Opinion
45494.
ARGUED SEPTEMBER 15, 1970.
DECIDED JANUARY 27, 1971.
Action on loan. Fulton Civil Court. Before Judge Wright.
Roland P. Smith, for appellant.
Where the testimony is in conflict as to whether or not the sum sued for was the balance of personal loans made to the defendant by the plaintiff or sums advanced by him as unconditional payments for services rendered, the trial court erred in directing the verdict and in rendering judgment against the plaintiff.
ARGUED SEPTEMBER 15, 1970 — DECIDED JANUARY 27, 1971.
Cota sued Alexander in the Civil Court of Fulton County for the balance of personal loans made by Cota to Alexander for a period of approximately a year. The defendant Alexander filed defenses, generally denying the claim of indebtedness, and claiming that any and all sums advanced were unconditional payment for services rendered. The defendant also filed a counterclaim for sums allegedly due him on a contract of employment.
Cota testified at the trial that he was a manufacturer's agent, selling sporting goods, and covering a number of states; that he had a business arrangement with Mr. Alexander to cover a part of the territory, Alexander to receive 60% of the commissions received from sales therein, and Cota to receive 40% of the commissions. Alexander would pay all of his own expenses as an independent contractor, and Cota was not obligated to pay any portion thereof. Alexander was due to receive funds from his previous employer which he allegedly never received. Consequently Cota advanced him moneys as a personal loan in order that he might subsist. Cota testified these were personal loans coming out of his personal accounts, all endorsed as cash loans, until Alexander's earnings started coming in. These were noted in an account as an advance commission or "cash advance." Alexander's commissions never equaled the cash advances. After he left the employment arrangement with Cota he went to work for a firm in Florida, and, as a result of several letters written by Cota, he made payments to him which were duly credited. The testimony by Cota was that Alexander was to repay the moneys advanced to him, which was a specific loan, and not a "draw."
At the completion of the evidence and argument of counsel as to whether the relationship between the parties was contractor/subcontractor, or an employer/employee relationship, the trial court directed the verdict in favor of the defendant Alexander as to the main action, but held there was no evidence whatever as to the cross action. The judgment followed the verdict in favor of the defendant, and the appeal by Cota is from the judgment against him, with error enumerated thereon.
Since the verdict was directed in defendant's favor in the trial court, we have for decision here the sole question: Did the evidence demand a finding that the money sued for represented advances over commissions earned, and that there was no express or implied agreement or promise by the agent to repay such excess to the principal? An examination of the evidence shows that a jury should have decided the issues of fact as to this question. It is apparent from the record and transcript that the trial court sustained the motion for directed verdict based upon the following decisions: Valdosta Roofing c. Co. v. Lawrence, 89 Ga. App. 168 ( 79 S.E.2d 10); Biles v. Home Interiors Gifts, 112 Ga. App. 21 ( 143 S.E.2d 566). The above-cited authorities are bottomed upon Fried v. Portis Bros. Hat Co., 41 Ga. App. 30 ( 152 S.E. 151), and Smith v. Franklin Printing Co., 54 Ga. App. 385 ( 187 S.E. 904). Other authorities along this line are Foster v. Union Central Life Ins. Co., 103 Ga. App. 420 ( 119 S.E.2d 289); Roxy Furniture c. Co. v. Brand, 106 Ga. App. 104 ( 126 S.E.2d 295); and Kennesaw Life c. Ins. Co. v. Hendricks, 108 Ga. App. 148 ( 132 S.E.2d 152).
But all of the foregoing authorities are premised upon the condition that the principal and agent contracted with a drawing account contemplated as a part of the agreement; or contracted with an agreement that advances on commissions would be made by the principal to the agent. The rule established by the above cases is a harsh one, and it should not be extended. In the case sub judice a verdict was directed, and, of course, in such cases the evidence must be construed most favorably toward the party opposing the motion for directed verdict. Thompson v. Neely Wilcox, 32 Ga. App. 131, 133 ( 123 S.E. 171); Norris v. Coffee, 206 Ga. 759 (4) ( 58 S.E.2d 812). However, the transcript shows that plaintiff testified that there was no drawing account contemplated at the time of the contract; that no advance commissions were contemplated; that the money involved here was personal loans out of affiant's personal account, and was not a "draw." It was for the jury to determine as to what was in the minds of the parties when they contracted and when the money was placed by the principal in the hands of the agent.
Accordingly, the trial court erred in directing the verdict against the plaintiff and rendering judgment against him.
Judgment reversed. Bell, C. J., Eberhardt, Pannell, Quillian, and Whitman, JJ., concur. Hall, P. J., Jordan, P. J., and Deen, J., dissent.
"Where a principal advances money to his agent on a drawing account against his commission to be earned as a salesman for selling merchandise, and his commission does not amount to the sums advanced, the employer cannot, in the absence of an express or implied agreement or promise to repay any excess of advances over the commissions earned, recover such excess from the employee." Valdosta Roofing c. Co. v. Lawrence, 89 Ga. App. 168, 170 ( 79 S.E.2d 10). In the present case the defendant regularly received sums of between $300 and $500 in consecutive months in addition and varying according to commissions paid him, which commissions were paid from one to six or more months after the sales to which they were credited were made. Plaintiff entered these checks in his business books under the head of "Advance Commission Account."
His positive testimony was that there was no discussion at the time of the employment contract about whether or not Alexander was entitled to a drawing account or the amount of it. He simply paid out stated amounts each month which he carried on his books as a drawing account. The cases cited in the majority opinion make it clear that under this statement of the case, which is the one most favorable to the appellant, the money must be treated as a draw, and also that in the absence of an agreement to the contrary such a drawing account is not recoverable where it exceeds commissions earned. The majority opinion is placing the burden on the employee to prove a specific agreement or pay back the money where the law puts the burden on the employer to prove a contrary agreement if he seeks repayment. The mere fact that the employer characterized the drawing account as a "personal loan" adds nothing to the testimony, since he recognizes it as a business expense. The direction of the verdict should be affirmed.
I am authorized to state that Presiding Judge Jordan and Presiding Judge Hall concur in this dissent.