46 S.E.2d 883 | Ga. | 1948
1. In the absence of statute providing otherwise, a corporation whose charter has expired or which has been otherwise dissolved can not 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 — providing that, "All corporations, whether they expire by their own limitations or are otherwise dissolved, shall nevertheless 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 party plaintiff 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 "party plaintiff has no legal existence." Accordingly, the Court of Appeals erred in its decision and judgment reversing the judgment of the trial court.
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 $1000, 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 *463 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 party defendant 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 there unto 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 judgment 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 *464 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: (1) 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 party plaintiff 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 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." *465
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.
1. The principal question for determination is whether section 36 of the Corporation Act of 1938 applies to foreign as well as domestic corporations. We think that it applies by its terms to Georgia corporations only, and since there is nothing in the record to indicate that the plaintiff corporation ever at any time engaged in business in Georgia, let it be understood at the outset that, in so far as this section is concerned, the question is limited to a determination of the meaning of its own particular provisions, regardless of whether the plaintiff might have become either subject to its provisions or entitled to rights thereunder by reason of other andadditional principles, if the plaintiff had ever done business in this State. See Williams v. East Tenn., Va. Ga. Ry. Co.,
The entire act consists of 46 sections, covering approximately 33 pages in the published volume. The caption, so far as here material, is as follows: "An Act authorizing the chartering and empowering of corporations, and amending, revising and perfecting the present corporation laws of the State; . . . and for other purposes."
While only section 36 is directly involved in the instant case, we will here quote it in its order along with several other sections.
"Section 35. If it should be deemed desirable in the judgment of the Board of Directors or for the benefit of any corporation incorporated or reincorporated under this Act, that it shall be dissolved, the Board of Directors may adopt a resolution to that effect and call a meeting of the stockholders having voting powers on a proposal to dissolve and take action on the resolution so adopted. Such meeting of the stockholders shall be held upon notice given in the manner hereinbefore provided and if at such *466 meeting or any adjournment thereof the holders of record of stock entitled to exercise two-thirds of all the voting power determine that the dissolution shall take place, a petition with a certified copy of said resolution attached thereto shall be filed in the manner hereinbefore provided for the amendment of the charter and an order obtained . . from the Superior Court or the Judge thereof dissolving said corporation in the same manner hereinbefore provided for the amendment of a charter to a corporation, and the same shall be advertised in like manner.
"Section 36. All corporations, whether they expire by their own limitations or are otherwise dissolved, shall nevertheless 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 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.
"Section 37. Upon the dissolution of any corporation under the provisions of this Act or upon the expiration of its corporate existence limited by its charter, the Directors or their survivors shall be Trustees thereof with full power to settle the affairs, collect the outstanding debts, sell and convey the property, real and personal, and divide the monies and other property among the stockholders, after paying its obligations and liabilities or providing therefor.
"Section 38. The persons constituted Trustees, as aforesaid, shall have authority to sue for and recover the aforesaid debts and property in the name of the Trustees of such corporation, describing it by its corporate name, and shall be suable by the same name for the debts owing by such corporation at the time of its dissolution and shall be responsible for the debts of the dissolved corporation to the extent of the monies and properties of such corporation which shall come into their hands or possession. Such Trustees may act by a majority thereof. Any vacancies in the office of Trustee may be filled by the Judge of the Superior Court instanter upon notice of any party at interest, including the Trustees. *467
"Section 39. When any corporation incorporated or reincorporated under this Act shall be dissolved or cease to exist in any manner whatever, the Judge of the Superior Court, of the county in which its principal place of business is located, on application of any creditor or stockholder at any time, may either continue such directors as Trustees, as aforesaid, or, upon equitable cause being shown thereof, appoint one or more persons the Receivers of and for such corporation to take charge of the assets and effects thereof, and collect the debts and property due and belonging to the corporation with power to prosecute and defend in the name of the corporation, or otherwise, all such suits as may be necessary or proper for the purposes aforesaid and to appoint an agent or agents under them and to do all other acts which might be done by such corporation if in being that may be necessary for the final settlement of unfinished business of the corporation, and the powers of such trustees or receivers may be continued as long as the Superior Court shall think necessary for the purposes aforesaid.
"The said Trustees or receivers, after payment of all allowances, expenses and costs and the satisfaction of all special and general liens upon the funds of the corporation to the extent of their lawful priority, shall pay the other debts due from the corporation if the funds in their hands shall be sufficient therefor, and, if not, they shall distribute the same ratably among all the creditors who shall prove their debts in the manner that shall be directed by an Order of the Superior Court for that purpose; and, if there shall be any balance remaining after the payment of such debts and necessary expenses, they shall distribute and pay the same to and among those who shall be justly entitled thereto as having been stockholders of the corporation or their legal representatives.
"Section 40. If any corporation created under any law of this or any other State becomes dissolved by the expiration of its charter or otherwise before final judgment obtained in any action pending in any court of this State against such corporation, the said action shall not abate by reason thereof but, the dissolution of such corporation being suggested of record and the names of the trustees or receivers of such corporation being *468 entered upon the record and notice thereof served upon said trustees or receivers, or, if such service be impracticable, upon the counsel of record in such case, the said action shall proceed to final judgment against the said trustees or receivers by the name of the corporation." Ga. L. Ex. Sess., 1937-38, pp. 214, 242-244.
This is the first case in which the courts of this State have had occasion to consider section 36. Similar statutes have been enacted in many other States, and it has been held by some courts that they include foreign corporations, and by others that they apply to domestic corporations only. The conclusions of the courts on this and related questions have been summed up in Corpus Juris Secundum as follows:
"Domestic statutes continuing the existence of dissolved foreign corporations for the purpose of prosecuting and defending actions after they have been dissolved are effective to render valid judgments obtained in the state, so far as property in the state belonging to the foreign corporation is concerned. It has been held, however, that other states need not, and will not, give such judgments the effect of reaching corporate assets within their boundaries. Statutes continuing the existence of domestic corporations after dissolution for the purpose of permitting suits by and against the corporation have in some jurisdictions, although not in others, been applied to foreign corporations so as to permit the institution of suit and recovery of judgment by or against such corporations after their dissolution; and, as appears in Abatement and Revival, § 102 b (2) (b) [1 C.J.S. 144], a similar result has been reached in determining whether such statutes abate pending actions." 20 C.J.S. 131, § 1902.
In American Jurisprudence, it is stated: "In most jurisdictions, . . . statutes have been enacted providing that after dissolution corporations shall continue to exist for the purpose of prosecuting and defending suits. Generally, statutes of this character enacted by the state of the domicile of the corporation are given an extraterritorial effect and are regarded as controlling in other states in which the corporation is sued or sues. In other words, if the law of the domicile permits the prosecution or defense of actions by corporations after dissolution, pending *469 suits in other jurisdictions will not abate. There are, however, some early authorities in which extraterritorial operation is denied to a statute of the domicile preventing abatement of actions, the ground of decision being that such statute has relation to remedies. In some courts, the general doctrine is qualified pro tanto by the rule that the form of the action and the method of procedure are matters of practice which are fixed and governed by the laws of the state in which the action is instituted.
"On the other hand, according to the majority of the courts, general statutes of the state in which a foreign corporation does business, extending the existence of dissolved corporations for winding up purposes, do not apply to enable the foreign corporation to sue or be sued there after its dissolution in the state of the domicile, even though the foreign corporation has its principal place of business in that state, unless the scope of such statutes is extended to foreign corporations by explicit words, contained either in the statutes themselves, or in some other statute. Whether such an extension should be inferred is a matter to be determined from the language used by the legislature. In some instances, local statutes preventing abatement of actions against corporations whose existence is terminated have been treated as controlling with regard to foreign corporations, apparently without reference to whether they are expressly made applicable to such corporations." 23 Am.Jur. 460-61, § 475. For similar statements, see 2 Beale "The Conflict of Laws," 742, 744; 16 Fletcher Cyc. Corp. 930, chapter 65, sections 8166, 8167. Annotations may also be found in 47 A.L.R. 1564 and 97 A.L.R. 502, and in 17 Ann. Cas. 227, following the decision in Commercial Loan Co. etc. v. Mallers, reported also in
There is a similar statute in Mississippi, and in Rawlingsv. American Oil Co.,
In the briefs filed in the instant case, there is some discussion as to whether a distinction should be made between suits against foreign corporations and suits by them, and in the brief of counsel for the defendants in certiorari the following cases have been cited as falling within the latter class and as supporting the view that our statute (section 36 supra) would save the present action from abatement: Swing v.
Bentley Gerwig Furniture Co.,
Our Code, § 22-1502, provides that "No foreign corporation shall exercise within this State any corporate powers or privileges which by the Constitution or laws of Georgia are denied or prohibited to corporations created by this State, or the exercise of which is contrary to the public policy of this State, anything in the charter or corporate powers of the foreign corporation to the contrary notwithstanding." In harmony with this provision are several decisions of this court, holding that where a foreign corporation does come into this State and engages in business here, it becomes a virtual inhabitant or resident of the State of Georgia, and is therefore subject to our laws to the same extent as domestic corporations. See, in this connection,City Fire Insurance Co. v. Carrugi,
The plaintiff corporation did, of course, institute the present proceeding to revive a judgment, and it also brought the original action in which the judgment was obtained, but merely engaging in litigation would not amount to doing business in this State, for either of the purposes just indicated. 20 C.J.S. 52, § 1836; 23 Am. Jur. 349, § 366.
We agree with counsel for the defendants in certiorari that the answer to the present question depends solely upon the intention of the General Assembly as expressed or implied in the section under consideration, there being no attack whatever upon its constitutionality, and accordingly, ascertainment of such intention will be the sole object of this inquiry, so far as it relates to that section. Needless to add that, if the statute had been attacked as being unconstitutional upon any ground, the Court of Appeals would not have had jurisdiction of the writ of error, but it should have been returned directly to this court.
In 20 C.J.S. 28, § 1808, it is stated: "Whether or not the *473
term `corporation' when used in a statute applies to foreign corporations operating within the state depends largely upon the subject-matter of the statute, its policy, and the context in which the term is employed. The word `corporation,' as used in statutes, generally applies to a foreign corporation, when there is nothing in the words of the statute itself which would indicate an intention on the part of the legislature to limit its effect to domestic corporations, or where there are no sufficient considerations of local or state policy from which can be inferred a motive on the part of the legislature so to restrict its operation; a fortiori, the term will be so applied where the statute manifests the intent that it shall do so. On the other hand, statutes referring to corporations will be construed as applying only to domestic corporations where such seems to be their intent." This accords with the ruling of this court inTorrance v. McDougald,
The word "all," standing alone, is a completely comprehensive term, and therefore the phrase "all corporations," would seem to include foreign corporations, if nothing else should be considered. But the words here are contained in a statute, and are therefore not to be treated as mere abstract terms. The cardinal rule for the construction of statutes is to ascertain the intention of the General Assembly in passing the law, and considering this section and its legislative environs, we do not think that it was intended to be so comprehensive as to include every corporation that has been or may be chartered anywhere in the world. The act itself destroys universality by expressly excluding certain classes of corporations: Section 1 excepts banking, insurance, and other corporations enumerated, while section 44a added to these exceptions electric-membership corporations. But there are other and additional reasons which in our opinion would "restrain" the general expression "all corporations."
One thing that should be kept in mind is that this is a Georgia statute, enacted by the Georgia legislature, and we would naturally expect, nothing to the contrary appearing, that any such statute would be intended to apply only to Georgia matters and *474 affairs. It is true that the General Assembly did not hesitate to deal with foreign corporations in express or clearly descriptive terms in several other sections of this act. For instance, see sections 18 to 23 inclusive, providing for merger of "any two or more corporations, incorporated either under the laws of this State or under the laws of any other State or country, except banks and trust companies"; also section 40, as quoted supra, referring to "any corporation created under any law of this or any other State." It also appears to be true, as pointed out by counsel for the defendants in certiorari, that unless section 36 does apply to foreign corporations, then there is no provision whatever in the act for suit by a dissolved foreign corporation. While these features of the act may be considered as legislative circumstances favoring the contention that section 36 was intended broadly to include all corporations other than those expressly excepted, they are circumstances only, and are not controlling. We do not know of any obligation of the State of Georgia to provide for suits by dissolved corporations of other States.
It may also be observed that, while several other sections do, as above stated, contain provisions clearly referring to corporations of other States, section 36 entirely omits such specific terms, and this would seem to be a material circumstances tending to show limited intent, since it would have been so easy to insert some descriptive phrase specifically including foreign corporations, as was done in other sections, if such was the intention of the General Assembly.
Perhaps the most important matter to be considered in the construction of any statute is the purpose for which it was enacted, if such can be ascertained. Compare Hirsch v.Shepherd Lumber Corp.,
Again, as we have shown above, this section follows immediately another section which provides for voluntary dissolution of "any corporation incorporated or reincorporatedunder this act" (italics ours); and immediately precedes a section providing for trustees for settling the affairs of any corporation which is dissolved "under the provisions of this act or upon the expiration of its corporate existence limited by its charter." See sections 35 and 37. Other sections, both immediately preceding and immediately following it, purport to deal only with Georgia corporations, unless it may be otherwise as to section 34, relating to liability for unsubscribed stock, which merely codifies a common-law principle that was enunciated by this court in Burns v. Beck Gregg Hardware Co.,
Counsel for the defendants in certiorari rely on the italicized phrase in Venable Brothers v. Southern GraniteCo.,
In Manufacturing Lumbermen's Underwriters v. South GeorgiaRailway Co.,
Counsel for the defendants in certiorari rely also uponByers v. Black Motor Co.,
The Court of Appeals, however, did not in the present case place its decision solely upon section 36, but cited and discussed provisions of the act of 1918 (Code, § 22-1210), also section 40 of the act of 1938. Several decisions applying the act of 1918 were mentioned and discussed, as supporting the conclusion that the present action did not abate on dissolution of the plaintiff corporation. With all deference to the views as thus expressed by that court, we are of the opinion that the present case must stand or fall by the terms of section 36 in so far as our corporation laws are concerned. Nor does the instant case involve any question as to whether the plaintiff was a de facto corporation. Compare Huey v. First National Bank ofFitzgerald,
It may be that our present corporation laws are still imperfect with respect to remedies both for and against foreign corporations. Nevertheless, after a careful consideration of section 36, we are of the opinion it was not intended by the General Assembly to apply to foreign corporations.
2. But still other laws remain for consideration, to wit, the statutes relating to proceedings for revival of dormant judgments, also, the law as to suit by a nominal plaintiff for the use of another.
"When any judgment obtained in any court of this State shall become dormant, the same may be renewed by an action or by scire facias, at the option of the plaintiff, within three years from the time it became dormant." Code, § 110-1003. "Scire facias to revive a judgment is not an original action, but the continuation of the suit in which the judgment was obtained." § 110-1005. "The scire facias, when the judgment has been transferred, shall issue in the name of the original plaintiff for the use of the transferee." § 110-1009. The proceeding in this case was by scire facias, and therefore it did not constitute a new action, but was a continuation of the suit in which the judgment was obtained. Yet it was brought in the name of the original plaintiff in whose favor the judgment was rendered, as was proper under the statute, and there was no other party plaintiff in the proceeding. Although the petition as amended prayed that the action be allowed to proceed in the name of the plaintiff for the use of another corporation as the holder and owner of the notes on which the original judgment was obtained, the fact that the proceeding was thus expressly brought for the use of another did not prevent it from abating when the only party in whose name it was brought was a corporation and that corporation ceased to exist as a legal entity, pending the proceeding. Joiner v. Singletary,
The instant case differs on its facts from Chapman v.Taliaferro,
In the instant case, the petition as amended did not plead any law of the State of New York, and no question as to comity or as to full faith and credit appears to be involved. We have examined all of the cases that have been cited by counsel on either side, but it would too greatly prolong this opinion to refer in particular to each of them. We cannot escape the conclusion that the proceeding to revive the judgment abated on dissolution of the corporate plaintiff, and that the Court of Appeals therefore erred in reversing the judgment of the trial court dismissing the petition.
Judgment reversed. All the Justices concur, except Wyatt, J.,who took no part in the consideration or decision of this case. *480