Atlanta Metallic Casket Co. v. Southeastern Wholesale Furniture Co.

• Decision Date: 14 September 1950
• Docket Number: No. 33135,No. 1,33135,1
• Citation: 82 Ga.App. 353,61 S.E.2d 196
• Parties: ATLANTA METALLIC CASKET CO. v. SOUTHEASTERN WHOLESALE FURNITURE CO., Inc. (ALABAMA)
• Court: Georgia Court of Appeals

Page 196

61 S.E.2d 196

82 Ga.App. 353

ATLANTA METALLIC CASKET CO. v. SOUTHEASTERN WHOLESALE FURNITURE CO., Inc. (ALABAMA).

No. 33135.

Court of Appeals of Georgia, Division No. 1.

Sept. 14, 1950.

Syllabus by the Court

Construing the allegations of the petition most strongly against the pleader, the petition does not allege facts sufficient to show that there was a joint enterprise entered into by the defendant and Calimode, Inc., nor does the petition allege facts estopping the defendant from denying such an undertaking.

Southeastern Wholesale Furniture Company, Inc., sued Atlanta Metallic Casket Company, doing business as Cannon and Company, for damages allegedly sustained by it by reason of an alleged breach of warranty in a sale to it by defendant of certain heating equipment. The allegations of the petition necessary to the consideration of the question to be decided substantially allege: that defendant is engaged and chartered to do the business of manufacturing and selling metal products; that defendant engaged in a joint enterprise with the attributes of a partnership for the manufacture and sale of oil floor furnaces known as 'Calimode' Furnaces; that photostatic copies of the written agreement between the defendant and Calimode, Inc., are attached to the petition marked 'Exhibit A and B' and are incorporated in the petition by reference; that Calimode, Inc., was engaged in and chartered to sell and manufacture heating equipment; that defendant and Calimode, Inc., operated and carried on their business relation as a joint enterprise with the attributes of a partnership as to third parties in the respects: that defendant and Calimode, Inc., made joint contribution to capital; that defendant was to furnish all raw materials, labor, engineering services, plant facilities, and shipping facilities; that Calimode, Inc., furnished the sales force, maintained a sales office and contributed a design of the Calimode Furnace; that all invoices directed the customers to make all remittances to the defendant and that defendant did receive said remittances; that all shipments of furnaces and all returns from customers were made at the plant of the defendant; that upon the sale of each furnace defendant retained a portion of the remittance which represented the defendant's manufacturing cost plus profit and that the defendant then remitted as to each furnace the amount due to Calimode, Inc.; that no other provision for payment to defendant existed other than the division of proceeds from the sales of furnaces; that a division of proceeds was made by the defendant to Calimode, Inc., out of each sale regardless of whether there were outstanding deliveries of furnaces which had not been paid for; that the defendant and Calimode, Inc., assumed the mutual risks of loss and profits depending upon the success or failure of the sales and cash receipts from the sales of said furnaces; that defendant recognized and considered Calimode, Inc., as its 'sales agency' and as to third parties, including petitioner, created the appearance of engaging in a joint enterprise with the attributes of partnership with Calimode, Inc.; that Calimode, Inc., had no facilities other than a small sales office; that Calimode, Inc., is a small family corporation being practically without any net worth whereas defendant is a large corporation with substantial net worth and a good credit rating, thus third parties including petitioner were thereby led to rely with confidence in purchasing said furnaces from defendant and Calimode, Inc.; that defendant is jointly and severally liable with Calimode, Inc., to petitioner for the damages sustained by petitioner in the purchase of defective Calimode Furnaces; that Calimode, Inc., is insolvent and is in receivership and that petitioner has not recovered by judgment or otherwise any damages from Calimode, Inc.; that defendant, acting through Calimode, Inc., by its agents and officers, sold and delivered to petitioner certain oil floor furnaces known as 'Calimode' floor furnaces; that petitioner purchased such furnaces for the purpose of reselling them as a wholesaler to dealers in Alabama; that the furnaces were represented and warranted by the defendant, acting through Calimode, Inc., as being floor furnaces of proper design and construction as to be fit for the intended purpose of providing heat at homes and similar places; that on the contrary the furnaces were not fit for the use intended but in fact were worthless and completely defective in that the furnaces after being installed and in use for several days would clog up with soot, grease and smoke so badly as to require that the furnace be turned off; that although demands were made upon the defendant, acting through Calimode, Inc., its agents and officers, to correct the defects, the defendant, acting through Calimode, Inc., its officers and agents, did not correct the defects so as to make the furnaces function in a usable manner; that it was necessary for petitioner to replace to its dealers 33 Calimode Furnaces with furnaces of other makes and the cost of those replacements was $3,980.11, being the reasonable market value therefor; that petitioner was further injured thereby in enumerated particulars. Exhibit A attached to the petition was as follows: 'Calimode, Incorporated, General Offices, Atlanta, Ga. August 19, 1947, Cannon and Company, 216 Elliott St., N.W., Atlanta, Georgia, Attention--Mr. R. A. Cannon, Subject--Open Account Shipments, Dear Mr. Cannon: Referring to our conversation of yesterday we are outlining in this letter a procedure for handling the invoicing of orders on OPEN account whereby Cannon and Company will be fully protected and yet not have to be concerned with the details of invoicing, mailing, etc. In other words, Calimode, Inc. will handle all of the office detail and Cannon and Company will manufacture and ship Calimode equipment. Shipments will be made by Cannon and Company for the account of Calimode, Inc. Calimode will bill the customer and every such account so billed shall be assigned to Cannon and Company. Each invoice shall carry, prominently marked thereon, a notation to the effect that the account has been so assigned, and that payment must be made directly by the debtor to Cannon and Company. Settlements between Cannon and Company and Calimode, Inc., will be made semi-monthly as per paragraph 9 below. 1. Calimode, Inc. will make out invoices as orders are received. 2. We will send you shipping instructions, bills-of-lading, and address labels fully executed for each individual shipment, and with this a copy of the customer's invoice for your Bookkeeping Department records. 3. Cannon and Company will make...