Newnan Motors Inc. v. Arrington

The superior court of Coweta County was without jurisdiction to entertain a suit in equity against a dissolved corporation chartered by the superior court of Fulton County and having its principal office therein.

No. 14256. SEPTEMBER 22, 1942. Lonnie and Otis Arrington filed in the superior court of Coweta County their petition against Newnan Motors Inc., a dissolved corporation, to recover damages for the conversion of a burned automobile. They alleged that the defendant was a corporation chartered by the superior court of Fulton County, and as follows: "Prior to such order dissolving it this corporation had its principal place of business in Coweta County, Georgia, where it operated an automobile sales business, and acted as agent for the Commercial Discount Inc., in repossessing cars in Coweta County, selling cars, and collecting accounts and notes in behalf of its principal. It maintained an office and place of doing business in said county, and all its business effects were in this county." It was alleged further that the corporation had been dissolved before the filing of the instant suit. In addition to the prayer for damages, the plaintiffs prayed for issuance of second-original process to be served on Samuel A. Miller (a resident of Fulton County), former secretary of the dissolved corporation; and for the appointment of a receiver.

At interlocutory hearing on the prayer for a receiver, Newnan Motors Inc. made a special appearance for the sole purpose of objecting to process, service, and jurisdiction, and a motion to dismiss the action. The plaintiffs offered no evidence, and relied solely on their petition verified as follows: "Georgia, Coweta County. Personally appeared W. A. Hart, attorney for petitioners, who, being duly sworn, deposes and says under oath that facts set forth in this petition are true in so far as they relate to matters therein which are in his own knowledge, and in so far as same relate to matters within knowledge of others he verily believes them to be true. [Signed] William A. Hart." The affidavit was attested by a Notary Public of Coweta County.

Newnan Motors Inc. introduced the following evidence: (1) Certificate of the Secretary of State of Georgia, showing incorporation of Newnan Motor Company Inc., in Fulton County. (2) Copy of charter, application, and order thereon in Fulton superior court, certified by J. W. Simmons, clerk of said court. This documentary evidence showed that the principal place of business of said corporation, as fixed by its charter, was Fulton County.

The defendant moved that the action be dismissed, because the petition was not positively verified as required by law. The court disallowed the special appearance objecting to jurisdiction, overruled the motion to dismiss, appointed a receiver for the assets of Newnan Motors Inc., dissolved, and ordered the receiver to take possession of the property of the dissolved corporation. To these rulings the defendant excepted. Since the question of jurisdiction is controlling, the assignment of error on failure to dismiss the action because of absence of positive verification of the petition need not be passed on. If it be made clearly to appear to the judge that the suit is brought in the wrong county, he should for that reason refuse to grant interlocutory relief.Trimble v. Knight, 178 Ga. 804 (174 S.E. 626). The right of action was asserted in a claim for damages; and counsel for defendants in error take the position that a suit of this character may be brought in the county where the injury was done, citing Martin Thompson Inc. v. Allen, 188 Ga. 42 (2 S.E.2d 668). In that case suit was entered in Peach County, to recover for personal injuries, against a corporation having its principal office and place of business in Peach County. The Code, § 22-1102, expressly authorizes such a suit in the last-named county. It was a common-law suit, brought under that section. The instant case does not allege a state of facts which makes that section applicable. Counsel point out that the instant suit was filed under the statutory provision set out in the Code, §§ 22-1210, 22-1211. The first of these two sections declares that "The dissolution of a corporation either as a result of the expiration of its charter, or for any other cause, shall not bring about its total extinction nor operate to extinguish any demand or cause of action against it in favor of any person whomsoever, whether arising from contract or tort, nor shall such dissolution work the abatement of any suit pending against it at the time of such dissolution, but all such pending suits may be prosecuted and enforced to a conclusion as though such corporation were still undissolved." Section 22-1211 in part declares that "Suits for the enforcement of any demand or cause of action due by such corporation may to a like extent be instituted and enforced against it in any court havingjurisdiction thereof at the time of its dissolution." (Italics ours.) Counsel argue that the italicized words authorize a suit to be instituted against a dissolved corporation in any court having jurisdiction of the demand and cause of action at the time of the dissolution. If the suit were one at law, and if it were alleged that the injury was committed in Coweta County, and damages only were prayed for, instead of invoking equitable relief, as in the Martin Thompson case, supra, a different question would be presented. The courts in construing an act of the General Assembly will, if possible, ascribe to it a meaning so as to make it square with the constitution, which declares that "Equity cases shall be tried in the county where a defendant resides against whom substantial relief is prayed." Code, § 2-4303. Section 22-1210, quoted above, declares that a dissolution of a corporation shall not bring about its total extinction. It exists for the purposes therein named. There is nothing in the section to indicate that during that period it ceases for the purpose of suit to be a citizen of that county where its principal office is located. "A corporation of this State is not subject to a suit for equitable relief by injunction in a county other than that fixed by its charter as the county of its principal office; and this is true although the suit embraces also a claim for past damages." Etowah Milling Co. v.Crenshaw, 116 Ga. 406 (42 S.E. 709). See Porter v. StateMutual Life Insurance Co., 145 Ga. 543 (89 S.E. 609);Georgia Land Live Stock Co. v. Savannah River Lumber Co.,150 Ga. 202 (103 S.E. 167); Cadwell v. Swift Co.,174 Ga. 313 (162 S.E. 814).

From the date of the application for charter of the plaintiff in error, and from the certificates appearing in the record, it is apparent that it was chartered under the corporation act approved January 28, 1938 (Ga. L. Ex. Sess. 1937-38, pp. 214-247); Code Supp. Ann. § 22-1801 et seq. One section of that act, now appearing in the Code Supplement as section 22-1877, makes it plain that the General Assembly never intended to suggest that a receiver for a dissolved corporation could be appointed except by the judge of the superior court of the county in which its principal place of business is located. The first part of that section declares: "When any corporation incorporated or reincorporated under this Chapter 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 therefor, appoint one or more persons the receivers of and for such corporation," etc.

The statement in the petition, not positively verified, that this corporation had its principal place of business in Coweta County does not contradict the statement in its charter that "The principal office of said corporation shall be in Atlanta, Fulton County, Georgia."

The superior court of Coweta County was without jurisdiction to appoint a receiver, and its judgment in so doing must be

Reversed. All the Justices concur.