Lead Opinion
We granted certiorari from the Court of Appeals’ opinion in El Chico Restaurants v. Transp. Ins. Co.,
OCGA § 14-2-1502 (a) provides that “[a] foreign corporation transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of .authority.” Transportation argues that the phrase “maintain a proceeding” in the statute includes the commencement of that action, so that the failure of a foreign corporation to obtain a certificate of authority prior to the commencement of thе action would render it void ab initio. Contrary to Transportation’s argument, however, the primary definitions of “maintain” do not include “commencement” of the item to be maintained. Rather, “maintain” most commonly means the continuation of a pre-existing condition
Although, as the dissent points out, there are some obscure definitions of “maintain” which include the commencement of the item to be maintained, our rejection of Transportation’s definition of the verb is not based solely on the atypical meaning it would ascribe to the statutory language. Instead, we look to the clear legislative history of OCGA § 14-2-1502 (a) to hold that maintaining a proceeding thereunder does not include the commenсement of the proceeding to be maintained. That history reveals that in 1969 the Legislature rewrote the law in this area so as to provide that
No foreign corporation that under this Code is required to obtain a certificate of authority shall be permitted to maintain any action, suit or proceeding in any court of this State unless before commencement of the action it shall have obtained such a certificate.
(Emphasis supplied.) Ga. L. 1969, pp. 152,196. The emphasized language establishes that the Legislature in 1969 did not believe a prohibition against foreign corporations
The inclusion of the “commencement” language in the 1969 legislation is important in light of the subsequent enactment of the Georgia Business Corporation Code in 1988. Ga. L. 1988, p. 1070. That enactmеnt, as set forth in the preamble, was intended to “revise and replace the laws relating to business corporations.” Id. As part of the revision and replacement, the Legislature chose to remove the 1969 language which had previously required foreign corporations to obtain a certificate of authority “before commencement of the action.” Id. at p. 1225; OCGA § 14-2-1502 (a). The rules of statutory interpretation demand that we attach significance to the Legislature’s action in removing the emphasized, limiting language. See Humthlett v. Reeves,
Our interpretation of OCGA § 14-2-1502 (a) is consistent with the statutory language and the legislative history. Further, this interpretation, which recognizes that an uncertified foreign corporation may initiate the aсtion but not continue it without obtaining a certificate of authority, allows an aggrieved party the opportunity to preserve its cause of action but not to reduce it to judgment until the certification process is followed, thereby avoiding the statute of limitatiоn problems arising from the construction proposed by Transportation and the dissent which would deprive aggrieved parties of access to the courts of this State for administrative reasons unrelated to the validity of the asserted causes of action.
Therefore, we affirm the Court of Appeals’ holding that the suit filed by El Chico was not void at its inception and thus was subject to amendment.
Judgment affirmed.
Notes
For example, the most recent edition of Black’s Law Dictionary defines “maintain” as “1. To continue (something). 2. To continue in possession of (property, etc.)...Id. (7th ed. 1999), p. 965. Standard dictionaries, such as The American Heritage Dictionary, define “maintain” as'“l. To keep up or carry on; continue .... 2. To keep in an existing state; рreserve or retain ...” Id. (3rd ed. -1992), p. 1084. See also Webster’s Third New International Dictionary (Unabridged, 1967), p. 1362 (“maintain” defined as “1: to keep in a state of repair, efficiency, or validity: preserve from failure or decline ....”).
Ballentine’s Law Dictionary (3rd ed. 1969), p. 764, defines “maintain аn action” as “to uphold, continue on foot, and keep from collapse a suit already begun. [Cit.]”
The fact that the revision notes to OCGA § 14-2-1502 reflect a failure to recognize the significance in the deletion of the limiting language in the 1969 version of the statute has nо impact on our interpretation of the meaning of OCGA § 14-2-1502 (a). Because of the clear legislative history behind OCGA § 14-2-1502 (a), our interpretation cannot be controlled by the construction given to OCGA § 48-13-37, which reflects no comparable change in statutory language. Sеe Ga. L. 1961, p. 480, § 6; Ga. L. 1978, pp. 309, 738, § 2. The latter statute, in fact, specifically provides that “[flailure to register precludes [the] right to sue.” (Emphasis supplied.) Id. Furthermore, nonresident contractors are expressly required to register “before beginning the performance of any contract” to avoid being denied the right to perform the contract, OCGA § 48-13-34, and OCGA § 48-13-37 merely provides that the failure to so register precludes the nonresident contractor from maintaining sin action only where such action is initiated “to recover payment for performance on [such] contract.” Accord Clover Cable v. Heywood,
We note that our interpretation is also consistent with the position taken by the majority of states which have addressed the issue. See 23 ALR5th 744, Application of Statute Denying Access to Courts or Invalidating Cоntracts Where Corporation Fails to Comply with Regulatory Statute as Affected by Compliance after Commencement of Action.
Dissenting Opinion
dissenting.
I dissent because the majority’s interpretation conflicts with the statutory language and
The statutory language and legislative history of OCGA § 14-2-1502 (a) are not crystal clear. OCGA § 14-2-1502 (a) provides that “[a] foreign corporation transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of authority.” On its face, this language may be read to provide that a certificate of authority is required before filing an action because the word “until” signifies a condition precedent
Additionally, the legislative history shows that the intention of the legislature was to carry forward the prior law, which held that suits by foreign corporations without a certificate of authority were void and subject to dismissal without prejudice. Prior to 1969, a corporation was permitted to obtain a certificate of authority after initiating an action.
Any ambiguity in the language and history of subsection (a), however, is resolved by reviewing the remaindеr of OCGA § 14-2-1502 and a similar statute, OCGA § 48-13-37, which contains identical language. The majority’s interpretation of OCGA § 14-2-1502 (a) renders a portion of subsection (b) meaningless. OCGA § 14-2-1502 (b) imposes a civil penalty on a foreign corporation that transacts business without a certificate of authоrity. This civil penalty “shall be in addition to other consequences set out in this Code section . . . .” Thus, the legislature clearly intended that there be an additional consequence for a failure to comply with the laws of this state. The inability to begin an action in the courts оf this state is the only other consequence set forth in OCGA § 14-2-1502. The majority’s reading of the statute, however, excises this legislatively-created consequence from the statute.
Additionally, subsection (c) specifically prevents a foreign corporation that has nоt obtained a certificate of authority from avoiding the consequences of this section by providing that a successor corporation or assignee of a cause of action must obtain a certificate of authority before commencing a suit on that cause of action. There would be no need for this provision if the foreign corporation were able to comply with the certificate of authority
Finally, the appellate courts’ interpretation of a similar statute, OCGA § 48-13-37, supports this result. That statute provides that non-resident contractors who fail to register with the revenue commissioner and post bond before commencing work under a contract are not entitled “to maintain an action to recover payment for performance on the contract in the courts of this state.”
The majority’s policy reason for its result is that otherwise out-of-state companies who ignore Georgia laws will face the bar of the statute of limitations. The legislature, however, has placed compliаnce with Georgia laws ahead of protecting causes of actions for foreign corporations. Furthermore, this Court has never interpreted OCGA § 14-2-1502 to bar a foreign corporation’s suit when it lacked a certificate of authority at the time the cause of action arose. Rather, to comply with Georgia’s laws, a foreign corporation need only obtain a certificate of authority before filing suit. The application process contained in OCGA § 14-2-1503 is not complicated and careful lawyers could easily monitor their client’s compliance with this law as well as meet the statute of limitations.
I am authorized to state that Justice Sears and Justice Hines join in this dissent.
Black’s Law Dictionary 1380 (5th ed. 1979) (“word of limitation, used ordinarily to restrict that which precedes to what immediаtely follows it”).
Bell Aircraft Corp. a Anderson,
1968 Ga. Laws 565, 790.
1969 Ga. Laws 152, 196.
A.B.R. Metals & Servs., Inc. v. Roach-Russell, Inc.,
OCGA § 14-2-1502, comment.
State v. C.S.B.,
OCGA § 48-13-37.
Clover Cable a Heywood,
Bibb County v. Hancock,