Courts; Jurisdiction_Georgia action to set aside N.C. deeds_stay of pending N.C. action to
quiet title
The trial court erred by staying proceedings in a North Carolina action to quiet title
where the administratrix of an estate in Georgia had filed an action in Georgia to set aside deeds,
then moved to stay the North Carolina action. While a foreign court could render judgments
that indirectly affect ownership of the property, only the court with in rem jurisdiction may serve
as a proper forum to determine title to the property.
Johnson, Lambeth & Brown, by Maynard M. Brown, Anna Johnson
Averitt and Robert White Johnson for the plaintiff-appellants.
Marshall, Williams & Gorham, L.L.P., by Charles D. Meier for
the defendant-appellees.
ELMORE, Judge.
Plaintiffs filed an action in New Hanover County, North
Carolina, to quiet title to certain real property located therein.
Wadell H. Pate, deceased, had been the prior owner of the property
and conveyed it by deeds of gift to his wife, Mildred Green Pate,
and stepson, Aaron L. Green (plaintiffs). Wadell H. Pate died
testate 22 February 2002. The administratrix of his estate, Polly
Pate Wilson, asserted that the deeds were conveyed by undue
influence and sought to have the deeds reformed. The plaintiffs
filed suit to quiet the title. Thereafter, the administratrix
filed suit in Georgia, where the plaintiffs reside, seeking to setaside the deeds of gift on the basis that they were procured
through fraud and undue influence.
The defendants in the North Carolina suit then filed multiple
motions, among them a motion to stay the proceedings to permit
trial in a foreign jurisdiction pursuant to N.C. Gen. Stat. § 1-
75.12, with respect to the Georgia suit. The trial court granted
that motion, staying the proceedings, and found as a matter of law:
1 1.
That the Richmond County, Georgia
Superior Court has personal jurisdiction
over the Plaintiffs and Defendants in
this action.
2 2.
That the Court having considered the
convenience and the access to another
forum, nature of [the] case involved,
relief sought, applicable law,
possibility of jury view, convenience of
witnesses, availability of compulsory
process to produce witnesses, cost of
obtaining attendance of witnesses,
relative ease of access to sources of
proof, enforceability of judgment, burden
of litigating matters not of local
concern, desirability of litigating
matters of local concern in local courts,
choice of forum by Plaintiffs, and all
other practical considerations which
would make the trial easy, expeditious
and less expensive concludes that
Richmond County, Georgia Superior Court
is a convenient, reasonable, and fair
place for trial.
3 3.
That it would work substantial injustice
for this action to be tried in New
Hanover County, North Carolina.
Section 1-75.12 of our General Statutes allows any court of
this State, upon motion of a party, to stay proceedings here to
allow trial in a foreign jurisdiction when it would work
substantial injustice for the action to be tried in a court of this
State. Subsection (c) of 1-75.12 states that a party in a
proceeding that has been stayed to permit trial in a foreignjurisdiction has an immediate right to appeal. N.C. Gen. Stat. §
1-75.12(c) (2003). “Entry of an order under N.C. Gen. Stat. §
1-75.12 is a matter within the sound discretion of the trial judge
and will not be disturbed on appeal absent an abuse of that
discretion.” Home Indemnity Co. v. Hoechst-Celanese Corp., 99 N.C.
App. 322, 325, 393 S.E.2d 118, 120, disc. review denied, 327 N.C.
428, 396 S.E.2d 611 (1990).
The issue presented to this Court is whether North Carolina
has exclusive in rem jurisdiction, and therefore is the proper
venue for this action. If the state of Georgia has jurisdiction
that may determine title to property located in North Carolina,
then the trial court was correct to stay the proceedings here to
await the outcome in the Georgia court, for the reasons stated by
the trial court. If, however, North Carolina has exclusive in rem
jurisdiction, then the Georgia proceeding cannot dispose of a deed
executed in North Carolina to convey property located entirely
within North Carolina, and the stay was ordered in error. We hold
that Georgia does not have in rem jurisdiction, and that North
Carolina is the proper venue. Regardless of issues of convenience
to the parties, which are valid issues, the North Carolina courts
alone have in rem jurisdiction over the subject property to
determine title when it is disputed. The trial court therefore
erred in staying the proceedings, and we vacate the stay order.
Black's Law Dictionary defines “in rem” as
A technical term used to designate
proceedings or actions instituted against the
thing, in contradistinction to personal
actions, which are said to be in personam.
“In rem” proceedings encompass any action
brought against a person in which essentialpurpose of suit is to determine title to or
affect interests in specific property located
within territory over which court has
jurisdiction.
Black's Law Dictionary 793 (6th ed. 1990).
In the case of Hanson v. Denckla, 357 U.S. 235, 2 L. Ed. 2d
1283 (1958), the United States Supreme Court discussed the effect
of in rem jurisdiction, stating that “[t]he basis of the
jurisdiction is the presence of the subject property within the
territorial jurisdiction of the forum State” Id. at 247, 2 L. Ed.
2d 1293 (citation omitted). Without question, North Carolina
exclusively has in rem jurisdiction of the subject property in the
case at bar.
We recognize that a foreign court with in personam
jurisdiction could render judgments that indirectly affect
ownership of property over which that court would have no in rem
jurisdiction in certain specific instances. However, a court in a
jurisdiction foreign to the subject property could not determine
title to the property. An example of the former would be an
equitable distribution in which the divorcing couple hold property
in North Carolina but bring the divorce action in another state.
The foreign court would have the authority, under principles of in
personam jurisdiction, to divide the commonly held title. But
where the ownership of the deed is in dispute or there is a cloud
on the title, a court must have in rem jurisdiction to decide such
matters. Our Supreme Court discussed this distinction in the case
of McRary v. McRary, 228 N.C. 714, 47 S.E.2d 27 (1948):
The Ohio court had jurisdiction to allot
alimony to plaintiff herein. Even so, the
jurisdiction acquired over the parties waspurely in personam. Its judgment cannot have
any extraterritorial force in rem. Nor did it
create a personal obligation upon the
defendant McRary which the courts of this
state are bound to compel him to perform. At
most it imposed a duty, the performance of
which may be enforced by the process of the
Ohio court.
The courts of the situs of lands cannot
be compelled to issue their decrees to enforce
the process of courts of another state, or the
performance of acts required by the decrees of
such courts, ancillary to the relief thereby
granted, affecting such lands.
By means of its power over the person of
the parties before it, a court may, in proper
cases, compel them to act in relation to
property not within its jurisdiction, but its
decrees do not operate directly upon the
property nor affect its title. The court's
order is made effectual only through its
coercive authority.
A judgment seeking to apportion the
rights of the parties to property outside the
jurisdiction of the court rendering it may be
given extrastate effect for many purposes, but
it does not establish any right in the
property itself, enforceable in the state of
its situs.
McRary v. McRary, 228 N.C. 714, 718, 47 S.E.2d 27, 30 (1948)
(citations omitted).
This Court applied the reasoning of McRary in the case of
Courtney v. Courtney, 40 N.C. App. 291, 253 S.E.2d 2 (1979). In
Courtney, a Texas court that had jurisdiction over the parties
entered a judgment ordering defendant personally to convey title to
North Carolina realty to plaintiff. On appeal, this Court affirmed
the trial court's decision, finding that the Texas judgment was
effective in North Carolina because it only affected the real
estate indirectly and was not an in rem order that improperly
purported to vest title. The Court reasoned:
In the instant case, the Texas court has not
exceeded its jurisdictional powers norcontravened any law or public policy of North
Carolina or Texas. Apparently recognizing its
limited jurisdiction, it never attempted to
vest any muniment of title in North Carolina
realty, as did the Ohio court in McRary.
Therefore, the in personam judgment directing
the conveyance of North Carolina realty is
entitled to full faith and credit in this
State.
Courtney v. Courtney, 40 N.C. App. 291, 298, 253 S.E.2d 2, 5
(1979).
Both the McRary and Courtney decisions cited the U.S. Supreme
Court decision in Fall v. Eastin, 215 U.S. 1, 54 L. Ed. 65 (1909),
and echo its reasoning. In that case, the Court affirmed the
Supreme Court of the State of Nebraska, which held that a deed to
land situated in Nebraska, made by a commissioner under the decree
of a court of the State of Washington in an action for divorce, was
not effective in Nebraska because the Washington court lacked in
rem jurisdiction.
These and other similar cases define the limits of in personam
jurisdiction, where in rem jurisdiction is lacking, to affect title
to land. The case at bar falls beyond these clearly defined
limits. When title to property is determined, only the court with
in rem jurisdiction may serve as a proper forum. North Carolina
being the only forum with in rem jurisdiction in the case at bar,
it is not a substantial injustice for the case to be tried in New
Hanover County, North Carolina.
Reversed.
Judges TIMMONS-GOODSON and BRYANT concur.
*** Converted from WordPerfect ***