Stoddard Cleaners, Inc. v. Carr, 22847

• Citation: 141 S.E.2d 434,220 Ga. 707
• Decision Date: 08 March 1965
• Docket Number: No. 22847,22847
• Parties: STODDARD CLEANERS, INC. v. James C. CARR.
• Court: Georgia Supreme Court

Page 434

141 S.E.2d 434

220 Ga. 707

STODDARD CLEANERS, INC. v. James C. CARR.

No. 22847.

Supreme Court of Georgia.

March 8, 1965.

Syllabus by the Court

The judgment sustaining the plea of the defendant was erroneous.

This is the second case in this court arising by reason of a transfer of assets by Car-Perk Services, Inc., to its president. In the first case the petition of Car-Perk Services, Inc., as amended, against James C. Carr, alleged: While the defendant was president of the plaintiff corporation it transferred to him assets consisting of two businesses, Rainbow Laundry and City Linen Service, together with described physical assets. The transfers of the businesses and assets were made for the sole purpose of enabling the defendant to hold and operate the businesses for the corporation and to enable the defendant to obtain a bank loan, which the businesses then required, the loan to be repaid from future earnings. The defendant, after having received the transfers from the corporation under such agreement, now claims to own the businesses individually, and refuses to return them to the corporation. The plaintiff prayed that the court decree the assets of the businesses held by the defendant to be impressed with a trust in favor of the plaintiff, and that the court compel a reconveyance by the defendant. The defendant contended that he had purchased the two businesses. The jury returned a verdict for the defendant and this court affirmed. For a full statement of the facts and issues in the former litigation, see Car-Perk Services, Inc. v. Carr, 219 Ga. 322, 132 S.E.2d 780.

In the present case Stoddard Cleaners, Inc., brought an action to recover from James C. Carr indebtedness of City Linen Service and Rainbow Laundry, the two businesses previously transferred by Car-Perk to Carr. It was alleged that a part of the consideration for the conyevance of the two businesses by Car-Perk to Carr was the agreement of Carr to pay the debts owed by the two businesses to creditors, and that Carr has failed and refused to pay the plaintiff the debts of the two businesses conveyed to him, and has denied any obligation for the debts. The plaintiff prayed for judgment upon its debts and a special lien upon the assets of Rainbow Laundry and City Linen Service.

The defendant's general demurrers to the petition were verruled. The defendant filed a plea setting out the former litigation (Car-Perk Services, Inc. v. Carr, 219 Ga. 322, 132 S.E.2d 780, supra), and contending that: 'The judgment in the previous case between these parties is binding on these parties as to all of the issues raised in the instant case.' The plaintiff made an oral motion to strike this plea of the defendant, and this motion was overruled.

Thereafter the trial judge sustained the plea, and held that the plaintiff was barred from bringing the present action. The judge wrote an opinion overruling the defendant's general demurrers and sustaining the plea of the defendant. In the opinion sustaining the plea it is stated in part as follows: 'It is the court's understanding that defendant contends that petitioner is a privy of Car-Perk Services, Inc. and is therefore concluded by the judgment in the case between Car-Perk and defendant for the reason that Car-Perk Services, Inc. could have asserted in that action that the contract between it and defendant required defendant to pay the debt to the present petitioner who is alleged to be a creditor of Car-Perk. From reading the case in 219 Ga. 322, 132 S.E.2d 780 it appears clear that Car-Perk Services could have asserted and litigated in that action the present contentions of petitioner. Therefore, the question is whether or not petitioner is precluded from now litigating that issue.'

The plaintiff excepted to the order denying its motion to dismiss the defendant's plea, and to the judgment sustaining the plea, and assigned error on these rulings.

M. H. Blackshear, Atlanta, for plaintiff in error.

Moreton Rolleston, Jr., Atlanta, for defendant in error.

HEAD, Presiding Justice.

In Car-Perk Services, Inc. v. Carr, 219 Ga. 322, supra, at page 325, 132 S.E.2d 780, at page 782, it is stated: 'Carr testified that there was absolutely no agreement that he reconvey the property; that the consideration of the sale to him was his assumption of the debts, agreement to pay them off and the note which he signed.' Under the defendant's testimony he agreed to pay the debts of the two companies acquired by him from Car-Perk and due to the...