Cohen v. Cohen

The petition for an injunction and an accounting, alleging that the defendant had excluded the petitioner from the management of his business and had acquired and failed to account for considerable moneys derived from its profits, while failing to allege any fraud or insolvency of the defendant, and thus not showing any ground for injunctive relief, sufficiently stated a cause of action for an accounting and the trial judge did not err in overruling the general and special grounds of demurrer.

No. 15324. NOVEMBER 15, 1945. Sam Cohen filed in Walker Superior Court, against Mrs. Era Heathel Cohen, a petition which as amended, omitting certain abandoned portions as to a receivership, alleged substantially the following: The petitioner and the defendant were married on February 16, 1912, and lived together as man and wife. In September, 1938, the petitioner through an arrangement with his brother-in-law established a business in LaFayette known as Cohen's Store. The business belonged to the brother-in-law, who furnished the money, but was operated by the petitioner until December, 1941, at which time he purchased the stock of merchandise consisting of dry goods, shoes, ready-to-wear, and notions. In buying the business the petitioner borrowed $1500 from his daughter, for which he and the defendant signed a note, and the above parties also executed a note to the brother-in-law for the balance of the purchase-money. After such purchase the business was operated by the petitioner with the assistance of the defendant. However, the defendant constantly nagged the petitioner about the manner of operation, interfered in matters connected with the business, objected to transactions made by him, and generally made conditions so unpleasant that it was impossible for him to continue with the business. Finally the petitioner decided it would be best for him to leave the business, and accordingly he deeded to the defendant the home in LaFayette, subject to a loan of $2800, and on January 5, 1943, he agreed that she should take charge of the business provided she would pay him the sum of $500, and relieve him from all liability for her support and maintenance. The agreement whereby the defendant should take charge of the business was reduced to writing and signed by the petitioner, was in contemplation of separation of the petitioner and the defendant, and contemplated a sale of the petitioner's business to the defendant, provided she paid to the petitioner the amount of money therein set forth. The written agreement was: "I hereby agree to sell Mrs. Sam Cohen my share in Cohen's Store including all assets for the sum of $500 to be paid $25 per month beginning February 15, 1943." In January or February, 1943, after the defendant had paid the petitioner $75 to $100 on the agreement, the parties became reconciled, the written agreement was completely rescinded by mutual verbal consent, the former plans and agreement for separation were terminated, and under such reconciliation agreement the defendant was to discontinue the monthly payments of $25, and no further payments thereon were made by the defendant. It was further agreed that the petitioner should again take charge of the business and arrangements should continue as they were prior to the separation. Thereafter, the petitioner and the defendant lived together and the petitioner again operated the store with the assistance of the defendant. However, conditions were very unsatisfactory for the petitioner because the defendant persisted in her determination to dictate the manner in which the business was operated, and after about eight months it became impossible for the petitioner to operate the business with any degree of harmony, so he decided in October, 1943, to go away, but without the intention of abandoning his business or turning the same over to the defendant. It was his purpose to stay away a sufficient length of time to enable matters to subside and enable him to reach some agreement with the defendant in reference to the operation of the business, or reach an agreement for a final settlement and division of the property. After an absence of about two weeks the petitioner returned to LaFayette for the purpose of getting some personal belongings and sufficient money to pay his necessary expenses during his temporary absence. Being unable to get into the store on account of the fact that the defendant had the key, he broke a glass in the front door, went in and opened the safe and took $100 in money, leaving a memorandum showing the amount he had taken. He also took some articles of merchandise for his own personal use. Immediately after this incident, the petitioner, upon application of the defendant, was adjudged a lunatic. Pending the lunacy hearing the petitioner turned over $70 of the money removed from the safe to his attorney, and is informed that his attorney gave the money to the defendant. The ordinary stated in his order that the petitioner had an estate, so for ten months while the petitioner was confined in the State Hospital the defendant sent to the hospital authorities $20 a month in payment of hospital charges, and also sent the petitioner $20 per month for his incidental expenses. The petitioner was released from the hospital on August 29, 1944, but the defendant has excluded him from participating in the management of the business. The defendant, from the profits derived from the operation of the business, paid the $3500 indebtedness due to the brother-in-law, and paid the balance due on the home which was deeded to her, and in addition thereto, has accumulated considerable sums from the profits of the business. The petitioner is willing to make a fair and equitable agreement as to a division, and has at all times stood ready and willing to reach such an agreement; however, she not only refused to make any accounting or equitable settlement, but threatened to have him recommitted to the State Hospital if he filed any proceeding to secure an accounting. The stock of merchandise is now worth $10,000 or more, and it was worth approximately that amount at the time the petitioner was excluded in October, 1943. If the defendant is permitted to continue to operate the business, she will appropriate to her own use all of the proceeds therefrom and will not account to the petitioner for any part thereof. The petitioner is now physically and mentally competent to transact business, and he desires a complete accounting and settlement with the defendant and to assume the active, management of the business. The prayers were for process, injunctive relief, a full and complete accounting, a judgment for the profits derived from the operation of the business less a reasonable and equitable amount for the services of the defendant, and general relief.

The defendant demurred to the original petition on general and special grounds, and to the petition as amended renewed all grounds of demurrer, and demurred to the amendment, all of which grounds will be hereinafter discussed in the opinion. The exception is to a judgment overruling the demurrer interposed by the defendant. The allegations of the amendment to the effect that the agreement to sell the business, which was reduced to writing, was in contemplation of separation of the petitioner and the defendant were averments of facts and were not contradictory to the express terms of the written agreement.

The allegations of the amendment setting forth the reconciliation of the parties were not subject to demurrer on the grounds that there were no allegations of any consideration, or of the terms of the mutual agreement of the parties, or how the new agreement rescinded the agreement to sell or reconveyed title to the petitioner. This was not a case where one of the parties sought to rescind the contract without the consent of the other, as provided for in the Code, §§ 20-905, 20-906, and the petitioner did not seek to have title reconveyed to him. He alleged that the contract to sell the business, which had never been complied with by the defendant, with the exception of payment of three or four installments, was rescinded by mutual consent of the parties. If the parties became reconciled, as set forth in the amendment, they had the right to rescind the separation agreement, including the agreement to sell the business, by mutual verbal consent (Powell v. Powell,196 Ga. 694, 699, 27 S.E.2d 393), and their mutual agreement again to live together as husband and wife would constitute a sufficient consideration. Crutchfield v. Dailey, 98 Ga. 462 (25 S.E. 526).

Under the allegations of the petition, wherein it was charged that the defendant was indebted to the petitioner in a greater amount than that received by him under the original agreement to sell, it was not necessary for the petitioner to tender to the defendant the amounts received under such agreement. To authorize a recovery in equity, a party is not obliged to return, as a condition precedent, that which he will be entitled to retain.Collier v. Collier, 137 Ga. 658 (3) (74 S.E. 275, Ann. Cas. 1913A, 1110); Pope v. Thompson, 157 Ga. 891 (2) (122 S.E. 604); Georgia Railroad Bank c. Co. v. Liberty NationalBank c. Co., 180 Ga. 4 (5) (177 S.E. 803); Hughes v.Cobb, 195 Ga. 213 (2) (23 S.E.2d 701). The petitioner alleged that he was willing to make a fair and equitable settlement with the defendant.

The allegations of the petition as amended to the effect that the petitioner was the owner of the business were not mere conclusions of the pleader. While the written contract was set forth, which showed that the petitioner agreed to sell his share in the business to the defendant, provided she paid him the sum of $500, such contract by its terms was to be performed in the future, and the petitioner alleged that the $500 was never paid, but, on the contrary, that the contract was rescinded by the mutual verbal consent of the parties.

The allegations, first, in reference to the agreement whereby the defendant was to take charge of the business provided she paid a stated amount, and, second, in reference to the subsequent reconciliation agreement whereby the petitioner was again to take charge of the business, were attacked by special grounds of demurrer as being vague and indefinite, and because they failed to show whether the agreements were in writing. These grounds of demurrer having been met by amendment wherein the petitioner alleged that the first contract was in writing while the agreement for the petitioner again to take charge of the business was by mutual verbal consent of the parties, are without merit.

The defendant demurred to the petition as a whole on the grounds: (a) the averments are insufficient to set forth any right of action either in law or in equity; (b) there is no equity in the petition for the reason that there is no allegation of fraud on the part of the defendant; (c) it is not alleged that the defendant is insolvent; (d) it is not alleged that the petitioner has no adequate remedy at law; (e) under the allegations of the petition the petitioner has no interest in the business referred to, and is not entitled to any accounting or any proceeds therefrom.

Since the passage of the uniform procedure act, where a suit is filed in a superior court, which has general jurisdiction both in law and in equity, the petition is not subject to general demurrer on the ground that the petitioner has an adequate remedy at law, if it states a cause of action for either legal or equitable relief. Code, §§ 37-901, 37-907; Pardue Medicine Co. v. Pardue, 194 Ga. 516 (22 S.E.2d 143), and cit.

The petition in the instant case did not allege fraud or insolvency on the part of the defendant, and therefore was insufficient to entitle the petitioner to injunctive relief or the appointment of a receiver. However, the portion seeking a receivership was eliminated by mutual consent of the parties before the demurrers were passed upon by the trial judge; and, while the petition as a whole was attacked as failing to allege fraud or insolvency, there was no demurrer which sought to strike the prayer for injunctive relief. Accordingly, while, as above indicated, the petition was insufficient to allege a cause of action for injunctive relief, the allegations to the effect that the defendant had excluded the petitioner from participating in the management of his business, and that she had accumulated considerable sums of money from the profits thereof, were sufficient to allege a cause of action for an accounting, and the trial judge did not err in overruling the general demurrer.

Other grounds of demurrer, not dealt with in this opinion, were expressly abandoned in the brief of counsel for the plaintiff in error.

Judgment affirmed. All the Justices concur.