Co-op Mortg. Investments Associates v. Pendley

• Decision Date: 19 February 1975
• Docket Number: 2,CO-OP,3,Nos. 1,No. 50064,50064,s. 1
• Citation: 134 Ga.App. 236,214 S.E.2d 572
• Parties: MORTGAGE INVESTMENTS ASSOCIATES v. H. Jack PENDLEY, Jr., et al
• Court: Georgia Court of Appeals

Page 572

214 S.E.2d 572

134 Ga.App. 236

CO-OP MORTGAGE INVESTMENTS ASSOCIATES v. H. Jack PENDLEY, Jr., et al.

No. 50064.

Court of Appeals of Georgia, Division Nos. 1, 2, 3.

Feb. 19, 1975.

Rehearing Denied March 11, 1975.

Henning, Chambers & Mabry, Walter B. McClelland, Atlanta, for appellant.

Arnall, Golden & Gregory, Cleburne E. Gregory, Jr., William H. Kitchens, Atlanta, for appellees.

Syllabus Opinion by the Court

WEBB, Judge.

Co-op Mortgage Investments Associates, a Maryland limited partnership, purchased from Messrs. Pendley, Bruce and Greene (hereinafter referred to as the Pendleys), certain improved realty in Fulton County. Pertinent to the consummation of the sale was the execution and delivery by Co-op Mortgage to the Pendleys of a purchase money note for $95,000 and a deed to secure the debt. The documents were executed 'Co-op Mortgage Investments Associates, a Maryland Limited Partnership, By A. V. Laurins & Co., Inc., General Partner, By A. V. Laurins, President.'

One year after the purchase, and on the day its note was due the Pendleys, Co-op Mortgage filed its complaint in the Superior Court of Fulton County against the Pendleys praying recovery of both actual and punitive damages, as well as satisfaction of the purchase money note, because of certain claimed deficiencies in the improvements on the realty acquired from the Pendleys, and for certain alleged misrepresentations and breach of warranties contained in the sales contract and in the owner's affidavit made by the Pendleys. The sales contract itself was between the Pendleys and 'A. V. Laurins Company, Inc.,' apparently in its individual corporate capacity.

To the complaint of Co-op Mortgage the Pendleys filed their answer and a counterclaim for $95,000 plus interest and attorney fees alleged to be due on the purchase money note. Thereafter the Pendleys moved to amend their counterclaim by adding A. V. Laurins & Co., Inc. as a party defendant, and that Laurins Company, being a nonresident, be served pursuant to Code Ann. $ 24-113.1. The trial court granted this motion, concluding 'that the presence of A. V. Laurins & Co., Inc. is required for the granting of complete relief on the counterclaim' and that jurisdiction over Laurins Company can be acquired. It is from this order that Co-op Mortgage appeals, pursuant to a certificate of immediate review.

The record discloses that during the year following the purchase of the property, Laurins Company, as general partner of Co-op Mortgage, offered for rent and improved apartments on the premises, and advertised and offered for sale condominiums, entering into some 29 contracts of sale. Such was done through a resident agent located on the property, employed and paid by Laurins Company.

Co-op Mortgage enumerates three alleged errors on which it presents succinctly two questions for determination, viz.:

1. In a proceeding instituted by a limited partnership, where a counterclaim against such plaintiff partnership is filed, is it necessary to add as a party defendant to such counterclaim the general partner who acted for the partnership in order to bind such general partner and to obtain complete relief?

2. Is Laurins company, a foreign corporation, under the facts of the case sub judice subject to the jurisdiction of the Superior Court of Fulton County under Georgia's Long Arm Statute, Code Ann. § 24-113.1 et seq.?

We answer these questions in the order presented.

1. It is our judgment that in this proceeding by a limited partnership, in which was filed a counterclaim against the partnership, it was proper to add as a party defendant to such counterclaim the general partner, and to have such general partner served in order to bind such general partner and to obtain complete relief.

The Pendleys included in their answer filed March 28, 1974 a counterclaim, as above stated, against Co-op Mortgage, the complainant, for $95,000 on the purchase money note, plus interest thereon and attorney fees. The assertion of their counterclaim, if to be sought at all, was compulsory at this time under Rule 13(a) of the Civil Practice Act. Code Ann. § 81A-113(a); Best v. Georgia Power Co., 224 Ga. 669, 164 S.E.2d 125; Blount v. Kicklighter, 125 Ga.App. 159, 160(1), 186 S.E.2d 543. Furthermore, counterclaims must be directed against the original parties to the action. 'A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.' Rule 13(a), supra. (Emphasis supplied.) Consequently, service of the counterclaim was limited to Co-op Mortgage the only named plaintiff.

Thereafter, on August 7, 1974, the Pendleys moved to amend their counterclaim by adding A. V. Laurins & Co., Inc. as a party defendant to the counterclaim, contending that this addition of Laurins Company was required for the granting of complete relief in the determination of the counterclaim, and that jurisdiction over Laurins Company was obtainable. Rule 13(h), CPA (Code Ann. § 81A-133(h)) provides: 'When the presence of parties other than those to the original action is required for the granting of complete relief in the determination of a counterclaim or a crossclaim, the court shall order them to be brought in as defendants as provided in this Title, if jurisdiction of them can be obtained.' Joinder 'as provided in this Title' necessarily means that the provisions of Rules 19 or 20, CPA (Code Ann. § 81A-119 or 81A-120) be satisfied by the party pleading a counterclaim who seeks to join additional persons. CPA Rules 13 and 19 have in common that the joinder be predicated on the requisite granting of 'complete relief.' This provision 'complete relief' embraces the desirability of avoiding repetitive lawsuits on essentially the same facts or subject matter, as well as the desirability of joining those in whose absence there might be a grant of hollow or partial relief to the parties before the court.

Co-op Mortgage, in opposition to the trial court's order naming Laurins Company a party defendant to the counterclaim, contends that adequate relief can be afforded the Pendleys without as a party defendant the presence of Laurins Company, a general partner of Co-op Mortgage, and that the Pendleys needed only to serve Laurins Company with the counterclaim in order to bind that company as a general partner. The Pendleys counter that under Georgia law it is unresolved whether when the original complaint was filed by the general partner on behalf of the limited partnership as plaintiff, service of the counterclaim on the limited partnership is sufficient service on the general partner so that any judgment on the counterclaim will bind the individual assets of the general partner.

A general partner in a limited partnership has the same rights and liabilities analogous to those of a partner in an ordinary general partnership, and he may become individually liable for all of the debts of the partnership. Code Ann. §§ 75-410, 75-103; Crane on Partnership (2d Ed.), p. 112, § 26; 60 Am.Jur.2d 261, Partnership § 379. ¹ Partners in an ordinary general partnership are jointly liable with the partnership for all debts and obligations of the partnership. Bray v. Peace, 131 Ga. 637(4), 62 S.E. 1025; Sirmons v. Rogers, 106 Ga.App. 166(1), 126 S.E.2d 530; 60 Am.Jur.2d 80, Partnership, § 160. But, 'to bind individual assets of a partner, the partner himself must be served, and must have had his day in court. The execution can not be made broader than the judgment, nor the judgment be broader than the original proceeding upon which it is based.' Flowers v. Strickland, 10 Ga.App. 739, 740, 73 S.E. 1092. 'In Georgia, a judgment against a partnership binds the partnership property and also the individual property of any partners who by proper service are made parties defendant in the action, Code § 75-312, but does not bind the individual property of partners not served.' Losito v. Gingo, 107 Ga.App. 840(1), 131 S.E.2d 780; Code § 39-117; Render & Hammett v. Hartford Fire Ins. Co., 33 Ga.App. 716, 723, 127 S.E. 902; Fincher & Womble v. Hanson, 12 Ga.App. 608, 611(3), 77 S.E. 1068; Denton Brothers v. Hannah, 12 Ga.App. 494(4), 77 S.E. 672; Warren Brick Co. v. Lagarde Lime & Stone Co., 12 Ga.App. 58(2), 76 S.E. 761; Higdon v. Williamson, 10 Ga.App. 376(1), 73 S.E. 528; Hollister Brothers v. Blumenthal & Bickart, 9 Ga.App. 176(1), 70 S.E. 970. If only the partnership is served, and no partner is served, the judgment could bind only the partnership assets. Fincher & Womble v. Hanson, 12 Ga.App. 608, 611(3), 77 S.E. 1068, supra.

'Where, in suit against two or more joint contractors . . . or partners, service shall be perfected on only part of said contractors or partners, and the officer serving the writ shall return that the others are not to be found,...