Beaty & Co. v. Atlanta & West Point Railroad

28 S.E. 32, 100 Ga. 123, 1897 Ga. LEXIS 11

Opinion

Atkinson, Justice.

The Texas Grate- Company, alleging itself to be a cor•poration existing under the laws of the State of Texas, on the 9th day of 'September, 1884, brought a suit against the defendant, the Atlanta & West Point Railroad Company, for damages alleged to have resulted to it in consequence of a failure upon the part of the defendant company to carry •and safely deliver, within a reasonable time; certain mer•chamdise from the city of Atlanta, Georgia, to Dallas, 'Texas, there to be delivered to the plaintiff, or to H. M. Beaty & Company for plaintiff. No written plea was filed do this action by the defendant, but it appeared by counsel, :(and made defense. There was a trial of this action, resulting in a verdict in favor of the plaintiff, and a judgment refusing a new trial was reversed by this court. 81 Ga. 602. On the 30th of December, 1895, the plaintiff amended its declaration by alleging that H. M. Beaty & Company was a partnership composed of four named persons, and that the merchandise in question was consigned to them for delivery, and for-the nse and benefit of the Texas Grate Company, and said Beaty & Co: now sue in this case for the 'use of said Texas Grate Company; and by amendment their mame was inserted as plaintiffs instead of that of the Texas •Grate Company. No exception was filed to the allowance ■of this amendment, but the case being continued was again called for trial on the 14th day of April, 1896, at which time the defendant filed an amended plea denying the corporate existence of the Texas Grate Company, and alleging that the non-existence of that company -as a corporation had come but recently to its knowledge, that the effect of the amendment theretofore allowed was to substitute H. ÜM. Beaty & Co. as plaintiffs in the cause, and that as to them 'the right of action was haired by the statute of limitations. 'To this plea the- plaintiffs demurred upon the grounds: 1st. That the defendant, not having excepted to the judgment, .allowing the amendment to' the declaration, was concluded thereby, and Beaty & Company, and pot the Texas Grate-Company, were the real plaintiffs. 2d. That the amend'-ment was legal and proper. 3d. That the interest of the nsee was of no concern to defendant. 4th. That the plea Came in too late as a plea of nul tiel corporation; it was a dilatory plea which should have been filed at the first term ;..' ■and, as an amended plea, there was nothing to amend by, and the question was res adjudioata. 5 th. That the defendant, after litigating with 'the Texas Grate Company for over ten years without questioning its corporate existence, could not now be heard to deny the same. 6th. That the amendment to the declaration related hack to the commencement of the suit, and the same was not affected by the statute of limitations. This demurrer the court overruled, and refused to strike the plea. Plaintiffs introduced testimony which made out their case upon its merits, provided it was not barred by the statute' of limitations. On cross-examination IT. M. Beaty, a witness for the plaintiffs; over objections similar to those contained in the demurrer to the defendant’s amended plea, was permitted to'testify as follows: “We were an organized company doing" business as H. M. Beaty & Go. and as tbe Texas Grate-Company. H. M. Beaty, W. S. Cummins, W. F. Mister- and J. J. Rawls were- partners composing the firm of Ií. M. Beaty & Co-., and did business under above name. We were H. M. Beaty & Company, and also the Texas Grate-Company, one and the same, -and we- were selling the Burn- • ham Patent Grate. We never applied for a charter from-■the State, and the Texas Grate Company was never legally' incorporated. We elected officers and instructed our secre tary to apply for a charter as soon as we could get fairly to-work with the sale of the grates; but owing to tbe delay in the delivery of the grates by -the defendant, we failed to-» obtain a charter and our business went to pieces.”

Error was assigned upon tbe refusal of tbe court to exclude-: this testimony, and upon the conclusion of the case the court granted a nonsuit and the plaintiffs excepted.

It may be stated as elementary law, that the existence of .a party plaintiff is indispensable to the maintenance of an .action, and the non-existence of a plaintiff who- professes to .sue is always a good reply to the progress of the action, unless the defendant has in some manner been estopped from .asserting the contrary. The probabilities are, in the present case, had the Texas Grate Company as a corporate entity insisted in its own name upon the prosecution of the action first instituted by itself, that the failure of the defendant to file a plea of nul tiel corporation in the first instance would have concluded it upon the question of the corporate existence of the plaintiff. But it so- happens, that although the .action sought to be instituted by the Texas Grate Company was a void action, for the want -of a party plaintiff, the defendant, not pleading in abatement, having acquiesced in the action and contested plaintiff’s right to recover for years, without a suggestion of the non-existence of the plain-tiff as a corporate- entity, was estopped, after pleading to the merits, to urge the invalidity of the action because ■of the non-existence of a plaintiff. This failure to timely -call in question the existence of the plaintiff did not have the •direct effect to render that valid which was theretofore void, but practically the same result follows, its effect being to cut off the defendant from the right to urge this invalidity, leaving the action as it then stood a valid action in the name of the Texas Grate Company against the defendant. It will be seen, however, from an inspection of the record, -that the plaintiff sought to amend, and did in fact amend its declaration by inserting the name of another person, in whom it then alleged the cause of action to be, as using for its use, and although no exception to the -allowance of this amendment was taken upon the ground that its effect was to introduce a new and distinct, party, yet, in order to- recover in the name of’the substituted plaintiff, it was necessary to prove the cause of action as laid by the amendment. Ordinarily the statute of limitations is suspended during the pendency of an action, and in the present case the defendant being estopped, as against the Texas Grate Company, to deny that it was competent in its own name to prosecute an action, even though under ordinary circumstances the pending suit would have been treated as void, its pendency would, in consequence of the estoppel above referred to •operating in favor of the plaintiff, have had the effect, as to that company, to suspend the running of the 'statute of limitations so long 'as it was being prosecuted in the name of this plaintiff in whose favor this estoppel operated. Rot so, however, as 'to the substituted plaintiff. As to it, there -was no estoppel upon the defendant, save only upon the question as to the propriety of the allowance of the 'amendment by which it became a party. Ror can the mere introduction of the Texas Grate 'Company as the usee 'have any hearing upon the right of this substituted plaintiff to prosecute the action. , If the Texas Grate 'Company as a corporation were a myth and had no existence at all, it could hold neither the legal title to, nor the equitable interest in a chose in action, and, consequently,' it could neither prosecute an action, nor take the fruits of one. Terrell v. Stevenson, 97 Ga. 570-572. It was competent neither to demand nor to receive the sum sued for; and therefore the action should properly be treated as proceeding in the ñamé and for the use of the substituted plaintiff. But for the bar of the statute which, in the meantime, had attached, the substituted plaintiff could prosecute the action as well as though he had originally instituted it; for, as we have seen before, no exception was taken to the judgment allowing the amendment. The defendant is concluded by that j-udg-' ment, and the substituted plaintiff is the proper plaintiff in the prosecution of this action;-but to say that the substituted plaintiff is a proper plaintiff and that the action may proceed in its name is one thing, and to say that as to it the statute of limitations was suspended by the pendency of the action which had previously thereto been prosecuted in file-name of the Texas Grate Company, is entirely a different thing. As long as the Texas Grate Company was prosecuting the action in its own name, the defendant wasestopped to deny its corporate existence, not having timely pleaded nul t-iel corporation; hut when the amendment was-allowed substituting a new party plaintiff, there being upon the defendant as to- that plaintiff no estoppel, it was competent for it t'o show the non-existence of the Texas Grate-Company, and that as a consequence of its non-existence, no suit conld ever have been filed by it which would have suspended the progress of the statute of limitations. The ineffectual effort upon the part of the- Texas Grate Company in its own name to institute the action was brutum fulmen. It was no suit. It was a void thing, and no- rights could, arise in favor of any person, except in its own name, and that not by virtue of any inherent power or right within itself to prosecute an action, but only because of the estoppel which arose in its favor against the defendant, -and prevented it, as against the Texas Grate Company, from asserting its non-existence. The’ artificial harrier arising out of the doctrine of estojipel was personal, and protected the original plaintiff only, and hence- when it abandoned its position, the substituted plaintiff, declaring upon the same-cause of action in which the former plaintiff had no interest, legal or equ-itahle, occupied no- better position with respect to -the statute of limitations -than if the action had not been-filed until the date of allowance o-f the amendment. It would have been otherwise if the original plaintiff had been competent to hold the equitable interest, so as that the action could have proceeded in the name of the- substituted plaintiff for its use; but, as we have seen, this was- impossible, because it was neither a natural nor artificial person, and' was not legally competent to hold the legal title to-, or any equit-able interest in the chose in action which was the basis- of tins suit. This being true, the statute of limitations was not suspended by the ineffectual effort of the original plaintiff to sue in its own name; and as it will be seen from the record that the statute had fully run and barred the right of' the substituted plaintiff to recover before it became a party-plaintiff to the action, the defendant was properly permitted, to plead and prove the non-existence of the Texas Grate Company in aid of its plea of the bar by the statute of limitations; and this being shown by the testimony of the plaintiff, the court did not err in directing a nonsuit..

Judgment affirmed.

All the Justices concurring.