Reynolds & Hamby Estate Mortg. Co. v. Martin

• Decision Date: 31 October 1902
• Citation: 42 S.E. 796,116 Ga. 495
• Parties: REYNOLDS & HAMBY ESTATE MORTG. CO., Limited, v. MARTIN.
• Court: Georgia Supreme Court

42 S.E. 796

116 Ga. 495

REYNOLDS & HAMBY ESTATE MORTG. CO., Limited, v. MARTIN.

Supreme Court of Georgia

October 31, 1902

Syllabus by the Court.

1. A petition for a receiver and other equitable relief against two foreign corporations, two individual citizens and residents of another country, and the sheriff of the county in which the petition is filed,--the sheriff being only a nominal defendant,--which does not set forth that either of the foreign corporations has any office, officer, agent, or place of doing business in this state, or that either of the alien individuals resides in said county or is to be found therein, does not set forth any jurisdiction in the superior court of the county of the sheriff's residence in this state, for a proceeding in personam, or a right to obtain a personal judgment against any one of the four principal defendants. An entry of service by the sheriff cannot supply the omission to set forth jurisdiction in the petition.

2. No ground for equitable relief in the defendant in error as an individual is set forth in the petition. (a) It is not made to appear that what he calls a fraud was a fraud upon him in any legal sense. (b) The matters and things set forth in the petition as a reason for interfering with a final judgment obtained by the plaintiff in error against the defendant in error, also set forth in the petition, could have been pleaded to a suit on the bond resulting in this judgment, if they possessed any legal efficacy. (c) The delay and laches of the defendant in error furnish a further reason for noninterference by a court of equity.

3. The defendant in error does not show that, as a stockholder of the two foreign corporations, he is entitled to a receiver to take charge of their assets in this state.

Error from superior court, White county; J. B. Estes, Judge.

Suit by John Martin against the Reynolds & Hamby Estate Mortgage Company, Limited, and others. From a judgment for plaintiff the above-named defendant brings error. Reversed.

J. L Oakes and H. H. Perry, for plaintiff in error.

Spencer R. Atkinson, W. A. Charter, and G. S. Kytle, for defendant in error.

ADAMS J.

John Martin filed in the superior court of White county, in this state, a petition for relief against the Gold Reefs of Georgia, Limited, the Reynolds & Hamby Estate Mortgage Company, Limited, alleged in the petition to be corporations of the kingdom of Great Britain and Ireland, and there domiciled, and Frederick Hunt and Edwin Bowley, also alleged to be citizens of that kingdom, and the sheriff of White county; the last named being only a nominal defendant, and not one against whom, under the decisions of this court, any substantial relief was prayed. A separate demurrer to this petition was filed by the Reynolds & Hamby Estate Mortgage Company on various grounds, which was overruled by the court below, and a bill of exceptions was taken to the judgment of the court overruling this demurrer. The prayers of the petition are for process against each of the defendants named, requiring them to appear at the next term of White superior court to answer the complaint; for the appointment of a receiver to take charge of, and, under the jurisdiction of the court, enforce the collection of, a judgment in favor of this company against the defendant in error set forth in the petition, to retain the proceeds of this judgment to answer such final judgment and decree as may be rendered in favor of the defendant in error; that the receiver be required to take possession of and hold, subject to the final decree and direction of the court, certain real property alleged to belong to the corporation known as the Gold Reefs of Georgia, Limited, one of the defendants, to the end, if the court should finally decree in favor of the defendant in error against the Gold Reefs of Georgia, Limited, that this company is indebted to him in the sum of pounds sterling>>1,826, alleged to have been obtained from the defendant in error in consequence of a gross fraud, that the defendant in error might in this way realize on any judgment which might be rendered in his favor in the premises; for a writ of injunction preventing this company from incumbering its Georgia property, and the Reynolds & Hamby Estate Mortgage Company, Limited, from assigning or setting over its judgment to any third party, and preventing the sheriff from advertising the property for sale under this judgment; and finally for general relief. There is no specific or direct prayer for a judgment or decree against any defendant. It is not, in terms, alleged that the defendant in error is entitled to a decree against any defendant, and the indication of the desire to obtain a decree against the Gold Reefs of Georgia rests upon implication, rather than upon specific statement or prayer. The petition sets forth that the defendant the Reynolds & Hamby Estate Mortgage Company, Limited, had at the November term, 1901, of White superior court, obtained against the defendant in error a general as well as a special judgment for the full amount of a bond given by the defendant in error to this company on the 22d day of February, 1898, covering the sum of pounds sterling4,000 principal, and secured by a mortgage, which judgment includes pounds sterling>>1,826, of which, according to the petition, the petitioner has been cheated and defrauded as stated in the petition. It is admitted in the petition that the defendant in error received pounds sterling2,174 of the face of his bond, and the general purpose of the petition is to obtain redress as to this balance of pounds sterling1,826 through the intervention of a court of equity by the appointment of a receiver, the collection of the judgment, and the seizure of the real property heretofore mentioned. The petition also sets forth the alleged rights of defendant in error as a stockholder in the two corporations, and the threatened destruction of those rights. There are no specific prayers that seem to be entirely germane to the status of a stockholder, and these allegations may be inserted for the purpose of giving additional weight and strength to the appeal of the defendant in error for relief as an individual against what he denominates a gross fraud.

1. There is no statement anywhere in the petition which suggests that any one of the four principal defendants has any residence of any kind in the county of White. All of them are alleged to be citizens and residents of the kingdom of Great Britain and Ireland. Neither of the two corporations is alleged to have any agent of any kind in this county. The sheriff of the county is made a party defendant for the purpose of arresting his proceedings under the execution based upon the judgment above mentioned. His connection with the case as a nominal defendant would not give to the court jurisdiction of the case. Rounsaville v. McGinnis, 93 Ga. 579, 21 S.E. 123; Coal Co. v. Anderson, 103 Ga. 810, 30 S.E. 640. We do not see how the court could render a judgment in personam against any one of the defendants, with or without service by publication. So far as we are aware, all the authorities are against jurisdiction for this purpose, unless, of course, the nonresident is found in this state, and here served. See, for example, Dearing v. Bank, 5 Ga. 505, 48 Am.Dec. 300 et seq; Schmidlapp v. Insurance Co., 71 Ga. 246; King v. Sullivan, 93 Ga. 627, 20 S.E. 76. In the last-mentioned case this court, through Mr. Justice Lumpkin, says (noticing the case of Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565, freely used in the argument by the distinguished counsel for the defendant in error): "A proceeding of the kind above mentioned [one against specific assets of a foreign corporation for the purpose of subjecting them to a judgment against the corporation] is, so far as the corporation is concerned, a proceeding in personam; and therefore, in order to give the court jurisdiction for the purpose indicated, actual service is essential. In the case of a foreign corporation which has no office, officer, agent, or place of business in this state, such jurisdiction cannot be obtained by merely serving the corporation by publication. This doctrine is supported by the principle announced in Pennoyer v. Neff, in which it was held that a personal judgment rendered by a state court against a nonresident of the state in an action upon money demand was without validity where the defendant was served by publication, but upon whom no personal service of process within that state was made, and who did not appear."

2. Treating the petition as a proceeding in rem,--that is to say, as an application for an equitable seizure, through the medium of a receiver, of the property of the defendant, to be held until the final decree in the case, and recognizing the ample power of a court of equity of this state to so seize such property and render a judgment against the same in a proper case made, we nevertheless hold that no such case is stated in this petition.

(a) We are unable to find how a fraud, in any legal sense, has been perpetrated upon the plaintiff below. He admits giving to the Reynolds & Hamby Estate Mortgage Company his bond, under his hand and seal, whereby he acknowledges to have received from this company as a loan pounds sterling 4,000, but says that at the time he executed this instrument he did not suspect and had no reason to suspect, the purpose of this company, in connection with the Gold Reefs of Georgia, to perpetrate upon him the gross fraud which he undertakes to set out. It seems that the defendants Hunt and Bowley were to make the loan which the Reynolds & Hamby Estate Mortgage Company was subsequently organized to carry; that the defendant in error received pounds sterling>>2,174 in cash;...