Odum v. South Atlantic Casket Co.

117 S.E. 275, 30 Ga. App. 166, 1923 Ga. App. LEXIS 331
CourtCourt of Appeals of Georgia
DecidedApril 11, 1923
Docket14210; 14211
StatusPublished

This text of 117 S.E. 275 (Odum v. South Atlantic Casket Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Odum v. South Atlantic Casket Co., 117 S.E. 275, 30 Ga. App. 166, 1923 Ga. App. LEXIS 331 (Ga. Ct. App. 1923).

Opinion

Luke, J.

This suit was filed in Chatham superior court by [167]*167Guy B. Odum, who in his petition alleged as follows: The'South Atlantic Casket Company is a corporation organized' and. existing under the laws of the State of Delaware, with its office' and principal place of business in Savannah, Chatham county, Georgia. John F. Weeks and J. Elmo Weeks are residents of Savannah, Chatham county, Ga. Allen W. Jones is a resident of Eiehmond county, Ga., but is engaged in business in Chatham county, Ga., and is largely interested in the South Atlantic Casket Company above named. The defendants, John F. Weeks and J. Elmo Weeks and Allen W. Jones, individually and as copartners, and the South Atlantic Casket Company, a corporation, are indebted to petitioner in the sum of $100,000, by reason of the following facts: During the month of March, 1921, the defendants John F. Weeks and J. Elmo Weeks were engaged in running the South Atlantic Casket Company as a copartnership under the name and style of “ The South Atlantic Casket Company.” The said South Atlantic Casket Company was engaged in the manufacture of funeral and undertaking articles and was doing a rather large business in the State of Georgia and in surrounding States. The said copartnership purported to own at that time considerable property, consisting of real estate, upon which the building, improvements, and machinery were situated, of the approximate value of $100,000. The defendants John F. Weeks and J. Elmo Weeks, in the operation of said business, because of injudicious management, purchases, and administration of the business, became very seriously involved financially, and during the early part of the year 1921 owed large debts of approximately $160,000. The defendants had reached such a point in their operations that it was impossible to finance the business; their credit had become impaired and lost; the banks refused to advance further loans, and the people from whom they had been purchasing materials were calling upon them for payment; the lumber concerns refused to make further shipments except for cash. The defendants and their business were paralyzed financially and insolvent, and had it not been for the facts hereinafter set forth, and the financial assistance which was discovered and obtained by petitioner, the creditors of the defendants would have placed the concern in the hands of a receiver or in bankruptcy.

While the defendants John F. Weeks and J. Elmo Weeks and [168]*168South Atlantic Casket Company were thus in an insolvent condition, the two first named defendants employed petitioner to secure financial aid and to sell stock in the proposed corporation. It was proposed and represented to petitioner that the defendants John F. Weeks and J. Elmo Weeks would incorporate the South Atlantic Casket Company with a capitalization of $250,000. It was understood and represented by defendants that their business would have to cease unless assistance in the shape of new capital was obtained. Through lack of working capital they were unable to take advantage of the good will and the trade which they had established prior to the proposed corporation. They were compelled to call their salesman in from the territory in order to reduce expenses, and at the same time to enable them to finance their operations. While matters were in this condition and the defendants were faced with bankruptcy unless new capital were obtained, petitioner was employed by the defendants for the purpose of-assisting in obtaining new capital. One manner in which he was to obtain new capital was by the sale of stock in the proposed corporation. A prospectus of said corporation was delivered to him by the defendants John F. Weeks and J. Elmo Weeks for the purpose of advising purchasers of stock of the proposition in which they were to become interested. A copy of said prospectus is' hereto attached and marked “ Exhibit A.” Petitioner was not employed upon any written agreement, but it was understood that he was to sell stock in the proposed corporation, or otherwise to get capital interested therein, and was to receive ten per cent, of the par value of the stock which they sold or of the capital which they interested in the concern. Petitioner was given a drawing account to cover living and traveling expenses, drafts to be drawn at the end of each week, and after petitioner had actually begun his labors in behalf’of defendants he did for many weeks actually draw upon defendants for such expenses, and the drafts were paid. While thus employed by the defendants for their benefit and for the benefit of the corporation, which was subsequently organized, petitioner sold a great deal of stock, altogether 248 shares of stock to various persons, who were ready, able, and willing to buy, and who, petitioner believes, actually bought stock in the corporation. A list of the purchasers discovered by petitioner, showing the amount of stock purchased, [169]*169the par value thereof, and the amount of 10% alleged to be due to petitioner thereon, is attached and made a part of this petion and marked “ Exhibit B.” The signed subscriptions to the capital stock of the South Atlantic Casket Company, a proposed corporation, were sent in to the defendants and received by them. Petitioner was not permitted to collect any money from prospective purchasers, being strictly instructed not to do so. Petitioner therefore received no money from the purchasers at the time of obtaining the subscriptions. Petitioner is advised and believes that the defendants were subsequently paid in whole or in part for the said capital stock sold by petitioner; but, although petitioner has demanded from the defendants a statement of the amounts due, such statement has been refused and no payments have been made whatever.

While petitioner was thus engaged on the road in selling stock for the defendants the financial difficulties and embarrassments of the defendants continued; it was impossible for the defendants to obtain matérial for the manufacture of their products; they could not obtain lumber for the manufacture of caskets and other undertaking stuff. Petitioner was therefore instructed to visit various lumber manufacturing concerns, in an effort to obtain shipments of lumber in exchange for stock, and, acting upon the instructions of his employers, he undertook to make such exchanges. In company with another employee and salesman he visited the Zitcraft Lumber Company in Bulloch county and induced this company to ship a carload of lumber to the defendants with the understanding that satisfactory arrangements should be made whereby payments should be made in stock.' The value of this carload of lumber was approximately $250; but petitioner has been unable to get any information from the defendants relative to its actual payment or the manner, in which it was paid. Petitioner then visited the Hilton Lumber Company at Pineora, Ga., and would have been able to do business with this concern had it not been for the fact that the defendants then owed to this concern unpaid bills, and they were unwilling to ship any more lumber to the defendants under the circumstances. They also visited various other lumber concerns but were unable to complete any arrangements with these concerns. At this time the affairs of the defendants and the South Atlantic Casket Company were acute; they had reached the [170]*170limit of their resources and were practically unable to do more business; they were unable to buy any lumber except small purchases on the local market, delivered by drays and paid for in cash.

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Bluebook (online)
117 S.E. 275, 30 Ga. App. 166, 1923 Ga. App. LEXIS 331, Counsel Stack Legal Research, https://law.counselstack.com/opinion/odum-v-south-atlantic-casket-co-gactapp-1923.