W. E. Floding, Inc., v. Gunter

• Decision Date: 14 February 1927
• Docket Number: 17485.
• Citation: 136 S.E. 798,36 Ga.App. 450
• Parties: W. E. FLODING, Inc., v. GUNTER.
• Court: Georgia Court of Appeals

136 S.E. 798

36 Ga.App. 450

W. E. FLODING, Inc., v. GUNTER.

No. 17485.

Court of Appeals of Georgia, Second Division

February 14, 1927

Syllabus by the Court.

This was an action against a corporation to recover commissions alleged to have been earned by the plaintiff in consummating sales of the company's stock. The defendant, being the issuer, was not required to obtain a permit from the Georgia securities commission before putting the stock on the market. If the plaintiff was required to do so before proceeding, as agent or solicitor, to sell or offer the stock for sale there being nothing in the record to show that the parties when entering into the contract sued on, anticipated that the plaintiff would sell the stock or offer to sell it without complying with the law, the defendant cannot escape liability for commissions on sales made by the plaintiff, merely because the plaintiff, subsequently to the making of the contract, may have violated the criminal law in selling the stock without a license.

Error from Superior Court, Fulton County; E. D. Thomas, Judge.

Action by N. U. Gunter against W. E. Floding, Incorporated. Judgment for plaintiff, certiorari by defendant to superior court was refused, and defendant brings error. Affirmed.

Candler Thomson & Hirsch and Welborn B. Cody, all of Atlanta, for plaintiff in error.

A. E Wilson, of Atlanta, for defendant in error.

BELL J.

Gunter brought suit in the municipal court of Atlanta against W. E. Floding, Incorporated, to recover commissions alleged to have been earned by him in selling stock of the defendant corporation. The trial having resulted in a verdict and judgment in favor of the plaintiff, the defendant carried the case by certiorari to the superior court, the certiorari was dismissed, and the defendant excepted.

The sole question for determination in this court is whether the recovery was unauthorized because the plaintiff sold the stock in violation of the securities law (Ga. Laws 1920, p 250). Although it is true that the defendant corporation was the issuer, and therefore was not itself required to obtain a permit from the securities commission for the sale of its stock before putting the same on the market (Smith v. State, 161 Ga. 103, 129 S.E. 766), it seems that the plaintiff, before proceeding as an agent or solicitor to sell or offer for sale such stock, should have obtained a permit or license to do so in accordance with the securities act (Ga. Laws 1920, p. 270, § 36). In the absence of a compliance with this statute by him (assuming such compliance was necessary), the courts would probably refuse to enforce any contract against a purchaser for the sale of such stock, and, if the sales were merely executory and nonenforceable, the plaintiff might possibly be precluded from recovering because his services were of no value. McLamb v. Phillips, 34 Ga.App. 210, 129 S.E. 570; Witt v. Trustees Co., 33 Ga.App. 802, 127 S.E. 810; So. Flour Co. v. Smith, 31 Ga.App. 52, 120 S.E. 36; City of Jeffersonville v. Cotton States Belting & Supply Co., 30 Ga.App. 470 (7), 118 S.E. 442; Bartow Co. v. Adair, 29 Ga.App. 644 (4), 116 S.E. 342. But such is not the present case. The evidence authorized the inference that the sales were all executed and that the stock was paid for. If the...