Latham. Two orders, ¡both dated March 7,1963, were .entered.

In one order, which relates .solely to. defendant's said motion to dismiss, it was ordered and adjudged: “1. That this Court has jurisdiction over the person of Edward L. Haponski and -over the property of Lane Trucking Company held by (him. 2. That defendant's motion, entered upon his special appearance herein be, .and the same is hereby in all respects overruled and denied.”

The other .order provides that defendant is enjoined “permanently” substantially as .set forth in -the temporary order; that defendant is adjudged in wilful contempt on account of his refusal to comply with the terms of said temporary order; and that defendant appear at a specified time and place to ¡show cause, if any, why he should not be .punished for contempt.

Defendant excepted to each off said orders, and excepted to each and ¡all of the findings of fact and oomclusionis of law set forth therein, and appealed.

Allen Langston for 'plaintiff appellee.

Bryant, Lipton, Bryant & Battle for defendant appellant.

Bobbitt, J.

Plaintiff alleged 'the “trucks, rolling stock and other equipment” were in the State of Florida when defendant took posses'-sáon ‘amid control thereof. There is no allegation or 'contention that the action involves property located in North Carolina and -subj act to' the jurisdiction, of our courts.

Plaintiff’s action is for prohibitory and mandatory injunctive relief. “Injunction is distinctly an equitable remedy, and the well-established principle underlying equity jurisdiction that it is exercised in 'per-sonam, and not in rem, is fully applicable.” 28 Am. Jur., Injunctions § 4; 19 Am. Jur., Equity § 452; 43 C.J.S., Injunctions § 162; 30 C.J.S., Equity § 102.

Plaintiff contends the service by the Sheriff of Broward County, Florida, in said county, was authorized by G.S. 1-104 and by G.S'. 55-33 (c) and conferred upon the Superior Court of Wake County, North Carolina, jurisdiction over the person of defendant. The court below so held.

The provisions of G.S. 1-104 are quoted and discussed by Denny, C.J., in Church v. Miller, 260 N.C. 331, 132 S.E. 2d 688. The purported service now under consideration was not made in accordance with the requirements thereof. No affidavit other than- the verified complaint was filed by plaintiff. The verified 'complaint ('treated as an affidavit) does not meet the requirements of G.S. 1-98.4. An affidavit in compliance with G.S. 1-98.4 is jurisdictional. Temple v. Temple, 246 N.C. 334, 98 S.E. 2d 314, and oases oited. The cause of action alleged by plaintiff is not one of the “kind® of actions and special proceedings” listed in G.S. 1-98.2 in which “service of process outside the State may be had.” There was no order “for service of process outside the State pursuant to G.S. 1-104.” See G.S. 1-99.

A-pairt from the foregoing, service in accordance with G.S. 1-104 would not confer -upon, the Superior Court of Wake County jurisdiction of the person of defendant and enable it to render a valid in per-sonam judgment. Church v. Miller, supra, and cases cited. As stated by Moore, J., in Burton v. Dixon, 259 N.C. 473, 479, 131 S.E. 2d 27, quoted with approval by Denny, C.J., in Church v. Miller, supra: “Jurisdiction of .a party in an action in personam, as ie .the instant -action, can only be acquired by personal service of process within the territorial jurisdiction of the court, or by acceptance of service, or by general appearance, active or constructive. Warlick v. Reynolds, 151 N.C. 606, 66 S.E. 657. In -an -action in personam constructive service (by publication, or -personal service outside the State) upon -a nonresident i-s ineffectual for any purpose. Stevens v. Cecil, 214 N.C. 217, 199 S.E. 161; McIntosh: North Carolina Practice and Procedure (2d ed. 1956), s. 911, p. 479.”

G.S. 55-33 («), a provision of the “Business Corporation Act” (Session Laws of 1955, Chapter 1371), provides: “Every resident of this State who- shall become a director of a domestic .corporation and thereafter removes his residence from this State shall be subject to the jurisdiction of the courts of this State in all actions or proceedings' brought therein by, or on behalf of, or against said corporation in which said director is a necessary or proper piarty, or in -any action or proceeding by sharehoIdeáis or creditors against said director for violation of his duty as a director.” Questions as ito the interpretation ,and validity of this statutory provision must be considered in relation to specific factual situations. This statutory provision refers to (1) actions in which a former resident of this State who- was and is a director of a domestic corporation is a necessary or proper party in his capacity a® such director and (2) actions by ¡shareholders or creditor® against a director for violation of his duty as such director. It has no .application to- the present case. Plaintiff alleged defendant was not a director when this action was commenced. The action is not for violation by defendant of his duty -as director but for alleged wrongful conduct of defendant (-in Florida) subsequent to. his removal from the .office of .director. Moreover, G.S. 55-33 (d) provides the exclusive method o.f service of process when iserviee of process is authorized by G.S. 55-33 (c). Hare, no attempt was made to- comply with G.S. 5-5-33 (d).

The court having acquired no jurisdiction, of .the person of defendant, the court erred in overruling defendant's motion to dismiss ¡and in entering am order' on the merits adverse to defendant. Accordingly, the said' orders of the court beloiw are reversed and the cause is remanded for entry of an -order dismissing the action.

Reversed and remanded.