DECIDED FEBRUARY 28, 1952.
Complaint; from McDuffie Superior Court — Judge Perryman. September 6, 1951.
Randall Evans Jr., for plaintiffs.
W. F. Wimberly, Harris, Chance McCracken, Stevens Stevens, for defendant.
1. The contract sued on, for the transfer of the defendant's sales agency to the plaintiffs for a period of ten years, was required to be in writing to be binding on the defendant.
2. The correspondence between the parties did not show the terms of the alleged contract, and was insufficient as a writing to comply with the statute of frauds.
3. The acts of the plaintiffs in preparation for their performance of the parol contract were of no benefit to the defendant and were not in part performance of the plaintiff's obligations under any essential part of the contract, such as would take the contract out of the statute of frauds.
4. The trial judge did not err in granting a nonsuit.
DECIDED FEBRUARY 28, 1952.
Ed Cofer and T. W. Cofer brought this action for breach of contract against Wofford Oil Company of Georgia, a corporation, and the material allegations of their petition were substantially as follows: The defendant is engaged in the business of selling gasoline, oil, greases, tires, batteries, fuel oil, and accessories, and it operates through agencies in the various counties in this State, with certain territory assigned to each agent. The products of the defendant are sold to the agents, and the agents sell the products to the retail trade and receive a profit on such sales. The defendant and the plaintiffs agreed: (a) the Wofford Company's agency for the territory of McDuffie, Wilkes, and Warren Counties would be transferred to the plaintiffs on September 25, 1950; (b) an inventory would be taken of all stocks of merchandise on hand, and the plaintiffs would pay for it at the inventory price, not to exceed $6000; (c) the plaintiffs would furnish a tank-truck with which to deliver gasoline, oil, etc., and would supply all customers of the defendant in said three counties, and would use diligence to secure additional customers; (d) the plaintiffs would name agents to be placed in the defendant's filling-station properties in said counties, with certain exceptions; (e) the plaintiffs would pay all expenses of delivery of the defendant's products; (f) the gasoline would be sold to the plaintiffs at a price on which they could charge a profit of 2¢ per gallon; fuel oil would be sold at a price on which the plaintiffs could charge 3¢ profit per gallon, and all other products would be sold to them so that they would receive 7% of the gross sales as profits; and (g) the defendant's bulk plant at Thomson, Georgia, would be the principal place of business of said agency. During the negotiations, the defendant requested the plaintiffs to sell their grocery-store business, as it would be necessary to devote their full time to the gasoline business, and the plaintiffs let it be known that they were going out of business as grocers. They employed another clerk upon whom they could depend to turn the grocery business over to in anticipation of taking over said agency on September 25, 1950, and to become an employee in the oil business when the plaintiffs' store was sold. The defendant requested the plaintiffs to purchase a truck to be used in carrying on the affairs of said agency, and the plaintiffs purchased such truck at a cost of $1400, which truck has been of no service to the plaintiffs. The contract in question is a mutual contract, enforceable against both the plaintiffs and the defendant, and is confirmed by writings from the defendant. The plaintiffs have been put to trouble and expense in anticipation of their full performance thereunder. The damages by way of anticipated profits were laid at $45,000.
On the trial of the case, the plaintiffs' attorney testified as to the negotiations with Ed McDonald, the defendant's agent, leading to the alleged contract, as did Ed Cofer. Cofer's testimony showed a parol contract, substantially as alleged, between the defendant and the plaintiffs, and also the following additional facts: "Then we were to take an inventory of the goods that were not to be signed for and we were to pay for whatever the inventory showed, and he said that wouldn't go over $6000 . . As to who we were to pay for it, well, we were to make payment to Mr. Bob Johnson [who then had the defendant's distributing agency in question], I assumed, because it was his inventory . . The business at that time he said was making $625 [per month]. We discussed what the expense of delivering the gas would be; that was figured at $250 a month. With regard to whether or not the question of ten years entered into the proposition or not, well, Mr. McDonald and I talked about it, and we wouldn't take the business for any less time than that, not less than ten years, that is, unless somebody violated some of the terms of the contract.
"It was suggested to me that we sell the store so that we could give the oil business our full time, and we made some preparations towards doing that. I let it be known that we would sell the store after I had confirmed that contract, and I knew where there was a customer. And with regard to our stock of goods, we didn't buy as heavy as we could have if we hadn't thought we were going to sell the store; we let the stock run down, which was a part of our preparation for selling the store . . and when we found we had to replace those goods, we had to replace them on a higher market.
"Mr. McDonald did make a suggestion to us with reference to buying a pick-up truck; he said it would be very necessary for us to have a light truck to haul oils and greases and batteries and stuff over to the station at Washington, Georgia, on quick runs like that; and he knew that we were buying that truck. We bought that truck because he said it was necessary to do that. We bought that to use in the oil business; we had all that was necessary for the store at that time.
"Then we employed a clerk in our store . . so that my brother or I could be out all the time trying to build up the business, put all of our time in that, and then if we sold the business we were going to make a place for him in the oil business. That was the reason why we hired him. Mr. McDonald knew about that.
"I was going to buy the merchandise from the defendant and resell it at that kind of a price. It was going to be my merchandise; I was going to buy it and pay for it . . And then I was going to buy a tank-truck. I never bought the tank-truck, but we did buy the pick-up truck. I was going to use that for myself, to deliver the materials and the accessories, and whatever I delivered was my merchandise. I bought that truck at the suggestion of Mr. McDonald to use it in our business.
"We were under contract to order whatever gasoline we might want and that the defendant would sell to us at a price that we could add to that two cents profit on it . . As to the oil business I testified that our contract was for a ten-year period . . I didn't know that we were going to have to sign a written contract; I didn't think we were, and I was taking their word on it, and I was giving mine. I was going to get an oral ten-year contract." The plaintiff, Ed Cofer, also testified that the defendant repudiated the contract on or shortly before September 20, 1950.
The plaintiffs introduced in evidence the following letters, of which only the material portions are set out: From the defendant's agent, McDonald, to the plaintiffs' attorney, dated June 5, 1950: "I met Ed Cofer later and must say I was impressed by him and his brother. I am coming back the latter part of next week to talk further to them." From McDonald to the plaintiffs' attorney, under date of August 22, 1950: "As you know, we are most anxious to make the transfer of the agency as soon as possible, but have held off due to Bob's illness. I believe that you will agree that to have made the change too soon might have been unfortunate and put the Cofers under a serious handicap." From McDonald to the plaintiff's attorney, dated August 31, 1950: "I value your opinion and am going to follow out your suggestions. I am going to try to come over to Thomson the first part of next week and see if we cannot arrange for an immediate change. I want to talk to the Cofer boys and see how long they think they will need to take over. Our arrangement with Bob Johnson calls for five-day notice which means, of course, I would want the Cofers to be all set before we mail Bob his notice. If everything appears to be O.K. and Bob is sufficiently well I believe we can go forward with this change promptly." Postcard from McDonald to Ed Cofer, undated: "Talked to Bob all morning and naturally he wasn't happy about it. He hates like the deuce to give it up. Talk to him about his truck, etc. I explained to him that we came to you with the proposition, so not to hold it against you. I don't think he will. Naturally he thinks the company is unfair to him, etc., etc., etc! We'll shoot for the 25th and I'll let you know in a few days." From Cofer Bros. to McDonald, dated September 11, 1950: "Your postal card was received and we wish to thank you for the information therein contained. In accordance with your suggestion while here several days ago, and as set forth in the postal card, we are making all arrangements for taking over the Pure Oil Agency on September 25th. . . We are engaging the services of a competent grocery clerk and meat cutter in our store, so as to relieve us of many duties in connection with the store so we can be prepared to go forward with the matter. He has begun work on this date. Please let us know just what Mr. Johnson decided with reference to his trucks. We shall be glad to make a trade with him concerning same, but if he is the least obstinate about it, then we will make other arrangements that will be entirely satisfactory without his co-operation."
At the close of the plaintiffs' evidence, the defendant moved for a nonsuit, on the ground, among others, that the evidence showed that the contract was within the statute of frauds, in that it involved the sale of goods and merchandise in excess of $50, and was a contract not to be performed within a year. The trial judge granted the nonsuit, and the exception here is to that judgment.
1. The contract sued on was one whereby the defendant was to give the plaintiffs the exclusive right to sell goods, purchased from the defendant, in a certain territory for a period of ten years, and in return the plaintiffs were to sell and deliver these goods and also to purchase the stock of the former agent. The testimony of Ed Cofer, one of the plaintiffs, was to the effect that he would not take the business for a shorter time than ten years, and the damages claimed by the plaintiffs were the expected profits from the agency over a ten-year period. The contract was one not to be performed within one year from the making thereof, and so was required to be in writing, by Code § 20-401 (5), to be binding upon the defendant. See Yarborough v. Hi-Flier Mfg. Co., 63 Ga. App. 725 (1) ( 12 S.E.2d 133).
2. The contract was alleged to be "confirmed by writings from the defendant." The plaintiffs contend that the postcard, signed by the defendant's agent McDonald, and stating that "We came to you with the proposition," is sufficient to satisfy the requirements of the statute, as an acknowledgment or recognition that there was a contract between the parties. They rely on the case of Georgia Refining Company v. Augusta Oil Co., 74 G. 497 (3). In that case, however, it was held that the contract not only was recognized by the correspondence, but also was partly performed. The writing or memorandum of the contract, to meet the requirements of the statute of frauds, must be complete in itself, with nothing left in parol. F. W. Grand c. Stores v. Eiseman, 160 Ga. 321 (1) ( 127 S.E. 872). It must show all the terms of the contract, the parties, and their assent thereto, in addition to showing the fact that there was a contract between the parties. Smith v. Jones, 66 Ga. 338 (42 Am. R. 72); Borum v. Swift Co., 125 Ga. 198 ( 53 S.E. 608); Wilkerson v. Patton Sash c. Co., 10 Ga. App. 697 (1) ( 73 S.E. 1088). The correspondence introduced in evidence in the present case contained none of the terms of the alleged contract, except possibly that the performance thereof was to begin on September 25, 1950, and was insufficient to comply with the statute of frauds.
3. The statute of frauds does not extend to the following cases: "1. When the contract has been fully executed. 2. Where there has been performance on one side, accepted by the other in accordance with the contract. 3. Where there has been such part performance of the contract as would render it a fraud of the party refusing to comply, if the court did not compel a performance." Code, § 20-402.
It is the plaintiffs' contention that their purchase of the pickup truck, their employing a clerk for their grocery business with the intention of later employing him in the sales agency, and their allowing the inventory of their grocery business to diminish because they intended to sell that business, constituted part performance of the contract sufficient to remove the case from the operation of the statute of frauds. However, the hiring of the clerk was not contemplated by the contract, as in the case of Barnett Line v. Blackmar, 53 Ga. 98, relied on by the plaintiffs, where the salary of the agent was agreed upon in view of the necessity of his employing a clerk. The plaintiffs here did not testify that they were required by the defendant to hire a clerk to perform their obligations under the contract, but the evidence shows that the clerk was employed to enable the plaintiffs to be ready to perform later under their alleged sales-agency contract, and that the plaintiffs were going to make a place for the clerk in the oil business if they sold their grocery store. This was preparation for performance, and not part performance of the contract itself, and was not sufficient to remove the case from the statute of frauds. See Baucom v. Pioneer Land Co., 148 Ga. 633 ( 97 S.E. 671); Wells v. H. W. Lay Co., 78 Ga. App. 364, 369 ( 50 S.E.2d 755). The purchase of the pick-up truck was not required by the alleged contract, which only required that the plaintiffs supply a tank-truck for deliveries of oil and gasoline. That such purchase was made on the advice of the defendant is immaterial. Smith v. Davidson, 198 Ga. 231 ( 31 S.E.2d 477); Dameron v. Liberty National Life Ins. Co., 56 Ga. App. 257 ( 192 S.E. 446). These acts, together with the preparations made for disposing of the plaintiffs' grocery business, were all preparatory to entering into their performance of the alleged contract to sell the defendant's products, which they did not do.
While a loss may have been voluntarily incurred by the plaintiffs in getting ready to perform the parol contract, there was no evidence showing that such acts were of any benefit to the defendant, so as to estop it from asserting the statute of frauds, as in the cases of Petty v. Kennon, 49 Ga. 468, Bagwell v. Milam, 9 Ga. App. 315 ( 71 S.E. 684), and Alexander-Seewald Co. v. Marett, 53 Ga. App. 314 ( 185 S.E. 589), which are cited and relied on by the plaintiffs. By such acts preliminary to the performance of the contract, nothing of value was furnished to the defendant. See Bentley v. Smith, 3 Ga. App. 242 ( 59 S.E. 720). While the plaintiffs might not have done these things but for their reliance on the parol contract, the acts were not in part performance of their obligations arising under such contract or of an essential part thereof, such as would take the contract out of the statute of frauds. Graham v. Theis, 47 Ga. 479; Simonton v. Liverpool c. Ins. Co., 51 Ga. 76; Baucom v. Pioneer Land Co., 148 Ga. 633 (supra); Lamons v. Good Foods, 195 Ga. 475 ( 24 S.E.2d 678); Smith v. Davidson, 198 Ga. 231 (supra).
4. The trial judge did not err in granting the motion for a nonsuit, as the plaintiff did not prove the alleged contract confirmed in writing nor show part performance thereof sufficient to take the contract out of the statute of frauds. Denmead v. Glass, 30 Ga. 637; Bentley v. Smith, 3 Ga. App. 242 (2) (supra); Bentley v. Johns, 19 Ga. App. 657 (2) ( 91 S.E. 999); Killarney Realty Co. v. Wimpey, 30 Ga. App. 390 (5) ( 118 S.E. 581); Kiser Co. v. Rosenbloom, 41 Ga. App. 183 (2) ( 152 S.E. 273); Lewis v. Southern Realty Investment Corp., 42 Ga. App. 171 ( 155 S.E. 369).
Judgment affirmed. Felton and Worrill, JJ., concur.