Summary
holding that an employee who actually performs services under an agreement that is terminable at will "may recover of the employer the compensation due him for the services rendered"
Summary of this case from Anthony v. Concrete Supply Co.Opinion
40686.
DECIDED JUNE 26, 1964.
Action on contract. Fulton Superior Court. Before Judge Pharr.
John E. Feagin, Sidney Haskins, for plaintiff in error.
Robert E. Knox, Sutherland, Asbill Brennan, D. R. Cumming, Jr., W. M. Hames, contra.
The trial court erred in sustaining the defendants' general demurrers and dismissing the petition.
DECIDED JUNE 26, 1964.
Gilbert D. Spindel sued National Homes Corporation and Knox Homes Corporation to recover sums allegedly due him under an oral contract, the nature of which will be more fully set out hereafter. The trial court sustained the defendants' general demurrers to the petition as amended, and the exception here is to that judgment.
The allegations of the amended petition, insofar as they are material to the issue of whether it was subject to the general demurrers, are as follows: Plaintiff and the defendant Knox Homes Corporation entered into an oral agreement in 1956, by which the plaintiff, who is an engineer specializing in designing houses, was retained as design consultant to the defendant. Under the agreement it was the plaintiff's duty to formulate plans and designs for homes to be precut and panelized in Thomson, Ga., for shipment to Knox dealers throughout the Southeastern United States. Defendant was to undertake a vigorous promotional program as to the new designs formulated by plaintiff and was not to jeopardize plaintiff's position by creating new designs of its own. "In accordance with this oral agreement numerous designs were prepared by plaintiff and accepted by defendants and utilized by them. The number of plans actually utilized and the number of shipments made under each design is a matter peculiarly within the knowledge of defendants. Further shipments made under plans bearing other insignia, but being essentially based on designs submitted by plaintiff with only minor changes have been made in large volume by defendants, the extent of which is a matter peculiarly within the knowledge of defendants." Plaintiff contends that, under the terms of the oral agreement, he was entitled to be compensated by the defendants for all of the designs utilized by the defendants. Defendant Knox agreed that it would pay the plaintiff a royalty fee of three-fourths of one percent of the "material package price of each unit sold, as billed to the ultimate user-purchaser and that [plaintiff] would be paid by Knox Corporation on the first day of each month." Plaintiff alleged that he proceeded according to the agreement and submitted to the Knox Corporation various designs which were utilized by it, based on which numerous prefabricated houses were sold.
Plaintiff alleged that it was the intention of the parties that the agreement would be reduced to writing, but that although numerous promises were made by the defendant Knox' agents, the agreement has never reduced to writing. Nevertheless, "up to and through the year 1959 Knox Corporation paid complainant substantial moneys purporting to be his royalty fees under the contract. Complainant alleges that not all royalty fees due him under the contract were paid by the defendants herein and that numerous designs and drawings submitted by complainant to Knox Corporation have been utilized by the defendants herein without the payment to complainant of the royalty fees to which he was entitled." Petitioner alleged that the failure of the defendants to report and remit all royalty fees due him and the utilization of plaintiff's designs under other names was fraudulently concealed from him and was not known to him until the summer of 1962; that in the summer of 1959, Knox Corporation, Knox Homes Corporation and National Homes Corporation effected a merger under which National Homes Corporation took over all the assets and enterprises of the Knox Corporation, and that National Homes Corporation is liable for the debts and obligations of Knox Homes Corporation; and that under the merger agreement National Homes Corporation was to take over and utilize the designs and engineering service furnished by the plaintiff to Knox Corporation, adapting the plaintiff's designs to its designs. Plaintiff alleged that the merger of the two corporations was the "vehicle of a fraudulent conspiracy designed to defeat complainant of the royalties to which he was entitled and to eliminate him from the picture completely, the defendant National Homes Corporation receiving the benefits of his labors, skill and efforts prior thereto." Plaintiff alleged that he had received no royalty payments since 1959, notwithstanding the fact that the defendant Knox Corporation since it had been taken over by National Homes Corporation had precut and prefabricated, sold and delivered numerous homes based on designs submitted by plaintiff; that the accounts between the plaintiff and defendants are long and complicated, and an accounting will be necessary to establish the monetary sums due the plaintiff on the royalty agreement, and that: "That dates and amounts of the sales of prefabricated houses are matters peculiarly within the knowledge of defendants herein, but complainant alleges that the total sum due him under the royalty agreement exceeds $150,000 (One Hundred Fifty Thousand Dollars)." The plaintiff prayed that there be a full and complete accounting between the parties, and that he have judgment against the defendants for the sum of $150,000 for actual damages.
While both general and special demurrers were filed by the defendants, the order of the trial court expressly sustained only paragraph 1 of the defendants' renewed demurrers, which was on the ground, "that admitting all properly pleaded allegations in plaintiff's petition, the same sets forth no cause of action." No cross bill complaining of the overruling of any special demurrers was filed, and the sole question thus presented for our decision is whether the petition was sufficient to withstand a general demurrer.
"`To be subject to general demurrer, a petition must be utterly lifeless.' Medlock v. Aycock, 16 Ga. App. 813 ( 86 S.E. 455)." Gunby v. Turner, 194 Ga. 378, 381 (2) ( 21 S.E.2d 640); Johnson v. John Deere Plow Co., 214 Ga. 645, 647 (1) ( 106 S.E.2d 901). While a promise may be a mere nudum pactum when made because it is lacking in mutuality, it may become binding on the promisor when the promisee furnishes the consideration contemplated by the promise. Peeples v. Citizens Nat. Life Ins. Co., 11 Ga. App. 177 ( 74 S.E. 1034); Ness v. Barber, 27 Ga. App. 417 ( 108 S.E. 812); Brown v. Bowman, 119 Ga. 153 (1) ( 46 S.E. 410). Even part performance by the promisee will render such a promise binding on the promisor. Fontaine v. Baxley c. Co., 90 Ga. 416 (1) ( 17 S.E. 1015). The test of mutuality in contracts is to be applied at the time the contract is to be enforced, and if the promisee has accomplished the object contemplated by the promise or offer by doing what was contemplated, thereby the promise is rendered valid and binding. Retailers Service Bureau v. Newman, Frierson c. Co., 40 Ga. App. 185 (2) ( 149 S.E. 89). As we construe the allegations of the petition in this case, the plaintiff has alleged an oral contract of employment at will for an indefinite time, performance of his duties thereunder, acceptance and utilization of the fruits of his performance and a refusal by the defendants to pay him in accordance with the terms of the agreement. Such an employment contract, even though it may not be performed within one year, is not within the statute of frauds, and when the employee has actually performed services thereunder he may recover of the employer the compensation due him for the services rendered. Brazzeal v. Commercial Cas. Ins. Co., 51 Ga. App. 471 ( 180 S.E. 853); Henderson v. American Hat Mfg. Co., 57 Ga. App. 10, 16 ( 194 S.E. 254); Van Houten v. Standard Fed. Sav. c. Assn., 93 Ga. App. 774 ( 92 S.E.2d 731).
It is clear that the contract here sued on was contemplated by the parties to be a severable one since the plaintiff alleges in his petition that the royalty fee of three-fourths of one percent of the material package price of each unit sold was to be paid by the defendant Knox Corporation on the first day of each month. Code § 20-112. Plaintiff, therefore, appropriately brought his action against the defendants for all breaches occurring up to the commencement of the action. Code § 20-1401.
While plaintiff alleged in his petition that he was entitled to an equitable accounting from the defendant in order to establish the monetary sums due him on the royalty agreement, this is insufficient to give equity jurisdiction to order an accounting, and since plaintiff alleges further that the number of units sold and the amount due him are peculiarly within the knowledge of the defendants, a plain case for a legal accounting is made. Burress v. Montgomery, 148 Ga. 548 (3) ( 97 S.E. 538); Code § 10-102.
The petition in this case was not utterly lifeless. The defendants could not admit the truth of all the plaintiff alleged and still escape liability, and the trial court erred in sustaining the general demurrer and dismissing the petition.
Judgment reversed. Felton, C. J., and Pannell, J., concur.