Kerlin v. Young, Nos. 4359, 4360

Nos. 4359, 4360 | Ga. | Oct 15, 1924

Hines, J.

(After stating the foregoing facts.)

The written articles of partnership provide that the interest of the parties in the firm business, assets, and profits “shall be in-proportion to the amount of cash invested by each which is as follows: R. 0. Kerlin seyen eights (1/8) or $35,000.00, and R. G. Young one eighth (1/8) or $5,000.00.” The partnership contract further provides, that, if Young shall become dissatisfied, or if Kerlin should become dissatisfied with Young, and should Young desire to withdraw, or should Kerlin desire that Young should withdraw, the only amount which he can receive upon his withdrawal at his own election or at the request of Kerlin, shall be the amount which he has paid into said business, viz.: $5,000.00. The written contract of partnership was executed on June 8, 1920. On the hearing before the auditor testimony was introduced to the effect that prior to the execution of the articles of partnership, and pending the negotiation which led up to their execution, it was agreed between Young and Kerlin that Young’s machinery, equipment, and stock on hand at his place of business should be accepted as his one-eighth interest in the firm business, or at a valuation of $5,000. Kerlin testified before the auditor that he told Young that he had commenced with a clean sheet, that he would have to have the equipment of Young to operate the service end of the firm’s business, and that if he had. equipment worth $5,000 it would answer the purpose of a credit of $5,000, but that there was. a distinct understanding between them that the equipment was to be valued at and worth $5,000. He further testified that the above testimony introduced by Young was substantially correct, that he agreed to take the equipment and supplies which Young had on hand at $5,000, provided it was worth that sum. On motion of the defendant the auditor ruled out the above testimony, on the ground that it contradicted and varied the written contract of partnership. On exception to this ruling the trial judge sustained the same, and permitted the above testimony to go to the jury on the trial of exceptions of fact to the auditor’s report. The defendant excepted to this ruling, on the ground that all oral negotiations leading up to the execution" of the partnership contract were merged in it, and that the above testimony adds to, varies, and contradicts the written articles of partnership. Is this exception well taken? We think not. Under the partnership agreement, Young was to contribute to the capital of the firm $5,000 and have a one-eighth interest in the partnership. Kerlin was to contribute to the capital of the firm. $35,000 and have a seven-eighths interest therein. It is insisted that the language, “the amount of cash invested by each,” means that Young was to put $5,000 in cash, or its equivalent, into the business after the formation of the partnership; and that to permit proof of a prior agreement that Kerlin agreed to accept the equipment, tools, and material which Young had in the business then being conducted by him individually would be to add to, vary, or contradict the terms of a written contract. The word, “cash,” means money—usually, ready money—but it also means money or its equivalent. Under this provision of the articles of partnership, it would not he reasonable to hold that Young could not contribute his part of the capital of the firm in property, if that course was agreeable to his partner.' This being so, his part of the capital was furnished in property the value of which would have to be fixed and determined. It certainly would be fair to permit his copartner to fix this valuation. After the formation of the partnership, Young turned over to the firm his equipment, tools, and merchandise of his individual business. He alleges these were accepted by Kerlin for the firm at a valuation of $5,000, and in full payment of the capital which he was to contribute to the firm. He alleges that these goods were so accepted by Kerlin unconditionally. Kerlin admits the acceptance of the goods by him for the firm at this valuation and in full of the contribution Young was to make, but insists that the valuation was conditioned upon its being subsequently found that the goods were of this value. Here was a sharp issue of fact between the partners. On the trial of this issue, we think it was permissible for Young to prove that prior to the execution of the articles of partnership, and pending the negotiations which led up thereto, Kerlin had agreed unconditionally to accept this property at a valuation of $5,000 and in full of the amount Young was to contribute. This testimony does not add to, vary, or contradict the written contract. It was properly admitted to bolster up Young’s version of the manner in which he had fulfilled his obligation to put $5,000 into the firm. Such testimony was consistent with the terms of the written contract. So we are of the opinion that the court below did not err in its ruling in- this matter.

Young tendered an amendment to his petition, -in which he prayed that, in the event it was found that he had not contributed assets and goods of the value of $5,000, he should be permitted to recover the reasonable market value of the equipment he delivered to the firm. This amendment was allowed subject to demurrer; and the defendant demurred thereto on the ground that it set up a new and distinct cause of action. The trial judge overruled this, demurrer, upon which ruling the defendant assigned error. We do not think this amendment set up a new and distinct cause of action. The contract between the parties provided for contractual rescission, on the happening of which at the instance of either party Young.was to receive the amount he had put in the business, which amount was stated to be $5,000. If he had put in less, and Kerlin rescinded the contract, then certainly he would be entitled to recover the amount he had actually put in. This amendment, in which he sought to recover a smaller amount, if it was found he had not contributed the full amount he was to put in the business under the contract, did not set up a new cause of action. He originally based his action solely upon contractual restitution. By this amendment he sought to recover on equitable restitution, if he failed to make out his case of contractual restitution. His cause of action was rescission of a partnership contract by Kerlin and his right to restitution. He-could, by amendment, allege another ground on which he was entitled to such restitution, without adding a new and distinct cause of action. This is what his amendment did. McCandless v. Inland Acid Co., 115 Ga. 968 (42 S.E. 449" court="Ga." date_filed="1902-07-22" href="https://app.midpage.ai/document/mccandless-v-inland-acid-co-5571907?utm_source=webapp" opinion_id="5571907">42 S. E. 449). The equitable right to restitution upon the rescission of a contract does not depend upon the full performance of the contract by the party seeking restitution. This right rests upon the doctrine that a party who has received from another anything of value by virtue of a contract can not rescind the same without restoring whatever thing of value he has so gotten. Civil Code (1910), §§ 4305, 4306.

The auditor found that “if the property delivered by Young was of less value than $5,000 and was not accepted as of that value by the defendant for the firm, the plaintiff was entitled to recover the value of the articles actually turned over by him to the firm.” To this finding of law the defendant excepted. The trial judge overruled this exception, to which ruling the defendant excepted. We think this finding of law was correct. This follows from what we have said touching the allowance of the amendment to plaintiff’s petition. If the allowance of that amendment was correct, and we have undertaken to show that it was, then this finding of the auditor was right.

In his motion for new trial the defendant insists that the verdict of the jury was contrary to law, and is without evidence to support it. We think that there is evidence to support the verdict. The jury was authorized to find that the defendant delivered to this firm goods of the value of $5,000, in full of the contribution which he was to make to its capital. This being so, there was evidence to support the verdict finding that he was entitled to restitution to that amount.

In his cross-bill of exceptions the plaintiff complains of certain rulings made by the court during the trial of the case. Having affirmed the judgment of the court below on the main bill of exceptions, it becomes unnecessary to deal with the errors complained of in the cross-bill.

Judgment affirmed on main bill of exceptions; cross-bill of exceptions dismissed.

All the Justices concur.