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PORCHER v. PEARSONS-TAFT LAND CREDIT CO.

Supreme Court of Georgia1922-11-17No. No. 3190
154 Ga. 483

Summary

Holding. The court reversed the judgment and held that service of the restraining order on F. W. Dart was effective service on the defendant corporation; the restraining order was operative at the time of the sale; and the sale conducted in violation of the restraining order was illegal, requiring that the interlocutory injunction should have been granted.

A defendant corporation that held a security deed with a power of sale conducted an auction to sell the plaintiff's land. The plaintiff sought an interlocutory injunction to stop the sale and obtained a restraining order that was served on F. W. Dart, the person conducting the auction. The defendant argued that service on Dart was ineffective because he was not properly shown to be the company's agent, and therefore the court lacked jurisdiction. The defendant also argued the case was moot because the sale had already been completed after the restraining order was dissolved.

The court rejected both arguments. Evidence showed that Dart had negotiated the original loan, prepared documents on behalf of the company, and was the only person exercising authority to conduct the sale. Since the power of sale was vested solely in the defendant company and could only be exercised through an authorized agent, and since Dart was actually performing the acts sought to be enjoined, the court found that service on Dart constituted valid service on the company. The restraining order was therefore effective at the time of the sale, making the auction illegal regardless of whether the order was later dissolved.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether service on a non-resident corporation's representative constituted valid service
  • Whether a sale conducted in violation of an active restraining order was legal
  • Whether evidence of agency was sufficient to bind the corporation through its agent

Procedural posture

The case came to the court on a writ of error appealing the trial court's refusal to grant an interlocutory injunction to prevent a land sale under a power of sale.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Gilbert, J.

On the hearing of the case in this court the defendants moved to dismiss tbe writ of error, on the ground, that the issue therein was moot. The exception was to the refusal, of an interlocutory injunction sought by the plaintiff, to prevent a sale of land at public outcry under a power of. sale contained in a security deed. Movants exhibited a deed from the defendant, which held power of sale, to the purchasers at the auction sale of the land, together with proof that the purchase-price had. been fully paid. This deed recites that the sale was effected by virtue of the power of sale in the defendant’s security deed.. Based upon this proof movants insist that the sale sought to be enjoined has been completed. For reasons .which will appear in the discussion of the merits of the casé the service was legally sufficient. The restraining order was in effect, and the sale conducted at that time, notwithstanding the restraining order, was at the peril of the defendant. The fact that on the hearing some days thereafter the restraining order was dissolved without a supersedeas will not have the effect of legalizing a sale which was at the time illegal. The motion to dismiss the writ of .error is denied. >

It appeared that a restraining order had been served on F. W. Dart, who conducted the sale, which had not been dissolved, and was therefore operative at the time, provided that, service on him constituted service on the company. The. defendant denied the sufficiency of the service, on the ground that F. W. Dart was served without any proof of agency, and that therefore the court-did not acquire jurisdiction of the defendant. On the interlocutory hearing there was oral evidence introduced by the plaintiff tending to show that F. W. Dart, who had negotiated the loan, acted for the defendant company throughout in preparing the papers, although the plaintiff, in one part of her testimony, said that F. W. Dart represented her in negotiating the loan. The defendant is a non-resident corporation. The sale of the land purported to be by authority of the power of sale contained in the security deed. The sale had no other validity except under that power. F. W. Dart was the only person, under the evidence, assuming and exercising any authority to make the salé. He could have derived that authority only from the -defendant. If he was a mere volunteer and without that authority, the sale would be without any binding effect. The power of-sale was lodged in the defend aut with authority to appoint an,agent to make the sale by duly executed and recorded instrument. No writing was shown. It would be unthinkable to hold that under the laws of Georgia a foreign corporation could acquire a security deed containing, a power of sale and could exercise that power without any authorized agent in this State, so as to prevent service of suit, and thereby deprive the holder of the equity of any opportunity to adjudicate disputed issues as to his rights. There was evidence for the defendant, denying that F. W. Dart was in any sense the agent or representative of the defendant, and also denying that defendant had any agent in the county of Coffee of such character as would authorize the service of suit upon him. There was evidence to the effect that F. W. Dart was requested by a named person in another county in Georgia to conduct the sale; but no .authority was shown in that person, either oral or documentary, to empower the sale. As stated above, that power was vested in the defendant company, and it is nowhere shown that they had assigned the same to any person, unless it was in F. W. Dart, who actually exercised the power. Moreover, it should be remembered, in considering whether F. W. Dart was the agent of the defendant company,, that the former was in fact exercising the very acts of the company sought to be enjoined. For these reasons we hold that under the evidence a finding was demanded that service on F. W. Dart was service on the company; that the restraining order was operative at the time of-the sale; that the sale, which was made at the peril of the defendant, was illegal; andtherefore that the court erred in refusing an interlocutory injunction.

Judgment reversed.

All the Justices concur.