Opinion
34352.
DECIDED FEBRUARY 3, 1953.
Year's support; from Clarke Superior Court — Judge West. September 12, 1952.
Milner, Stephens Bentley, for plaintiff in error.
C. O. Baker, Robert E. Gibson, contra.
1. Where, by the terms of a written contract, executed April 3, 1950, between P and C, it is provided that P and C are to purchase the interest of C's partner in a certain business for $2700, which business is then to be incorporated and operated by P and C, that P is to pay $2500 and C is to pay $200 on the purchase price of the partner's interest, which interest is to vest in P, that, prior to the incorporation of the business, C is to account to P for all the assets of the partnership and transfer such assets to the corporation, that upon incorporation all of the one hundred shares of stock shall be issued to P, but that when the business is free of debt except for current operation expenses incurred, P shall keep fifty-one shares of the stock and issue forty-nine shares to C for no further consideration than the performance of the contract, that C shall be employed as the full-time manager of the actual operation of the business and receive a salary of $75 per week, but shall have no management or control over the finances, cashiers, or bookkeepers, which shall be the province of the president, P, and that C's actions in hiring other employees, setting wages and hours, making purchases, and fixing prices shall be subject to the approval of P, who shall have final power over the operation of the business and its management, that the proceeds of the business after payment of all debts shall be applied first to return to P the $2500 invested by him plus legal interest thereon, and any remaining proceeds shall be divided in the ratio of forty-nine percent to C and fifty-one percent to P, which ratio shall apply in the event of liquidation of the business — such contract, properly construed, excludes by its terms any idea that P shall receive any compensation for his services as president of the corporation beyond his preferred claim to have his investment repaid with interest before the division of profits, his two-share advantage in the stock holdings, and his two percent advantage in the distribution of the profits.
2. Where, in an action upon the contract indicated in division 1, it appears from the evidence that C died on August 31, 1950, and his interest under the contract has been set aside as a year's support to his widow and minor daughter, the plaintiffs in such action on the contract, and P continued to operate the business, both as president and as manager, until the business was sold on May 14, 1951 — the trial court did not err in charging the jury as follows: "As far as Mr. Parrott, as a partner and as president of the corporation, was concerned in handling the finances, selecting, hiring, and directing the cashiers and bookkeepers, he was to receive no compensation whatsoever for that service. Construing this contract, he was not to be paid anything for that service. If he rendered it, he was not to be entitled to any compensation according to this contract. I do charge you, however, if he did any service outside of what is set out in the contract, such as going there and supervising the kitchen work or working in the establishment, and after Mr. Collins' death, any and all work other than what is contemplated and set out in this contract, he would be entitled to compensation; he would be entitled to a reasonable compensation for the services rendered." Such charge was in conformity with a proper construction of the contract and the evidence.
3. Where, in such a case as indicated in divisions 1 and 2, it appears from the evidence that under the plaintiffs' view they are entitled to $5078.91, and under the defendant's view they are entitled to only $2175.60 less $894.88 due by the plaintiffs to the corporation, less a personal debt due by the plaintiffs to the defendant, and it further appears that the defendant has paid himself a salary of $500 per month during the entire time the corporation was in operation, and had paid himself $1000 for services rendered in selling the corporate business, and there was also some evidence for the value of his services as manager of the business subsequent to C's death, the verdict of the jury in the sum of $3707.22 was within the range of the evidence and will not be disturbed by this court.
The trial court did not err in overruling the motion for new trial for any reason assigned.
Judgment affirmed. Gardner, P. J., and Townsend, J., concur.
DECIDED FEBRUARY 3, 1953.
Mrs. Virginia Collins, individually and as next friend for her her minor daughter, Virginia Joan Collins, brought as action against Charles Parrott Sr., to recover the equity of her deceased husband, J. W. Collins, in the Pig Drive In Incorporated, which had been set aside as a year's support for her and her minor daughter. The material allegations of the petition are substantially as follows: During his life J. W. Collins entered into a contract with the defendant on April 13, 1950, setting out the manner of operating the Pig Drive In, later known as the Pig Drive In Incorporated. According to the terms of the contract, J. W. Collins was to receive 49 percent and the defendant was to receive 51 percent of any money remaining after all debts had been paid. The $2500 advanced by the defendant and repaid to him before any division of the profits, was actually borrowed from National Bank of Athens and repaid with interest by the Pig Drive In Incorporated. The defendant sold the Pig Drive In Incorporated, or all of its stock to Delmer Dillard for $10,099.51. After all expenses of every kind had been paid, there was a balance of $5750, and there was a profit on the operation of the business of $8939.99, making a total of $14,689.99. 49% of that amount is $7198, which, less $894.88 claimed on accounts, and less $663.90 paid by defendant on funeral bill, leaves $5639.32 due the plaintiff.
The terms of the contract between the defendant and J. W. Collins are as follows: "J. W. Collins T. L. Collins Jr. are partners owning and operating a restaurant business known as Pig Drive-In which is conducted on premises they hold under lease from C. B. Brazzell, located at 1855 West Broad Street in Athens, Georgia. Legal action has been instituted by T. L. Collins Jr. to obtain a dissolution of said partnership and liquidation of the business. J. W. Collins has obtained from T. L. an offer by T. L. that he will sell his interest in the business for $2700 cash, the purchaser to assume the liability of T. L. on the debts of the partnership. The parties hereto now make this contract with a view to the purchase of T. L. Collins Jr.'s interest, to define the respective rights and obligations of the parties hereto in regard to such purchase and the future ownership and operation of said business.
"Charles Parrott agrees to pay $2500 of said purchase price and to assume the liability of T. L. Collins Jr. on the partnership debts. J. W. Collins will pay the remainder of the purchase price ($200) from funds of the partnership now in his possession or control. The interest of T. L. Collins Jr. shall be vested in Charles Parrott subject to the terms of this contract. The purchase of T. L.'s interest shall be consummated as soon as a transfer of the lease on the above premises shall be made to the corporation hereinafter mentioned, in a legally effective manner.
"The parties hereto shall as soon as practical incorporate said business under the name of Pig Drive-In Inc., unless such name shall not be available, in which event the corporate name shall be selected by Charles Parrott. All the business assets, both the interest of J. W. Collins and the interest purchased from T. L., shall be transferred to the corporation, which shall assume the liabilities. The corporation shall issue one hundred [shares?] capital stock, and all said stock shall be issued to Charles Parrott. Subsequently, when and if the corporation shall becomes free of debt except for current operating expenses incurred but not due, Charles Parrott shall convey to J. W. Collins 49 (forty-nine) shares of said stock for no further consideration than the performance of this contract, providing the said J. W. Collins is then managing the business under the terms of this contract and in conformity with its provisions.
"J. W. Collins shall be employed by the corporation as manager of said restaurant business, he to devote full time to said business, and to receive a salary of $75 per week. He shall manage and direct the actual operation of the business at the place of business, but shall have no management or control over the handling of finances, and all his actions in the matters of hiring employees, setting wages and hours, making purchase contracts and setting prices, shall be subject to approval of the corporation president, who shall have the final power over the operation of the business and its management. The handling of all finances shall be as directed by the president, who shall select, hire and direct the cashiers and bookkeeper, and those employees shall not be under control of J. W. Collins. However, J. W. Collins shall have free and full access to all records of finances at all reasonable times, but such records shall be kept under the direction and custody of the president or those authorized by him.
"Charles Parrott shall be president and sole director of the corporation so long as he is owner of the majority of the stock. Except for the transfer of the 49 (forty-nine) shares to J. W. Collins, no stock shall be transferred except after an opportunity given the other stockholders to purchase it at the price and terms for which it is sought to be transferred, unless such transfer is by devise or inheritance or gift.
"The employment of J. W. Collins as manager shall continue during good behavior and performance of duties at least until the transfer to him of the 49 (forty-nine) shares of stock, provided the business is not sooner liquidated or sold by the corporation. Said business shall be operated on a cash and carry basis both as to sales and purchases, except as authorized by the president, and until all debts are paid no dividends shall be declared. Said business shall not be sold or liquidated within twelve months from this date so long as a net profit is shown each month. If at the end of twelve months from this date the debts have not been reduced by at least five thousand dollars ($5000) the president may, at this option, sell or liquidate the business by public sale or private sale. The proceeds shall after payment of all debts, be applied first to return to Charles Parrott the $2500 invested by him plus legal rate of interest thereon from date of payment to T. L. Collins Jr. and any remaining divided [sic, dividend?] to go 51% to Charles Parrott and 49% to J. W. Collins. Such division and application of net proceeds shall apply to liquidation of the business at any time after this date while Charles Parrott is still holder of all the capital stock, and none has been transferred to J. W. Collins.
"Charles Parrott having agreed with T. L. Collins Jr. to purchase his interest and such agreement having been made on March 30, 1950 at 10 a. m., J. W. Collins shall account to Charles Parrott for all assets of the business as of said date and hour, and for all receipts and disbursements since then, and until the formation of the corporation and transfer of the assets to it, the records and moneys of the business shall be handled and controlled by Charles Parrott, and he as an individual shall have all the powers hereinabove agreed to be vested in the president of the corporation. J. W. Collins warrants that the debts do not exceed $8000 and that they have been fully disclosed to Charles Parrott prior to said date and time, and that all fixtures, equipment, supplies and stock used in connection with said business are partnership assets; except one ice box and the cooks' personal knives.
"All action taken under this contract shall be in contemplation of the assignment of the lease to the corporation, and if for any reason the corporation cannot get a valid assignment of the lease then the obligations of Charles Parrott hereunder shall cease and he shall be required only to restore or account for proper business use of partnership funds turned over to him. The costs and expenses of incorporation shall be an expense of the business.
"In witness whereof the parties have set their hands and seals to duplicate originals of this contract this April 3, 1950."
On the trial of the case, the jury returned a verdict of $3707.22 for the plaintiffs. The defendant's motion for a new trial, based upon the usual general grounds and one special ground, was denied and he excepted.