Title: First National Bank & Trust Co. v. Pomona MacH. Co.
Citation: 107 Ariz. 286, 486 P.2d 184
Docket Number: 10332
State: Arizona
Issuer: Arizona Supreme Court
Date: June 25, 1971

107 Ariz. 286 (1971) 486 P.2d 184 FIRST NATIONAL BANK AND TRUST COMPANY, a national banking association, Appellant, v. POMONA MACHINERY CO., a sole proprietorship, et al., Appellees. No. 10332. Supreme Court of Arizona, In Division. June 25, 1971. *287 Rawlins, Ellis, Burrus &amp; Kiewit by Michael S. Milroy and Michael V. Mulchay, Phoenix, for appellant. Jennings, Strouss &amp; Salmon by Jon L. Kyl and Charles E. Jones, Phoenix, for appellees. CAMERON, Justice. This is an appeal from an order of the trial court dismissing the plaintiff's complaint and quashing the writ of garnishment issued therein. We are called upon to determine: *288 The facts necessary for a determination of this matter on appeal are as follows. The First National Bank and Trust Company, a national banking association with its principal place of business in the State of California, filed this action in Maricopa County Superior Court to collect monies due under the terms of a promissory note given by Pomona Machinery Company, a California sole proprietorship, and guaranteed in writing by Edward D. Testo, the sole proprietor, and his wife, both California residents. At the same time the action was filed, and in aid thereof, there was issued a writ of garnishment directed to the Arizona Bank. Summons and copies of the complaint were served on the defendants by the Sheriff's Office of Los Angeles County pursuant to Rule 4(e) of the Rules of Civil Procedure, 16 A.R.S. The bank by answer admitted an indebtedness to both Pomona and Testos, but in an amount less than the amount allegedly due on the note. Appellee filed a motion to dismiss for want of jurisdiction over the subject matter, insufficiency of process, lack of jurisdiction over the persons, and failure to state a claim. The motion was granted and appellant herein asserts error. Appellee on appeal counters that even if jurisdiction existed it should not have been exercised as the prejudgment garnishment statute is unconstitutional. JURISDICTION We are first concerned with the jurisdiction over the subject matter of the action. Jurisdiction over the subject matter the underlying obligation (i.e., the debt as defined in § 12-1571, subsec. A, par. 2, A.R.S.) is the power to hear and determine cases of the general class to which the particular proceedings belong, i.e., the abstract question. Arizona Public Service Co. v. Southern Union Gas Co., 76 Ariz. 373, 265 P.2d 435 (1953); Tube City Min. &amp; Mill Co. v. Otterson, 16 Ariz. 305, 146 P. 203 (1915). The Superior Court had jurisdiction over the subject matter of this case and therefore could issue the writ of garnishment. Art. 6, § 6, Arizona Constitution, A.R.S., § 12-123, subsec. B; 6 Am.Jur.2d, Attachment &amp; Garnishment, § 17, p. 573. Having jurisdiction over the subject matter of the lawsuit does not mean, however, that the court had personal jurisdiction over the defendants in this case. Pursuant to filing the complaint, summons was personally served on both defendants in California pursuant to the Rules of Civil Procedure, 16 A.R.S. As pertinent hereto, Rule 4(e) (1) reads: Rule 4(e) (2) is, of course, the longarm rule. However, not all service accomplished pursuant thereto involves in personam longarm jurisdiction or the minimum contacts theory embodied therein, and absent reasons for application of longarm personal jurisdiction (See Liston v. Butler, 4 Ariz. App. 460, 421 P.2d 542 [1967] and Phillips v. Anchor Hocking Glass Corp., 100 Ariz. 251, 413 P.2d 732 [1966]), the rule in Arizona is that there must be personal service within the State to support in personam jurisdiction and judgment: As to the garnishment itself, the res, and the person of the garnishee, the appellant filed an affidavit stating facts sufficient to authorize issuance of a writ of garnishment upon garnishee The Arizona Bank pursuant to 4 A.R.S. § 12-1573. Thereupon the writ was served personally upon the garnishee in Maricopa County and jurisdiction vested. As we have previously noted: Thus, when the garnishee's answer disclosed an admitted indebtedness to defendants, Pomona and Testo, the court acquired, from the date of the service of the writ, jurisdiction over the res of the account. There being jurisdiction over the subject matter and over the amount garnisheed but no personal jurisdiction over the sheed but no personal jurisdiction over the defendants, we must then determine whether the court in Arizona has jurisdiction in an action wherein we have a foreign plaintiff, foreign defendants, foreign debt, and property in the State subject to garnishment or attachment. Upon occasion garnishment proceedings have been described as in rem, however: By its terms, such is the nature of a § 12-1571, subsec. A, par. 2 garnishment action, where the garnishment is originally ancillary to the main action. See Porter v. Duke, 34 Ariz. 217, 270 P. 625 (1928); 6 Am.Jur.2d, Attachment &amp; Garnishment, § 17, p. 573. As we have previously noted: We hold, therefore, that the service of process in the instant case was sufficient and operated to provide all the requisites for proceeding quasi in rem. When a writ of garnishment is served in aid of the principle cause, as in this case, it operates to fulfill the due process notice requirement. (See Porter v. Duke, supra, 34 Ariz. at 229, 270 P. 625.) It has been stated: The motion to dismiss on jurisdictional grounds was improperly granted. FORUM NON CONVENIENS Appellee argues even if the Arizona court had jurisdiction it should refrain under the doctrine of forum non conveniens as the action could have been tried more appropriately and justly in California. While from the record we see no special circumstances warranting applicability of such extraordinary action by the trial court in this cause, it may be that certain circumstances for applicability of the doctrine do exist. In any event, that determination cannot be made on a factually incomplete record. It should be remembered that since it is plaintiff's right to choose the forum, his choice should not be disturbed except upon adequate showing. Appellee has not made such a showing in this case. UNCONSTITUTIONALITY Appellee urges that we declare prejudgment garnishment in this case unconstitutional as a deprivation of due process pursuant to Snidach v. Family Finance Corp. of Bay View, 395 U.S. 337, 89 S. Ct. 1820, 23 L. Ed. 2d 349 (1969). We decline to so hold. This court has previously held that the Snidach holding was limited to wages. Termplan, Inc. v. Superior Court of Maricopa Co., 105 Ariz. 270, 463 P.2d 68 (1969). Thus: There exist proper grounds for distinguishing between depriving a wage earner of his present cash flow by prejudgment garnishment and impounding reserve assets of a business enterprise. The latter's entity rights are adequately protected by the right to replevy under § 12-1578, subsec. B, A.R.S.; the counter-claim procedures for wrongful garnishment under De Wulf v. Bissell, 83 Ariz. 68, 316 P.2d 492 (1957); and, the ultimate hearing on the merits. Judgment reversed. With the issuance of the mandate of this court, the order of the trial court dismissing the plaintiff's complaint and quashing the writ of garnishment is reversed and the complaint and writ reinstated. STRUCKMEYER, C.J., and HAYS, V.C.J., concur.