Nat'l Manufacture &. Stores Corp. v. Dekle

• Decision Date: 15 February 1934
• Docket Number: No. 23171.,23171.
• Citation: 48 Ga.App. 515,173 S.E. 408
• Court: Georgia Court of Appeals
• Parties: NATIONAL MANUFACTURE &. STORES CORPORATION. v. DEKLE.

48 Ga.App. 515

173 S.E. 408

NATIONAL MANUFACTURE &. STORES CORPORATION.

v.DEKLE.

No. 23171.

Court of Appeals of Georgia, Division No. 2.

Feb. 15, 1934.

Syllabus by Editorial Staff.

Error from City Court of Savannah; Davis Freeman, Judge.

Action by J. R. Dekle against the National Manufacture & Stores Corporation. Judgment for plaintiff, and defendant brings error.

Reversed.

Statement of facts by the court:

Dekle sued National Manufacture & Stores Corporation for $600 and interest, representing two monthly salary installments of $300 each, as manager of its furniture business in Savannah, Ga., under an alleged year to year contract from July 13, 1927, at an annual salary of $3,600. He obtained a verdict and judgment for the amount sued for. The petition alleged: "That said contract expired on the 13th day of July in each and every year, and that said defendant, by allowing your petitioner to continue in its employ after July 13, 1929, and allowing him to enter upon another year of service, ratified, confirmed, and renewed said contract for another year, and became bound to employ your petitioner up until the 13th day of July, 1930;" that he was discharged over his protest without cause, and "in breach of the contract of employment, " on August 14, 1929. It further alleged: That on April 11, 1927, he gave to the defendant's assignors an option to purchase the furniture business that he was then conducting, which option was exercised and consummated on July 13, 1927; that attached to the option was the employment agreement, both of which were assigned to and accepted by the defendant. By amendment he set forth: "That the considerations moving your petitioner to sell his business to defendant were that the defendant was to pay your petitioner the purchase price as follows: 85 per cent. cash, and the balance in shares of Class A stock in the corporation to be formed, the exact number actually given to your petitioner being 150 shares, said stock to be of the par value of $100;" the assumption of "petitioner's lease on the premises then occupied by petitioner in the conduct of his business"; and the employment of "your petitioner as manager of the business which your petitioner was selling in Savannah for the period hereinabove specified and at an annual salary of $3,600." The option bore date of April 11, 1927, described the assets, and provided that the amount to be paid therefor in cash should be 85 per cent. of the purchase price, the balance to be paid by transferring an amount of the Class A 7 per cent. cumulative stock of a corporation to be formed by the purchaser and others, which class of stock was to have no voting power except in case of default for four dividend periods, and was to be "callable at any dividend period * * * at $101 per share, plus any accrued dividend." The plaintiff also undertook not to go into a similar business for ten years within 200 miles of Savannah, "except as might or may be in connection with the purchaser herein." The original option in evidence appears to contain no other reference to any employment of the plaintiff, although the petition pleaded that the employment agreement was "attached to said option and made part thereof, " and although such an agreement is referred to in other pleadings. The agreement mentioned seems to be contained only in a letter, dated July 13, 1927, signed by the defendant, addressed to the plaintiff, as follows:

"The right and option you gave us April -- 1927, to purchase the properties and assets of your business operated in Savannah as Dekle Furniture Company upon terms stated therein having been exercised by us, and said purchase being now in process ofconsummation, we desire before same is completed to again refer to and confirm "Our agreement with you of April -- 1927, with reference to your employment by us as Manager of the business which we propose to continue at Savannah and to acknowledge said agreement to be part and parcel of and predicated upon the same consideration as the agreement of bargain and sale of said business and assets this day executed.

"The agreement of April -- 1927, above referred to being as follows:

"Should this option be exercised, the purchaser agrees to employ the seller as manager of the business at Savannah at an annual salary of not less than $3,600, payable in monthly instalments of $300 each, and agrees also that, in event the seller at any time during such period is relieved of his duties as such manager without cause, to buy his 150 shares of Class A stock in the proposed corporation for cash at and for the purchase price of $101 per share.

"This stipulation as to employment, salaries, etc. attached to and made a part of this option, was made and executed before signature. This --day of April, 1927."

The evidence does not indicate that the provisions of this letter were included in or attached to the option as originally executed. The defendant demurred to the petition and its amendment upon the ground that it set forth no cause of action. The answer denied all indebtedness, and alleged that the plaintiff was discharged for cause. It further set up that "it was expressly understood and agreed * * * that plaintiff should not be employed for any fixed term, but that his services could be dispensed with at any time with or without cause, " as set forth in the letter of July 13, 1927, when the agreement was consummated, and also that the "negotiations and agreement as to the employment" are set forth in two additional letters, one of April 15, 1927, from the plaintiff to the purchaser, and the other of April 16, 1927, in reply.

The letter of April 15 was as follows: "Referring to our prospective trade, I have gone over the matter thoroughly with my attorney, also my banker, Mr. Hugo Frank, and they are both of the opinion that inasmuch as I would have no contract with you as manager, that I should have the option of turning in my block of Class A stock, and to be paid for same in cash at the price of $101 per share, provided I should be displaced as manager within 5 years from date of sale. You can appreciate my position Mr. Hirsch, for if I should be let out for any reason, I would need all available assets in order to establish myself in some other line. Furthermore you would not yourself want $15,000 of your money invested in Class A stock with no control or voting power whatever in connection with it. Kindly advise me by return mail if you could not include the above in your option, as it would certainly make it more attractive to me. Kindly let me hear by return mail what you think of this proposition, and my answer will be forthcoming without any further delay, and whatever I do will be final."

The reply of April 16 read: "I acknowledge receipt of your letter of the 15th. I cannot enter into the stipulation you suggest. I will, however, vary the option to this extent--if you are relieved of your position with the Company without cause, we will buy your Class A stock. If you voluntarily leave, or the board of directors decide to ask for your resignation on account of your failure to perform your duties, then in that event we cannot redeem. As stated, we will buy your stock if you are relieved of your duties without cause. If the above is satisfactory to you, you can have it inserted in the option before you return it to us."

These letters and averments of the defendant appear not to have been attacked by any pleading of the plaintiff.

The plaintiff testified that he sold his Class A stock to a third person within three or four months after the sale of the business to the defendant, and that he did not own this stock at the time of the suit, and could not have called on the defendant to pay him $101 a share for it; that he sold it because he "did not like the management especially, the way the business was being handled, and thought sooner or later it might be worth a great deal less than it was at that time, " and "I had an opportunity to close it out, which I did at a different price, " and "I consider the money I obtained for that Class A stock as part of the purchase price of my business"; that at the time of the trial, "Class A is not worth anything"; that "after considerable negotiations, they employed me for a year at $3,600; the salary was to be $3,600 a year, payable monthly"; that "the option was signed April 11, but I did not send it on to them; there were negotiations after that, and it was sent to them at a later date--after that date, additions to the option were made"; that he completed the transaction with the defendant on July 13, 1927, and continued in its employment twoyears and a month or two before his discharge, "had started over into the third year"; that at the time of closing the transaction, "I took from them a contract or letter authorizing the agreement of employment, " and "this is the letter" (referring to that of July 13, 1927); that "this contract was never modified or changed in any way"; that, in accordance with the option, 85 per cent. of the purchase price was paid in cash, and the Class A stock was delivered to him.

Upon the issue as to whether the plaintiff was discharged with or without cause, the evidence was conflicting. Counsel for the plaintiff in error as to this make the concession and contention stated in the decision.

The trial court eliminated all issues in the case except the question of whether the plaintiff was discharged for cause, and gave the instruction referred to in the decision.

In addition to the general grounds, there are special grounds of exception to the charge as stated, and exception to the exclusion from evidence of the two letters of April 15 and 16, 1927, because they, with the letter of July 13, 1927, "measured the rights of plaintiff and prevented any recovery by plaintiff in the present suit, " confining "his right of recovery to the option of turning in) his block of Class A stock and to be paid $101 per share, provided he should...