Huey v. National Bank of Fitzgerald
| Decision Date | 12 May 1933 |
| Docket Number | 9213. |
| Citation | 169 S.E. 491,177 Ga. 64 |
| Parties | HUEY et al. v. NATIONAL BANK OF FITZGERALD. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
Where separate demurrer of one defendant is overruled, remaining defendants need not be made parties to, or be served with copy of, bill of exceptions assigning error on overruling of demurrer.
Defendant suing out bill of exceptions to review judgment overruling his general demurrer to petition may name other defendants as parties plaintiff in error, and, where he omits to do so, has option of adding them by amendment without notice to them.
In equity cases, all persons whose rights and interests are sought to be affected are necessary parties defendant, and when made defendants, are parties against whom substantial equitable relief is prayed, within constitutional requirement that equity cases be tried in county where a defendant resides against whom substantial relief is prayed (Const art. 6,§ 16, par. 3).
Suit by transferee of common-law execution against stockholders to cancel security deed granted by corporation to secure loan made after corporation's charter expired by operation of law, less than 5 years previously, held fatally defective as constituting collateral attack on de facto corporation (Park's Ann. Civ. Code, § 2823 (i); Civ. Code 1910, § 2226).
1. "Where a petition is filed against several defendants, and a separate demurrer thereto by one or more of them is overruled, the remaining defendants need not be made parties to, or be served with a copy of, a bill of exceptions assigning as error the overruling of the demurrer mentioned." Jones v. Hurst, 91 Ga. 338, 17 S.E. 635. Where a general demurrer filed by one of several defendants to the plaintiff's petition is overruled by the court, such defendant, in suing out a bill of exceptions to review the judgment, may name the other defendants as parties plaintiff in error; and where he omits to do so, he has the option of adding them by amendment.
2. In equity cases all persons whose rights and interests are sought to be affected are necessary parties defendant; and where such persons are accordingly made defendants, they are parties against whom substantial equitable relief is prayed, within the rule as to venue in equity cases. Upon the assumption that the petition stated a cause of action as to the nonresident defendants the court was not without jurisdiction because no sufficient relief was sought as against the resident defendant.
3. Where the charter of a corporation has expired but the corporation has continued in business in ignorance of such expiration, the charter may be revived upon certain conditions at any time within five years from the date of such expiration; and where the charter is so revived, all of the property and other rights "of such corporation" shall continue as corporate assets, and all that the "corporation" may have done in the meantime shall be "held as the acts and doings of the original corporation so revived." Where the company continues to do business within the period allowed for revival, and nothing further appears, it is to be treated as a de facto corporation. The corporate existence of a company having the character of a de facto corporation cannot be collaterally attacked. The present suit was fatally defective as amounting to a mere collateral attack upon such a corporation, and the general demurrer to the petition should have been sustained.
Error from Superior Court, Ben Hill County; R. Eve, Judge.
Equitable suit by National Bank of Fitzgerald against H. G. Huey and others. Demurrer to petition was overruled, and some of defendants bring error.
Reversed.
H. C. Morgan, of Homerville, for plaintiffs in error.
Jay & Garden and McDonald & McDonald, all of Fitzgerald, for defendant in error.
On April 8, 1932, National Bank of Fitzgerald filed an equitable suit in the superior court of Ben Hill county against Lon Dickey and T. J. Dickey, residents of Ben Hill county and Glynn county, respectively, and against H. G. Huey Gas & Oil Company, a partnership whose members were residents of Clinch county. There were no other parties defendant. H. G. Huey Gas & Oil Company, which will be hereinafter referred to as the Huey Company, filed a demurrer questioning the jurisdiction of the superior court of Ben Hill county as to this partnership or the members thereof, and also contending that the petition failed to set forth any cause of action. The Huey Company also filed a plea to the jurisdiction. The court "overruled" the demurrer and the plea to the jurisdiction, and the Huey Company excepted. The defendant in error moved to dismiss the writ of error, because the defendants Lon Dickey and T. J. Dickey were not made parties to the bill of exceptions. In response to this motion the Huey Company prayed for leave to amend the bill of exceptions by adding Lon Dickey and T. J. Dickey as parties plaintiff in error. The record does not show that either of these parties made any appearance in the superior court.
The petition alleged the following facts: On January 6, 1909, Lon Dickey Lumber Company (hereinafter called the Dickey Company) was incorporated by the superior court of Ben Hill county, and was thereafter duly organized as a corporation. Its charter expired by operation of law on January 6, 1929, and "said charter has not been renewed, *** and said corporation is not now in existence." At the expiration of the charter of this company it was not indebted to any person, and no action has been taken by any one for the administration of its assets through a receiver. Lon Dickey and T. J. Dickey owned the entire outstanding capital stock of the Dickey Company when its charter expired, and upon the happening of this event the title to all of the corporate property, both real and personal, immediately vested in these stockholders as tenants in common. On March 4, 1930, the Dickey Company executed and delivered to the Huey Company its deed to secure a debt, purporting to convey certain real estate situated in Coffee county, the debt being "evidenced" by a promissory note of even date for the sum of $6,000. The Huey Company was not previously a creditor of the Dickey Company, and this note, executed in the name of the Dickey Company, actually represented a loan negotiated by Lon Dickey from the Huey Company, "and the proceeds thereof were received by Lon and T. J. Dickey and used for their individual use and benefit." The security deed contained a power of sale, under which the Huey Company is now advertising the property for sale for the purpose of satisfying "such alleged indebtedness." Such deed was and is void by reason of the fact that the same was executed and delivered subsequently to the expiration of the charter of the Dickey Company.
The National Bank of Fitzgerald is the transferee of a common-law execution against Lon Dickey and T. J. Dickey, based upon a judgment of the superior court of Ben Hill county, rendered on October 16, 1929, which execution was duly recorded in Ben Hill county on October 22, 1929, and in Coffee county on January 18, 1930. (A copy of the execution was attached to the petition, and showed a balance due amounting to about $7,000.) Upon its entry on the general execution docket of Coffee county the execution became a general lien upon the real estate thereafter purportedly conveyed by the security deed. This deed is a cloud upon the title to the property; and if the Huey Company is permitted to sell the property thereunder, the sale would create a further cloud upon such title. The existence of the security deed would deter any one from bidding upon the property if the same should be sold under the plaintiff's execution. To avoid a multiplicity of suits, it is necessary that the sale under the security deed should be enjoined; that the deed be declared to be a cloud upon the title; that the property be decreed to be vested in Lon Dickey and T. J. Dickey, subject to the lien of the plaintiff's execution; and that the Huey Company be adjudged to have "no right, title, interest, claim, or lien in and to said *** property." Lon Dickey and T. J. Dickey are both insolvent, and the plaintiff has no complete and adequate remedy at law. There is now "located and growing upon the real estate hereinbefore described a considerable amount of timber, which constitutes a material portion of the value of said property; and if said timber is cut and removed from said property, the value thereof will be materially depreciated."
The petition contained the following prayers: (1) That the Huey Company, their members, agents, and employees be enjoined from selling the property under the security deed, and from transferring or assigning this deed and the evidence of indebtedness secured thereby; (2) that Lon Dickey and T. J Dickey be enjoined from committing any waste, injury, or damage to the lands and premises, and "in particular from cutting and removing from said lands any of the timber growing thereon"; (3) that a decree be entered canceling the security deed; (4) that the title to the lands be declared to be vested in Lon Dickey and T. J. Dickey, subject to the special lien of the execution held by the plaintiff; (5) that the plaintiff have such other and further relief as may be in accordance with equity.
A demurrer to the petition was filed by the defendant partnership. This demurrer was overruled, and the partnership excepted. There is no merit in the motion to dismiss the writ of error, based upon the ground that the other parties defendant were not made parties to the bill of exceptions. "Where a petition is filed against several defendants and a separate demurrer thereto by one or more of them is overruled, the remaining defendants need...
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