Court Opinion

ID: 3885432
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:15:27.143537+00
Date Added: 2024-06-11T14:15:27.041716
License: Public Domain

August 26, 1919. The opinion of the Court was delivered by
Plaintiff sued to recover actual and punitive damages for an alleged fraudulent breach of contract, and, under the rulings and instructions of the trial Court, he recovered judgment for $1,000 actual and $1,500 punitive damages; hence this appeal.
The facts are practically undisputed. Defendant was engaged in the city of Columbia in manufacturing and selling ice cream to the retail trade, and owned a plant worth from $2,500 to $3,500. Being engaged in other enterprises and needing a competent assistant for his ice cream business, he advertised for one, and got into communication with plaintiff, who lived in Oconee county. After some correspondence between them, plaintiff came to Columbia, in February, 1917, and the plant was shown to him by defendant, and the possibilities of making the business a success were discussed between them. Defendant told him that, while he had actually made very little out of it the year before, he believed that, with the assistance of a competent man, it could be made a very profitable business, and painted the *Page 514 
possibilities of success in rather glowing terms, as to what they could do and the profits they could make, but without misrepresenting any past or existing fact, and he impressed upon plaintiff in their correspondence and conversations that the success of the business would depend upon the ability and energy with which it was conducted.
Thereupon they entered into a written contract, the substance of which was that they would form a corporation, under the name of Owings Laboratory Company, with a capital stock of $5,000, in shares of the value of $10 each, and that Owings would sell to plaintiff, $1,000 worth of stock, or more, if wanted, for which plaintiff was to pay $500 cash, and the balance at his convenience, without additional cost or interest; that Owings would put in his formulas and trade names free, and furnish the house in which the business was conducted, without charge for rent or lights during the year 1917, and thereafter at a nominal rent, that plaintiff would devote his entire time and efforts to the business, and was to have one-fourth of the net income, as his "drawing account," and, if that was not sufficient, then, one-third thereof.
Under this agreement, plaintiff gave defendant his check for $500, on March 6, 1917, and moved his family to Columbia, and began work about the last of April. The business proved a failure, and plaintiff got practically nothing out of it, but the money which he paid in was used in the business. The corporation was never organized, and, of course, no stock was ever delivered to plaintiff.
The foregoing are the salient features of the transaction between the parties. There are some details which it is unnecessary to state, as they have no material bearing upon the case or applicable law. There are exceptions to the admission of testimony and to the charge, but the consideration of these becomes academic in the view which we take of the refusal of defendant's motion to direct the verdict *Page 515 
on the issue of fraud. The testimony does not warrant the inference that Owings was guilty of fraud, either in inducing plaintiff to enter into the contract and pay his money, or in failing to organize the corporation, and give plaintiff the stock which he paid for. But there is no doubt that he broke his contract to organize the corporation and deliver the stock paid for. He testified, however, that the failure to organize it was acquiesced in by plaintiff, in the hope that they could find some one to take plaintiff's place; and it appears that, in August, they inserted an advertisement in a newspaper with that end in view, which was dictated by defendant and written out by plaintiff and carried to the paper; and that when defendant offered later to organize the corporation plaintiff refused to join with him. This was admitted by plaintiff.
As the business is admittedly a failure, plaintiff's stock would probably be worth much less than the money he paid for it with interest thereon, and, as defendant admits his liability to that extent, and says he is willing to pay back the money with interest thereon from date of receipt thereof, the judgment of this Court is that the judgment of the County Court be reversed, and that the case be remanded for a new trial, unless plaintiff or his attorneys shall, within 20 days after service upon his attorneys of notice of filing the remittitur herein, remit upon the record all of the judgment recovered, except the sum of $500, with interest thereon from March 6, 1917.
Judgment reversed nisi.
MR. CHIEF JUSTICE GARY and MESSRS. JUSTICES WATTS and GAGE concur.
MR. JUSTICE FRASER disqualified.
On petition for rehearing.