Stein Steel & Supply Co. v. Briggs Mfg. Co., 40831

• Court: Georgia Court of Appeals
• Writing for the Court: EBERHARDT; BELL, P. J., and JORDAN
• Citation: Stein Steel & Supply Co. v. Briggs Mfg. Co., 138 S.E.2d 910, 110 Ga.App. 489 (Ga. App. 1964)
• Decision Date: 29 September 1964
• Docket Number: No. 40831,No. 3,40831,3
• Parties: STEIN STEEL & SUPPLY COMPANY v. BRIGGS MANUFACTURING COMPANY

Page 910

138 S.E.2d 910

110 Ga.App. 489

STEIN STEEL & SUPPLY COMPANY v. BRIGGS MANUFACTURING COMPANY.

No. 40831.

Court of Appeals of Georgia, Division No. 3.

Sept. 29, 1964.

Rehearing Denied Oct. 15, 1964.

Syllabus by the Court

1. (a) To constitute a binding agreement of accord and satisfaction an agreement to accept a return of merchandise previously sold on open account must be supported by a valid consideration.

(b) The breach of an exclusive distributorship agreement is not a consideration supporting an agreement that merchandise might be returned for credit unless the exclusive distributorship agreement itself is valid and binding.

2. A general demurrer to an amendment to a pleading may be filed at any time before verdict.

3. It is within the discretion of the trial judge as to whether he will entertain a second motion for summary judgment, the first having been denied, particularly where there has been a material change in the status of the pleadings after denial of the first motion.

This case began as a simple suit on an open account but has become procedurally complicated. Stein's answer to the suit was a general denial and a cross action based on the following facts: The parties had orally agreed that defendant was to be the exclusive distributor for plaintiff's products in the metro-Atlanta area. Stein gave up its exclusive distributorship of another line, and allowed plaintiff to place a display on its premises. Plaintiff was to furnish and pay two salesman but furnished only one. Plaintiff (Briggs) then notified Stein that another dealer was to be co-distributor of its products, whereupon Stein notified plaintiff that this would be in breach of their contract. When plaintiff would not continue Stein as exclusive distributor defendant demanded and plaintiff agreed that Stein might return for credit the Briggs merchandise then on hand at defendant's warehouse. An inventory was taken in September, 1959, and plaintiff requested Stein to send portions of it to certain other dealers. In August, 1960, the remaining inventory was still in defendant's warehouse and defendant asked for shipping instructions, stating, in the alternative, that it would have to begin charging storage on the merchandise. Defendant prayed in its cross action for judgment for storage charges accruing after the request for shipping instructions and the excess of the value of the inventory over what its account with plaintiff showed.

Plaintiff's general demurrer to the cross action only was sustained. Defendant then amended its answer by including the same facts as had been alleged in the cross action. Plaintiff moved for a summary judgment on the basis that the sustaining of the demurrer to the cross action was an adjudication that the facts alleged did not constitute a defense to the plaintiff's suit and that the cross action further admitted that plaintiff was due the sum sued for. The motion was denied. After a lapse of some nine months, the plaintiff demurred to the amendment to the answer. The demurrers were sustained over defendant's written motion to dismiss the demurrers as filed too late. Plaintiff again moved for summary judgment, attaching affidavits in support of its suit on open account. Defendant responded with an affidavit again setting out the facts outlined above, relied on its general denial and urged that there was no provision of law for a second motion for summary judgment. Plaintiff's motion was granted.

Stein excepts to the sustaining of demurrers to its cross action and its amendment, the overruling of its motion to dismiss plaintiff's demurrers to its amendment and to the granting of the motion for summary judgment.

Fine & Rolader, D. W. Rolader, Atlanta, for plaintiff in error.

Gerstein & Carter, Joe W. Gerstein, Atlanta, for defendant in error.

EBERHARDT, Judge.

1. The central issue here and the only substantive one is whether the matter pleaded by Stein Steel in its cross action and its amended answer is a legally sufficient defense to an action on open account. These allegations show that Stein is relying on its agreement with Briggs to return the merchandise, as an accord and satisfaction. An accord and satisfaction is legally valid as a defense either when it has been fully executed or when it is separately enforceable under the usual contract rules.

(a) Absent a valid consideration there was no accord and satisfaction as to the unexecuted portion of the agreement that the merchandise might be returned for credit. Code § 20-1203; and see 1 EGL 160, Accord & Satisfaction, § 7. And this is true though there had been a part performance by a return or a shipping of a portion of it to others upon instruction from the creditor. Taylor v. Central of Ga. Ry., 99 Ga.App. 224, 108 S.E.2d 103, and citations. The contract being one admitting of apportionment, however, it may be observed that the part performance could be pleaded as a defense pro tanto if the debtor had not received credit for the merchandise actually returned or shipped to others. Code § 20-1103.

(b) The consideration relied upon by Stein is its rights under the alleged breach of the contract which it had for an exclusive distributorship when Briggs appointed another distributor in the same area for its products. For the breach to constitute a consideration supporting the agreement that merchandise previously purchased might be returned for credit it must appear that the exclusive distributorship agreement was valid and binding. Under a factual situation similar to that here presented it was held in Huggins v. Southeastern Lime & Cement Co., 121 Ga. 311, 48 S.E. 933 that the unexecuted portion of the agreement for return was unilateral and unenforceable. To the same effect is Mountain City Mill Co. v. Cobb, 124 Ga. 937, 53 S.E. 458, where Cobb was appointed exclusive distributor of 'White Satin' flour but the mill sold flour to one of his business rivals. Again, the court refused to allow Cobb's attempted recoupment in an open account action, holding the contract to be unilateral. Chappell v. F.A.D. Andrea, Inc., 41 Ga.App. 413, 153 S.E. 218 presented the same factual pattern and the court held that not only was the contract involved unilateral and not binding, but also was too...