Georgia Co. v. Castleberry

Supreme Court of Georgia

Georgia Co. v. Castleberry

43 Ga. 187

CourtSupreme Court of Georgia

DecidedJuly 15, 1871

StatusPublished

Cited by11 cases

This text of 43 Ga. 187 (Georgia Co. v. Castleberry) is published on Counsel Stack Legal Research, covering Supreme Court of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Georgia Co. v. Castleberry, 43 Ga. 187 (Ga. 1871).

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Opinion

McCay, Judge.

For all essential purposes, the “Georgia Company,” doing business at the time this contract was made, and the corporation subsequently chartered and now sued, are separate and distinct. The formek was a mere partnership, the members of which were each bound for the debt; the latter is a person — .a nonentity — which gets its existence and responsibilities from the charter. Though the members of the part[189]*189nership aiid the members of the corporation be the same, yet the rights of the one and the other are different.

To make the company liable for the debt of the partnership, the same formalities are required as to make any individual liable for the debt of another. Such a contract must be in writing, signed by the party to be charged. There is no pretence of such a written undertaking, even if it were in the power of the president to so do. The assumption of a debt due by the old partnership, with no new consideration, is outside of the scope of the charter, and therefore outside of the scope of the president’s duties, as they are derived from the nature of his office, and even a written contract promising to pay this debt would be of doubtful validity, unless there was special authority from the company.

We are aware that there are instances in which a corporation has been held liable for debts contracted before the date of the charter, but it will, we think, be found that these are all cases where the debt was contracted in the course of the organization, as debts forming part of the expenses or for the payment of the costs arising in procuring the charter, or where the company has, in fact, received the consideration.

Thex’e is nothing hex’e except the single fact that the partnership was of the same name as the afterwards chartered company, and had the same agent and was engaged in the same bxxsiness. It does not even appear that the one is the successor of the other, except in name.

Upon the whole, we think the Justice of the Peace was right, and that, under the facts as set forth in the answer’, the chartered company was not liable for this debt.

Judgment reversed.

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McCay, Judge.

For all essential purposes, the “Georgia Company,” doing business at the time this contract was made, and the corporation subsequently chartered and now sued, are separate and distinct. The formek was a mere partnership, the members of which were each bound for the debt; the latter is a person — .a nonentity — which gets its existence and responsibilities from the charter. Though the members of the part[189]*189nership aiid the members of the corporation be the same, yet the rights of the one and the other are different.

To make the company liable for the debt of the partnership, the same formalities are required as to make any individual liable for the debt of another. Such a contract must be in writing, signed by the party to be charged. There is no pretence of such a written undertaking, even if it were in the power of the president to so do. The assumption of a debt due by the old partnership, with no new consideration, is outside of the scope of the charter, and therefore outside of the scope of the president’s duties, as they are derived from the nature of his office, and even a written contract promising to pay this debt would be of doubtful validity, unless there was special authority from the company.

We are aware that there are instances in which a corporation has been held liable for debts contracted before the date of the charter, but it will, we think, be found that these are all cases where the debt was contracted in the course of the organization, as debts forming part of the expenses or for the payment of the costs arising in procuring the charter, or where the company has, in fact, received the consideration.

Thex’e is nothing hex’e except the single fact that the partnership was of the same name as the afterwards chartered company, and had the same agent and was engaged in the same bxxsiness. It does not even appear that the one is the successor of the other, except in name.

Upon the whole, we think the Justice of the Peace was right, and that, under the facts as set forth in the answer’, the chartered company was not liable for this debt.

Judgment reversed.

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Bluebook (online)

43 Ga. 187, Counsel Stack Legal Research, https://law.counselstack.com/opinion/georgia-co-v-castleberry-ga-1871.

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