Van Wagenberg v. Van Wagenberg

Oppenheimer, J., delivered the opinion of the Court. This appeal from a judgment entered in the Circuit Court for Somerset County on a judgment previously entered by the Supreme Court for New York County, New York, involves questions under the full faith and credit and due process of law •clauses of the federal constitution and the construction of a New York statute. No testimony is involved; the facts before us are those disclosed by the pleadings and court records and are undisputed. Andre Van Wagenberg, the appellant, (the husband) and Aino Van Wagenberg, the appellee, (the wife) were married in Washington, D. C. on May 24, 1943.

Their only child, Maria 'Theresa, (the daughter) was born on August 5, 1946. The fam ¹⁵⁸ ily lived in Somerset County until marital difficulties arose, when the wife moved to Nassau County, New York, taking the daughter with her. There, the wife instituted an action for separation. On April 25, 1952, the husband and wife entered into 1 an agreement (the agreement) executed in the office of a law firm in New York City.

The agreement gave the husband’s residence as Princess Anne, Maryland, and that of the wife as Bong Island, New York. It recited the marriage and separation of the parties and the institution of the wife’s action for separation. It provided that the wife should have exclusive custody of the daughter and that the daughter’s residence was to be with her mother. The husband agreed to pay $325 a month for the wife’s support and maintenance, unless the parties were divorced and the wife remarried, and $175 for the support and maintenance of the daughter, until her attainment of majority, marriage or death.

Paragraph SECOND (d) reads as follows: “In addition to the sums hereinabove specified, the Husband shall pay all extraordinary and unusual medical expenses of the child arising from serious accidents or serious illnesses.” To secure these payments, Paragraph FOURTH of the agreement required the husband to maintain on deposit with Fahnestock & Co., a New York investment brokerage house, $2000 in cash or marketable securities and to authorize Fahnestock & Co. to pay the wife her monthly allotment out of such funds upon presentment by her of a sworn statement that such allotment was at least fifteen days overdue. In the event of a withdrawal from the account by the wife, or a decline in the market value of any deposited securities below the stipulated $2000 figure, the husband was to make additional contributions sufficient to restore the fund to the full amount provided for. The agreement provided that it was not to be merged in any order or decree in any divorce proceeding, although its provisions might be incorporated in any such order or decree, but was to continue in full force and effect between the parties. Prior to the execution of the agreement, and evidently while the wife’s proceeding for separation was pending in New York, the husband had instituted a divorce proceeding against the wife ¹⁵⁹ in Somerset County, Maryland.

After the agreement had been signed in New York, the wife filed a cross-bill in the Maryland proceeding. On June 2, 1952, the Circuit Court for Somerset County dismissed the husband’s bill and granted the wife a divorce a vinculo. The court, in its decree, provided for the support and maintenance of the wife and daughter in the terms set forth in the agreement. In August, 1954, the daughter contracted infantile paralysis.

In April, 1963, the wife filed a complaint against the husband in the Supreme Court of the State of New York, County of New York. In her complaint, the wife alleged she was a resident of the City and State of New York and that the husband was a resident of Princess Anne, Maryland. She recited the terms of the agreement and the Maryland divorce decree, copies of both of which were filed as exhibits. The complaint alleged that, because of the daughter’s infantile paralysis, it was necessary that she have four operations and special nursing care, and that the extraordinary medical expenses incurred by the wife on behalf of the daughter totalled $25,000 to date, of which the husband had paid only $6,500.

The wife asked judgment for the remainder of the expenses, in the sum of $18,500. Pursuant to Sections 302(a) (1) and 313 of the New York Civil Practice Eaw and Rules, a copy of the complaint was served upon the husband in Princess Anne on September 13, 1963, by a Maryland attorney. The husband filed no answer and entered no appearance of any kind in the New York case, either in person or by attorney. On November 19, 1963, the case was tried in the New York court before Justice Streit, without a jury, and judgment rendered for the wife for $18,500 plus interest and costs.

The judgment recites that the action is for breach of an express contract, that the husband is a nonresident of New York, and that the summons and complaint were served on him personally without the State. It also recites that “a warrant of attachment granted in the action has been levied on the property” of the husband. The wife filed suit on the New York judgment in the Circuit Court for Somerset County on December 26, 1963, and moved for summary judgment. The husband filed an affidavit in opposition to the wife’s motion in which he set forth that he ¹⁶⁰ had not been personally served with process in the New York proceeding in the State of New York, and claimed that the New York judgment is invalid as a judgment in personam and is not entitled to full faith and credit in Maryland.

After further procedural pleadings, not here relevant, Judge Prettyman granted the wife’s motion for summary judgment, and the husband appealed. The husband contends first, that he has the right to contest the validity of the New York judgment, despite the full faith and credit clause; second, that the New York Legislature in enacting Section 302(a) (1) of the New York Civil Practice Law and Rules did not intend to include the execution of a separation agreement within the meaning of the jurisdictional phrase “transact any business”; and, third, that if the New York Civil Practice Law be construed contrary to this contention, then the assertion of jurisdiction over him by the New York court was unconstitutional as a deprivation of due process of law. I Under the full faith and credit clause of Article IV, § 1 of the federal constitution, and the act of Congress, 28 U. S. C. § 1738 , the duly attested record of the judgment of a state is entitled to such faith and credit in every court within the United States as it has by law or usage in the state from which it is taken, and if it appears on its face, as here, to be a record of a court of general jurisdiction, its jurisdiction over the cause and the parties is presumed. Adam v. Saenger, 303 U. S. 59, 62 (1938) and cases therein cited; Roach v. Jurchak, 182 Md. 646, 650 , 35 A. 2d 817 (1944).

However, in a suit upon the judgment of another state the jurisdiction of the court which rendered it is open to judicial inquiry; if there was no jurisdiction, the judgment is not entitled to faith and credit. Adam v. Saenger, supra, at 62; Thompson v. Whitman, 85 U. S. (18 Wall.) 457, 469 (1874); Johnson v. Johnson, 199 Md. 329, 335 , 86 A. 2d 520 (1952); Restatement, Judgments, § 5 and comment d (1942); Goodrich, Conflict of Laws, §§ 72 and 209 (4th ed. 1964); Rashid, The Full Faith and Credit Clause: Collateral Attack on Jurisdictional Issues, 36 Geo. L. J. 154 (1948). ¹⁶¹ If the court of the state rendering the judgment sued upon was not authorized by that state to exercise its jurisdiction in the particular matter, the purported judgment is subject to collateral attack.

The power of the state (Maryland) in which the suit on the judgment of the sister state (New York) is brought, to examine into whether, under the New York law, the court of that state which rendered the judgment had authority to do so, is beyond question. Treinies v. Sunshine Mining Co., 308 U. S. 66, 78 (1939); Magdanz v. District Court of Woodbury County, 222 Iowa 456, 269 N. W. 498 (1936); Ellis Chalmers Mfg. Co. v. Lewelling Grain Co., 141 Kan. 350 , 41 P. 2d 1032 (1935); Traders Trust Co. v. Davidson, 146 Minn. 224 , 178 N. W. 735 (1920); Folger v. Columbian Ins. Co. & Trustees, 99 Mass. 267 (1868). “[T]he fact that a state has judicial jurisdiction to do a certain thing does not mean that any court of that state has power to do it * * * the fact that the court acted beyond the authority vested in it by the state may make the judgment void where rendered and therefore not entitled to recognition and enforcement elsewhere.” Restatement (Second), Conflict of Laws, § 74, comment g, (Tent.

Draft No. 3, 1956). See also Goodrich, supra, § 79 and 3 Freeman, Judgments, §§ 1370, 1389 (1925). The husband is not barred from collaterally attacking the validity of the New York judgment by the doctrine of res judicata. He filed no answer and made no appearance of any kind in the New York proceedings.

Sutton v. Leib, 342 U. S. 402, 408-09 (1952). Compare Sherrer v. Sherrer, 334 U. S. 343, 351 (1948) and Chicot County Drainage Dist. v. Baxter State Bank, 308 U. S. 371, 375 (1940). Compare, also, Colby v. Colby, 217 Md. 35 , 141 A. 2d 506 (1958) and Leatherbury v. Leatherbury, 233 Md. 344 , 196 A. 2d 883 (1964). Not only did the husband not appear in any way in the New York proceedings, but the determination as to the jurisdiction of the New York court depended upon questions of law—the construction and constitutionality of the statute of the state under which the court acted.

Those issues were not litigated. See Restatement, Judgments, § 10 comment b. We hold that the judgment of the New York court is open to collateral attack by the husband in the Maryland action on that judgment. ¹⁶² II The New York statute involved is § 302 of the New York Civil Practice Law and Rules (the statute) effective September 1, 1963. It reads as follows: “§ 302.

Personal jurisdiction by acts of non-domiciliaries (a) Acts which are the basis of jurisdiction. A court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, as to a cause of action arising from any of the acts enumerated in this section, in the same manner as if he were a domiciliary of the state, if, in person or through an agent, he: 1. transacts any business within the state; or 2. commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; or 3. owns, uses or possesses any real property situated within the state. (b) Effect of appearance. Where personal jurisdiction is based solely upon this section, an appearance does not confer such jurisdiction with respect to causes of action not arising from an act enumerated in this section.” The question before us is whether the term in (a) 1. “transacts any business -within the state” applies to the execution by the husband of the agreement in New York, under the attendant circumstances.

The husband contends that the jurisdictional phrase should be construed as limited to activities which are essentially “commercial” in the sense of endeavoring to make a financial profit and as excluding marital separation agreements. As Justice Gray remarked in Folger, supra, “We cannot speak with the same confidence of the intention and the policy of the legislature of another state as we might of those of our own.” Unlike the federal courts, we cannot refer the question of law to the state where it originated. See Aldrich v. Aldrich, 375 U. S. 249 (1963) and annots. 94 L. ed. 879 (1949) and 3 L. ed. 2d 1827 (1959). ¹⁶³ We have the benefit, however, of three recent decisions of the New York Court of Appeals construing the relevant portion of the statute, although none of these decisions involved a question such as that before us. All three dealt with the applicability of the statute to foreign corporations.

The three decisions are reported together as Longines-Wittnauer Watch Co. v. Barnes & Reinecke, 15 N. Y. 2d 443, 209 N. E. 2d 68 , 261 N. Y. S. 2d 8 (1965). The first case, Longines, was an action by a New York corporation against a Delaware company, with its place of business in Illinois; the court found that the defendant had engaged in “purposeful acts” in New York sufficient to meet “the liberal statutory criterion.” (at 457). In Feathers v. McLucas, the plaintiffs had brought a tort action for injuries sustained as a result of the explosion in New York of a tank manufactured by the foreign corporation in Kansas; the court held that the language of paragraph 2, conferring personal jurisdiction over a non-domiciliary which, in person or through an agent, commits a tortious act within the state, did not include the commission of a tortious act without the state which causes injury within it. Judge Fuld, who delivered the three opinions, pointed out that the New York statute was modeled upon a similar Illinois statute, and that, in a corresponding situation, the Illinois court, in Gray v. American Radiator & Sanitary Corp., 22 Ill. 2d 432, 176 N. E. 2d 761 (1961), had held the tort was committed in Illinois for the purposes of the jurisdictional statute.

The New York court, however, disagreed with the Illinois court’s interpretation. The third case was Singer v. Walker, cert, denied 34 U. S. L. Week 3160 (U. S. Nov. 8, 1965), which also involved an alleged tort of a foreign corporation. There, a child, a resident of New York, had been injured, in Connecticut, by a hammer manufactured in Illinois by an Illinois corporation, and sold by a dealer in New York to the child’s aunt. The court held that jurisdiction could not be sustained under paragraph 2, but that there was jurisdiction under paragraph 1 on the ground that the appellant had transacted business within New York and the cause of action was one “arising” therefrom.

It is the analysis of the genesis and purpose of the statute in Judge Fuld’s opinion which we find particularly enlighten ¹⁶⁴ ing in the consideration of the problem before us. He pointed out that: “The standard for assessing the irreducible minimum forum activities constitutionally requisite to subject foreign corporations and nonresident individuals to personal jurisdiction was reformulated in the cases of International Shoe Co. v. Washington (326 U. S. 310) and McGee v. International Life Ins. Co. ( 355 U. S. 220 ). By those decisions, the Supreme Court opened a broad and previously unavailable—although still largely undefined—area for state exercise of jurisdiction over such parties.

In place of the former rigid tests of ‘residence’ and ‘doing business’, the Supreme Court, in International Shoe, substituted the flexible requirement that a nonresident defendant, against whom a judgment in personam is sought in the forum state, be shown merely to ‘have certain minimum contacts with it such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice’” ( 326 U. S., at p. 316 ).” 15 N. Y. 2d at 451. He quoted from Hanson v. Denckla, 357 U. S. 235, 253 (1958), that “it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protection of its laws.” (at 451-52). Judge Fuld traced the history of the enactment of the statute as follows: “In enacting section 302, the Legislature chose not to fix precise guidelines, as other states have done, so as to draw within the jursidictional reach of the New York courts only contracts ‘made within this State’ (Md. Ann. Code, art. 23, § 92, subd. [d]) or contracts ‘made in this State or to be performed in this State’ (N. C. Gen. Stat., § 55-145, subd. [a], par. [1]) or contracts ‘to be performed in whole or in part by either party in [this State]’ (Minn.

Stat. Ann., § 303.13, subd. 1, par. [3] ; Tex. Rev. Civ. Stat. Ann. ¹⁶⁵ [Vernon], art. 2031b, § 4; Vt. Stat. Ann., tit. 12, § 855).

The Advisory Committee which drafted the section took cognizance of such statutes in its report (N. Y. Advisory Comm. Rep. [N. Y. Legis. Doc., 1958, No. 13], pp. 39-40) and decided, instead, to follow the broad, inclusive language of the Illinois provision, adopting as the criterion the ‘transact [ion of] any business within the state.’ The design of the legislation, as expressed by the committee, was to take advantage of the ‘new [jurisdictional] enclave’ (Bomze v. Nardis Sportswear, 165 E. 2d 33, 36, per L. HAND, J.) opened up by International Shoe where the nonresident defendant has engaged in some purposeful activity in this State in connection with the matter in suit. (See N. Y. Advisory Comm.

Rep. [N. Y. Legis. Doc., 1958, No. 13], pp. 39-40; see, also, 1 Weinstein-Korn-Miller, N. Y. Civ. Prac., par. 302.06).” 15 N. Y. 2d 456-57. 1 Again, at 460, the Judge said : “* * * [T]he draftsmen of section 302 pointedly announced that their purpose was to confer on the court ‘personal jurisdiction over a non-domiciliary whose act ¹⁶⁶ in the state gives rise to a cause of action’ or, stated somewhat differently, ‘to subject non-residents to personal jurisdiction token they commit acts within the state’. (See N. Y. Advisory Comm.

Rep. [N. Y. Legis. Doc., 1958, No. 13], pp. 37, 39; emphasis supplied.)” We find it significant that, in applying “the plain language of the statute and the expressed design of those who drafted it” Judge Fuld repeatedly referred, not to commerce or transactions for profit, but to acts done within the state. He emphasized that the legislature had not confined the jurisdictional reach only to contracts made within the state, and that the design of the statute was to assert jurisdiction over any “purposeful activity” in the state. There is a strong inference, in his analysis, that the phrase “transaction of any business” includes, but is not limited to, contracts of any kind made within the state, and “purposeful activity” of any kind, within the state.

In discussing the facts in the three cases, the Judge necessarily referred to commercial transactions for these were the acts involved, but the analysis of the purpose, history and meaning of the statute which preceded the particularized consideration of the cases contains no such limitation. While in Feathers the New York court refused to go as far as had Illinois in the construction of the language of paragraph 2, the basis of the distinction was that it was the commission of an act within the state which was determinative. The consideration of the constitutional power of the legislature to include injuries resulting from tortious acts committed without the state is not relevant to the question involved in this section of our opinion, which concerns not constitutional power but legislative intent. As the New York court indicated, the failure of the New York legislature to include jurisdiction over the situation presented in Feathers was a matter of choice, not constitutional limitation. “[I]t could have made explicit provision for such situations as some states have done * * *” 15 N. Y. 2d at 461.

But Feathers emphasizes that it is the commission or non-commission of an act within the state which governs. That the execution of the agreement here involved was an act done within the state of New York is not in dispute. Not only was the agreement executed in the state but the covenants ¹⁶⁷ requiring payments by the husband to the wife, for herself and the daughter, were to be fulfilled in that state. As security for the performance of the husband’s obligations, a sum of money or securities were to be left in the state, in the custody of a New York investment brokerage house, and if the designated amount of the deposit was depleted, the husband obligated himself to make additional payments to the New York firm.

These are business transactions. The New York suit resulted from the husband’s alleged failure to make the additional payments to the wife, in New York, for which the agreement provided, to meet the extraordinary medical expenses of the daughter, who, the agreement further provided, was to be in the custody of the wife, a resident of New York. Clearly, the wife’s cause of action arose from the act of the husband in executing the agreement and in failing to perform his obligations thereunder. An agreement of the nature here involved is a legal act of the most serious nature.

Unlike a marriage ceremony, which creates a status, or a divorce, wdiich terminates a status, the agreement sounds in contract. The contract is specific and definite; by its express terms, it is not to be affected by any subsequent judicial action in divorce proceedings. The contractual nature of a separation agreement, as distinguished from the personal obligations inherent in the status of marriage, was recognized in England in the jurisdictional conflict between the ecclesiastic and civil courts. 2 ¹⁶⁸ Judge Prettyman said in his opinion in the court below: “The Court has reached the decision, as stated in Black’s Law Dictionary, that the word [business] has no specific or legal meaning, and that it is a very comprehensive term embracing everything about which a person may be engaged.” It may well be that it is because “business” is not a word of art that the New York court used the term “act” so consistently in its discussion of the meaning of the statute.