Yarborough v. Hi-Flier Mfg. Co.
| Decision Date | 27 November 1940 |
| Docket Number | 28421. |
| Citation | 12 S.E.2d 133,63 Ga.App. 725 |
| Parties | YARBOROUGH v. HI-FLIER MFG. CO. |
| Court | Georgia Court of Appeals |
Syllabus by the Court
Where oral agreement entered into in 1934 provided that broker should have exclusive sale of manufacturer's products in certain territory, and that agreement was to continue from year to year unless it was terminated by either party on or before July 1, of calendar year next preceding business season for sale of the products, the agreement was not to be performed within one year from the making thereof and was within the statute of frauds and void. Code 1933, § 20-401 subd. 5.
An oral contract which is within the statute of frauds because it is not to be performed within one year from making thereof may be taken out of the statute by part performance which would render it a fraud upon the party refusing to fulfill the contract if the court did not compel a performance. Code 1933, § 20-402.
That broker entered upon performance of oral agreement under which broker had exclusive right to sale of manufacturer's products in designated territory, which was void because it was not to be performed within one year and was therefore within statute of frauds, and made arrangements and entered into the business as broker had done for several years did not constitute such "part performance" as to take the agreement out of the statute of frauds where there was no showing of such loss to broker or benefit to manufacturer that would render it a fraud upon the broker for the manufacturer to fail to carry out the agreement. Code 1933 §§ 20-401, subd. 5, 20-402.
1. An oral agreement entered into in 1934, which provided that the plaintiff was to have the exclusive sale of the defendant's products in a designated territory and that the contract was to continue from year to year until and unless it was terminated by either party on or before July 1st of the calendar year next preceding the business season for the sale of the defendant's products, falls within the provisions of the statute of frauds, as an "agreement *** that is not to be performed within one year from the making thereof."
2. While an oral contract of employment, within the statute of frauds, may be taken out by part performance thereof where one party to the contract performs some act essential to the performance of the contract which results in loss to him and benefit to the other party thereto, the mere fact that one party entered upon the performance of the agreement, and made "his arrangements, and entered into the business of the defendant [other party] as he had been doing for many years for the 1939-1940 season," which shows no loss to him or benefit to the other party, was not sufficient to take the contract out of the operation of the statute.
W. A Yarborough sued out an attachment against Hi-Flier Manufacturing Company, a nonresident corporation. Thereafter the plaintiff filed a declaration in attachment from which the following appears: The plaintiff is a broker in the City of Atlanta, and for more than five years has had the account of the defendant and has represented the defendant in the "Southern territory," including Georgia (Par. 4) that he entered into a contract with the defendant to handle the defendant's goods in such territory, and it was "understood" that the contract was to be continuous from year to year "unless it was terminated by one of the parties on or before August of the calendar year next preceding the business season for the products of the defendant." The plaintiff further alleged that he had expended large sums of money in building up the defendant's business in the territory, and that the business was built up to such an extent that it was profitable to the plaintiff and the commissions earned by him averaged a net income to him of about $750 yearly; that there was no intimation or notice from the defendant of any intention to cancel the contract or discontinue the plaintiff's representation of the defendant in the territory for the year 1939-1940; that the plaintiff made all his arrangements and entered into the business as he had been doing for many years, for the 1939-1940 season, and that on September 29, 1939, he received a notice from the defendant that other arrangements had been made for working the territory and the plaintiff had been supplanted by another representative for the defendant therein; that this was in violation of the agreement, and that at the time the plaintiff received this notice he was actively engaged in representing the defendant in the territory and was actually taking orders for the 1939-1940 season. It was further alleged that it is the custom, which is well understood among brokers and manufacturers, that representation of a manufacturer by a broker is not to be terminated after the "season begins" and after the "broker representative" has entered upon the duties of representing the manufacturer for a year after the season opens. The plaintiff further alleged that the defendant violated the agreement by supplanting him in the territory without notice as required by the contract, and that the plaintiff has been thereby injured and damaged in the sum of $750. It was also alleged that the plaintiff stood ready and willing to perform, and notified the defendant, that he would perform all the duties as a representative of the defendant during the 1939-1940 season, and that he actually entered upon the performance of these duties, but that the defendant "absolutely refused to allow the plaintiff to carry out the contract between them" for that season.
The defendant demurred to the petition generally and upon various grounds of special demurrer. The judge sustained certain of the special demurrers and gave the plaintiff ten days in which to amend the petition. The order recited that the general demurrer was not then passed on. On February 19 1940, the plaintiff amended the original declaration and alleged that he represented the defendant in certain designated territory including the State of Georgia, that the terms upon which he represented the defendant were upon a commission basis of ten per cent of all merchandise sold in such territory for the defendant; that the contract between the parties was an oral agreement, "the terms of which are set out in this paragraph," that, specifically amending paragraph 4 of the original declaration, the plaintiff represented the defendant in such territory upon a commission basis by which he was to receive ten per cent of [upon] all merchandise sold by the defendant to the trade in that territory, that this agreement was oral and was to continue until terminated by written notice and either party desiring to terminate the agreement was to give such notice to the other party on or before July 1, in the year that it was sought to be terminated [end of paragraph 2 of this amendment]; that the plaintiff yearly sold and delivered about $15,000 worth of merchandise for the defendant in such territory, that his commission was approximately $1,500 a year, that it cost him approximately ten per cent of his commission to sell the merchandise in such territory; that he employed salesmen to assist him in representing the defendant in the designated territory, that for the last three years he has employed as many as three salesmen who assisted him in representing the defendant therein, that he received written notice from the defendant stating that the defendant had...
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