Bros v. Southern Granite Co

• Decision Date: 15 December 1910
• Parties: VENABLE BROS. v. SOUTHERN GRANITE CO.
• Court: Georgia Supreme Court

69 S.E. 822

135 Ga. 508

VENABLE BROS.

v.SOUTHERN GRANITE CO.

Supreme Court of Georgia.

Dec. 15, 1910.

(Syllabus by the Court.)

1. Abatement and Revival (§ 39^*)—Dissolution of Defendant Corporation.

The dissolution of a corporation by the expiration of its charter, pending a suit against it, abates the action. The acts of the two persons in this case who owned all of the stock of the defendant corporation, in continuing to defend the suit after the expiration of the charter, did not prevent the abatement of the suit because of the expiration of the defendant's charter, and authorize plaintiffs to proceed to judgment against the defendant as a corporation de facto or a corporation by estoppel.

[Ed. Note.—For other cases, see Abatement and Revival, Cent. Dig. §§ 194-204; Dec. Dig. § 39;* Corporations, Cent. Dig. § 2589.]

2. Corporations (§ 030*)—Dissolution—Dismissal of Writ of Error—Want of Party Defendant.

There being no defendant to the action in the court below, after the dissolution of the defendant corporation by the expiration of its charter, it follows that there was no party which could be made defendant in error to the bill of exceptions filed by the plaintiff; and therefore the writ of error must be dismissed.

[Ed. Note.—For other cases, see Corporations, Cent. Dig. §§ 2482-2486; Dec. Dig. § 630.*]

(Additional Syllabus by Editorial Staff.) 3. Corporations (§ 1*)—Definition.

A "corporation" is an artificial person created by law for specific purposes, the limit of whose existence, powers, and liberties is fixed by its charter.

[Ed. Note.—For other cases, see Corporations, Cent. Dig. § 1; Dec. Dig. § 1.*

For other definitions, see Words and Phrases, vol. 2, pp. 1608-1621; vol. 8. pp. 7619, 7620.]

Error from Superior Court, De Kalb County; L. S. Roan, Judge.

Action by Venable Bros, against the Southern Granite Company. Judgment for defendant, and plaintiffs bring error. Dismissed.

Jas. L. Key, for plaintiffs in error.

A. H. Cox and Chas. H. Cox, for defendant in error.

FISH, C. J. Venable Bros, brought an action against the Southern Granite Company. It does not appear from the record when the suit was instituted, nor what was the alleged cause of action. It does appear that the charter of the defendant corporation expired in June, 1906. Subsequently thereto the plaintiffs amended their petition, and a demurrer to the petition as amended wasfiled by the attorney who bad previously represented the corporation. The demurrer was overruled, and upon writ of error to this court, sued out in the name of the corporation, the judgment was affirmed. Afterwards, when the case came on for trial in the superior court, it was, upon motion of counsel purporting to represent the defunct corporation, referred to an auditor. The auditor having heard the case and made his report, and exceptions having been filed thereto by such counsel, these exceptions came on for a hearing; whereupon such counsel filed a motion to abate the action, on the ground that the charter of the defendant corporation had expired by limitation on June 30, 1906 (which appears to have occurred pending the suit), and that there had never been any renewal or extension of the charter. This motion was supported by evidence which was not disputed. It also appeared from the evidence that all of the stock of the defunct corporation was owned by two named persons, who had paid from the corporation's assets the fees of the attorney representing it, and had given direction as to the defense of the action, and that they had sold some of the property of the corporation after the expiration of its charter. The presiding judge granted an order abating the action, and holding "that the Southern Granite Company was not, as to this case, a corporation de facto, and was not a corporation by estoppel." To this order the plaintiffs filed a bill of exceptions, upon which counsel who had represented the defendant corporation in the action prior to its dissolution, and who had continued to defend the action after the expiration of the charter, acknowledged service as "attorney of record for the Southern Granite Company, defendant."

A corporation is an artificial person, created by law for specific purposes, the limit of whose existence, powers, and liberties is fixed by its charter. Civ. Code 1895, § 1831. Every corporation is dissolved by the expiration of its charter. Id. 1882. "When a corporation expires by limitation of time, * * * it can no longer prosecute or defend an action, in the absence of some saving provision in its governing statute. An action can no more be prosecuted against a dead corporation than against a dead man. In such a case the opposing party suggests the death of the corporation, and upon the fact being admitted or proved the suit abates, just as an action for an injury to the person abates on the suggestion of the death of the defendant, unless there is a saving statute allowing it to be revived against his legal representative." 10 Cyc. 250; 1 Clark & Marshall on Corp. 247; 1 Thomp. Corp. § 243. In Logan v. W. & A. R. Co., 87 Ga. 533, 13 S. E. 516, a writ of error pending in the Supreme Court against a corporation when its charter expired was dismissed, on the ground that after the expiration of its charter the corporation was no longer a legal entity.

Upon its dissolution for any cause, all the property and assets belonging to the corporation, constitute a fund, first for the payment of its debts, and then for equal distribution among its members. Civ. Code 1895, § 1886. If a corporation is not a person in law until after the grant of its charter, and no valid judgment therefore can be rendered against it until after its incorporation, as was held in Bartram v. Collins Mfg. Co., 69 Ga. 751, and Rau v. Union Paper Mills Co., 95 Ga....