Woodall v. Beauchamp

• Court: Georgia Court of Appeals
• Writing for the Court: MARSHALL; DEEN, P. J., and WEBB
• Citation: Woodall v. Beauchamp, 236 S.E.2d 529, 142 Ga.App. 543 (Ga. App. 1977)
• Decision Date: 13 June 1977
• Docket Number: No. 53855,No. 3,53855,3
• Parties: W. S. WOODALL v. J. M. BEAUCHAMP et al

Page 529

236 S.E.2d 529

142 Ga.App. 543

W. S. WOODALL v. J. M. BEAUCHAMP et al.

No. 53855.

Court of Appeals of Georgia, Division No. 3.

June 13, 1977.

Burt, Burt & Rentz, D. D. Rentz, Albany, for appellant.

Beauchamp & Hedrick, William H. Hedrick, Albany, for appellees.

MARSHALL, Judge.

Appellant Woodall brings this appeal from the grant of summary judgment in favor of appellee Beauchamp. The facts reflect that a group of five men, including Woodall and Beauchamp, formed a corporation to operate a night club in Albany. In order to obtain operating expenses, two notes were signed by the corporation totaling approximately $40,000. Each of the corporate stockholders, including Woodall and Beauchamp, signed the notes as guarantors. As the corporation was originally organized, Beauchamp and another, named Taylor, were the majority stockholders and principal officers. Woodall was a minority stockholder. Pursuant to an agreement to purchase and sell, Beauchamp and Taylor sold their interests in the business to Woodall, making him the majority stockholder. In addition to a cash payment, Woodall, as a part of the purchase price, executed a written indemnity agreement releasing Beauchamp and Taylor from the obligation of guaranty on the two notes. Subsequently, the notes came in default and judgment was rendered against all the guarantors for the existing obligation remaining upon the two notes. This judgment is not in issue in this case.

Beauchamp brought a third-party cross-claim against Woodall based upon the agreement of indemnity. In turn, Woodall brought a cross-claim against Beauchamp, denying liability on the indemnity agreement and alleging that the agreement was executed based upon materially false representations by Beauchamp as to the solvency of the corporation, including both the debts owed by the corporation and the amount of income. Woodall admitted the execution of the indemnity agreement. There was a dispute as to whether Beauchamp had made any false representations or whether Woodall had negligently failed to make a proper investigation into the financial condition of the corporation. The trial judge granted summary judgments in favor of Beauchamp, and entered a monetary judgment in the amount of the indebtedness. It is from these rulings of the trial judge that the appeal emanates and to which the enumerations of error relate. Held :

1. We do not need to consider Woodall's contentions relating to whether a jury question was raised by the dispute over fraudulent representations or the absence thereof; or a second contention by Beauchamp, that, assuming such fraudulent representations were made, Woodall cannot complain thereof, because of his negligence in failing to make any efforts to verify the accuracy of the representations made by Beauchamp. In this case, the facts show that the corporation was formed and the business of the night club commenced sometime in 1972. In April, 1973, Woodall bought out the interests of Beauchamp and Taylor and commenced the operation of the business himself. He soon found out that there were many debts owed and that the corporation was losing money. Nevertheless, Woodall continued...