Petition — Colodny v. Krause

ee

Supreme Conrt,

FILED *

, AUG 17 ITT

MICHAEL ROBAK, JRCLERK

IN THE

SUPREME COURT OF THE UNITED STATES

ROSALYN COLODNY and JEAN FELDMAN,

APPLICANTS,

VS.

R.A. KRAUSE, AS NOMINEE OF THE

TRUSTEE OF ATICO MORTGAGE INVESTORS

A MASSACHUSETTS BUSINESS TRUST.

RESPONDENT.

°

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES SUPREME COURT

RUBY CARPIO BELL

Attorney for Applicants

BELL & DESIDERIO, P.C.

3445 Peachtree Road, N.E.

Suite 900

Atlanta, Georgia 30326

Telephone: 404—261-6235

INDEX

Page

EET TCSP Ee CEPT TE Pore a ee Coe Pe ee ee |

Ee ed ow i we ene ked se baeereetebasteesen 1

a ik CEREUS aha O A Ob wwe ?

ee sig ad's debe bose 6b SO ees 2?

ee ee eee ress ae baeih ene 00 beeen 3

BL OT ee ET TEP PY TORE LL eee 6

I ee ee ee ce ek bea Ch b 00a at °4

ee I oc i Road cadersbecdsicdesone 15-19

B—Opinions and judgment below................... 20-24

C—Part of recording raising the constitutional

SID cuicckonevacseccctas aan

D—Certified copy of minutes of Georgia court of appeals

and supreme court as to filing dates of appeals below . 29-3]

E—Certified judgment from court of appeals on file

in superior court of Fulton County, Georgia........ 32-33

CITATIONS

CASES: Page

Aetna Insurance Company v. Hartshorn,

ee EE nd 6 nk kc Dakmacess - bas beet eeens 7

Armstrong v. Manzo, 380 U.S. 545, 552;

ee a es Pe Oe i, SEEMED ci cco wbcdccvcdens 10

Brotherhood of Railroad Trainmen v. Chicago M.

St. P. & P. R. Co.,

i fo ay. elteks heehee bdce 10

Brotherhood of Railroad Trainmen v. Swan,

RE, SOOE cde wdiecctecesécecnvasees 10

Burton et al v. Platter,

I da ae ouy ee ees 10

Carter v. Kubler,

320 U.S. 243; 64 S. Ct. 1; 88 L. Ed. 26 (1943)............ 11

Chicago Burlington and Quincy Railway Company v.

People of the State of Illinois ex rel Drainage

Commissioners,

200 U.S. 561; 26 S. Ct. 341, 50 L. Ed. 596 (1905)......... 13

Council of Federated Organizations v. Mize,

eT er ere ae ee eee 7

E.B. Miller & Co., et al v. Federal Trade Commission,

ee: cbs wee eeees 10

Enterprise Irrig. Dist. v. Farmers’ Mutua! Canal Co.,

243 U.S. 157, 164; 37 S. Ct. 318; 61 L. Ed. 644(1916)..... 13

Fuentes v. Shevin,

407 U.S. 67; 92 S. Ct. 1983; 32 L. Ed. 2d 556(1972) ...... 7

Hill v. EPC,

ee ane eek es cake’ 660s 10

Ivanhoe Irrigation District v. McCracken,

357 U.S. 275, 78 S. Ct. 1174; 2 L. Ed. 2d 1313 (1958) ..... 13

Moser v. Mortgage Guarantee Co.,

BAe Oe BO Gee. BOOED cw ce vc cect cveoscecse dint ae

Mathews vy. Eldridge,

424 U.S. 319; 96 S. Ct. 893; 47 L. Ed. 2d 18 (1976) .......

Mayor and Aldermen of the City of Vicksburg v.

Henson, Receiver of the Vicksburg Water Works Company,

231 U.S. 259; 34 S. Ct. 95; 58 L. Ed. 209 (1913)..........

Morgan v. United States,

304 U.S. 1, 58 S. Ct. 773; 82 L. Ed. 1129 (1938)..........

North American Van Lines, Inc. v. Harper’s Magazine Co.,

a a i a

North American Van Lines, Inc. v. United States,

CO i re ake

Postal Telegraph Cable Company v. City of Newport, Kentucky,

247 U.S. 464; 38 S. Ct. 566; 62 L. Ed. 1215 (1917)........

Ricker v. United States,

es I i On Sk ohne en cénbe bb deodece ses

Royal Typewriter Company v. National Labor Relations Board,

a i es Sud aeaie

Salvino v. United States et al.,

De eee cane een

Sniadack v. Family Finance Corp.,

395 U.S. 337; 89 S. Ct. 1820; 23 L. Ed. 2d 349 (1969) .....

State Tax Commission of Utah v. Van Cott,

306 U.S. 511, 59 S. Ct. 605; 83 L. Ed. 950 (1939).........

Techem Chemical Co., Ltd. v. M/T Choyo Maru,

oa kc. cee sakes pues oe ues

United States v. Dillman, et ai

a Rs Caso oid'db wee on ee ee caus :

West Chicago Street Railroad Company vy. People of the State

of Illinois, ex. rel. City of Chicago,

201 U.S. 506; 26 S. Ct. 518; 50 L. Ed. 845 (1905).........

Wood v. Chesborough,

228 U.S. 672; 33 S. Ct. 706; 57 L. Ed. 1018 (1912)........

IN THE

SUPREME COURT OF THE UNITED STATES

NO.

ROSALYN COLODNY AND JEAN FELDMAN

APPLICANTS,

VS.

R.A. KRAUSE, AS NOMINEE OF THE

TRUSTEE OF ATICO MORTGAGE INVESTORS

A MASSACHUSETTS BUSINESS TRUST

RESPONDENT.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES SUPREME COURT

The Petition of Rosalyn A. Colodny and Jean Feldman

respectfully prays that a Writ of Certiorari issue to review the

judgment and opinion of the Georgia Court of Appeals in this

matter rendered and filed on January 11, 1977.

OPINION BELOW

The opinion of the Court of Appeals of Georgia, reported

as Colodny et al, v. Krause, 141 Ga. App. 134 (1977),

appears in the Appendix hereto.

JURISDICTION

The judgment of the Georgia Court of Appeals was entered

on January 11, 1977. A timely petition for rehearing was

filed in the Court of Appeals and was denied by said Court

on January 28, 1977.

Thereafter an Application for a Writ of Certiorari was

filed in the Supreme Court of Georgia on February 28, 1977,

and was denied by that Court on April 21, 1977. A Motion

for Rehearing on said application for a Writ of Certiorari was

filed on May 2, 1977, and was denied on May 11, 1977. The

case was remanded to the Court of Appeals of Georgia on

May 20, 1977 which forwarded the remittitur to the Fulton

County Superior Court on that same date and judgment was

2

entered in that Court on May 23, 1977. This Petition for Writ

of Certiorari was filed within ninety (90) days of that date.

Certified copies of the minutes of the Georgia Court of

Appeals and Supreme Court appear in the Appendix. This

Court’s jurisdiction is invoked under the provisions of 28.

U.S.C.A. 1257(3).

QUESTIONS PRESENTED

1. Is it a denial of due process and equal protection as

guaranteed by the Fifth and Fourteenth Amendments

to the United States Constitution, to bind a Defendant

in a subsequent suit in the state of domicile to the

results of a foreign judgment against her where that

same foreign judgment was previously refused full faith

and credit in the state of domicile for lack of notice or

hearing in the foreign state?

2. Is it a denial of due process and equal protection as

guaranteed by the Fifth and Fourteenth Amendments

to the United States Constitution, to enter an in

personam judgment without notice of or holding a fair

market value hearing in a subsequent suit in the state of

domicile for a deficiency balance growing out of a

previous real estate foreclosure in the foreign state?

3. Is the misapplication of a defensive plea of res judicata,

resulting in two separate judgments against the same

parties on the same debt, a denial of due process and

equal protection as guaranteed by the United States

Constitution, Fifth and Fourteenth Amendments?

STATUTORY PROVISIONS INVOLVED

United States Constitution, Amendment Five

United States Constitution, Amendment Fourteen

——

—

3

STATEMENT OF THE CASE

This case arose as the result of the petitioners’ signing,

together with their respective husbands, a guaranty agree-

ment in 1972 to pay the debt of Concord Developers, Inc.,

with the Respondent for a construction loan of

$2,700,000.00. (R. 18). The corporation defaulted after

$481,034.42 was advanced and Respondent filed a Com-

plaint fcr foreclosure and deficiency against Concord, the

guarantors, inter alia, in Lexington County, South Carolina

on March 22, 1974 (R. 4 31-39, 146-209). The Petitioners

were served extraterritorarily by the Sheriff's Office in

Atlanta, Georgia, the state of their domicile, and return

of service made and service shown in the record to have been

defectively made upon them. (R. 46-47. 50-51, 198, 201).

Because of lack of proper service, Petitioners did not appear

or defend in South Carolina. However, the South Carolina

action proceeded to judgment against the Corporation and

the guarantors and a deficiency judgment was found and

entered up against Petitioners in the amount of $142,749.91

on June 27, 1974 which judgment stands of record in the

state of rendition. (R. 42, 43, 151, 152).

Respondent then filed a Complaint in Georgia on October

24, 1974 to domesticate the South Carolina judgment against

only the guarantors. (R. 5). Petitioners filed their Motion to

Dismiss the Complaint based upon improper service upon

them and filed defensive pleadings (R. 11). At a hearing held

on June 2, 1975, the Fulton County Superior Court refused

to grant full faith and credit to the South Carolina judgment

as to the Petitioners and entered its Order accordingly

(R. 96).

Respondent amended its Complaint on April 1, 1975 and

added Count II which alleged the original note, guaranty and

sought judgment against Petitioners for the same claim

covered by the South Carolina judgement which had already

been denied full faith and credit (R. 14). Said Complaint, as

amended, sought no confirmation or fair market value

hearing and plead no law vitiating that requirement nor did it

make any allegations at all concerning a hearing or the

4

holding thereof for such purpose.’ (R. 14).

Petitioners filed an answer to Count II and raised the

defense of res judicata, among others (R. 56-59, 60). Peti-

tioners later amended their answer and raised the consti-

tutional questions here sought to be reviewed. (R. 214-215,

220).

Both Petitioners and Respondent filed Motions for Sum-

mary Judgment (R. 62-92 and R. 14-55 respectively), and

each thereafter filed Supplemental Briefs (R. 122,210 and

R. 216, respectively). Oral argument was held on August 13,

1975 and ruling and order finally made and entered on June

18, 1976 (R. 223-224). Appeal to the Georgia Court of

Appeals was filed. The Court of Appeals sustained the trial

court’s grant of Summary Judgment to the Respondent and

denial of Summary Judgment to the Petitioners, the report

of that case appearing at 141 Ga. App. 134, copy attached in

Appendix, P. 15-19 Motion for Rehearing was filed on

aw 21, 1977 and denied on January 11, 1977. Appendix

Application for Writ of Certiorari to the Georgia Supreme

Court was filed on February 28, 1977 and denied on April

21, 1977. Motion for Rehearing in the Supreme Court was

filed May 2, 1977 and denied on May 11, 1977. See

Appendix, p. 30.

Petitioners primary contentions were: (1) that the previous

adjudication of the deficiency balance against them in South

Carolina to which they were named parties, but not properly

(1) Georgia Code Annotated on this subject reads as follows:

“67-1503. Confirmation of sales under powers — When any real

estate is sold on foreclosure, without legal process, under powers

contained in security deeds, mortgages or other lien contracts, and

at such sale said real estate does not bring the amount of the debt

secured by such deed, mortgage, or contract, no action may be

taken to obtain a deficiency judgment unless the person instituting

the foreclosure proceedings shall, within 30 days after such sale,

report the sale to the judge of the superior court of the county in

which the land lies for confirmation and approval and obtains an

order of confirmation and approval thereon.”

"67-1504. Payment of true market value as condition precedent to

confirmation of sale. The court shall require evidence to show the

true market value of the property sold under such powers, and shall

not confirm the sales unless he is satisfied the property so sold

brought its true market value on such foreclosure sale.”

5

served and which stands of record in the state of its

rendition, unreversed or set aside, barred the bringing of the

instant suit, especially since that judgment had been refused

full faith and credit under Count | of this same litigation

upon attempt to domesticate the judgment (R. 96), (2) that

having had no notice of nor hearing in South Carolina as to

the fair market value, the deficiency judgment was invalid

against them for any purpose (R. 96) and; (3) that Count II

did not give notice of nor was a fair market value hearing

held in order to bind them to any deficiency balance found

on summary judgment, confirmation of the deficiency being

a condition precedent ot collection of a deficiency balance

under a foreclosure sale in Georgia. See Footnote (1).

Petitioners only connection with the transaction out of

which both the South Carolina Judgment and the Georgia

litigation arose was the execution of a guaranty agreement,

the pertinent portion of which reads as follows: (R. 28-30).

‘‘For valuable consideration, the undersigned (hereinafter

called “guarantors’’) for themselves, their heirs, personal

representatives and assigns, hereby jointly and severally,

unconditionally guarantee to R.A. Krause, as nominee of

the Trustees of ATICO Mortgage Investors, a Massa-

chusetts Business Trust, with power to satisfy, discharge,

release, foreclose, assign and/or transfer the within guar-

anty, and to execute deeds of conveyance and deed

restrictious, and to designate a substitute nominee in his

stead (hereinafter called “‘mortgagee’’) and its successors,

participants, endorsers, or assigns, the due performance

and full and prompt payment, whether at maturity or by

acceleration or otherwise, of and all obligations and

indebtedness of Concord Developers, Inc., West Concord,

South Carolina, (hereinafter called ““Borrowers’’) to Mort-

gagee pertaining to the development and/or construction

loans (or evidenced in the documents now or hereafter

supporting same) made by the Mortgagee aforesaid for the

improvement of land, lying and being in the city of West

Columbia, County of Lexington, State of South Carolina,

more particularly described as follows: ...”

The trial court’s ruling merely granted Summary Judgment

to Respondent and denied Summary Judgment to Petition-

ers, (R. 223,224), without separating or indicating the

6

grounds therefor. Petitioners appeal embraced all of the

affirmative defenses raised at the trial !evel, as well as general

summary judgment law as to genuine issues of material fact.

The Court of Appeals held, in short, that Count Il was a mere |

suit on the guaranty contract (Division 2 of the »pinion) and

had nothing to do with the South Carolina judgment, that

the plea of res judicata was “inopposite’’ and was virtually

silent as to the due process defenses (Appendix P. 21). The

result is two judgments against the Petitioners — one in

South Carolina for $142,749.91, (R. 42,43 — 151-152), and

the instant judgment in Georgia for $201,562.48,

(R. 233-224), for the exact same debt, growing out of the

same transaction and guaranty agreement.

REASONS FOR GRANTING THE WRIT

1. The decision below conflicts with decisions of this

Court as to what due process is in general and what

constitutes a full and fair hearing under the United States

Constitution, Amendments Five and Fourteen.

Petitioners contend that under the facts and circumstances

of this case, they have been denied the due process to which

they were entitled by virtue of the U.S. Constitution,

Amendments Five and Fourteen, and that this Court should

accept the Writ of Certiorari to reverse the Georgia Court of

Appeals on this question.

The Statement of the Case shows the procedural history of

the judgment here sought to be reviewed. Petitioners have

been found liable to pay a deficiency balance arising from a

real estate foreclosure sale in South Carolina, covered by a

construction loan from» Respondent for which they were

guaraniors, without notice or hearing as demanded by the

aforesaid amendments to the U.S. Constitution, in either the

State of South Carolina where the foreclosure took place or

in the State of Georgia as shown under Section 2 hereof. This

Section shall deal solely with the South Carolina proceedings

resulting in the judgment there which was subsequently

allowed to be used as evidence of “fair market value” in

Georgia in the litigation below when the trial court had

already refused the South Carolina judgment full faith and

credit for lack of proper service. The Georgia Court of

Appeals addressed the constitutional issues raised in the trial

court by amendment in division 2 of its opinion (App. P. 21)

rans wee er — ree ee

—-

by stating:

“Appellants next contend as error that the summary

judgment was based upon a judgment obtained in South

Carolina against them without notice or opportunity to be

heard in that state. The basis for the action against

appellants in this state was the guaranty contract, not the

South Carolina judgment. Their liability under the guar-

anty was reduced by the net amount of the foreclosure

proceedings in South Carolina. If Appellants contend that

the valuation established in the South Carolina foreclosure

proceedings, to which this court gave full faith and credit

as to the husbands of these parties in the previous

appearance here, was less than fair market value, they

neither alleged nor offered proof of a valuation different

from that established in the South Carolina action.”

Herein lies the crux of the Georgia Court’s error in this

case. This Court has held time and time again too numerous

to be mentioned that the two fundamental principles or

minimal requirements of due process are notice and oppor-

tunity to be heard or to defend. Aetna Insurance Company y.

Hartshorn, 477 F. 2d 97 (1973); Mathews v. Eldridge, 96 S.

Ct. 893, (1976); North American Van Lines, Inc. v. Harper's

Magazine Co., 537, F. 2d 758 (1976); Council of Federated

Organizations v. Mize, 339 F. 2d 898 (1974); Techem

Chemical Co., Ltd., v. M/T Choyo Maru, 416 F. Supp. 960

(1976); Sniadack v. Family Finance Corp., 395 U.S., 337, 89

S. Ct. 1820, (1969); Fuentes v. Shevin, 407 U.S. 67, 92 S. Ct.

1983, (1972).

Yet the Georgia Court of Appeals, disregarding completely

the mandates of the Supreme Court of the United States, has

held that these Petitioners can be held liable for a judgment

in Georgia by resort to and use of another judgment from

South Carolina which was admittedly without due process

and refused full faith and credit on that basis. While it, on the

one hand, denies the judgment from South Carolina domesti-

“cation in Georgia, it has by its ruling sanctioned its use for

the purpose of binding petitioners to the result of the

judgment when it meets none of the minimum requirements

of due process.

Petitioners were given no notice of default by the maker of

acceleration of the note. No notice was given them of the

8

complaint for foreclosure in South Carolina. No notice was

given them of the foreclosure order entered in South

Carolina. No notice was given them of the foreclosure sale in

South Carolina. No notice was given them of the intent to

hold a fair market value hearing in South Carolina for the

purpose of determining the deficiency. No notice was given

them of the deficiency balance remaining as found by the

South Carolina Court. No notice was given them of the

deficiency judgment against them. No notice was given them

that they had a right following the foreclosure sale to contest

the value within a ninety (90) day period following the sale,

as provided by the South Carolina statutory law regarding

foreclosures.

(2) South Carolina General Statutes, Mortgages, etc. Generally Chapter

2, Section 45-86 reads as follows:

§ 45-86 Deficiency judgment. In actions to foreclose mortgages the

court may adjudge and direct the payment by the mortgagor of any

residue of the mortgage debt that may remain unsatisfied after a

sale of the mortgaged premises in cases in which the mortgagor shall

be personally liable for the debt secured by such mortgage and if

the mortgage debt be secured by the covenant or obligation of any

person other than the mortgagor the plaintiff may make such person

a party to the action and the court may adjudge payment of the

residue of such debt remaining unsatisfied after a sale of the

mortgaged premises against such other person and may enforce such

judgment as in other cases. (1952 Code §45-85, 1942 Code §487;

1932 Code §§487, 8712; Civ. C. ’22 §5232; Civ. P. 22 § 430; Civ.

C. °12 $3468; Civ. P. °L2 §218; Civ. C. 02 §2382; Civ. P. 02

| ry 1870 (14) 190; 1894 (21) 816; 1900 (23) 349; 1935 (39)

South Carolina General Statutes, Executions and Judicial sales

generally, Chapter 20, Section 10-1782 reads as follows:

§ 10-1782. Same; confirmation of sale and deed. — If no objection

as to the price at which the property may have been sold by the

judgment debtors shall be made in writing by either of the judgment

creditors and filed with the sheriff within three months from and

after the time such payment shall have been made, the sale shall

thereupon be considered confirmed, and the sheriff shall make the

following endorsement on the back of the deed of conveyance, viz.:

“No objection having been filed in my office to the within bargain

and sale within the time prescribed by law this bargain and sale is

therefore confirmed.”’ Such endorsement shall be dated and signed

officially by the sheriff. (1952 Code § 10-1782; 1942 Code §9079;

1932 Code §9081; Civ. C. ’22 §5486; Civ. C. 12 §3707; Civ. C.

02 §2622; G.S. 687; R.S. 2122; 1872 (14) 604).

9

Absent notice as shown above, the crucial hearing require-

ment of due process was effectively eliminated. The record

from South Carolina, combined with the dismissal order in

the Georgia proceeding denying full faith and credit to the

South Carolina judgment, stands as proo* positive of the

denial of due process claimed by the petitioners beginning in

the trial court. To allow that infected South Carolina

judgment to be offered and used as the proof of fair market

value against them in the Georgia proceeding as held by the

Georgia Court of Appeals is to further compound the denial

of due process to them already inflicted in South Carolina.

The Georgia Court of Appeals at Division 2 of the opinion

(Appendix P. 21) apparently considered the notice and hear-

ing afforded the husbands of these parties to have satisfied

the due process guaranteed these petitioners. Due process by

osmosis is not contemplated by the Fifth and Fourteenth

Amendments.

2. The decision below conflicts with decisions of this

Court as to the notice of a claim asserted as required by

virtue of the U. S. Constitution, Amendent Five and

Amendment Fourteen and specifically in this case the

holding of a hearing of fair market value in order to be able

to adjudge the petitioners liable for an in personam judgment

for a deficiency balance; and the failure to give such notice

and hold such hearing when specifically required by Georgia

statutory law constitutes a denial of equal protection of the

law as guaranteed by said amendments to the U.S. Consti-

tution.

As shown above in the Statement of the Case, the

petitioners were served in Georgia with a complaint seeking

to domesticate a South Carolina judgment. Prior to the

summary judgment proceeding and argument thereon, Re-

spondent amended the compalint to resue on the note

guaranteed by petitioners alleging the execution of the note,

guaranty agreement, the South Carolina foreclosure, etc.,

seeking inter alia, attorneys fees, plus judgment for the

difference between the note amount ana the bid price of the

property in South Carolina,—or the deficiency resulting from

the foreclosure. Said complaint as amended, constituted and

can be construed from its allegations as no more than a suit

10

on a note. No hearing was sought for the purpose of

determination of fair market value and no law was plead

vitiating that requirement. (R. 14-17). (See also, Footnote

{1}, under Section 1 hereof). No notice of such hearing

was given and no such hearing was held, yet judgment was

rendered on summary judgment against Petitioners.

Inherent in the right to due process guaranteed by the

Fifth and Fourteenth Amendments to the U.S. Constitution

is the right to a hearing. This right to a hearing denotes a

“full and fair hearing’ and includes not only the right to

present evidence, but also a reasonable opportunity to know

the claims of the opposing party to meet them. Morgan v.

United States, 304. U.S. 1; 58 S. Ct. 773, 82 L. Ed. 1129

(1938); Hill v. EPC, 335 F. 2d, 355, (5th Cir. 1964); E.B.

Miller & Co. et al v. Federal Trade Commission, 142 F. 2d

511 (6th Cir. 1944).

The due process clause of the Fifth Amendment guaran-

tees no particular mode of procedure, but, does require

adequate notice of opposing claims, reasonable opportunity

to prepare and to meet them in an orderly hearing adapted to

the nature of the case and a fair and impartial decision.

Brotherhood of Railroad Trainmen vy. Chicago, M. St.

P.&P.R. Co., 237 F. Supp. 404, (1964); North American Van

Lines, Inc., v. United States, 412 F. Supp. 782 (1976);

Salvino v. United States, et al, 119 F. Supp. 277 (1954):

Burton, et. al, v. Platter, 53 Fed. 901 (1893); United States v.

Dillman, et. al, 146 F. 2d 572 (Sth Cir. 1944); Brotherhood

R.R. Trainmen v. Swan, 214 F. 2d, 56 (7th Cir. 1954).

It has also been held time and time again that due process

to be effective must be accorded at a meaningful time and in

a meaningful manner. Armstrong v. Manzo, 380 U.S. 545,

552; 85 S. Ct. 1187; 14 L. Ed. 2d 62, (1965); Royal

Typewriter Company v. National Labor Relations Board, 533

F. 2d 1030, (1976).

The case of Ricker v. United States, 417 F. Supp., 133

(1967), although dealing with a Farmer’s Home Administra-

tion foreclosure, sets forth the notice and hearing require-

ments to which a mortgagor is entitled under the Fifth

ae to the U.S. Constitution, and holds at Headnote

that:

“Although requirements of due process may vary with

1]

differing circumstances, procedural due process demands

at minimum notice and opportunity to be heard.”

Again at Headnote 10 that same case holds:

‘“Formality and procedural requisites for due process

hearing can vary, depending on the importance of the

interests involved and nature of the proceedings, but the

Constitution requires meaningful and timely opportunity

to be heard.”

Guaged by the dictates of the Ricker standard, although

the Georgia Statutory Law (Footnote [1]) adequately

provides for and protects the requirements of due process

enunciated by the United States Constitution, its application

to the facts of this case is devoid of the minimum standard of

notice and meaningful and timely opportunity to be heard.

A diligent search has resulted in no case ruled on by this

Court directly on point. However, the case of Carter v.

Kubler, 64 S. Ct. 1, 320 U.S. 243, (1943), is a bankruptcy

case involving the valuation of the debtor’s land on a petition

for reappraisement, involving the same principle involved in

the case at bar. The fair market value of the land foreclosed

in South Carolina for the purpose of determining a deficiency

for which petitioners might ultimately be responsible under

their guaranty is analagous to the valuation of the debtor’s

land in Carter, supra. The court there held that the parties

were entitled to a valuation based on strict adherence to the

procedure followed, under the Bankruptcy Act, citing Moser

v. Mortgage Guarantee Co., 9 Cir. 123 F. 2d, 423. Using that

same rationale, the Georgia Court should have afforded the

Petitioners a hearing on the “fair market value” of the

property¢and that hearing should have been a fair and full

hearing. This is especially true since Georgia law makes it a

condition precedent to the collection of a deficiency that fair

market value be determined and imposes a relative short

period after foreclosure to file for confirmation. In Carter,

supra at Page 3, Section (2, 3) the Court stated: “The basic

elements of such a hearing include the right of each party to

be apprised of all the evidence upon which a factual

adjudication rests, plus the right to examine, explain or rebut

all such evidence.” The failure to provide such a hearing in

accordance with the Georgia Statute, having ruled that

Georgia law applied (Appendix P. 23 Division 5 of the

12

Opinion) constitutes not only a denial of the due process

clause but also the equal protection clause of the Sth and

14th Amendment to the United States Constitution.

The Georgia trial court, affirmed by the Georgia Court of

Appeals, ruled on the one hand that Georgia law applied to

the facts of this case, but then immediately ignored the

statutory mandate, contrary to its own prior decisions in this

area and contrary to the constitutional safeguards set out in

the statute. Not only was the requisite hearing omitted, but

summary judgment was granted by the allowance of the use

of the same South Carolina judgment already refused full

faith and credit earlier in the case, as proof of fair market

value, without notice that any such hearing was to be held, or

that the complaint, as amended, was in fact a confirmation

proceeding, giving petitioners the right to adduce evidence in

rebuttal thereof.

In the final analysis, the Georgia Court refused to

domesticate the foreign judgment, but, allowed the domesti-

cation of its results, i.e., bound the petitioners to the fair

market value found in South Carolina without notice or

opportunity to be heard in either state. The due process

guaranteed by the U.S. Constitution demands far more than

that afforded these petitioners. The decision below cannot be

justified when measured against even the minimum standard

of due process.

3. The decision below conflicts with decisions of this

Court as to the proper application of a plea of res judicata

and is a denial of due process as gurantee’ by the U.S.

Constitution, Amendments Five and Fourteen.

Usuatly questions of the application of the doctrine of res

judicata are to be determined under state law. However, a

decision of a state court which denies asserted federal rights

in the application of the doctrine of res judicata if such

application is clearly inconsistent with the right to.due

process of law will not preclude this court from reviewing

and correcting the state court’s error. Postal Telegraph Cable

ae v. City of Newport, Kentucky, 247. US. 464

).

Petitioners here contend that the failure by the Georgia

Court of Appeals to correctly apply the doctrine of res

judicata in the case below by recognizing the South Carolina

13

judgment against them as a complete bar to Count II, is such

an error that it denies them of their fundamental right to due

process. The improper application of the affirmative defense

of res judicata in the decision by the Georgia Court of

Appeals is so ill-founded and so intimately interwoven with

the constitutional defenses raised by them in the trial court

and ruled on by the Court of Appeals of Georgia that this

Court’s review of the entire case below is warranted although

the issue of res judicata may be a non-fedeyal question. State

Tax Comm’n y. Van Colt, 306, U.S. 511; Enterprise Irrig.

Dist. v. Farmers’ Mutual Canal Co., 243, U.S. 157, 164; cf.

Ivanhoe Irrigation District v. McCracken, 357, U.S. 275;

Chicago Burlington and Quincy Railway Company v. People

of the State of Illinois ex rel Drainage Commissioners, 200,

U.S. 561; West Chicago Street Railroad Company v. People

of the State of Illinois, ex. rel. City of Chicago, 210 U.S. 506;

Wood v. Chesborough, 228 U.S. 672, (1912).

It is clear from a comparative analysis of this record below

and the record of the South Carolina action (R. 146-209)

that the debt sued on by the Respodnent in the instant case

is exactly the same debt as already reduced to judgement in

South Carolina. It is likewise abundantly clear that the

parties to the instant action are the exact same parties, and it

is unquestioned that the South Carolina judgment is of

record in that state against Petitioners since under Count I, it

was offered in Georgia in certified form for domestication as

well as used by the Respondent as proof of fair market value

in the current suit under Count II, (App. P. 20 Court of

Appeals Opinion Division 1). Thus, all elements of a valid

plea of res judicata have been satisfied.

The failure of the Court of Appeals of Georgia to reverse

the trial Court and sustain the plea has resulted in a denial of

due process to these Petitioners in that they have again been

subjected to judgment for the same cause of action and two

judgments now stand against them. True, the judgments

differ in amount, but each are valid, final and binding. As an

example of their validity, if the Respondent were to find

property or assets of Petitioner in a third state, it could take

either the South Carolina judgment or the Georgia judgment

and seek domestication in such foreign state and Petitioners

would again be put to defending the reduction of the South

14

Carolina judgment, if it were the one chosen, on the grounds

of full faith and credit as it successfully did under Count I in

Georgia. Surely the law does not contemplate that a

Defendant once she has a judgment against her, can or should

be again vexed with litigation upon that exact same cause ad

infinitum. Thus, the doctrine of res judicata was created

which is the civil counterpart of double jeopardy against

which the Fifth Amendment to the U.S. Constitution

guarantees protection. Mayor of Aldermen of the City of

Vicksburg v. Henson, Receiver of Vicksburg Water Works

Company, 231 U.S. 259 (1913). While Applicants have

located no case directly on point so that the question here

presented appears to be of first impression, this court has

conversely found that the erroneous sustaining of a plea of

res judicata is a denial of due process. See Postal supra.

Petitioners submit that the misapplication of a valid plea of

res judicata by failing to apply it when the facts, as here, not

only warrant but demand its application in bar, is a denial of

due process and equal protection. See Section | of this

Application for a full discussion of the specific constitutional

issues. The failure by the Court of Appeals of Georgia to

correctly sustain the plea of res judicata has compounded the

denial of due process originally denied Petitioners in South

Carolina and Georgia.

CONCLUSION

For the foregoing reasons, a Writ of Certiorari should be

issued to review the judgment and opinion of the Georgia

Court of Appeals.

Respectfully submitted,

BY:

Ruby Carpio Bell

Attorney for Applicants

BELL & DESIDERIO, P.C.

Suite 900

3445 Peachtree Road, N.E.

Atlanta, Georgia 30326 ,

Telephone: 404—261-6235

15

JANUARY TERM, 1977

APPENDIX A

53160. COLODNY et al. v. KRAUSE.

u

WEBB, Judge.

Krause as trustee for Atico Mortgage Investors sought to

enforce a deficiency judgment obtained in South Carolina

against Mr. and Mrs. Colodny and Mr. and Mrs. Feldman in a

realty mortgage foreclosure proceeding. All four are residents

of Georgia. Mesdames Colodny and Feldman had not been

properly served in the South Carolina deficiency judgment

proceeding, and their motion to dismiss on that ground was

sustained. The trial court by summary judgment sustained,

however, the deficiency judgment against Messrs. Colodny

and Feldman, and we affirmed. Colodny v. Krause, 136 Ga.

App. 379 (221 SE2d 239) (1975).

Count 2 of Atico’s complaint based upon a guaranty

contract executed by the four individuals, and not then

before us, thereafter was adjudicated by the trial court as to

Mesdames Colodny and Feldman. Their motion for summary

judgment was denied, and summary judgment was entered

for Atico against these two for 4201,562.48.

Mesdames Colodny and Feldman make a six-pronged

assault upon the summary judgment ‘n their appeal to this

court, and we shall deal with the alleged errors in the orders

presented.

1. Appellants assert error by the trial court in denying

their motion for summary judgment in that Atico’s action “‘is

barred by the doctrine of res judicata” by virtue of the

deficiency judgment proceeding in South Carolina.

The South Carolina judgment was res judicata as to the

husbands of these appellants, in that the husbands were

served, and the judgment was entitled to full faith and credit.

Colodny v. Krause, p. 380. But Mesdames Colodny and

Feldman were never served in the South Carolina proceeding.

It is fundamental that the legal liability of one person to

another person can be ascertained only in an action brought

against such person by the other in a court of competent

jurisdiction. Code § § 3-607, 110-501. “A judgment is not

conclusive as to one who was not a party to the proceeding in

16

which it was rendered, nor as to one over whom the court

acquired no jurisdiction, even though the latter may be

named as a party defendant in the proceeding.” Smith vy.

Downing Co., 21 Ga. App. 741, 742 (9) (95 SE 19) (1917).

See also Patrick v. Simon, 237 Ga. 742, 743 (2) (1976).

Where a verdict and judgment are had against two

defendants, on a joint and several contract, and it appears

that one was never served’, the verdict and judgment as to the

one not served are void. Kitchens v. Hutchins, 44 Ga. 620 (4)

(1872); Hicks v. Bank of Wrightsville, 57 Ga. App. 233, 234

(1) (194 SE 892) (1938).

“A personal judgment can not be obtained against a person

who is not named as a party defendant and properly served in

the action.”’ (Emphasis supplied.) Webb & Martin, Inc. v.

Anderson-McGriff Hardware Co., 188 Ga. 291 (2) (3 SE2d

882) (1939); Burgess v. Nabers, 122 Ga. App. 445, 447 (2)

(177 SE2d 266) (1970). The South Carolina judgment was

rendered by a court which lacked jurisdiction of the two

appellants, was a nullity and not final as to them, and

appellants’ plea of res judicata must fail. Gilmer v. Porter-

field, 233 Ga. 671 (212 SE2d 842) (1975) upon which

appellants place reliance is inapposite here.

2. Appellants next content as error that the summary

judgment was based upon a judgment obtained in South

Carolina against them without notice or opportunity to be

heard in that state. The basis for the action against appellants

in this state was the guaranty contract, not the South

Carolina judgment. Their liability under the guaranty was

reduced by the net amount of the foreclosure proceedings in

South Carolina. If appellants contend that the valuation

established in the South Carolina foreclosure proceeding, to

which this court gave full faith and credit as to the husbands

of these parties in the previous appearance here, was less than

fair market value, they neither alleged nor offered proof of a

valuation different from that established in the South

Carolina action.

3. Appellants contend that Atico did not comply with

Georgia’s confirmation procedures set forth in Code Ann.

§ 67-1503. The real estate foreclosed upon is in South

Carolina. Goodman vy. Nadler, 113 Ga. App. 493 (148 SE2d

480) (1966) applies here, wherein the same argument was

17

made. We held that Georgia’s confirmation statute

(§ 67-1503) “is obviously drawn so as to apply only to

foreclosure sales in Georgia.” Ibid, p. 495. And, “[t]he

plaintiff is not barred, under these circumstances, from

bringing the action in personam in the county of the

defendants’ residence because of any requirement contained

in Code § 37-608.” Ibid. p. 496.

Appellants argue that to allow Atico to obtain a personal

judgment against them for deficiency would be against the

public policy of this state. “Where the question [public

policy] has arisen in other jurisdictions it has generally been

heid that recovery of a deficiency judgment otherwise

allowable under the law of the situs of the mortgaged

property and the contract indebtedness which it secures is

not violative of the public policy of the state of the forum on

grounds of public policy although contrary to the rule in

effect in such state. [Cits.j The strongest ground of public

policy which occurs for the enforcement of statutes requiring

confirmation in foreclosure proceedings is to protect the

debtor from being subjected to double payment in cases

where the property was purchased for a sum less than its

market value. Code § 37-609 requires that evidence satis-

factory to the court of the true market value of the property

is a condition precedent to the confirmation. We reach the

same conclusion on an action in Georgia based on a Florida

judgment and applying Florida law, for in Florida a nonresi-

dent mortgagor not personally served in the foreclosure

proceeding is not bound by the amount brought in at the

foreclosure sale, but may offer evidence to show the true

value of the property. The traditional test used in determin-

ing whether the public policy of the forum prevents the

application of otherwise applicable conflict-of-laws principles

was well expressed by Justice Cardozo in Loucks v. Standard

Oil Co. of N.Y., 224 N.Y. 99 (120 NE 198), to the effect

that foreign law will not be applied if it ‘would violate some

fundamental principle of justice, some prevalent conception

of good morals, some deep-rooted tradition of the common

weal.’ No such reason exists here.” Goodman y. Nadler,

supra, pp. 496. 497. (See 44 ALR3d 927, § 3).

4. Appellants argue that the denial of their motion for

summary judgement was error in that their risk under the

18

guaranty agreement has been increased and they have been

discharged.

There is no merit in this contention. Atico obtained a

judgment against the other two guarantors, husbands of

appellants, and in this action Atico is pursuing appellants for

a judgment on the same guaranty that underlay the defi-

ciency judgment entered in South Carolina and to which this

state gave full faith and credit as to the husbands. There has

been no release of anyone, and no risk has been increased to

the appellants. Furthermore, the guaranty agreement which

these appellants signed provides, among other things, “a

separate action or action may be brought and prosecuted

against guarantors...’ Also, “guarantors authorize mortga-

gee... without affecting their liability ...to (d) release or

substitute any one or more of the endorsers or guarantors,”

and “guarantors waive any right or claim of right... to

require mortgagee to proceed against the guarantors in any

particular order.”

Even if there had been a release of parties liable, under the

terms of the guaranty contract these two guarantors were not

thereby discharged. We consider Overcash vy. First Nat. Bank,

115 Ga. App. 499 (155 SE 2d 32) (1967) (cert. den.) to be

applicable. Chief Judge Felton, speaking for this court, held

that the alteration by the credit bank of a contract of

suretyship “‘by the release of one of the three original sureties

and the substitution of a new surety therefor did not

discharge the other two original sureties, defendants, since

such novation was authorized by a provision in the contract

to the effect that the bank could surrender any kind of

security it held and substitute any kind of collateral for the

indebtedness without notice to or further consent of the

sureties.”

Atico here simply was trying to get Mrs. Colodny and Mrs.

Feldman to do that which they promised; nothing more,

nothing less.

5S. We agree with appellants’ assertion that the laws of

Georgia must be applied. The law of Massachusetts, referred

to in the guaranty as applicable to that contract, will be

taken as not contrary to the law of Georgia. White Farm

Equipment Co. v. Jarrell & Clifton, 139 Ga. App. 632, 634

(2) (229 SE2d 113) (1976); Craig v. Craig, 53 Ga. App. 632,

19

636 (4) (186 SE 755) (1936). We find no error here.

6. The final argument of appellants is that genuine issues

of fact remain to be determined. All of their arguments as to

this contention focus on the value of the real estate

foreclosed upon. Appellants never by pleading or any sort of

evidence, affidavit or otherwise, asserted that the property

was worth more than $400,000 received in the South

Carolina foreclosure. Had they so desired to raise this

question and make it an issue of fact, they should have

pleaded the issue or attempted to prove a different value by

affidavit or other evidence. Atico had submitted with its

pleadings a property authenticated copy of the special

referee’s report of sales submitted in the South Carolina

confirmation proceeding, which showed the mortgaged prop-

erty was sold for $400,000. There was no evidence of value

other than this amount. Appellants’ own motion for sum-

mary judgment also would seem to indicate that to them

there was no issue of fact. Atico having shown a value of the

land foreclosed upon, the burden shifted to appellants to

show a different amount, and this they failed to do. Compare

Heimanson v. Meade, 140 Ga. App. 534 (1976).

Judgment affired. Deen, P.J., and Marshall J., concur.

SUBMITTED JANUARY 5, 1977 —DECIDED JANU-

ARY 11, 1977 —- REHEARING DENIED JANUARY 28,

1977 — CERT. APPLIED FOR.

Action on judgment. Fulton Superior Court. Before Judge

Tanksley.

Bell & Desiderio, Ruby Carpio Bell, for appellants.

Kidd, Pickens & Tate, Charles M. Kidd, for appellee.

20

JANUARY 11, 1977

APPENDIX B

In the interest of time, this opinion is sent to you without

proofreading or other editorial inspection. It will be appreci-

ated if counsel will notify the clerk of the discovery of

typographical errors.

53160. COLODNY et al. v. KRAUSE.

WEBB, Judge.

Krause as trustee for Atico Mortgage Investors sought to

enforce a deficiency judgment obtained in South Carolina

against Mr. and Mrs. Colodny and Mr. and Mrs. Feldman in a

realty mortgage foreclosure proceeding. All four are residents

of Georgia. Mesdames Colodny and Feldman had not been

properly served in the South Carolina deficiency judgment

proceeding, and their motion to dismiss on that ground was

sustained. The trial court by summary judgment sustained,

however, the deficiency judgment against Messrs. Colodny

and Feldman, and we affirmed. Colodny v. Krause, 136 Ga.

App. 379 (221 SE2d 239) (1975).

Count 2 of Atico’s complaint based upon a guaranty

contract executed by the four individuals, and not then

before us, thereafter was adjudicated by the trial court as to

Mesdames Colodny and Feldman. Their motion for summary

judgment was denied, and summary judgment was entered

for Atico against these two for $201 562.48.

Mesdames Colodny and Feldman make a six-pronged

assault upon the summary judgment in their appeal to this

court, and we shall deal with the alleged errors in the orders

presented.

1. Appellants assert error by the trial court in denying

their motion for summary judgment in that Atico’s action “is

barred by the doctrine of res judicata” by virtue of the

deficiency judgment proceeding in South Carolina.

The South Carolina judgment was res judicata as to the

husbands of these appellants, in that the husbands were

served, and the judgment was entitled to full faith and credit.

Colodny yv. Krause, p. 380. But Mesdames Colodny and

Feldman were never served in the South Carolina proceeding.

21

It is fundamental that the legal liability of one person to

another person can be ascertained only in an action brought

against such person by the other in a court of competent

jurisdiction. Code § § 3-607, 110-501. “A judgment is not

conclusive as to one who was not a party to the proceeding in

which it was rendered, nor as to one over whom the court

acquired no jurisdiction, even though the latter may be

named as a party defendant in the proceeding.” Smith vy.

Downing Co., 21 Ga. App. 741, 742 (9) (95 SE 19) (1917).

See also Patrick v. Simon, 237 Ga. 742, 743 (2) (1976).

Where a verdict and judgment are had against two

defendants, on a joint and several contract, and it appears

that one was never served, the verdict and judgment as to the

one not served are void. Kitchens v. Hutchins, 44 Ga. 620 (4)

(1872); Hicks v. Bank of Wrightsville, 57 Ga. App. 233, 234

(1) (194 SE 892) (1938).

“A personal judgment can not be obtained against a person

who is not named as a party defendant and properly served in

the action.”’ (Emphasis supplied.) Webb & Martin, Inc. v.

Anderson-McGriff Hardware Co., 188 Ga. 291 (2) (3 SE2d

882) (1939); Burgess v. Nabers, 122 Ga. App. 445, 447 (2)

(177 SE2d 266) (1970). The South Carolina judgment was

rendered by a court which lacked jurisdiction of the two

appellants, was a nullity and not final as to them, and

appellants’ plea of res judicata must fail. Gilmer v. Porter-

field, 233 Ga. 671 (212 SE2d 842) (1975) upon which

appellants place reliance is inapposite here.

2. Appellants next content as error that the summary

judgment was based upon a judgment obtained in South

Carolina against them without notice or opportunity to be

heard in that state. The basis for the action against appellants

in this state was the guaranty contract, not the South

Carolina judgment. Their liability under the guaranty was

reduced by the net amount of the foreclosure proceedings in

South Carolina. If appellants contend that the valuation

established in the South Carolina foreclosure proceeding, to

which this court gave full faith and credit as to the husbands

of these parties in the previous appearance here, was less than

fair market value, they neither alleged nor offered proof of a

valuation different from that established in the South

Carolina action.

22

3. Appellants contend that Atico did not comply with

Georgia’s confirmation procedures set forth in Code Ann.

§ 67-1503. The real estate foreclosed upon is in South

Ca olina. Goodman y. Nadler, 113 Ga. App. 493 (148 SE2d

480) (1966) applies here, wherein the same argument was

made. We held that Georgia’s confirmation statute

(§ 67-1503) “is obviously drawn so as to apply only to

foreclosure sales in Georgia.” Ibid, p. 495. And, “(t]he

plaintiff is not barred, under these circumstances, from

bringing the action in personam in the county of the

defendants’ residence because of any requirement contained

in Code § 37-608.” Ibid. p. 496.

Appellants argue that to allow Atico to obtain a personal

judgment against them for deficiency would be against the

public policy of this state. “‘Where the question [public

policy| has arisen in other jurisdictions it has generally been

held that recovery of a deficiency judgment otherwise

allowable under the law of the situs of the mortgaged

property and the contract indebtedness which it secures is

not violative of the public policy of the state of the forum on

grounds of public policy although contrary to the rule in

effect in such state. [Cits.] The strongest ground of public

policy which occurs for the enforcement of statutes requiring

confirmation in foreclosure proceedings is to protect the

debtor from being subjected to double payment in cases

where the property was purchased for a sum less than its

market value. “ode § 37-609 requires that evidence satis-

factory to the court of the true market value of the property

is a condition precedent to the confirmation. We reach the

sume conclusion on an action in Georgia based on a Florida

judgment and applying Florida law, for in Florida a nonresi-

dent mortgagor not personally served in the foreclosure

proceeding is not bound by|the amount brought in at the

foreclosure sale, but may offer evidence to show the true

value of the property. The traditional test used in determin-

ing whether the public policy of the forum prevents the

application of otherwise applicable conflict-of-laws principles

was well expressed by Justice Cardozo in Loucks v. Standard

Oil Co. of N.Y., 224 N.Y. 99 (120 NE 198), to the effect

that foreign law will not be applied if it “would violate some

fundamental principle of justice, some prevalent conception

23

of good morals, some deep-rooted tradition of the common

weal.” No such reason exists here.” Goodman v. Nadler,

supra, pp. 496. 497. (See 44 ALR3d 927, § 3).

4. Appellants argue that the denial of their motion for

summary judgement was error in that their risk under the

* guaranty agreement has been increased and they have been

discharged.

There is no merit in this contention. Atico obtained a

judgment against the other two guarantors, husbands of

appellants, and in this action Atico is pursuing appellants for

a judgment on the same guaranty that underlay the defi-

ciency judgment entered in South Carolina and to which this

state gave full faith and credit as to the husbands. There has

been no release of anyone, and no risk has been increased to

the appellants. Furthermore, the guaranty agreement which

these appellants signed provides, among other things, “a

separate action or action may be brought and prosecuted

against guarantors...’ Also, “guarantors authorize mortga-

gee... without affecting their liability ...to (d) release or

substitute any one or more of the endorsers or guarantors,”

and “guarantors waive any right or claim of right... to

require mortgagee to proceed against the guarantors in any

particular order.”

Even if there had been a release of parties liable, under the

terms of the guaranty contract these two guarantors were not

thereby discharged. We consider Overcash v. First Nat. Bank,

115 Ga. App. 499 (155 SE 2d 32) (1967) (cert. den.) to be

applicable. Chief Judge Felton, speaking for this court, held

that the alteration by the credit bank of a contract of

suretyship “‘by the release of one of the three original sureties

and the substitution of a new surety therefor did not

discharge the other two original sureties, defendants, since

such novation was authorized by a provision in the contract

to the effect that the bank could surrender any kind of

security it held and substitute any kind of collateral for the

indebtedness without notice to or further consent of the

sureties.”

Atico here simply was trying to get Mrs. Colodny and Mrs.

Feldman to do that which they promised; nothing more,

nothing less.

5. We agree with appellants’ assertion that the laws of

24

Georgia must be applied. The law of Massachusetts, referred

to in the guaranty as applicable to that contract, will be

taken as not contrary to the law of Georgia. White Farm

Equipment Co. v. Jarrell & Clifton, 139 Ga. App. 632, 634

(2) (229 SE2d 113) (1976); Craig v. Craig, 53 Ga. App. 632,

636 (4) (186 SE 755) (1936). We find no error here.

6. The final argument of appellants is that genuine issues

of fact remain to be determined. All of their arguments as to

this contention focus on the value of the real estate

foreclosed upon. Appellants never by pleading or any sort of

evidence, affidavit or otherwise, asserted that the property

was worth more than $400,000 received in the South

Carolina foreclosure. Had they so desired to raise this

question and make it an issue of fact, they should have

pleaded the issue or attempted to prove a different value by

affidavit or other evidence. Atico had submitted with its

pleadings a property authenticated copy of the special

referee’s report of sales submitted in the South Carolina

confirmation proceeding, which showed the mortgaged prop-

erty was sold for $400,000. There was no evidence of value

other than this amount. Appellants’ own motion for sum-

mary judgment also would seem to indicate that to them

there was no issue of fact. Atico having shown a value of the

land foreclosed upon, the burden shifted to appellants to

show ua different amount, and this they failed to do. Compare

Heimanson v. Meade, 140 Ga. App. 534 (1976).

Judgment affired. Deen, P.J., and Marshall J., concur.

SUBMITTED JANUARY 5, 1977 ~- DECIDED JANU-

ARY I1. 1977 - REHEARING DENIED JANUARY 28,

1977 CERT. APPLIED FOR.

Action on judgment. Fulton Superior Court. Before Judge

Tanksley.

Bell & Desiderio, Ruby Carpio Bell, for appellants.

Kidd, Pickens & Tate, Charles M. Kidd, for appellee.

25

APPENDIX C

IN THE SUPERIOR COURT OF FULTON COUNTY

STATE OF GEORGIA

R.A. KRAUSE, as Nominee of

the Trustees of ATICO Mortgage CIVIL ACTION NO. C-426

Investors, a Massachusetts

Business Trust,

vs.

LESTER B. COLODNY, ROSALYN A. THIRD AMENDMENT TO

COLODNY, RICHARD FELDMAN and ANSWER

JEAN FELDMAN.

Now comes the Defendants, ROSALYN A. COLODNY

and JEAN FELDMAN, and make this their third amended

answer by showing the Court as follows:

Defendants, ROSALYN A. COLODNY and JEAN FELD-

MAN hereby adopt and reaffirm en toto their first and

second amended answers in this case as specifically as if set

out herein.

2

Detendants, ROSALYN A. COLODNY and JEAN FELD-

MAN hereby state a EIGHTH DEFENSE to Plaintiff's

complaint, to wit:

EIGHTH DEFENSE

The Plaintiff is not entitled to judgment on its claim

because such judgment would be a violation of the due

process guaranteed to the Defendants, ROSALYN A.

COLODNY and JEAN FELDMAN by the Fifth and Four-

teenth Amendments to the Constitution of the United States

and the Constitution of Georgia of 1945. (Ga. Code Ann.

§ 2-103).

26

Respectfully submitted,

FILED IN OFFICE BELL & DESIDERIO, P.C.

NOV. 18, 1975 BY:

Ruby Carpio Bell

BY:

Barry Allen

\ Attorneys for Defendants

Walter W. Miles

DEPUTY CLERK SUPERIOR COURT

FULTON COUNTY GEORGIA

CERTIFICATE OF SERVICE

I hereby certify that I have this day served copies of

Defendants’ Third Amendment to Its Answer and the Second

Supplemental Brief in Support of Defendants’ Motion for

Summary Judgment and in Opposition to Plaintiff's Motion

for Summary Judgment by placing such copies in an

envelope, with adequate postage thereon, addressed to:

Charles M. Kidd

Weltner, Kidd, Crumbley & Tate

2130 First National Bank Tower

Atlanta, Georgia 30303

This 18th day of November, 1975.

BELL & DESIDERIO, P.C.

BY:

Ruby Carpio Bell

Attorney for Defendants

27

IN THE SUPERIOR COURT OF FULTON COUNTY

STATE OF GEORGIA

R.A. KRAUSE, as Nominee of

the Trustees of ATICO Mortgage

Investors, a Massachusetts

Business Trust, CIVIL ACTION NO. C-426

Plaintiffs,

vs. BOOK 3191, PAGE 35

LESTER B. COLODNY, ROSALYN A.

COLODNY, RICHARD FELDMAN and

JEAN FELDMAN, FOURTH AMENDMENT TO

ANSWER

Defendants.

Now comes the Defendants, ROSALYN A. COLODNY

and JEAN FELDMAN, and make this their fourth amended

answer by showing the Court as follows:

l. °

Defendants ROSALYN A. COLODNY and JEAN FELD-

MAN hereby adopt and reaffirm en toto their first and

second amended answers in this case as specifically as if set

out herein.

rs

In order to correct citation in their third amendment to

their answer, the Defendants, ROSALYN A. COLODNY and

JEAN FELDMAN hereby amend the Eighth Defense raised in

their third amendment to their answer, and do hereby state

their Eighth Defense as follows:

EIGHTH DEFENSE

The Plaintiff is not entitled to judgment on its claim

because such judgment would be a violation of the due

process guaranteed to the Defendants, ROSALYN A.

COLODNY and JEAN FELDMAN, by the Fifth and Four-

teenth Amendments to the Constitution of the United States

and the Constitution of Georgia of 1945, § 2-103 (Ga. Code

Ann. § 2-103).

28

GEORGIA, Fulton County, Clerk’s Office Superior Court

Filed & Recorded, December 16, 1975.

Respectfully submitted,

CLERK

BY:

BELL & DESIDERIO, P.C. Ruby Carpio Bell

3445 Peachtree Rd., N.E.

Suite 900

Atlanta, Georgia 30326

(404/261-6235) BY:

Barry P. Allen

Attorneys for Defendants.

CERTIFICATE OF SERVICE

I certify that I have this day served a copy of the foregoing

Fourth Amendment to Answer by placing a copy of the same

in an envelope, with adequate postage thereon, addressed to:

Mr. Charles M. Kidd

Weltner, Kidd, Crumbley & Tate

2130 First National Bank Tower

Atlanta, Georgia 30303

This 16th Day of December, 1975.

BARRY P. ALLEN

Bell & Desiderio, P.C.

3445 Peachtree Road, N.E.

Suite 900

Atlanta, Georgia 30326

(404) 261-6235

FILED IN OFFICE

DEC. 16, 1975

Deborah Moore

DEPUTY CLERK SUPERIOR COURT

FULTON COUNTY GEORGIA

29

APPENDIX D

COURT OF APPEALS OF THE STATE OF GEORGIA

ATLANTA, JANUARY 28, 1977

The Honorable Court of Appeals met pursuant to adjourn-

ment. The following order was passed:

53160. Rosalyn A. Colodny et al. v. R.A. Krause, etc.

Upon consideration of the motion for a rehearing filed in

this case, it is ordered that it be hereby denied.

Court of Appeals of the State of Georgia

Clerk’s Office, Atlanta,

January 28, 1977

I certify that the above is a true extract from the minutes

of the Court of Appeals of Georgia.

Witness my signature and the seal of said court hereto

affixed the day and year last above written.

CLERK.

Court of Appeals

of the State of Georgia

Clerk’s Office

Atlanta, June 14, 1977

I hereby certify that the foregoing pages contain a true and

correct copy of the Motion for Rehearing and the Order of

Denial in Case No. 53160, Rosalyn A. Colodny and Jean

Feldman, vs. R.A. Krause, as Nominee of the Trustees of

ATICO MORTGAGE INVESTORS, a Massachusetts Business

Trust.

Witness my signature and the seal of said Court hereto

affixed, the day and year above written.

Clerk, C.A. GA.

30

SUPREME COURT OF GEORGIA

ATLANTA, APRIL 21, 1977

The Honorable Supreme Court met pursuant to adjourn-

ment. The following order was passed:

Rosalyn A. Colodny, et al. v. R.A. Krause, etc.

Upon consideration of the Application for Certiorari filed

in this case, it is ordered that it be hereby denied. Nichols,

C.J., Undercofler, P.J., Jordan, Ingram, Hall and Hill, JJ.,

concur. >

SUPREME COURT OF THE STATE OF GEORGIA,

CLERK’S OFFICE, ATLANTA,

| certify that the above is a true extract from the minutes

of the Supreme Court of Georgia.

Witness my signature and the seal of said court hereto

affixed the day and year last above written.

Clerk.

SUPREME COURT OF GEORGIA

ATLANTA, MAY 11, 1977

The Honorable Supreme Court met pursuant to adjourn-

ment. The following order was passed:

Rosalyn A. Colodny, et al v. R.A. Krause, etc.

Upon consideration of the Motion for Reconsideration

filed in this case, it is ordered that it be hereby denied. All

the Justices concur, except Bowles, J., not participating.

SUPREME COURT OF THE STATE OF GEORGIA,

CLERK’S OFFICE, ATLANTA,

I certify that the above is a true extract from the minutes

of the Supreme Court of Georgia.

Witness my signature and the seal of said court hereto

affixed the day and year last above written.

CLERK.

31

Supreme Court of the State of Georgia

Clerk’s Office, Atlanta

June 14, 1977

I hereby certify that the foregoing pages, hereto attached,

contain a true and correct copy of the Application for

Certiorari, the order denying Application for Certiorari, the

Motion for Reconsideration and the order denying the

Motion for Reconsideration in the Supreme Court of Georgia

in Case No. 32199, Rosalyn A. Colodny et al v. R.A. Krause,

etc., as appears from the records and files in this office.

Witness my signature and the

seal of this Court hereto

affixed the day and year

first above written.

Clerk, Supreme Court of Georgia

32

APPENDIX E

ATLANTA, JANUARY 11, 1977

The Honorable Court of Appeals met pursuant to adjourn-

ment. The following judgment was rendered:

53160. Rosalyn A. Colodny et al v. R.A. Krause, etc.

This case came before this court on appeal from the

Superior Court of Fulton County; and, after argument had, it

is considered and adjudged that the judgment of the court

below be affirmed. Deen, P.J., Webb and Marshall, JJ.,

concur.

IT IS ORDERED THAT THE JUDGMENT OF THE

COURT OF APPEALS OF THE STATE OF GEORGIA

IN THE WITHIN STATED CASE, BE AND THE SAME IS

HEREBY MADE THE JUDGMENT OF THIS COURT.

THIS THE 23rd DAY OF MAY, 1977.

JUDGE FULTON SUPERIOR COURT, A.J.C.

BILL OF COSTS, $30.00

Court of Appeals of the State of Georgia

Clerk’s Office, Atlanta,

May 20, 1977

| certify that the above is a true extract from the minutes

of the Court of Appeals of Georgia, and that

RUBY CARPIO BELL

paid the above bill of costs.

Witness my signature and the seal of said court hereto

affixed the day and year last above written.

CLERK.

33

FILED IN OFFICE

MAY 23, 1977

DEPUTY CLERK SUPERIOR COURT

FULTON COUNTY GEORGIA

BOOK 831, PAGE 357

Court of Appeals

of the State of Georgia

CERTIFICATE OF SERVICE

I hereby certify that I have this date served the Respond-

ent with a copy of this Notice of Intent to Apply for Writ of

Certiorari to the United States Supreme Court by serving a

copy thereof upon its Counsel or Record, Charles M. Kidd,

Kidd, Pickens & Tate, 2130 First National Bank Tower,

Atlanta, Georgia 30303, by depository of same in the U.S.

Mail, properly addressed with adequate postage thereon to

assure delivery.

This day of August, 1977.

BELL & DESIDERIO, P.C.

BY:

Ruby Carpio Bell

Attorney for Applicants

3445 Peachtree Road, N.E.

Suite 900

Atlanta, Georgia 30326

Telephone: 404—261-6235