Court Opinion

ID: 6688754
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:35:20.73717+00
Date Added: 2024-06-11T16:01:02.299532
License: Public Domain

SMITH, J.
(dissenting.) This case is before us on petition for rehearing, and believing as I do that the conclusion reached by the last majority decision was erroneous, I take this opportunity to state the reason for my dissent, which was noted when the majority opinion was handed down. In my judgment, the fundamental error in that decision is in the assumption that an action by a junior mortgage lienholder to redeem from a prior mortgage lien, affects, or that the decree in such action, acts “diretly upon, property vdtMn th&s state.” I base my dissent upon the proposition that an action by -the junior to be subrogated to the rights of the senior lienholder, does not act directly, or at all, upon the title or possession of the real property, and that the action-is in personam, the subject matter of which is merely a chose in action and is personal property, wild oh follows the domicil of a nonresident owner. Justice Whiting is correct in saying that in this case, the right of subrogation by redemption is entirely distinct from the right to foreclose appellant’s junior mortgage. This leaves but the single question, whether the non-residence of the senior mortgage lienholder tolls the ten year statute of limitation, and this depends- upon whether jurisdiction of -the nonresident lienholder -can be obtained by substituted service under the -statutes- of this -state. .
In actions in rem. or quasi in rem, a court may acquire jurisdition of nonresident defendants, by service or publication in the manner authorized by statute. Actions quasi in rem, though brought against persons-, are such as only seek to subject certain property of those persons to the discharge of -claims asserted or to affect the title of the property itself. All proceedings having for their sole object the sale or -other disposition of the property of a defendant to- satisfy the demands of the plaintiff -or which •affect the title or status of property, are in a general way, designated as quasi in, rem. But it is only by virtue of its jurisdiction of property within the -state, that its tribunals can inquire into a nonresident’s obligations to its own citizens, or those of -a sister state, and the inquiry can- then proceed only so far as may be *45necessary for the disposition of the property itself. If nonresidents possess no property which is within. the state, there is .nothing upon, which its tribunals • can act. So necessarily such tribunals can -have no jurisdiction to pass upon the obligations or statutory rights of nonresidents, except to. the extent and for the purpose, mentioned. Freeman v. Alderson, 119 U. S. 185. As to taxation, of debts-due to nonresidents see Buck v. Beach, 206 U. S. 392, 11 A. & E. Ann. Cas. 732, and note. Subd. 4, Sec. 112, Code Civ. Proc. provides that jurisdiction of a nonresident defendant may be acquired through service by publication, when the -subject of the action is real or personal property, within this state, .and the relief demanded consists in excluding the defendant from any interest or lien therein.. The validity of this statute is sustained by the above decision. It is indispensable however, that the property affected, whether real or personal, be within the state. In this case, it is clear that the real estate itself, is not the subject of the action, because neither the real estate, its possession, nor the legal title, is involved. The onfy -remedy sought is. an enforcement of the right of a junior lienholder -to-be subrogated to the rights of a senior lienholder, upon payment of the amount due and secured by the senior lien. The subject matter of the action is the indebtedness and the senior lien. Neither the real property itself, nor the legal title, nor right of possession, is in any way affected by the judgment of subrogation. Both the real estate and the legal title and possession remain as they were before, subject to the two liens, which may become in a sense, consolidated in the junior lienholder by the redemption decree.
This case stands precisely as though no action of foreclosure had ever -taken place, so far as the rights of both' lien-holders are concerned- The existence of the junior lien-is the foundation upon which rests the right to the remedy by subrogation, and to a decree establishing that right. The question here must be considered exactly as it would be if the owner of the legal title in possession, and the owner or holder of' the senior lien, were two entirely distinct persons. The owner of the legal title, whether in possession -or out of posession, is neither a necessary nor a proper party to this action., for he has no interest in either of the liens, nor in the ownership of the lines, and his title or rights are not affected by any judgment which can be entered adjudicating the *46rights of the two lienholders. Let us suppose that A is the owner of the legal title and in possession of the land; that B owns the senior mortgage, and C. the junior mortgage. N|o possession nor any hostitle assertion of title by A, can start running any statute of limitation which might bar rights which exist only as between B and C. The indebtedness and the lien which belong to B are personal property.. By the action, C seeks only to acquire B’s title to the indebtedness evidence and secured by the senior mortgage. It is .plain, I think, that the action therefore deals with and affects only personal property. Does that personal property remain “within the state,” when the owner becomes a nonresident of the state, so that it becomes “personal property within the state,” contemplated by 'Subd. 4, Sec. 112? I hardly see how it could be so ¡held. The rights of subrogation by redemption, is a valuable but intangible right and' chose in .action, and is personal property. Dunley v. Toledo A. A. & G. T. Ry. Co., 50 Mich. 470, 15 N. W. 555; Seaman v. Clark, 69 N. Y. Supp. 1002; Power v. Harlow, 57 Mich. 107; Battishill v. Humphrey, 64 Mich. 494, define various rights or choses in action. A chose in action is property within the meaning of a statute which authorizes service by publication on a nonresident who has property in the state. Winfree v. Bagley, 102 N. C. 515. It is of course conceded, that actions which seek to. enforce liens upon properly, real or personal; actions for specific performance of contracts; actions to remove cloud from title, -when the property sought to he affected is within the state, may be maintained against nonresidents upon substituted service, as also actions to determine the civil status and capacity of inhabitants of the state. The indispensable element in all cases however, is that the particular property or the status of the person must be affected, and such person or property must be within the jurisdiction of the ■state. The nonresidents in this case were the owners of the senior lien, and of the indebtedness which it secured. It may be conceded that the owners of real property affected by the senior lien, or another lienholder upon the same property, may maintain an action against any one or all of such nonresidents to foreclose his lien or to “exclude the defendant from any. lien in the real property,” which means to extinguish the lien — when the real property is within the state, and the title or possession may be *47directly affected by the decree. But in an action for subrogation by redemption, the senior lien is merely personal property, the situs of which is the home of its owner. The purpose of an action by a junior mortgage lienholder to redeem from a senior mortgage lien, is to deprive the senior lienholder of his personal property, and to vest his title thereto, in the junior lienholder. Can this be done -when the personal property, the “intangible chose in action,” possessed by the senior lienholder, has no other situs than his foreign domicile, and' -therefore is not personal property “in the state?”
I concede the statute may warrant such service in an action where its purpose is the extinction of a lien or its foreclosure, because the property affected is in the state, and is relieved from the lien — but can one lienholder so appropriate a nonresident’s debt and lien, in invitum? I have found no case which so hold's. All the authorities I have found hold such an action to be in personam, and no case has been found which holds it quasi in rem. It is conceded I think, that the weight of authority sustains the view first announced by this court. It seems to me sound, and we should not adopt a new or different rule upon some principle not heretofore recognized or applied.
Justice Whiting suggests that “the reason” for this rule has ceased to exist, and that the rule itself has therefore “ceased to exist.” But the “reason” for this rule now, as it has always been, is founded in the constitution of the state, and can only cease to exist when the Constitution itself has ceased to exist, because of misconstruction by the courts, or its repeal by the sovereign will of the-people themselves.