Harris v. Balk

SCOTUS - 1905 (198 U.S. 215)

Facts:

• Harris, from NC, owed Balk, from NC, $180. Balk owed Epstein, from MD, $300.
• Epstein sued Harris when they were both in MD for the amount Harris owed Balk, $180.
• Epstein won judgment in MD, and Harris paid Epstein $180.
• Later, Balk sued Harris for the $180 owed to him.

Procedural History:

•  Balk won in lower court.
• Upheld in NC supreme court.
• Reversed and remanded by SCOTUS.

Issues:

•  Must a state give "full faith and credit" to a judgment made against one of its residents while that resident was in another state?
• Can a person's debts be attached in another state when the person the debt is owed to crosses state lines?

Holding/Rule:

•  For purposes of jurisdiction,  debts have no situs but follow a debtor wherever he goes.
• States must give "full faith and credit" to judgments made against its residents when those residents are in another state.

Reasoning:

•  The situs of a person's debt is not stationary but follows the debtor wherever he goes.
• It is the object of the courts to prevent a debt from being paid twice.

Dissent:

•  None given.

Notes:

•  This is one of the first cases about jurisdiction issues with non-tangible property.
• Debt is an intangible form of property

• Through this case, someone can gain in personam jurisdiction over a debtor's debtor if they are in the same state.
• This is especially troublesome for corporate debtors.