Opinion
23734.
SUBMITTED OCTOBER 11, 1966.
DECIDED OCTOBER 20, 1966.
Cancellation. Clayton Superior Court. Before Judge Banke.
Kemp Watson, John L. Watson, Jr., for appellants.
Ralph H. Hicks, Hoke Smith, for appellee.
1. Where, pursuant to an action for the appointment of a receiver because of the alleged fraudulent dissipation of assets by its debtors, the appointment of the receiver as prayed, and an amendment by petitioner showing the maturity of the notes executed by the defendants jointly and severally, and after almost interminable pleadings, hearings, rulings and contentions, a jury verdict found for the plaintiff a stated amount against one defendant and a different amount against the other, and a judgment was entered accordingly and it is too late to appeal from that judgment, it is conclusive against the defendants in favor of the petitioner as to the amounts therein shown.
2. It was not error after more than a year from the date of such judgment to deny a motion of the defendants therein for a judgment ordering cancellation of the notes upon which the judgment was based and decreeing that the defendants owed petitioner nothing.
SUBMITTED OCTOBER 11, 1966 — DECIDED OCTOBER 20, 1966.
This action is one for an accounting, receivership, injunction to prevent the dissipation of assets, and by amendment for judgment in stated amounts against two of the defendants. The petitioner brings this action as a stockholder, in his own behalf and in behalf of all other stockholders, and individually as the largest secured creditor of the defendant manufacturing corporation, Tu Tone Muffler Corporation, hereinafter called the corporation, against the president, as the largest stockholder, individually, his wife, the corporation, and two associate corporations, all as defendants. It arises out of certain loans made to the corporation for which the president, Duncan, signed notes for the corporation and individually, which were joint and several, using certain properties of the corporation as security. The averments allege that Duncan, in lieu of using these borrowed funds for the development of the corporation as intended, has fraudulently promoted certain activities for his own use and has dissipated the funds to his own use and for other purposes, said actions being ultra vires, and that he has in other named instances mismanaged the corporation; and this action seeks to prevent further disposing of the assets of the corporation, an accounting of the sums of money loaned by the petitioner and those funds diverted, and for judgment in favor of the corporation against the defendants misusing these funds. By amendment, after the appointment, proceedings and actions of the receiver, hearings on pleas of usury brought by Duncan and the corporation, in which judgment was returned against the petitioner as to defendant Duncan but against the corporation, and after the notes had become past due and unpaid, petitioner sought a money judgment against Duncan in a stated amount and against the corporation in a stated sum. The associate corporations are named apparently as defendants only as recipients of the money, or some of it, from the corporation.
The case proceeded to verdict and judgment in favor of the petitioner against Duncan for a definite amount and against the corporation for a sum certain; and against the petitioner in favor of one of the associate corporations on its counter claim, with the final decree placing title to certain real estate in the petitioner and granting it special liens in certain other real and personal property involved.
Several months later petitioner sought to obtain an order of sale by the receiver of certain assets in order to pay off a secured creditor and to use the balance of the funds to satisfy the special liens in its favor. In response to this motion Duncan and the corporation, the two defendants against whom the two substantial money judgments were granted in favor of the petitioner, filed a motion to have the promissory notes, which were joint and several, delivered up and canceled since, by operation of law, the petitioner, having elected to seek a judgment against one of them for a certain amount and against the other for a sum certain, thereby released in each instance the other as to the indebtedness and in each instance so released the entire balance of the indebtedness due; and the resulting verdict and judgment thereon was void, resulting in a complete accord and satisfaction of the indebtedness sued upon. The motion was denied, and the appeal is from that judgment.
The appeal is from a judgment denying a motion, filed in response to a motion of Georgia Money Corporation for appropriate orders to effectuate a sale of collaterals to secure debts culminating in a judgment in its favor, to declare the notes upon which the judgment was rendered satisfied and order them surrendered up and canceled. This record consisting of voluminous pleadings, orders, service and exhibits comprising 299 pages almost defies intelligent analysis and understanding. It contains pleadings and judgments and orders thereon that simply block any logical and reasonable explanation. But through this miserable mist we finally after indescribable labors see that originally Georgia Money Corporation filed a petition against Tu Tone Muffler Corporation and Duncan, et al., reciting page after page of history of their relationship, and finally alleging that because of all those laboriously recited reasons the petitioner loaned described amounts to the corporation, taking therefor notes in different amounts at different times, secured by certain properties, and that there had been through fraudulent and ultra vires acts of Duncan, the corporation president, misuse of such funds, and a receiver was asked for and appointed. During the proceedings of the case pleas of usury had been filed by both the corporation and Duncan, resulting in a judgment, after a hearing thereon, in favor of Duncan and against the corporation. Finally, by amendment, it was alleged that all the notes had become due and judgment was prayed against both the corporation and Duncan but for different amounts. The notes were signed by the corporation by Duncan as president and individually, reciting that they were joint and several. In the meantime, on October 27, 1962, both the corporation and Duncan filed a pleading in which it was alleged "the acts of plaintiff aforesaid were such that the joint character of the promissory notes and contract sued upon by the plaintiff . . . was destroyed." The judgment followed the jury verdict in that case and was in favor of the plaintiff and against the defendant corporation for $46,604.96; the defendant Duncan for $15,632.24; and in favor of one of the associate corporations against the petitioner for $15,632.24 on its counter claim, but allowing a setoff of this amount against the above two judgments in favor of the petitioner. That judgment was dated February 5, 1965, to be entered nunc pro tunc as of December 16, 1964, and was not reversed by appeal or otherwise and stands today as entered.
In view of the various orders and judgments and pleadings preceding the judgment it is not void, and is binding upon the parties thereto. Furthermore, in view of the foregoing facts, Ward v. Fleming, 18 Ga. App. 128 ( 88 S.E. 899), even if sound in that case, does not apply here where even the defendants preceded this judgment with an amendment alleging that the two makers of the notes were not joint obligors. Also the payee of such notes has never expressly or impliedly released either of the obligors to the notes from liability thereon; hence Code § 20-910 has no application here. See Code § 20-1201. The factual situation requires application of the rule in Underwood v. Underwood, 139 Ga. 241 ( 77 S.E. 46); 50 CJS 20, Judgments, § 599; 30A AmJur 365, Judgments, § 313, to the effect that the cause of action on which the suit was brought is merged in the judgment from its date.
It would needlessly burden the reports of this court to outline even briefly all the alleged fraud, the appointment and actions of the receiver, the judgments on usury, and the stipulations of the parties, but suffice it to say, these and the pleadings prevent this judgment from showing upon its face that it is void and therefore subject to be disregarded. Code § 20-910 does not apply here.
The entire complicated record leaves one thing crystal clear and that is that these defendants obtained the money of Georgia Money Corporation and still owe it as evidenced by the judgment, and common justice demands that it be paid before the defendants are granted complete release therefrom.
Judgment affirmed. All the Justices concur.