Greene v. Johnson

• Decision Date: 30 April 1984
• Docket Number: No. 67736,67736
• Citation: 318 S.E.2d 205,170 Ga.App. 760
• Parties: GREENE v. JOHNSON.
• Court: Georgia Court of Appeals

Page 205

318 S.E.2d 205

170 Ga.App. 760

GREENE v. JOHNSON.

No. 67736.

Court of Appeals of Georgia.

April 30, 1984.

Albert B. Wallace, William R.L. Latson, Carl A. Adcock, Jonesboro, for appellant.

Charles J. Vrono, Forest Park, for appellee.

BENHAM, Judge.

On June 1, 1977, appellee Johnson and appellant Greene executed a number of documents by which Johnson purchased Greene's accounting business. Included among the documents were two promissory notes executed by appellee in favor of appellant, and a restrictive covenant not to compete signed by appellant. When Johnson filed suit against appellant for alleged breach of contract, appellant counterclaimed for the unpaid balance of the two promissory notes. The trial court directed a verdict in the main action in favor of Greene, and the jury found for Johnson on the counterclaim. In this appeal appellant maintains that the trial court erroneously denied her motions for directed verdict and for judgment notwithstanding the verdict or, in the alternative, motion for new trial on the counterclaim. We agree and, accordingly, reverse.

The promissory notes in question were in the amounts of $24,000 and $30,000 respectively. The $24,000 note, on which interest was to accrue at the rate of 7% per year, was given "in accordance with and pursuant to the terms of a certain Restrictive Covenant not to Compete" executed by appellant Greene. According to the terms of the covenant, appellant agreed to refrain from engaging in public accounting or tax preparation in a six-county area for six years and to refrain from requesting, advising, or inducing clients of the sold business to terminate their relationship with that business and its new owner. The $30,000 note was given "in accordance with and pursuant to the terms of a certain Employment Agreement" entered into by the parties. That agreement guaranteed appellant Greene an annual salary of $5,000 for six years.

At trial appellee Johnson admitted the execution of the notes in question, his receipt of the business' fixtures, furniture, machines, equipment, supplies, and client files, and his failure to make payments on either note. He asserted failure of consideration as a defense to appellant's counterclaim.

" 'A plea of total or partial failure of consideration is a permissible defense to an action founded upon a contract. [Cit.] The burden of proving a prima facie case to recover (on the contract) is on the one claiming under the contract. The burden of sustaining the plea of total or partial failure of consideration is on the one asserting the defense. [Cit.]' " Toole v. Brownlow & Sons Co., 151 Ga.App. 292(1), 259 S.E.2d 691 (1979). "If [Johnson] relies upon a total failure he must show that the goods were wholly without value; if he relies upon a partial failure he must show the extent of the failure with such particularity and certainty that the jury (or judge) could, without guesswork or speculation, arrive at the amount. [Cits.] Where it appears from the evidence that the goods have some value, a plea of total failure of consideration has not been sustained [cit.], and absent proof of the extent of the failure, partial failure of consideration has not been sustained. [Cit.]" Coast Scopitone, Inc. v. Self, 127 Ga.App. 124(1), 192 S.E.2d 513 (1972).

Appellee Johnson's defense of failure of consideration was based upon evidence that Ms. Greene had approached at least one of her former clients subsequent to the sale of the accounting business and asked him to let her do his accounting. Appellee maintains that...