Sanders v. Stewart, 59186
| Decision Date | 19 February 1980 |
| Docket Number | No. 59186,59186 |
| Citation | 153 Ga.App. 810,266 S.E.2d 801 |
| Parties | SANDERS v. STEWART et al. |
| Court | Georgia Court of Appeals |
Furman Smith, Jr., Atlanta, for appellant.
Sometime in the spring of 1977 Larry Stewart responded to an advertisement by James E. Sanders, Jr., a self-styled business broker and consultant, relative to the sale, by and through the broker, of a small grocery store located in Chestnut Mountain and known as Chestnut Mountain Shopette. The store was owned by one Alfred Hewett who leased the real property from another. During the process of negotiations the First National Bank of DeKalb County foreclosed on the store, and Hewett went into bankruptcy.
Eventually, a sale was consummated with Stewart in which the store, allegedly containing certain inventory and equipment, was purchased with a down payment of $4,000 to the bank, supposedly the holder of the first lien, and Stewart executed on June 29, 1977, a promissory note in the amount of $3,000 to Sanders with interest from maturity until paid in full at 9% per annum, repayable in 36 equal monthly installments of principal and interest in the amount of $95.45 each, beginning the first day of August 1977, and continuing on the first day of each month thereafter until paid in full. Simultaneously therewith an agreement was executed in favor of Sanders with reference to the inventory as well as "all accessories, parts and equipment now or hereafter affixed thereto or used in connection therewith." A financing statement was also executed as to all equipment of the debtor and "all accessories, parts and equipment" and all inventory now or hereafter acquired. A lease of the premises was also executed with the landlord for a period of five years but with a special stipulation therein that the premises were leased "exclusive of equipment which may be owned by landlord, inventory attached and marked Exhibit 'A'." (Emphasis supplied.) A dispute arose as to the ownership of the equipment. The bank admitted it did not own the two milk coolers. An ice cream box was claimed by another and all other equipment was claimed by the landlord. Stewart never received clear title to any equipment.
Stewart operated the store for a number of months, ultimately losing the two milk coolers which were picked up under court order. Two payments were made on the note to Sanders, and Stewart refused thereafter to pay further, contending there was no certainty as to what equipment he had purchased.
On February 15, 1978, Sanders brought a foreclosure of personal property action against Stewart, attaching thereto the security agreement and notification by letter from an attorney with reference to acceleration of the note and the intent to seek attorney fees as well as the amount of the note. Stewart, as defendant, filed an affidavit of illegality, setting forth the various negotiations toward the purchase of certain inventory and equipment of the Chestnut Mountain Shopette, as well as the alleged representations by the plaintiff made during the negotiations that such inventory and equipment were pledged as security to the First National Bank of DeKalb County, the borrower had defaulted and gone into bankruptcy, and the court had awarded all equipment to the bank. Defendant contended that the plaintiff was a broker for the bank to sell such equipment and inventory, and had advised him the lien of the bank was the only encumbrance on said equipment and inventory, all other claims having been disposed of by the bankruptcy proceedings. He alleged that he executed the note and security agreement believing the plaintiff's representations to be truthful. Affiant further stated in the affidavit that subsequent to the execution of the note and security agreement and making payments as provided therein, certain creditors of the original owner of the equipment came forth to repossess said equipment, and he alleges that the representations made by the plaintiff were fraudulent and for the purpose of inducing him to enter into a sales agreement with plaintiff and further that the contract between plaintiff and affiant is unenforceable due to a total failure of consideration. Defendant also filed a counterclaim contending that he had paid two monthly installments and had contractually committed himself to pay the sum of $3,420 based upon the fraudulent representations by the plaintiff made for the purpose of inducing him to enter into a contract with plaintiff and sought damages in the sum of $190, punitive damages in the sum of $10,000 and $500 attorney fees. Defendant also executed a bond as principal with one Paul J. Miller as security in the sum of $2,500, the obligation conditioned upon the return of certain personal property claimed by the plaintiff when called for by the levying officer upon the foreclosure of a certain lien executed by the defendant to the plaintiff. Thereafter, plaintiff amended his complaint to add Paul J. Miller as a party defendant alleging that defendant Stewart closed the Chestnut Mountain Shopette, sold or otherwise disposed of all of said inventory so that said inventory cannot be delivered as provided in said bond and also alleged that the defendant Stewart is insolvent.
The case proceeded to trial, and the jury returned a verdict in favor of the defendants. The judgment followed the verdict, and the plaintiff appeals. Held :
1. The evidence here was in conflict as to whether or not the plaintiff was the agent (broker) for the bank, the defendant (Stewart), or both, or merely an independent broker representing only his own interest; and also as to whether the plaintiff had been employed as a consultant to advise defendant as claimed with reference to the purchase of the grocery store. The evidence is also in conflict as to what the defendant had purchased and what he was to pay for the goods and as to who actually owned the alleged goods he wanted to purchase (inventory and/or equipment). There is also conflict as to whether or not he indeed purchased any equipment, although he claims he paid $4,000 for the inventory and was to pay $14,000 for the equipment and did pay the $3,000 note as partial payment for the equipment, the commission payable to Sanders by the bank. Defendant did operate the store for some months selling most of the inventory and taking the remainder (approxima...
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