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Lawskills.com Georgia Caselaw
EMPIRE BANKING COMPANY v. MARTIN.
49442.
Claim to fund. Clinch Superior Court. Before Judge Lott.
QUILLIAN, Judge.
The prayer for relief constitutes no part of the pleader's cause of action; a pleading should not be dismissed for legal insufficiency unless it appears to a certainty that the claimant is entitled to no relief, legal or equitable, under any state of facts which could be proved in support of the claim.
Rachael K. Martin, appellee, filed suit against Empire Banking Company, appellant, in Clinch Superior Court. The complaint alleged: that appellant was a banking corporation chartered by the State of Georgia with an office and place of business in Homerville; that on February 1, 1969, Louise King executed and delivered to the appellant a promissory note in the amount of $42,923 and a deed to secure debt securing the promissory note, and on that date for further security she executed and delivered to appellant a security agreement covering certain property, including a car, truck, goods, inventory and accounts receivable; that on February 1, 1969, Louise King executed and delivered to the appellee a promissory note in the amount of $15,000 and also executed and delivered to appellee a deed to secure debt which conveyed the same real estate conveyed to the appellant and created a second lien upon the property; that on or about the same date, Louise King executed and delivered to the appellee a security agreement and financing statement to secure her note pledging motor vehicles, merchandise, fixtures, furnishings and accounts receivable; that the documents created a second lien upon the aforesaid items of personal property subject only to the security deed given to the appellant; that on February 4, 1970, appellant began to foreclose the deed to secure debt and security agreement and, pursuant to the powers in the agreement, sold, at public outcry, the real estate described in the deed to secure debt and the personal property described in the security deed; that appellant purchased the real property for $50,000 and the personal property for $60,000 at the sale and that the combined total of both the real and personal property purchased at the sale by the appellant was $110,000.
The complaint further alleges that at the time of the foreclosure Louise King was indebted to appellant in an amount not to exceed $65,000 and that appellant therefore realized from the proceeds of the sale at least $45,000 in excess of that owed at the time of the foreclosure; that appellee, as the second mortgage holder, was entitled to the excess of the purchase price over the amount of the debt secured by the first mortgage to the extent of her interest which, at the time of the foreclosure, was $15,000 principal plus $900 interest; that appellee requested the appellant to make payment to her as the second mortgage holder but appellant has failed and refused to do so and converted the excess proceeds to its own use; that appellant is indebted to appellee in the amount of $15,000 principal, together with interest from February 1, 1969, at the rate of six percent; that appellant's refusal to pay the monies due appellee amounted to bad faith and caused the appellee unnecessary trouble and expense. The demand is for a judgment against the appellant in the amount of $15,000 plus interest, attorney fees, expenses of litigation and costs.
Appellant answered the appellee's complaint setting out four defenses, the first of which was that the complaint failed to state a cause of action upon which relief can be granted. Appellant then amended its answer to clarify some language in its fourth defense. Subsequent to that time, a request for admissions and interrogatories was served on defendant within the time prescribed by law and the defendant filed a motion to modify the time for making answer to the request for admissions and interrogatories and also filed a motion to dismiss the case for failure to state a claim.
The motion to dismiss came on for a hearing and the court by an order of March 4, 1974, overruled appellant's motion to dismiss the case for failure to state a claim upon which relief could be granted. In the same order overruling appellant's motion to dismiss, the trial judge signed a certificate for immediate review. An appeal was then taken to this court.
The appellant contends that the only action that could be brought under the circumstances of this case was an equitable action alleging that the debtor is insolvent, the plaintiff is without adequate remedy at law, and that it would be necessary to make the debtor a party to such action. It is therefore argued that since the debtor was not made a party and that the plaintiff did not pray for equitable relief the claim should be dismissed on motion brought by the appellant.
In support of the arguments made, appellant cites the following authority. In Baker & Hall v. Gladden, 72 Ga. 469, it was held: "The holder of an unforeclosed mortgage cannot claim at law the balance of a fund arising from the sale of the property covered by the mortgage, after paying the judgment under which it was sold, and which was older than the mortgage, but he can make such a claim in equity, and this could be done on a money rule, with proper allegations, showing the insolvency of the debtor and that the mortgage creditor would be without remedy, unless such fund were awarded to him." Smith v. C. I. T. Corp., 64 Ga. App. 481, 483 (13 SE2d 731), is authority for the proposition that: "A court of law cannot have jurisdiction to decide the equities between liens until it first has the liens themselves, in the forms of executions, in the sheriffs hands. In this case the attempt is made to circumvent that requirement. Only a court of equity can do that, and there must exist some extraordinary reason for it." See also Coweta Fertilizer Co. v. Kiser Co., 33 Ga. App. 278 (125 SE 793); Thornton v. Wilson, 55 Ga. 607; Ennis v. Harralson Bros. & Co., 101 Ga. 282 (28 SE 839).
For the purposes of this appeal, we assume but do not decide that the rationale of the cases cited by the appellant with regard to a mortgage would be applicable to a deed to secure debt as in this case. See, however, Columbus Plumbing &c. Co. v. Home Federal &c. Assn., 104 Ga. App. 36, 38 (121 SE2d 62); 216 Ga. 706 (119 SE2d 118), where it was pointed out that the aid of a court of equity need not always be invoked.
Assuming arguendo that the debtor was an indispensable party to this action, Section 41 of the Civil Practice Act (Code Ann. 81A-141; Ga. L. 1966, pp. 609, 653) provides that a dismissal for "lack of an indispensable party" does not operate as an adjudication upon the merits. In discussing Section 19 of the Federal Rules of Civil Procedure (which Georgia's CPA 19 as amended Ga. L. 1972, pp. 689, 694 copies) 3A Moore's Federal Practice 2212, 19.05 [2] points out: "If the indispensable party can be joined, the court should ordinarily permit the joinder and not dismiss the action." The Georgia Supreme Court followed this principle as to CPA 19 prior to the 1972 Amendment (Smith v. Merchants & Farmers Bank, 226 Ga. 715 (3) (177 SE2d 249); King v. King, 228 Ga. 818, 819 (188 SE2d 502)) and held that when not specifically raised the failure to name an indispensable party would not subject a claim to a motion to dismiss. Section 12 of the Civil Practice Act (Code Ann. 81A-112 (b) (7); Ga. L. 1966, pp. 609, 622; 1967, pp. 226, 231; 1968, pp. 1104, 1106; 1972, pp. 689, 692, 693) now requires that defense of failure to join a party under Section 19 must be asserted either in the responsive pleading or by motion in writing. Hence, while the failure to name one as a party might be the basis for corrective action as prescribed in CPA 19, it is not cause for dismissal of the complaint under the ground of "failure . . . to state a claim upon which relief can be granted."
The "prayer for relief constitutes no part of the pleader's cause of action; a pleading should not be dismissed for legal insufficiency unless it appears to a certainty that the claimant is entitled to no relief, legal [or] equitable . . . under any state of facts which could be proved in support of the claim." 6 Moore's Federal Practice 1212, Judgments, 54.60. See Kinzy v. Waddell, 203 Ga. 689, 692 (47 SE2d 872); Mitchell v. City of Atlanta, 217 Ga. 202, 205 (121 SE2d 764) (decided prior to the Civil Practice Act). As further pointed out in Moore's: "If a party is entitled to any relief under the facts as established by the pleadings or proof, the claim will not be dismissed simply because complainant has erred as to legal theory and is not entitled to the relief prayed for." P. 1264, 54.62.
The instant complaint, while not specifically asking for a money rule or any particular equitable relief, does not disclose that the plaintiff would not be entitled to any relief. Hence, the trial judge did not err in refusing to sustain the appellant's motion to dismiss the complaint.
Judgment affirmed. Bell, C. J., and Clark, J., concur.
Kopp, Peavy & Conner, John G. Kopp, for appellant.
SUBMITTED MAY 28, 1974 -- DECIDED OCTOBER 22, 1974.
Friday May 22 11:45 EDT


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