Harris v. Balk
Citation: 198 U.S. 215 (1905) Court: United States Supreme Court
Facts
Balk (North Carolina) owed money to Harris (North Carolina). Epstein (Maryland) was separately owed money by Balk. When Harris temporarily traveled to Maryland, Epstein garnished the debt that Harris owed to Balk in a Maryland court. Harris paid the debt to Epstein pursuant to the Maryland judgment. Balk later sued Harris in North Carolina for the original debt, and Harris asserted the Maryland judgment as a defense. Balk argued the Maryland court lacked jurisdiction to garnish an intangible debt.
Issue
Can a state court exercise quasi-in-rem jurisdiction over an intangible debt by garnishing the debtor while the debtor is temporarily present in the state?
Holding
Yes. The Supreme Court held that the situs of a debt travels with the debtor, so Maryland had quasi-in-rem jurisdiction to garnish the debt Harris owed to Balk when Harris was present in Maryland. The Maryland judgment was entitled to full faith and credit in North Carolina.
Rule / Doctrine
The situs of an intangible debt is wherever the debtor can be found. A state may exercise quasi-in-rem jurisdiction over a debt through garnishment of the debtor while the debtor is present in the state, even if both creditor and original debtor are domiciled elsewhere. The garnishment judgment must be given full faith and credit by other states.
Significance
Harris v. Balk extended quasi-in-rem jurisdiction to intangible debts and was the leading authority on garnishment jurisdiction for decades. It was substantially overruled and limited by Shaffer v. Heitner (1977), which held that all assertions of jurisdiction — including quasi-in-rem — must satisfy the minimum contacts standard of International Shoe. Under Shaffer, transient presence of the debtor alone is likely insufficient to sustain jurisdiction over the underlying debt.