Piedmont Life Ins. Co. v. Bell
| Decision Date | 14 February 1961 |
| Docket Number | Nos. 1,Nos. 38540,2,38568,s. 38540,s. 1 |
| Citation | 103 Ga.App. 225,119 S.E.2d 63 |
| Parties | PIEDMONT LIFE INSURANCE COMPANY. v. O. A. BELL. O. A. BELL v. PIEDMONT LIFE INSURANCE COMPANY |
| Court | Georgia Court of Appeals |
Syllabus by the Court
1. A plea of the statute of frauds may be made in the defendant's answer, even though the petition alleges an exception to the statute of frauds, since the defendant is entitled to insist upon the plea remaining in the case so that if the exception is not proved the plea will bar the action.
2. Though a purported contract may be nudum pactum when made because the promisee is not under any obligation to perform the act requested by the promisor, where the promisee supplies the requested consideration a contract comes into existence and is mutually enforceable.
3. Where the oral contract calls for the payment of commissions on a series of sales, the contract is divisible, and the right of action arises at the time of each successive breach.
4. An allegation that all of the directors, stockholders, and officers of a corporation were present and were acting within the scope of their authority is, as against a special demurrer, a sufficient charge of action on behalf of the corporation.
5. 41 special demurrers are considered and disposed of in the opinion.
The plaintiff sued under an oral contract to recover approximately $400,000 alleged to be due. The petition alleges: that the defendant orally agreed with the plaintiff to employ his services to solicit subscriptions for the remaining portion of its initial 10,000 shares of authorized capital stock; that the plaintiff was to furnish his full-time services in this transaction and was to complete within two years the sale of the initially authorized capital stock; that as part compensation the plaintiff was to receive 10% of the purchase price of the shares, and as further compensation, if he succeeded in disposing of the initial stock issued, he would be granted the exclusive right until January, 1957, to solicit subscriptions and to sell the remaining 90,000 shares of the capital stock authorized under the defendant's charter at a stipulated price or at such other price as the defendant might fix from time to time. There are other allegations that the plaintiff fully performed the agreement for the sale of the initial stock subscription; that the defendant accepted the performance and paid the commission agreed upon; that the defendant carried out and performed the terms of the agreement until 1950 by allowing the plaintiff the complete and exclusive right to solicit subscriptions for the additional 90,000 shares, when in January, 1950, the defendant's president informed the plaintiff that after February 1, 1950, he would not be permitted to solicit subscriptions nor to sell any further shares, and thus the plaintiff was prevented from exercising the rights under the oral agreement which he had acquired. It is further alleged that the plaintiff stood ready to perform, but was prevented by the defendant, and that from time to time, beginning in 1950, certain amounts of the remaining 90,000 shares were sold, and that by virtue of this oral agreement being breached by the defendant the plaintiff became entitled to 10% of the sales prices, and that an amount approximating $400,000 was owing to the plaintiff for this breach. The petition prays for an accounting to determine the amount to which the plaintiff is entitled under the alleged oral agreement.
The defendant filed an answer and general and special demurrers, the substance of which is that the petition does not state any cause of action; that the contract as alleged is required by the statute of frauds to be in writing; that the entire action is barred by the statute of limitations, or that in any event as to breaches occurring more than four years prior to the filing of the petition the statute of limitations bars any recovery.
The plaintiff filed forty-four special demurrers to the defendant's answer, which, in the main, attack the answer on the insufficiency of the plea of the statute of frauds and the statute of limitations.
On a hearing, the trial court overruled the defendant's renewed and additional demurrers on all the grounds. The plaintiff's demurrers to the defendant's answer on three grounds were sustained, resulting in the striking from the defendant's answer the defenses of the statute of frauds and the statute of limitations. The remaining forty-one grounds of the plaintiff's demurrers to the defendant's answer were overruled. The defendant excepted to the order overruling the general and special demurrers and to the order sustaining the plaintiff's demurrer to the defendant's answer and the striking of the paragraphs of the defendant's answer pleading the statute of frauds and the statute of limitations.
The plaintiff filed a cross-bill excepting to the overruling of the remaining forty-one grounds of demurrer to the defendant's answer.
Robert S. Wiggins, Atlanta, for plaintiff in error.
Reeves & Collier, Rex T. Reeves, Merrell H. Collier, Atlanta, for defendant in error.
1. The defendant contends that the trial court erred in striking its defensive plea of the statute of frauds from the answer as pleaded in this language;
In McDougald v. Banks, 13 Ga. 451, the Supreme Court held that it is necessary to plead the appropriate section of the statute of frauds unless the pleadings of the plaintiff show that his case is not within the exceptions to the statute. Numerous cases since have stated or held that the statute of frauds must be pleaded or there must be a special plea to that effect or some similar language. See Hotel Candler, Inc. v. Candler, 198 Ga. 339, 346, 31 S.E.2d 693; Johnson v. Latimer, 71 Ga. 470.
In Wolf v. Arant, 88 Ga.App. 568, 571, 77 S.E.2d 116, the defendant interposed a general demurrer to the petition which in essence asserted that the promise or contract alleged in the petition was never reduced to writing 'within the meaning of the statute for the prevention of frauds, as codified in paragraphs 20-401 et seq. of the Code of Georgia.' The demurrer, apparently treated as a special demurrer, was held to be without merit in that it was incomplete and did not specify which provision of the statute of frauds required the contract to be in writing. In any event, the Wolf case is distinguishable from this one, since the plea here of the statute of frauds was made in the defendant's answer and not by demurrer.
From these cases, and numerous others, it appears that, although there is no statutory requirement for it, the statute of frauds must be raised by an affirmative plea, which must set forth the section of the statute relied upon, or there must be a timely motion for nonsuit, or objection to the testimony must be made so as to invoke a ruling in the trial court on the statute.
While it is to be noted that the paragraph of the defendant's answer under consideration which pleads the statute of frauds does not plead the section of the statute relied upon verbatim, it does by indirection clearly point to the requirement of the statute of frauds relating to contracts not to be performed in one year. Further, the plea in the answer which raises the statute of frauds refers to the allegation that the contract was oral, that it could not be performed within one year, and was, therefore, within the statute.
While it appears from the cases that the defendant must raise the defense of the statute of frauds by an affirmative plea, there are no cases holding that the plea may not be made in the answer. On the contrary, there is authority that a plea in bar, of which the statute of frauds is one, may be contained in the answer. Galloway v. Merrill, 213 Ga. 633, at page 634(3), 100 S.E.2d 443, and see Mendel v. L. F. Miller & Sons, 134 Ga. 610(1), 68 S.E. 430.
Under these circumstances we are constrained to accept as the just view that the defendant here has the right to have the plea of the statute of frauds remain in the case, even though there is an allegation in the petition which, if proved, would take the case out of the statute, for if there is a failure to prove the allegation, the defendant then has the right to judgment because of the statute. Failure to plead the statute is to waive it, since it is a plea in the nature of personal privilege, of which one can avail himself or not as one wishes. Draper, Moore & Co. v. Macon Dry Goods Co., 103 Ga. 661, 30 S.E. 566; Armour v. Ross, 110 Ga. 403, 413, 35 S.E. 787; 3 Williston on Contracts, 3d ed., § 527, at p. 718.
Accordingly, we think that this is a sufficient plea to raise the issue, and the trial court erred in sustaining the plaintiff's demurrer and striking the paragraph of the defendant's answer which asserted the defense.
2. The company urges strenuously that the oral contract alleged in the petition was wholly unilateral in character for the reason that it imposed no obligation upon the plaintiff now seeking to enforce it, and since there was no mutuality of obligation it was void and unenforceable and its general demurrer should have been sustained, not overruled, as the trial court did in this case.
The petition alleges that the company orally agreed with the plaintiff to employ his services to solicit subscriptions for the initial authorized capital stock, and that the plaintiff orally agreed with the defendant company to furnish the plaintiff's services and to devote his full time to soliciting subscriptions for the purchase of the shares of stock at the designated price until he had...
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