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Cooper v. G. E. Construction Co.

Court of Appeals of Georgia
Oct 30, 1967
116 Ga. App. 690 (Ga. Ct. App. 1967)





Action on contract. Fulton Civil Court. Before Judge Williams.

J. E. Wilson, for appellant.

Mitchell, Clarke, Pate Anderson, Paul H. Anderson, for appellee.

1. Where a contract was entered into and properly executed by a corporation with an individual, obligating the corporation to construct for the individual a house, and thereafter an amendment to the contract, reciting it to be made between the same corporation and individual, was signed by "Golden Green, President, G. E. Construction Company" and the individual, and a further amendment, reciting it to be an amendment to the original contract, but which was signed by "Golden Green, Contractor" and the individual, and the subject matter of the two amendments related to the construction of the house referred to in the original contract, it sufficiently appears that it was the intention of the parties that the corporation be bound by the acts of its president in signing the amendments.

2. Where performance, or part performance, was undertaken by the corporation under the contract as amended, whether perfectly or imperfectly, it will be held to have ratified the amendments to the contract and is bound thereby.


On September 27, 1962, plaintiff, Cooper, entered into a contract with G. E. Construction Company for the purchase of described land. The contract contained an additional covenant for a "house to be built according to plans and specifications attached thereto." It was duly signed, both by Cooper as purchaser and by G. E. Construction Company, by Golden Green, President, as seller. A supplemental or amending agreement was entered into in October, 1962, between "G. E. Construction Company, hereinafter called the contractor, and James H. Cooper, hereinafter called the owner" whereby the obligation of the contractor to provide all materials and perform all work necessary to the construction of the house was spelled out, and the plans and specifications were amended in certain particulars. This contract was signed by "James H. Cooper, Owner," and by "Golden Green, President G. E. Construction Co., Contractor." On December 20, 1962, another supplemental or amending contract making additional changes in the plans and specifications was entered into. It recited that it was to "supersede any agreements in conflict herewith made prior to this date of December 20, 1962; all other provisions of contract dated September 27, 1962, are reaffirmed," and was signed by "James H. Cooper III, Owner," and by "Golden Green, Contractor," These contracts are attached as exhibits to the amended petition.

Plaintiff alleges that the defendant (G. E. Construction Company) "has constructed a house on plaintiff's lot which he purchased through defendant," but that "said house was not built in accordance with plans and specifications," and that it was not built "in accordance with the contract, as amended." It is alleged that the additional or supplemental contracts were entered into between plaintiff and defendant, that is to say, between Cooper who purchased the lot and G. E. Construction Company, which sold the lot and agreed to build a house on it. Particulars in which there was failure to construct the house in accordance with the requirements of the plans and specifications, as amended, are alleged, and plaintiff seeks to recover the difference in the value of the house (exclusive of the lot) if it had been constructed in accordance with the plans and specifications and its value as actually constructed. A second count, adopting the allegations of the first, alleged that defendant had wilfully, intentionally and in bad faith breached its obligation under the contract, as amended.

To both counts defendant filed a general demurrer plus special demurrers, one of which was directed to the failure to attach to the petition, or otherwise incorporate therein, the alleged written contract as amended, plans and specifications. The court passed on the general demurrers and the above-mentioned special demurrer, sustaining them with 15 days allowed plaintiff to amend. Plaintiff timely amended his petition by attaching copies of the alleged contract and a purported amendment of the contract. Defendant demurred to the amendment and renewed its demurrers to the petition as amended on the grounds that the defects for which the original demurrers were sustained had not been cured, that no copies of the alleged plans and specifications were attached, and that the purported amendment to the contract was, in fact, a new agreement, superseding the original one. Plaintiff again amended by attaching alleged copies of the plans and another amendment to the contract and alleging his inability to attach a copy of the specifications because he had neither the original nor a copy thereof. Defendant demurred to the second amendment and renewed its demurrers to the petition as amended on the additional grounds that the additional purported amendment to the contract was not germane, the parties to it being different from those to the original contract, and that the plaintiff did not show that he is unable to acquire or otherwise gain access to a copy of the alleged specifications.

The court sustained the defendant's renewed general demurrer to the petition as finally amended, from which judgment the plaintiff appeals.

1. There is a suggestion that plaintiff's remedy was by way of reformation of the amendments to the contract so that all would appear to have been executed by the defendant, G. E. Construction Company. While this may have been desirable, it is doubted that equity would entertain the action inasmuch as we find a remedy at law to exist.

The fact that the original contract was entered into between and executed by the corporation, G. E. Construction Company, and the individual, Cooper, and that recitals in each of the amendments thereto indicate that they were negotiated between the corporation and the individual, and that the amendments were signed by the president of the corporation who had executed the original contract in its name and on its behalf, is sufficient to show an intention on the part of the parties that the amendments be obligations of and binding upon the corporation. Certainly this, together with the allegations of the petition that the amendments were entered into between the corporation as the contractor and the individual for whom it was to build a house, and that it did enter upon performance of its obligations under the contract as thus amended, is sufficient as against a general demurrer to show that the corporation was obligated. Raleigh Gaston R. Co. v. Pullman Co., 122 Ga. 700 (9) ( 50 S.E. 1008). And see Merchants Bank of Macon v. Central Bank of Ga., 1 Ga. 418 (44 AR 665); Stubbs Co. v. Waddell, 4 Ga. App. 264, 267 ( 61 S.E. 145); Allen v. Montgomery, 25 Ga. App. 817 (2) ( 105 S.E. 33); Cochran v. Grand Theater Co., 29 Ga. App. 481 (3) ( 115 S.E. 926); Dorsey v. Rankin, 43 Ga. App. 12 ( 157 S.E. 876). "Recovery may be had against a railway company upon an obligation signed merely by one describing himself as `president,' upon proof that both parties to the contract understood that it was the obligation of the railway company, and that the company received the consideration furnished by the other party, and either authorized the execution of the contract in its behalf or ratified it thereafter." Ocilla Southern R. Co. v. Morton, 13 Ga. App. 504 (1) ( 79 S.E. 480).

The obligation to build a house is not one required to be under seal, nor was the original contract or either of the amendments executed under seal. Mr. Green, as president of the corporation "is its alter ego, presumably in charge of its affairs and with the power to act for it within the scope of its ordinary business and his usual official duties." Franklin Savings Loan Co. v. Branan, 54 Ga. App. 363, 366 ( 188 S.E. 67). While "a president of a corporation, merely in virtue of being such, has not power to bind the company by a contract, . . . power in the president to contract for a corporation may be inferred from a course of dealings, or it may ratify his acts." Potts-Thompson Liquor Co. v. Potts, 135 Ga. 451, 460 ( 69 S.E. 734). Whether the recitals and allegations here are sufficient to show a "course of dealings," they are enough to show a ratification.

2. The object of securing signatures of the parties to a written contract is, of course, to take it out of the Statute of Frauds and to afford mutuality so that it may be enforced. Aspironal Laboratories v. Rosenblatt, 34 Ga. App. 255 (2) ( 129 S.E. 140); Robinson v. Belcher, 37 Ga. App. 412 ( 140 S.E. 412). But this is not the only manner of obtaining mutuality. If one of the parties has not signed, his acceptance is inferred from a performance under the contract, in part or in full, and he becomes bound. Aspironal Laboratories v. Rosenblatt, supra; Loewenherz v. Weil, 33 Ga. App. 760 ( 127 S.E. 883); Retailers Service Bureau v. Newman, Frierson McEver Co., 40 Ga. App. 185 ( 149 S.E. 89); Friedlander v. Schloss Bros. Co., 43 Ga. App. 646 ( 159 S.E. 870); Virginia Lumber Corp. v. Williams Tie Co., 44 Ga. App. 618 ( 162 S.E. 723); Watson v. Atlanta Joint Stock Land Bank, 56 Ga. App. 10 ( 192 S.E. 72). It is axiomatic that performance, whether in part or in full, relieves an oral contract from the operation of the Statute of Frauds. Code § 20-402. And part performance will satisfy the requisites both of mutuality and of the Statute of Frauds. Friedlander v. Schloss Bros. Co., supra.

Certainly, if not already so, the obligations of G. E. Construction Company as contained in the contract as amended became binding when it subsequently furnished the consideration by performing what it conceived to be its obligations under them. Fontaine v. Baxley, 90 Ga. 416, 425 ( 17 S.E. 1015); Hall v. Wingate, 159 Ga. 630 (1c) ( 126 S.E. 796). This is a principle of long standing. See Jernigan, Lawrence Co. v. Wimberly, 1 Ga. 220.

The terms of a written contract (here the contract of September 27, 1962, with plans and specifications attached) may be modified by a subsequent contract wholly in parol. American Nat. Ins. Co. v. Lynch, 49 Ga. App. 580 (1) ( 176 S.E. 546). This applies to a building contract, such as we deal with here. Bailey v. Martin, 101 Ga. App. 63 ( 112 S.E.2d 807). And see Morrison v. Roberts, 195 Ga. 45, 46 (2) ( 23 S.E.2d 164). Of course there must be some performance to afford the necessary mutuality or to take it out of the Statute of Frauds.

A contract partly executed by a corporation, though ultra vires, will be enforced where it has received benefits thereunder in its corporate capacity. Corbin Supply Co. v. Loftis, 50 Ga. App. 309 ( 178 S.E. 185). There is, of course, no claim of ultra vires here.

Though the supplemental or amending contracts were signed improperly (only by the corporate contractor's president) it is our view that they are binding on it. Since it is settled that even if not otherwise, these would have been binding under a performance or part performance without any signature on behalf of the corporate contractor, thus treated as if they had been wholly in parol, we can see no reason why they became less so because the contractor's president affixed his name thereto — once as President of G. E. Construction Company, and once simply individually.

Judgment reversed. Bell, P. J., Jordan, P. J., Hall, Pannell, Deen, Quillian and Whitman, JJ., concur. Felton, C. J., dissents.

The amended contract showed that it was executed by two individuals. In my judgment the plaintiff's pleadings do not authorize a conclusion that the plaintiff seeks to recover on the theory adopted by the majority — a construction in favor of the pleader on demurrer which is contrary to the rule in Georgia. Ford Motor Co. v. Williams, 219 Ga. 505 ( 134 S.E.2d 32). The majority ruling violates the parol evidence rule in that an individual's signature cannot be construed to be that of a corporation in the circumstances of this case. The sole remedy is reformation, if in fact the mutual intent was to have a contract between an individual and a corporation. If the parties so desired, they could have executed a new agreement, one constituting a novation. If they did there is a wrong party defendant. It will be noted that the last agreement, executed by two individuals, in the very first sentence, provides: "The following stipulations are amendments to contract dated September 27, 1962, and made a part thereof, and to superceed [sic] any agreements in conflict herewith made prior to this date of December 20, 1962, all other provisions of contract dated September 27, 1962, are reaffirmed."

Summaries of

Cooper v. G. E. Construction Co.

Court of Appeals of Georgia
Oct 30, 1967
116 Ga. App. 690 (Ga. Ct. App. 1967)
Case details for

Cooper v. G. E. Construction Co.

Case Details


Court:Court of Appeals of Georgia

Date published: Oct 30, 1967


116 Ga. App. 690 (Ga. Ct. App. 1967)
158 S.E.2d 305

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