Clark v. Bandy

• Decision Date: 11 September 1943
• Docket Number: 14616.
• Parties: CLARK v. BANDY.
• Court: Georgia Supreme Court

27 S.E.2d 17

196 Ga. 546

CLARK v. BANDY.

No. 14616.

Supreme Court of Georgia

September 11, 1943

Syllabus by the Court.

Regardless of whether a petition sets out a cause of action, if the plaintiff proves every fact charged, without at the same time disproving his right to recover by establishing the existence of other undisputed facts which show that he is not entitled to a verdict, it is not proper to award a nonsuit. On application of this rule of practice to the facts of the present record, the grant of a nonsuit was error.

Clark sued Bandy. It is recited in the bill of exceptions that on the call of said case for trial the judge overruled the defendant's demurrer, and announced that he would not try any question of the amount of recovery at this trial, but that he would submit to the jury the questions whether a contract of partnership was entered into between plaintiff and the defendant, and, if not, whether there was a contract between the parties to form a partnership, and breached by defendant, and if these issues were found in favor of the defendant that finding would terminate the case; however, if the jury should find either issue in favor of the plaintiff then the case would be referred to an auditor for the purpose of ascertaining the amount the plaintiff would be entitled to recover.

The first count of the amended petition as amended alleges as follows: In 1937 the plaintiff and the defendant who were brothers-in-law, were partners in a hotel business at Cartersville, Georgia, known as the Braban Hotel; and the defendant and Fred R. Prater were partners in a bedspread manufacturing business at Rome, Georgia. In December of that year such bedspread partnership was dissolved, and Bandy took over the business. Immediately thereafter, on or about December 5, 1937, the defendant proposed to the plaintiff the formation of a partnership under the following conditions Plaintiff would take over the active management and operation of the bedspread business at a salary of $125 per month, with the option to purchase from defendant a one-fourth partnership interest in the business at any time he saw fit on the basis of the net book value of such one-fourth interest as of the first day of January, 1938. Defendant proposed that he would finance plaintiff, and that plaintiff might pay for his one-fourth interest out of the profits of the business. Under those conditions plaintiff gave up the active management of the Braban Hotel business in Cartersville, where he owned one fourth and Bandy owned three-fourths, and took over the active management of the bedspread business in Rome. After operating the business for one year, plaintiff advised defendant that he desired to exercise his option under the agreement to purchase a one-fourth undivided interest in the business at the book value as of January 1, 1938. Defendant agreed thereto, and agreed that he would execute to plaintiff articles of partnership in accordance with their oral agreement. Defendant told plaintiff at that time that he believed that they should dissolve their partnership in the hotel business before articles of partnership should be prepared; whereupon plaintiff proceeded to surrender all of his interest in the Braban Hotel to defendant, and then moved his wife from Cartersville to Rome, and continued to manage the bedspread business, relying upon defendant to carry out his agreement the interest in the hotel which he relinquished being the active operation of the same. It was not alleged that plaintiff owned title to the hotel, or to any undivided interest in the title thereto, though he had contracted to purchase the same. Defendant never executed formal written articles of partnership with plaintiff; yet plaintiff continued to operate the business until about August 20, 1942, at which time the defendant repudiated the partnership contract, excluded the plaintiff from the business and the premises where it was located, and refused to account to plaintiff for any portion of the profits or the assets of the business. As of January 1, 1938, the net assets of the business were $70,363.33. As of August 20, 1942, the net assets of the business were approximately $220,000.

Plaintiff alleged that by reason of the oral agreement between himself and defendant he and defendant were partners; that he had left his one-fourth undivided interest in the profits in the business, and drawn only a small salary therefrom; and that at the time he was excluded from the business his interest in the business exceeded in value $35,000. He prayed for an accounting, and for judgment. Count two of the amended petition alleges substantially the same facts as have been just detailed, except that it alleges, that the contract between plaintiff and defendant was a contract to form a partnership to be consummated by the execution of formal articles of partnership; that plaintiff performed all of the obligations imposed upon him under said contract, but defendant failed and refused to execute formal articles of partnership; that on or about January 1, 1942, defendant told plaintiff that the business had been very profitable, and that he didn't feel that he should carry out the agreement to sell plaintiff a one fourth interest on the basis agreed upon, when the business had already earned for plaintiff more than that amount, and insisted that plaintiff negotiate with him a contract for a smaller interest or on a different basis; that plaintiff did negotiate with defendant, but they never reached any basis for settlement or agreement other than the agreement originally entered into between them; and that these negotiations, induced by the defendant, continued to about August 20, 1942, at which time defendant ordered plaintiff away from the premises where the business was conducted.

The pertinent portions of the testimony relating to the agreement between the partners were as follows: From the deposition of the defendant taken before the trial: 'I think I bought Fred Prater's interest in the partnership, took it over along the last of November, 1937. * * * I think it was about the last of December or first of January when I got in touch with Ernest and called him over and gave him a job. As I remember the gist of the conversation, our trade was this: I told him, 'I don't know whether the business will suit you or not, I have been thinking about this, and figure that your wife can look after the hotel, and I don't know whether this business will pay or not; but if you want to try it out, I will give you a job. I will start you off at $125 a month until we get straightened out here. Why, I will give you more money.' And I think it was run practically all that year; his salary remained at $125. About January 1 1938, I told Ernest this, I says, 'If the business works out all right and you want an interest in it, I will sell you up to twenty-five per cent. interest in it. I knew that Clark had no money or resources. He couldn't have bought it unless he saved some money, unless we come to some terms on how about selling the interest on credit. I didn't anticipate that he could save enough out of $125 a month to buy a one-fourth interest. However, his wife was working over there at the hotel, and with what they was getting over there it was quite a bit more than $125 a month. Out of the profits of the company ultimately would have been about the only way he could have paid for it unless he was more conservative than he was while he was there. * * * I told him if the business went over and he wanted an interest in it, I would sell him up to one fourth interest in it. He says, 'I will try it.' He came here and went to work at $125 a month, and also the proposal that if it worked out all right, and he wanted an interest, I would sell him up to one fourth interest. At the beginning of the year 1939 nothing was said between me and Mr. Clark as to consummating the partnership. During the year 1939 not anything was said about a partnership, or details pertaining to it or anything that I have any recollection of. Back in 1937 and when I made the trade with Mr. Clark, and when I told him I would sell him up to twenty-five per cent. interest in the business, there was not any discussion about terms or any thing; the only thing that was said was what I have stated. My invested capital as of the time Mr. Clark came over and took charge, I think it showed, after forming the new company or taking it over from Fred Prater, and taking all deductions that was possible off of material and depreciation, there was something over $70,000. That was not the figure I had in mind when I told Mr. Clark that I would sell him up to one fourth interest in the business. I wouldn't have had any thought of selling him an interest at only what it cost me. My total investment at Rome at that time was about $75,000 or $78,000. That is the figure I had in mind when I told Mr. Clark I would sell him up to one fourth interest. * * * After the discussion I had with Mr. Clark before January 1, 1938, there was no further discussion of the same subject-matter, not as far as drawing up any papers or anything. * * * The only thing that I ever remember was in 1940, with regard to the partnership, that I had a little talk pertaining to a lot of things, and that was mentioned. I mentioned that proposition that I made him when he went to work over there, the offer that I made that he could have a twenty-five per cent. interest in it. * * * I told him if it was successful and he wanted an interest in it, I would sell him up to twenty-five per cent. * * * That was in 1940. We failed of making a $30,000 profit that year by only $31.96. That was six months that I virtually operated it myself. It was understood between me and Mr. Clark during...