Basnight v. Southern Jobbing Co

• Decision Date: 30 September 1908
• Citation: 148 N.C. 350,62 S.E. 420
• Parties: BASNIGHT. v. SOUTHERN JOBBING CO. et al.
• Court: North Carolina Supreme Court

62 S.E. 420

148 N.C. 350

BASNIGHT.

v.SOUTHERN JOBBING CO. et al.

Supreme Court of North Carolina.

Sept. 30, 1908.

Evidence—Parol Evidence — Admissibility to Contradict Writing.

Defendants, being sued on their written guaranty as individual stockholders that their corporation would pay plaintiff a specified sum for his stock at his option, could not show by parol that it was agreed when the instrument was signed that they should not be personally liable, though their titles as officers of the corporation were affixed to their signatures.

[Ed. Note—For cases in point, see Cent. Dig. vol. 20, Evidence, § 1908.]

Appeal from Superior Court, Craven County; W. R. Allen, Judge.

Action by J. S. Basnight against the Southern Jobbing Company and others. From a judgment for plaintiff, defendants J. J. Baxter and W. G. O'Neal appeal. Affirmed.

This is an action by the plaintiff against the Southern Jobbing Company, J. J. Baxter, and W. G. O'Neal, to recover the sum of $5,000, which was paid to them for 50 shares of the stock of the jobbing company, under an agreement between him and the said parties which is as follows:

"This agreement, made and entered into this May 24, 1905, by and between the Southern Jobbing Company, a corporation in the state of North Carolina, party of the first part, and Jesse S. Basnight, party of the second part, and J. J. Baxter, W. G. O'Neal, E. F. O'Neal, and David Kramer, stockholders of the Southern Jobbing Company, all of Newbern, N. C, parties of the third part, witnesseth: That the said parties of the first part and the third part do represent to the party of the second part that the exhibit marked 'A, ' hereto attached, is a true and correct inventory and statement of all the liabilities of the party of the first part outstanding; that the total amount of capital stock issued by the said party of the first part is the sum of five thousand ($5,000) dollars par value, and that for and in lieu of the dividends earned up to this time the corporation will issue stock of the value of twelve hundred ($1,200) dollars, and will apportion three hundred ($300) dollars of stock to David Kramer; and do further represent that there is now due the said corporation debts as shown in Exhibit B, a copy of which is hereto attached; and do further represent that the statement hereto attached, marked 'Exhibit C, ' is a true and correct statement of the financial affairs of said corporation.

"Upon which representations the said Jesse S. Basnight has agreed and does hereby agree and does hereby subscribe to fifty shares of the stock in the said Southern Jobbing Company at par, to wit, $5,000, upon the following terms and conditions: (1) The parties of the third part do agree to execute proxies, irrevocable for one year, to the said Jesse S. Basnight to vote their stock at any and all meetings of the company. (2) That the said Jesse S. Basnight shall be elected for a term of one year treasurer of the Southern Jobbing Company and general manager thereof, at the salary of twelve hundred and fifty ($1,250) dollars per year, to be paid in monthly or quarterly installments. (3) That the said Jesse S. Basnight shall have the option, at the expiration of one year from date, of selling the said stock, with all accrued dividends and profits, to the said Southern Jobbing Company, at the price of five thousand ($5,000) dollars, without interest or profit added, or he shall have the option to keep and hold the said stock, together with all profits and dividends, declared or accumulated, as if the said purchase had been absolute and unconditional.

"And the said party of the first part, as principal, and the said parties of the third part, as sureties, do hereby contract and agree with the said party of the second part: (1) That upon his demand, one year from date, the party of the first part will pay to Jesse S. Basnight the sum of five thousand ($5,000) dollars for his said fifty shares of stock. (2) That they will warrant and guarantee that the said statements and Exhibits A, B, and C are true and correct and do contain a full statement of what they purport to show. (3) That they will guarantee the payment and collection of all debts due the party of the first part as shown by Exhibit B aforesaid, on or before twelve months from date, together with interest thereon from and after maturity. (4) That the salary and proxy above shall be paid and executed as there stated.

"And the said party of the second part does hereby contract and agree that he will enter upon his duties as treasurer and general manager as aforesaid and will devote thereto such part of his time as shall be necessary and beneficial for the interest of the said corporation.

"In testimony whereof, the said parties have hereunto subscribed their names and affixed their seals this 24th day of May, 1905.

"[Seal.] Southern Jobbing Company,

"Per J. J. Baxter, Pres.

"[Seal.] J. J. Baxter, Pres.

"[Seal.] W. G. O'Neal, Sec.

"[Seal.] D. Kramer, Vice Pres.

"[Seal.] E. F. O'Neal.

"[Seal.] J. S. Basnight."

The contract is set out in the complaint In their answers J. J. Baxter and W. G. O'Neal admit that they executed the contract, but aver that it was not executed by them as sureties, as it was agreed at the time they signed it that they should not be liable individually as sureties, and they affixed their official titles to their names and intended to sign it merely as officers of the corporation.

Without objection by the defendants the court submitted issues to the jury which, with the answers thereto, are as follows:

"(1) Was it the agreement between the parties, at the time of signing the contractin this action, that the defendant Baxter would not be personally liable? Answer: Yes.

"(2) Was it the agreement between the parties, at the time of signing the contract in this action, that the defendant O'Neal would not be personally liable? Answer: Yes."

The defendant J. J. Baxter testified: "The plaintiff came to me with a written paper, and asked me to sign the same. I told him I would not be individually liable. I first signed the paper for the Southern Jobbing Company, and plaintiff asked me to sign individually also. I told him I would not sign individually, but would sign my name as president of the company, and would agree for my stock to be liable to him for the repayment of his money. I signed the paper, 'J. J. Baxter, President.' Plaintiff asked me not to add 'President' I said: 'Do you take me for a fool?' He and I then agreed that I should not be personally liable, but my stock would only be liable to him in addition to all of the property of the concern, which was turned over to him as general manager." W. G. O'Neal testified to the same effect.

The plaintiff testified: That there was no such agreement, but that the defendants Baxter and O'Neal were to be liable individually as sureties, according to the terms of the contract. That before the contract was executed he had several verbal conversations with the officers of the company and told them to put their proposition in writing. Whereupon they delivered to him a paper, in the handwriting of Baxter, of which the following is a copy: "We, the stockholders of the Southern Jobbing Company, guarantee to J. S. Basnight a profit of 25 per cent. for one year on an investment of $5,000 in our company. May 22, 1905. J. J. Baxter, President. W. G. O'Neal, Sec. and V. Pres." That in reply to that paper he handed them a paper of which the following is a copy: "May 22, 1905. To Southern Jobbing Company—Gentlemen: In lieu of your proposition of to-day, I am writing. I make you the following proposition: (1) I will take $5,000 worth of stock at par in your company, reserving the option to return the stock to the company at the end of one year, without interest or dividends; the company and present stockholders guaranteeing to refund the money at my option at that time. (2) The company to pay me a salary of $1,250 for the one year. (3) The...