Opinion ID: 1862520
Heading Depth: 1
Heading Rank: 6

Heading: Does a Mississippi chancery court have subject-matter jurisdiction over the Louisiana real property assets of a partnership?

Text: By way of his first brief, appellant Crowe claims that the lower court lacked subject-matter jurisdiction because Louisiana law does not recognize an unregistered foreign partnership. On rebuttal, significantly expanding his argument, appellant Crowe alleges that the lower court's judgment wholly lacks effect because the court lacked subject matter jurisdiction over lands located in Louisiana. Appellee Smith contends that Crowe cannot raise this issue on appeal, since it was not raised before the lower court. Appellant Crowe also claims that, even if subject-matter jurisdiction could be had in this action, the court's judgment ordered an officer of the court to act with respect to Louisiana land. Thus, Crowe claims, the court improperly assumed subject-matter jurisdiction of the Louisiana land, itself. Chief Justice John Marshall articulated the rule, [I]n a case of fraud, of trust, or of contract, the jurisdiction of a court of chancery is sustainable wherever the person be found, although lands not within the jurisdiction of that court may be affected by the decree... . Massie v. Watts, 10 U.S. (6 Cranch) 148, 160, 3 L.Ed. 181 (1810); see also Tideway Oil Programs, Inc. v. Serio, 431 So.2d 454, 457 (Miss. 1983). In Matter of Estate of Varvaris, 528 So.2d 800, 803 (Miss. 1988), this Court noted: the courts of this state are open to citizens of this state who wish to litigate their respective rights to real property, notwithstanding that such property may physically lie within a foreign nation and notwithstanding further that the rights of the parties must ultimately be determined by reference to the law of that foreign nation. Also, in the predecessor case to Varvaris, the Court operated on the rule that, where a Mississippi court has subject matter and personal jurisdiction, it may enter a personal judgment which would be binding in other states under the full faith and credit clause of the United States constitution. Kountouris v. Varvaris, 476 So.2d 599, 607 (Miss. 1985); see U.S. Const. art. IV, § 1; Restatement (Second) of Conflicts of Laws § 102 comment d (1971). The fact that the judgment may not be given full faith and credit in a foreign jurisdiction does not defeat the authority of a court of this state to adjudicate a matter. Kountouris, 476 So.2d at 607. Although with no binding authority on this Court, Louisiana decisions have articulated the same principles: While a foreign court may not act directly on title to property, it may affect the parties' dealings with the property and bind them personally. Purchase Corp. v. Starkes, 560 So.2d 1005, 1007 (La. Ct. App. 1990) (quoting Dickerson v. Scott, 476 So.2d 524, 527 (La. Ct. App. 1985)). The Fifth Circuit has also commented on the principle of a judgment which affects property in another state: The mere fact ... that ... validly created rights and obligations [arising out of a decree] may to some degree involve the parties' interests in foreign realty cannot negate the in personam effect of the decree creating those equities. Allis v. Allis, 378 F.2d 721, 726 (5th Cir.1967), cert. denied, 389 U.S. 953, 88 S.Ct. 337, 19 L.Ed.2d 363. The Allis court pointed out that, while the court with in personam jurisdiction could fashion a decree, a court having jurisdiction over the situs of the real property could then choose to give operative effect to the decree. Id. Further, this Court has explained that, once parties have sought the jurisdiction of a court of this state to determine contractual obligations involving realty in another state, the matter is res judicata; the question cannot be submitted to a court associated with the situs of the realty. Lyle Cashion Co. v. McKendrick, 227 Miss. 894, 906-08, 87 So.2d 289, 293-94 (1956). This rule binds not only the party that sought jurisdiction, but all parties to the suit. Id. (dictum); Restatement (Second) of Conflicts of Laws § 102 comment d (1971). The next question becomes one of determining which state's law ought to be applied by a Mississippi court entitled to hear such a case. In Tideway Oil, the Court identified the primary question as relating to choice of law, not jurisdiction. Tideway Oil, 431 So.2d at 457-58. Mississippi law resolves choice-of-law questions by employing the center-of-gravity doctrine. Id. at 458, Spragins v. Louise Plantation, Inc., 391 So.2d 97 (Miss. 1980). The doctrine requires that a court examine the two states' policies, the location of the property, the location of the agreement's execution, and the intent of the parties. Tideway, 431 So.2d at 458. The final question becomes one of ascertaining whether or not the Mississippi chancery court, in particular, had jurisdiction to adjudicate Smith's complaint against Crowe. The dissolution of a partnership requires the settling of accounts. Miss. Code Ann. § 79-12-79 (Supp. 1988). A Mississippi chancery court holds the authority to hear a case for an accounting. Evans v. Hoye, 101 Miss. 244, 253, 57 So. 805, 806 (1911); see also Miss. Const. Art. 6, § 159; Miss. Code Ann. § 9-5-81 (1972). While partnership assets may be tangible property, the partnership interest being litigated upon dissolution constitutes intangible personal property; an action to dissolve, then, is an action over personal property. See Miss. Code Ann. § 79-12-51 (Supp. 1988) (a partner's interest in the partnership constitutes personal property); see also U.P.A. § 26 (1969); Grenada Bank v. Willey, 694 F.2d 85, 87 (5th Cir. [Miss.] 1982), reh'g denied, 697 F.2d 1092 (5th Cir.1983), cert. denied, 462 U.S. 1123, 103 S.Ct. 3097, 77 L.Ed.2d 1355. Thus, a Mississippi chancery court may properly hear a case for the dissolution and accounting of a partnership. In this case, Crowe argues in his first brief that the chancellor's decision was null and void because the partnership, which held Louisiana assets, was not registered in Louisiana. This contention bears no relevance to the power of a Mississippi court to adjudicate matters arising out of a partnership agreement between two Mississippi citizens. As noted in the Kountouris and Varvaris cases, the effect of foreign law on a Mississippi judgment does not negate the power of a court of this state to issue a judgment. Therefore, the contention that the Australia Island Farm may not have been properly registered in Louisiana does not affect the rights of Mississippi citizens as to the disposition of the assets of their Mississippi partnership. Perhaps the failure to register affects the parties' ability to invoke the protection of the laws of Louisiana. Regarding the choice-of-law issue, however, this adjudication of a Mississippi partnership does not seek to determine the parties' rights under Louisiana law. Most significantly, by the parties' own agreement, and also by weighing the other components of a center-of-gravity analysis, Mississippi law applies to this action for dissolution. Also without merit is Crowe's claim that causing an officer of the court to sell Louisiana property shifted the subject matter of this action to Louisiana. The Mississippi Chancery Court's jurisdiction arose from the partnership relation of the parties. The fact that an officer of the court was ordered to help effect the judgment did not change the nature of the action, the dissolution and accounting of a Mississippi partnership. Appellee Smith's protest, that this issue appears for the first time on appeal, carries no weight; a failure of subject-matter jurisdiction may be raised at any stage of a proceeding. See Miss.R.Civ.P. 12(h)(3) and comment (1988). In this case, however, the subject-matter jurisdiction of the lower court is present. D. Issue # 4