Continental Supply Co. v. Robertson

• Decision Date: 20 October 1924
• Docket Number: (No. 184.)
• Citation: 265 S.W. 659
• Parties: CONTINENTAL SUPPLY CO v. ROBERTSON et al.
• Court: Arkansas Supreme Court

265 S.W. 659

CONTINENTAL SUPPLY CO v. ROBERTSON et al.

(No. 184.)

Supreme Court of Arkansas.

October 20, 1924.

Rehearing Denied November 24, 1924.

Appeal from Lee Chancery Court; A. L. Hutchins, Chancellor.

Action by the Continental Supply Company against J. T. Robertson and others. From decree dismissing complaint, plaintiff appeal. Affirmed.

The Continental Supply Company, a corporation, brought this suit at law against J. T. Robertson, D. H. Echols, and J. B. Harris, to recover the sum of $1,575.33, alleged to be a balance due on an account for merchandise. The defendants averred that they had had a full settlement of their account with the plaintiff, and that the plaintiff should not be allowed to recover against them on the ground of mistake in the settlement because of unreasonable delay, and of change of conditions which have resulted since the settlement. On motion of the defendants, which was consented to by the plaintiff, the case was transferred to the chancery court.

It appears from the record that the Continental Supply Company was a corporation dealing in tools, machinery, and materials used in drilling oil wells, and J. T. Robertson, J. B. Harris, and D. H. Echols were trustees of an association known as the Texas & Arkansas Oil & Gas Company, which was engaged in drilling oil wells on leased lands. On the 27th day of June, 1919, these trustees entered into a contract with the Continental Supply Company, whereby they agreed to promptly pay to said Continental Supply Company all sums of money that might become due it from the Texas & Arkansas Oil & Gas Company, for any merchandise, machinery, and materials sold and delivered or contracted to be sold and delivered to them by the Continental Supply Company.

Large amounts of machinery and materials were purchased by the representative and agent of the Texas & Arkansas Oil & Gas Co., from the Continental Supply Company, under this contract, and payments were made from time to time. Some time in December, 1919, the Continental Supply Company sent to D. H. Echols, as secretary and trustee of the Texas & Arkansas Oil & Gas Company, a statement of account showing a balance due of $15,688.77. On December 22, 1919, D. H. Echols sent to the Continental Supply Company a check for the balance claimed to be due, and also mailed to it a letter as follows:

"Inclosed herewith you will find our check for $15,688.77, in payment of the attached statement. This will be notice to you that the writer desires to be relieved of all responsibility for purchase of this company from a personal standpoint.

"Some time during the summer I signed, with J. T. Robertson and J. B. Harris, a guaranty for the payment of this company's account to the extent of $40,000. In payment of the account at this time, it is my desire to have you acknowledge receipt of advice from me that I will not be responsible further for any purchases made by this company or its agents.

"Your prompt compliance with this request will be appreciated by the writer."

On December 27, 1919, the Continental Supply Company mailed to D. H. Echols, as secretary of the Texas & Arkansas Oil & Gas Company, a reply to his letter, which is as follows:

"We are in receipt of yours of the 22nd inst. enclosing check for $15,688.77, against the account of your company, for which we wish to thank you very kindly. We also note your remarks to the effect that you wish to be released from the guarantee of $25,000 given by you, Messrs. J. T. Robertson and J. B. Harris, and wish to advise that this letter will indicate that you are released from this responsibility from this date, inasmuch as the other two gentlemen are still on this guarantee. We are sending them a carbon copy of this letter."

Other facts will be stated in the opinion. The chancellor was of the opinion that the complaint should be dismissed for want of equity, and a decree was entered of record in accordance with his findings. The case is here on appeal.

Bryan, Williams & Cave, of St. Louis, Mo., and Mann & McCulloch, and D. S. Plummer, all of Marianna, for appellant.

H. F. Roleson, of Marianna, and C. W. Norton, of Forrest City, for appellees.

HART, J. (after stating the facts as above).

In the case before us, the defendants were indebted to the plaintiff in a large amount for machinery and materials purchased by the former from the latter to be used in drilling oil wells on leased territory, operated by the defendants as trustees for certain other persons associated with them for the purpose of drilling wells for oil and gas. In this connection it may be stated that the defendants were personally liable for the account under a written guaranty signed by them, and the facts as disclosed in the record also show them to be liable as trustees of a business trust doing business under a declaration vesting in them absolute authority over the trust business and property, within...