Goldfarb Novelty Co. of Fla. v. Vann

• Decision Date: 10 April 1957
• Citation: 94 So.2d 845
• Parties: GOLDFARB NOVELTY COMPANY OF FLORIDA, Inc., a Florida Corporation, Philip Goldfarb and Saul B. Goldfarb, Appellants, v. David VANN, Appellee.
• Court: Florida Supreme Court

Page 845

94 So.2d 845

GOLDFARB NOVELTY COMPANY OF FLORIDA, Inc., a Florida Corporation, Philip Goldfarb and Saul B. Goldfarb, Appellants, v. David VANN, Appellee.

Supreme Court of Florida, Division A.

April 10, 1957.

Rehearing Denied May 9, 1957.

Anderson & Nadeau, Miami, for appellants.

Theodore J. Sakowitz, Miami, for appellee.

THOMAS, Justice.

The appellee filed a complaint by which he sought an accounting of the transaction to which he and the appellants-Goldfarb and Goldfarb Novelty Company, a corporation were parties, and recovery of monies found to be due him. He asked also for a decree providing that upon payment of $750 the company deliver to him 25 shares of its stock or, in the event it developed that all stock of the corporation had been issued to the individual appellants, they be required to transfer to him that number of shares.

As a basis for this relief, the appellee alleged that he was employed as a traveling salesman by Goldfarb Novelty Company, unincorporated, a firm composed of the appellants, Philip and Saul B. Goldfarb, to sell to retail dealers giftware manufactured or imported by the firm. The employment lasted from June 1947 until August 1954 and during all that period, except the last year, the appellee was given exclusive right to sell the merchandise in ten states. While he was so engaged, continued the appellee, one of the individual appellants became desirous of developing a business in Florida and proposed to the appellee that he and both individual appellants enter the novelty and souvenir business in Florida and organize a corporation for the purpose. After some negotiation, during which one George J. Kotler entered the picture, it was agreed that the capital of the corporation should be $3,000 and that 100 shares of stock of no par value be issued for which the incorporators were to pay at the rate of $30 per share. Each of the Goldfarbs was to receive 32 1/2 shares, Kotler 10 shares and the appellee 25 shares.

It was agreed that the corporation would buy its merchandise from the original firm on credit; that the corporation would pay that firm $2500 each year for 'service and expense'; and that goods would be furnished to the corporation by the firm at cost plus ten per cent.

Appellee averred that it was agreed by the incorporators that he be employed as manager and salesman at a salary of $100 per week, and 25% of the net profits which would be paid at the end of the fiscal year. This arrangement was to cover the period of one year, from 1 September 1953 to 31 August 1954. The parties also agreed that Kotler would be employed as co-manager and salesman at a salary which was not stated in the complaint, plus 10% of the net profits to be paid at the close of the fiscal year. As a further consideration for the new employment, the appellee relinquished his right to sell for the firm in five of the states where he had originally been given exclusive representation, and also surrendered the right to sell in a sixth state except for two accounts. Release of this territory, he charged, reduced his annual income to the extent of $5,000.

All the plan was launched, asserted the appellee, but a month before the expiration of the year, during which the appellee was to serve as manager and salesman, he was excluded from the premises of the corporation.

Parenthetically, Kotler was not a party to this litigation to there will be no further reference to him.

The appellee represented that he had fully performed, and he charged that the corporation had violated the terms of the agreement by failing to account for the net profits and pay him his share of them, and had not paid his 'salary for the last two weeks of said fiscal year.' He estimated the profits amounted to $19,000 and he claimed 25% of that sum, or $4,750, and $200 for unpaid salary.

The appellee further alleged that he had repeatedly called upon the defendants for satisfaction and had offered to pay $750 for the stock he was to receive, but all his efforts had been unavailing.

The answers filed by the defendants were, in effect, general denials of the salient allegations of the complaint.

In the corporation's anwer, however, it was admitted that the four men had agreed to form the corporation and to distribute the stock as appellee had alleged. The answer contained the allegation that appellee had not paid for his stock, that he had worked during the time alleged, except that he was absent for several weeks during the period he was receiving compensation. It was charged that he voluntarily terminated his services. The corporate defendant denied any indebtedness to appellee but admitted it had not paid to appellee a percentage of its net profits. In an amendment this appellant claimed damages it suffered by reason of the appellee having entered direct competition while he was absent from his position.

To like effect was the answer of the appellants-Goldfarb.

We have examined the motions to dismiss and in them were raised only questions of jurisdiction of the subject matter and person and the sufficiency of the process or service. We have not discovered in these motions or the answers any specific basis for the present challenge that the arrangement was unenforceable because the negotiations did not culminate in the execution of a written contract.

Considering the complaint and answers together, it is clear that the capital stock of 100 shares was to...