Court Opinion

ID: 5639327
Source: CourtListenerOpinion
Date Created: 2022-01-11 06:08:25.318398+00
Date Added: 2024-06-11T08:37:18.463248
License: Public Domain

Banke, Judge.
Boss contracted to design furniture for Barwick Industries, Inc., in return for Barwick’s agreement to pay him royalties on the sale of that furniture. The contract provided that the design documents and the manufacturing dies made from them were to be the property of Barwick but that Boss would retain a right of first refusal in the event Barwick chose to sell them. Upon termination of the contract, Barwick was to continue to pay royalties to Boss on the sale of furniture manufactured from his designs.
Barwick subsequently sold its furniture plant to Bassett Furniture Industries of North Carolina, Inc., and Bassett Furniture Industries, Inc. (hereinafter referred to together as “Bassett”). Although Boss’s designs and the manufacturing dies produced from them were among the assets transferred to Bassett, the contract of sale did not list Barwick’s obligation to pay royalties to Boss among the liabilities assumed by Bassett. Boss brought this suit against Barwick and Bassett to recover both lost royalties and damages for the breach of his contractual right of first refusal. He contends that Bassett impliedly assumed these obligations by accepting and using his designs with actual or constructive knowledge of the arrangement between him and Barwick. He also seeks to recover on the theories of unjust enrichment, intentional interference with contractual rights, and conspiracy to interfere with contractual rights. This appeal is from the grant of Bassett’s motion for summary judgment. The suit against Barwick remains pending in the court below. We previously certified the case to the Supreme Court to determine whether the Bulk Transfer provisions of the UCC precluded Boss’s common-law claims, and, answering this question in the negative, the Supreme Court has returned the case to us. Boss v. Bassett Furniture Indus., 249 Ga. 166 (288 SE2d 559) (1982).
In support of its motion for summary judgment, Bassett’s president, vice-president, internal auditor, and general counsel each submitted identical affidavits stating that Barwick’s contractual relationship with Boss had not been mentioned during the negotiations for the purchase of the plant. The central issues in this *247appeal are whether these affidavits negated the plaintiff’s allegations that Bassett purchased and used his designs with actual or constructive knowledge of Barwick’s obligations to him and whether, in any event, Bassett may be held liable for breach of these obligations. Held:
1. The statements contained in the affidavits do not refute the plaintiffs factual allegations. Each of the four Bassett officers stated that “at no time during the negotiations . . . was any mention ever made” of a contractual relationship between the plaintiff and Barwick, that “at no time during the negotiations” was he “made aware” of the plaintiff’s claims, that he had no knowledge of the “written contract” between Boss and Barwick during the negotiations, and that he did not learn that the plaintiff “was claiming rights under his contract with Barwick” until three years after the sale took place. These statements are not, strictly speaking, inconsistent with the plaintiff’s allegations that at the time the sale took place Bassett was aware that he had designed furniture for Barwick, that Barwick was obligated to pay him royalties on the sale of furniture made from these designs, and that he had a right of first refusal in the event the designs and dies were sold. Furthermore, three of the affiants admitted that they had been aware during the negotiations that the plaintiff had been employed to design furniture for Barwick, and at least one of them stated in his deposition that it was not an unusual practice in the furniture industry for designers to be compensated on the basis of royalties. This record does not demand the conclusion that Bassett acted without knowledge of Boss’s rights.
2. We proceed to the question of whether, assuming Bassett was in fact aware of the plaintiff’s rights, it may be charged with liability for breach of either the royalty obligation or the right of first refusal.
“Where a contract or undertaking is personal, it binds only the original parties and those who may assume the obligation or ratify or adopt the contract, even though the contract contains a provision that it is binding upon the successors and assigns of one of the contracting parties. (Cits.) A third person may, of course, assume the obligation expressly in writing, or he may do so by implication where his conduct manifests an intent to become bound. (Cits.) In the latter event all the circumstances must be considered, such as the subject ■matter of the contract, the third person’s acts and words, whether he acquiesced in the terms of the contract, performed its obligations, or accepted the benefits.” Central of Ga. R. Co. v. Woolfolk Chem. Works, 122 Ga. App. 789, 791-792 (178 SE2d 710) (1970), citing Greer v. Pope, 140 Ga. 743 (79 SE 846) (1913). Although the burden of *248proving an express or implied assumption is on the claimant at trial, the defendant as movant on motion for summary judgment, has the burden of proving that an assumption did not occur. See Central of Ga. R. Co., supra, at 795-796.
There can be no question that Barwick’s alleged obligation to give the plaintiff first refusal on the sale of the designs was a personal one, since it could be performed only by Barwick. It follows that Bassett cannot be charged with liability for the alleged breach of this obligation. The obligation to pay royalties, on the other hand, was one which Bassett was fully capable of discharging after the sale. Furthermore, since it involved merely the payment of a liquidated sum of money, no personal attributes or skills were necessary to perform it. Indeed, it has been held that where the creator of “intellectual property” such as the designs involved in this case transfers his creation subject to a reservation of rights, and the transferee in turn transfers it to a third party who has knowledge of the reservation of rights, the latter is automatically bound to honor the reservation. See In re Waterson, Berlin & Snyder Co., 48 F2d 704, 710 (2d Cir. 1931) (transfer of music copyrights); Standard Oil Co. v. Clark, 163 F2d 917, 930 (2d Cir. 1947), aff’g. 64 FSupp. 656 (S.D.N.Y. 1945) (transfer of patents); Barnes v. American Brake-Beam Co., 238 Ill. 582 (87 NE 291) (1909) (transfer of patent); In re Tidy House Products Co., 79 FSupp. 674 (S.D. Iowa 1948) (transfer of trademark and trade name).
The cases cited by Bassett do not demand a conclusion that the subject matter of the contract between Boss and Barwick rendered it incapable of being assumed by implication. The case of Greer v. Pope, supra, is distinguishable in that the obligation at issue there involved the performance of personal services rather than merely the payment of money. Also distinguishable are Hunter v. Benamy Realty Co., 115 Ga. App. 829 (156 SE2d 160) (1967), and James Talcott v. Roy D. Warren Commercial, 120 Ga. App. 544 (171 SE2d 907) (1969), wherein this court concluded that a lessor’s obligation to pay a monthly commission to a broker was personal in nature and accordingly did not bind a subsequent grantee of the property. Those cases involved transfers of real rather than personal property, and such transfers are governed by Code § 29-301 and a line of cases dealing with covenants appearing in real estate deeds and leases. See, e.g., Goldberg v. Varner, 72 Ga. App. 673 (2) (34 SE2d 722) (1945). Such covenants are always considered personal, and thus unenforceable against a transferee, if they do not “run with the land.” See generally Pindar, Georgia Real Estate Law, § 19-181, and cases cited therein.
Having determined that Barwick’s obligation to pay royalties *249was one which was capable of being assumed by implication and having determined that Bassett failed to eliminate all material issues of fact on this issue, it follows that the trial court erred in granting Bassett’s motion for summary judgment as to this claim. It also follows that material issues of fact exist on the unjust enrichment claim, the general rule being that where nothing remains to be done on a contract but to make payment, the payment may be enforced by an assumpsit action as well as by a breach of contract action. See generally 1 Ency. Ga. Law, Actions, § 23.
Decided June 30, 1982
Rehearing denied July 27, 1982
Matthew H. Patton, Kevin B. Buice, for appellant.
Hamilton Lokey, R. Daniel McGinnis, Ezra H. Cohen, Corneill A. Stephens, for appellees.
3. We also find that material issues of fact remain as to the claims for malicious interference with contractual rights and conspiracy to interfere with property rights. While there is nothing in the record to support Boss’s allegation that Bassett intended to defeat his right of first refusal, there is no evidence which refutes this allegation, either. Inducing one to breach his contract with another is an actionable tort under Code § 105-1401. See e.g., Sheppard v. Post, 142 Ga. App. 646 (1) (236 SE2d 680) (1977). It follows that the trial court erred in disallowing the claims for attorney fees and punitive damages. See generally Ponce De Leon Condominiums v. DiGirolamo, 238 Ga. 188 (1, 2) (232 SE2d 62) (1977);

Judgment reversed.

Quillian, C. J., McMurray, P. J., and Shulman, P. J., concur. Carley and Pope, JJ., concur specially. Deen, P. J., Birdsong and Sognier, JJ., dissent.