Trust Co. of Ga. v. Mortgage-Bond Co. of N.Y.

• Decision Date: 17 January 1948
• Docket Number: 15934
• Citation: Trust Co. of Ga. v. Mortgage-Bond Co. of N.Y., 203 Ga. 461, 46 S.E.2d 883 (Ga. 1948)
• Parties: TRUST CO. OF GEORGIA et al. v. MORTGAGE-BOND CO. OF NEW YORK.
• Court: Georgia Supreme Court

46 S.E.2d 883

203 Ga. 461

TRUST CO. OF GEORGIA et al. v. MORTGAGE-BOND CO. OF NEW YORK.

No. 15934

Supreme Court of Georgia

January 17, 1948

Syllabus by the Court.

1.In the absence of statute providing otherwise, a corporation whose charter has expired or which has been otherwise dissolved cannot be treated as a legal entity with capacity to sue or be sued in its corporate name.

(a)Section 36 of the Corporation Act of 1938, Laws 1937-1938Ex. Sess., pp. 214, 242, providing that, 'All corporations, whether they expire by their own limitations or are otherwise dissolved, shall neverthless be continued for the term of three years and until final disposition of all suits begun within that time from such expiration or dissolution bodies corporate for the purpose of prosecuting and defending suits by or against them and enabling them gradually to settle and close their business, to dispose of any [and?] convey their property and to divide their assets but not for the purpose of continuing the business for which the said corporation shall have been established,' does not apply by its terms to foreign corporations, and cannot be applied to a dissolved foreign corporation which has never done business in this State.Nor is there any other statute in Georgia providing for suit, or the continuation of a suit, by a foreign corporation which has ceased to exist as a legal entity by expiration of its charter or other manner of dissolution.

(b) Whether the provisions of section 36, as quoted, could properly be applied so as to authorize suits either by or against a dissolved foreign corporation which had done business in this State, is a question that is not presented by the instant record.

2.In the instant proceeding to revive a dormant judgment obtained in this State by a New York corporation, where it was shown by amendment that such corporation was voluntarily dissolved in New York pending such proceeding for revival, but it did not appear whether such corporation had ever done business in this State, and there was no other partyplaintiff in such proceeding, the trial court did not err in sustaining the demurrer by the defendants attacking the petition as amended as showing upon its face that the 'partyplaintiff has no legal existence.'Accordingly, the Court of Appeals erred in its decision and judgment reversing the judgment of the trial court.

The present case is before this court on certiorari to the Court of Appeals.For the decision under review, see75 Ga.App. 211, 42 S.E.2d 780, 781.The action in the trial court was a proceeding by a New York corporation to revive a dormant judgment.By an amendment, it appeared that the plaintiff was suing for the use of another corporation to which the cause of action was assigned pending the original suit in which the judgment was obtained.The amendment further disclosed that the corporation was voluntarily dissolved after institution of the proceeding for revival; whereupon the trial court sustained a demurrer and dismissed the action.The main question in the case is whether the action abated on dissolution of the plaintiff as a corporate entity, and involves a determination as to whether section 36 of the Corporation Act of 1938, Laws 1937-1938, Ex.Sess., pp. 214, 242, providing for continued existence of 'all corporations' for the term of three years after their dissolution and until final disposition of all suits begun within that time, for the purpose of prosecuting and defending suits by or against them, and other purposes, applies to foreign corporations.The Court of Appeals held that these provisions apply alike to foreign and domestic corporations and reversed the judgment of the trial court.The petition as amended did not show whether the corporation had ever been engaged in business in Georgia.

The facts of the case, as stated in detail by the Court of Appeals, were as follows:

On May 22, 1945, the Mortgage-Bond Company of New York filed a petition for scire facias to revive a judgment obtained by it on January 7, 1936, in Fulton Superior Court against W. H. Wynne, States Realty Company, Inc., and Wynndam Court Apartment Company, Inc.It was alleged that said judgment was more than seven years old and was dormant, and that no part of the debt for which said judgment was rendered had been paid except $1,000 realized from the sale of certain property levied on and sold in February, 1936, under the fi. fa. issued on said judgment, which amount had been credited thereon.It was alleged that W. H. Wynne had died testate after the rendition of the judgment and the issuance of the fi. fa., and under his will which had been probated Trust Company of Georgia was named as executor and trustee and had qualified as such more than 12 months before the filing of the petition.The petition prayed that scire facias issue and be served upon Trust Company of Georgia, as executor and trustee of the said W. H. Wynne; that it be required to show cause why it should not be made a partydefendant in the case; that service likewise be made upon the other defendants; and that all of the defendants be required to show cause why said judgment should not be revived.

In amendments to the petition for scire facias, it was alleged that the Mortgage-Bond Company, the original plaintiff had sold, conveyed, transferred, assigned, and delivered on October 21, 1935, to Mortbon Corporation of New York all of its assets and property (except its corporation franchise and name), with all 'privileges and appurtenances whatsoever thereunto belonging,' subject to certain conditions not material to this case; that under said assignment the notes evidencing the indebtedness on which said original judgment was issued became the property of Mortbon Corporation; and that after the date of said assignment the latter corporation had exclusive custody and control over said notes, and upon the rendition of said corporation assumed exclusive custody and control over said judgment and the execution issued thereon.It was also alleged in the amendments that, notwithstanding said transfer and assignment, which was made after the filing of the original petition in the suit on the notes and before the judgment was obtained therein, Mortbon Corporation allowed and permitted the case to proceed in the name of the assignor, and allowed and permitted the judgment to be taken in the name of said assignor, but that said corporation was the owner and holder for a valuable consideration of the notes on which the judgment was obtained and the indebtedness represented by them, after October 21, 1935(the date of the assignment), and was the beneficial and equitable owner and holder of the judgment and the execution issued thereon at all times after the judgment was rendered and the execution was issued.

It appears from the petition that it was in fact filed by Mortbon Corporation, although it was filed in the name of The Mortgage-Bond Company; and that on June 30, 1945, after the filing of the petition, the name of Mortbon Corporation was changed to Telfair Stockton & Company Inc., and the petition prayed that the action proceed in the name of the plaintiff for the use of Telfair Stockton & Company Inc.It also appears that on June 4, 1945, while the petition for scire facias to revive said dormant judgment was pending, the charter of the plaintiff, The Mortgage-Bond Company, was dissolved under a voluntary proceeding in the Supreme Court of the State of New York.It was then alleged that, 'notwithstanding the dissolution of said charter, the present owner and holder of the beneficial and equitable interest in said dormant judgment, to wit, Telfair Stockton & Company Inc., is under the laws of the State of Georgia and equitable principles, entitled to have said case proceed in the name of The Mortgage-Bond Company of New York, and is, under said laws and equitable principles, entitled to have said dormant judgment revived and to have the same enforced.'

Each of the defendants filed demurrers to the petition as amended as follows: Said petition does not as a whole, nor do any of its parts, show a cause of action against this defendant for the revival of the judgment sought to be revived in said petition.(2) Said petition as amended shows on its face that the partyplaintiff has no legal existence.The demurrers were sustained by the trial court, and the plaintiff, The Mortgage-Bond Company of New York, suing for the use of the Telfair Stockton & Company, Inc., excepted.

The Court of Appeals, having reversed the judgment of the trial court sustaining the demurrers and dismissing the petition, the defendants in error in the Court of Appeals, namely, Trust Company of Georgia, as executor and trustee under the will of W. H. Wynne, deceased, States Realty Company, Inc., and Wynndam Court Apartment Company, Inc., presented to this court an application for the writ of certiorari, which application was granted.

In the motion for rehearing in the Court of Appeals, the movants, now petitioners in certiorari, averred, among other things, that the court'overlooked the fact that it does not appear in the record that at the time of its dissolution, or at any other time, the Mortgage-Bond and Trust Company[?] was engaged in business in the State of Georgia.'

The petition for certiorari assigned error on the decision and judgment of the Court of Appeals upon the ground, among others, that they were illegal and contrary to law, because the court incorrectly held that section 36 applies to foreign as well as Georgia corporations.

James A. Branch, Thos. B. Branch, Jr., Poole, Pearce & Hall and Margaret Hills, all of Atlanta, for plaintiffs in error.

MacDougald Troutman, Sams & Branch and T. M. Smith, all of Atlanta for defend...