Bunch v. Garner

• Decision Date: 26 October 1922
• Docket Number: 7 Div. 326.
• Citation: 94 So. 114,208 Ala. 271
• Parties: BUNCH v. GARNER.
• Court: Alabama Supreme Court

94 So. 114

208 Ala. 271

BUNCH v. GARNER.

7 Div. 326.

Supreme Court of Alabama

October 26, 1922

Appeal from Circuit Court, Calhoun County; A. P. Agee, Judge.

Action by Arthur J. Bunch against J. G. Garner, as executor of the estate of R. E. Garner, deceased, for breach of a contract. After adverse ruling on the pleading, plaintiff takes a nonsuit and appeals. Affirmed.

J. J Willett, of Anniston, for appellant.

Knox Acker, Sterne & Liles, of Anniston, for appellee.

MILLER J.

Arthur J. Bunch, plaintiff below, appellant here, filed this suit against J. D. Garner as executor of the estate of R. E Garner, deceased, for damages for breach of a contract made and entered into by and between him and R. E. Garner, the testator.

The court sustained demurrers of defendant to counts 1 to 5, both inclusive, as originally filed and as amended; and demurrers to counts numbered 7 and 8, added by amendment, were also sustained by the court. The plaintiff took a nonsuit on account of these adverse rulings to him by the court on the pleadings. The court granted the nonsuit, dismissed the case and taxed the plaintiff with the court cost. This appeal is prosecuted from that judgment. The rulings of the court on the demurrers to the different counts of the complaint are the errors assigned.

Where it clearly appears on the face of the count of the complaint that the contract or agreement alleged to have been breached is obnoxious to the statute of frauds, it is subject to demurrer; and can be raised by demurrer either at law or in equity. If the contract as presented by the counts is void on account of the statute of frauds, then there can be no damages recovered for its breach, and its invalidity appearing in the count can be pointed out, and the defense to it interposed by demurrer. Strouse v. Elting, 110 Ala. 132, 20 So. 123; Thompson v. New South Coal Co., 135 Ala. 630, 34 So. 31, 62 L. R. A. 551, 93 Am. St. Rep. 49; Merritt v. Coffin, 152 Ala. 474, 44 So. 622; Conoly v. Harrell, 182 Ala. 243, 62 So. 511.

"Every agreement which, by its terms, is not to be performed within one year from the making thereof *** is void, unless such agreement, or some note or memorandum thereof, expressing the consideration, is in writing, and subscribed by the party to be charged therewith, or some other person by him thereunto lawfully authorized in writing." Section 4289, Code 1907.

Counts 1, 2, 3, and 4, as originally framed and filed and as amended, set out the agreement in full. As amended each states the agreement was in writing, ready to be signed, and R. E. Garner promised to sign it, but died before it could be signed. These counts, before they were amended, do not state directly that the contract is in writing, but it is set out in its very words and concludes in this way:

"In witness whereof the parties hereto have hereunto set their hands and seals on this _____ day of _____, 19___.

"Witness: __________. [L. S.]

"__________. __________. [L. S.]"

From this averment and the contents of the contract as it appears in full in each count, it is evident that it was in writing and was never signed by either party. The contract is exhibited, places for the signatures to it are shown in each count, and no signatures appear therein. The places for the signatures are blank. This will be construed under demurrer as affirmatively showing that no party signed the contract. Conoly v. Harrell, 182 Ala. 243, 62 So. 511.

This contract does not comply with the statute of frauds as it appears in counts 1, 2, 3, and 4, as originally filed and as amended, because the contract was not subscribed by R. E. Garner or some other person by him thereunto lawfully authorized in writing. Section 4289, Code 1907. This written agreement was not subscribed by R. E. Garner or his duly authorized agent in writing. It was subscribed by no one. This court, in White v. Breen, 106 Ala. 172, 19 So. 62, 32 L. R. A. 127, said:

"In short, all that the law demands is a written statement of the essential elements of the contract over the signature of the party sought to be charged, or his duly authorized agent, so that the establishment of the contract be not left to oral evidence."

Was the agreement, alleged to have been breached by these counts, by its terms not to be performed within one year from the making thereof? It is alleged that it was made on or about January 1, 1919. The plaintiff and defendant's testator agreed to organize with a third person, to be selected by deceased, a corporation with authorized capital of $100,000, and paid-in capital of $30,000, to engage in general mercantile business in the city of Anniston, and to establish from time to time afterwards stores in other cities and towns. R. E. Garner was to cause to be subscribed $29,900 of the paid-in capital stock, and plaintiff $100 thereof. The corporation was to rent for five years, from R. E. Garner, a store building in Anniston for the establishing of its first store, and it was to pay him monthly $150 rent for five years for the building. The plaintiff, Arthur J. Bunch, was to be the general manager of the corporation, and was to give his entire time and attention to its business, and was to receive as his compensation for his said services an amount equal to one-half of the net profits. He shall be guaranteed compensation of $3,000 per year, payable monthly, regardless of the earnings of the corporation.

"The contract of employment between the corporation and said Bunch shall run for a period of five years from the beginning of business of said corporation."

The plaintiff seeks by these counts to separate the agreement to form the corporation from the agreement to serve and manage the corporation. It appears from the contract that his agreement to serve the corporation was the consideration of plaintiff's intestate agreeing to form the corporation. The plaintiff's real interest, outside of his $100 stock in the corporation, was his employment to serve it for five years at a guaranteed annual salary of $3,000, payable in monthly installments, and his one-half interest in the net profits during that time.

In Bain v. McDonald, 111 Ala. 272, 20 So. 77, Chief Justice Brickell, wrote:

"The promise cannot be dissevered from the consideration; and, to support the present action, the plaintiff, of necessity, must have shown the agreement in its entirety. Lapham v. Whipple, 8 Metc. 59. An entire agreement cannot be within the statute of frauds as to a part, and without it as to the residue. Atwater v. Hough, 29 Conn. 508. In Browne on Statute of Frauds (5th Ed.) § 140, the principle is stated: 'It is clear that if the several stipulations are so interdependent that the parties cannot reasonably be considered to have contracted but with a view to the performance of the whole, or that a distinct engagement as to any one stipulation cannot be fairly and reasonably extracted from the transaction, no recovery can be had upon it, however clear of the statute of frauds it may be, or whatever the form of action employed. The engagement in such cases is said to be entire and indivisible."' It appears the parties contracted with a view of forming a corporation and for plaintiff to serve and manage the corporation, and the deceased to finance it. The agreement to form and to serve the corporation and to finance it was made in its entirety by the parties, and a severance of the agreement would do violence to the very intention of the parties. The agreement on its very face is entire and indivisible. The various parts of the contract are inseparably interwoven; and cannot be separated into independent parts without doing violence to the real intention of the parties. It is evident there would have been no such agreement between the parties to organize this corporation, to run a mercantile business for five years, without the agreement of plaintiff to serve and manage it for five years, and without the agreement of R. E. Garner to furnish the money to maintain it for five years.

This contract as it appears in counts 1, 2, 3, and 4, as originally filed and as amended, is...