Copeland v. Swiss Cleaners

• Decision Date: 29 March 1951
• Docket Number: 1 Div. 422
• Citation: 52 So.2d 223,255 Ala. 519
• Parties: COPELAND v. SWISS CLEANERS, Inc., et al.
• Court: Alabama Supreme Court

Page 223

52 So.2d 223

255 Ala. 519

COPELAND v. SWISS CLEANERS, Inc., et al.

1 Div. 422.

Supreme Court of Alabama.

March 29, 1951.

Rehearing Denied May 10, 1951.

V. R. Jansen, of Mobile, for appellant.

Holberg, Tully & Aldridge and J. W. Grayson, all of Mobile, for appellees.

FOSTER, Justice

This is a suit by U. S. Copeland, the appellant, against Swiss Cleaners, Inc., a corporation, and Jesse L. Dillard on a promissory note purporting to be executed by the Swiss Cleaners, Inc., by Jesse L. Dillard, president and endorsed by Jesse L. Dillard. The note contains a waiver by the endorser of demand, presentment, protest and notice of protest, suit and all other requirements necessary to hold them. The defendants pleaded separately, first, non est factum, and, second, want of consideration. The sixth plea of the Swiss Cleaners sets up the fact that plaintiff together with Idell R. Copeland entered into a written contract with Jesse L. Dillard, one of the defendants herein, on August 22, 1947, after the execution of the note sued on, whereby for the consideration named the said U. S. and Idell Copeland warranted that all outstanding indebtedness of the corporation had been or would be paid by them, attaching a copy of the agreement. Defendant alleged that the terms of the contract had been complied with by said Dillard, and that by virtue of said agreement said note has been paid and discharged. The copy of the agreement, alleged to be attached, purports to be dated August 22, 1947, between U. S. and Idell Copeland and Jesse L. Dillard. It recites a sale thereby made by the Copelands to Dillard of one hundred and fifty shares of stock of the corporation and their interest in certain fixtures and equipment of the corporation. The corporation had one hundred and seventy shares of stock. The consideration expressed was to pay $8,000.00 indebtedness of the Copelands, $4,000.00 cash to the Copelands, and $11,000.00 to be paid the Copelands September 20, 1947, without interest. The agreement recites that the price stated, aggregating $23,000.00, was to include the purchase of twenty shares of stock owned by George R. Copeland, a minor, whose disabilities were to be removed and he was then to transfer the same to Dillard by September 20, 1947, in default of which there was to be deducted from the $11,000.00, then payable, the sum of $2706.00. In said agreement the Copelands warranted that all outstanding indebtedness of the corporation had been or would be paid by them. Said plea does not in terms refer to the note sued on as an outstanding indebtedness of the corporation. But it gives the date of the contract as August 22, 1947, and the complaint describes the note as dated August 21, 1947. The basis of the claim thus set up is that the note to plaintiff was an outstanding debt of the corporation on August 22, 1947, and therefore within the terms of plaintiff's warranty that it had been paid or would be paid by him.

The seventh plea sets up the same matter and alleges that the plaintiff is estopped by reason thereof to maintain this action. The same matter was pleaded by Jesse L. Dillard in pleas B and C. A demurrer was overruled to those pleas, and plaintiff made replication. Replications A, B and C were those which were finally filed, and demurrer was sustained to them. Replication A alleges in substance that prior to the execution of the note sued on and the execution of the contract attached to the pleas, plaintiff was the owner of a controlling interest in Swiss Cleaners, Inc., that he owned the capital stock, and that negotiations for the purchase of the property by defendant Dillard began in August 1947; that an agreement was reached to acquire all the capital stock and take over the direction of the company for the purchase price of $25,000.00 to be paid by the assumption of certain obligations of the corporation and plaintiff and by a cash payment and by deferred payments. That on August 21, 1947, $4,000.00 was paid by Jesse L. Dillard to plaintiff and the parties joined in the preparation of contracts to transfer the property. Said Dillard was to become thereby the only stockholder and officer of said corporation, and executed and delivered to plaintiff the note sued on after its endorsement by him, to be taken as a part of the deferred payment to be made to plaintiff by said purchaser; that the debt evidenced by said note was not a pre-existing obligation but was created by Jesse L. Dillard as the sole stockholder and owner of said business. Replication B admits the execution of the contract but denies that the note sued on was due prior to the sale of said property and alleges that said debt was created by the sole stockholder of the capital stock upon its transfer to him. Replication C alleges that the debt evidenced by the note was created by the said contract and said note was given to reduce the purchase price of said property which said Dillard originally agreed to pay in cash at the time of his purchase, and said debt was not an obligation of plaintiff or the corporation prior to the transfer of said business by plaintiff, nor was it a pre-existing obligation. The court sustained demurrer to all those replications.

The cause went to trial before the presiding judge without the intervention of a jury on the complaint and pleas of non est factum and want of consideration and special pleas 6 and 7, B and C, supra. There was evidence introduced by plaintiff with respect to the execution of the note. The court ruled that the evidence was not sufficient to prove the execution of the note and sustained objection to it. Plaintiff was not able to proceed further on account of the adverse rulings of the court and took a non-suit for the purpose of reviewing those rulings on appeal.

Appellant has assigned as error the ruling of the court overruling the demurrer to defendant's pleas sustaining the defendant's demurrer to plaintiff's replications and sustaining objection to the introduction of the note.

Appellee has moved to strike certain assignments of error upon the ground that they are insufficient, particularly those assignments referring to the court's action in overruling plaintiff's demurrer to pleas of defendant, to which we have referred, and sustaining defendant's demurrer to plaintiff's replications.

It is our view that the motion to strike the assignments is not well taken. The motion is based on the ground that there is not a separate assignment as to each ground of demurrer relied on. We have had occasion to deny that contention in several of our cases wherein the assignments of error merely challenged the ruling on demurrer with no separate assignment challenging the ruling as to each separate ground. Allison, Russell, Withington Co. v. Sommers, 219 Ala. 33, 121 So. 42; Jackson v. Ariton Banking Co., 214 Ala. 483, 108 So. 359, 45 A.L.R. 1026.

We revert to the question of whether the evidence was sufficient to admit the introduction of the note, required by the plea of non est factum. It appears from the evidence without conflict that on and prior to August 21, 1947, the plaintiff and Idell Copeland owned one hundred and fifty shares of the stock of the Swiss Cleaners, Inc., a corporation, doing business in Mobile. There were one hundred and seventy of such shares outstanding. Twenty shares of stock were owned by a minor brother. There were negotiations between plaintiff and Jesse L. Dillard looking to a sale of it all to Dillard. It resulted in an agreement between them, including Idell Copeland, and a sale of such property. The sellers had purchased the property from another party by purchasing the stock in the Swiss Cleaners. There was a balance due to such sellers of something like $8,000.00. The agreement reached between him and Jesse L. Dillard, as shown by the testimony, was that the purchase price of the property should be $25,000.00, payable as follows, $8,000.00 to the plaintiff's sellers, $6,000.00 cash payment to the plaintiff and Idell Copeland, and $11,000.00 payable September 20th next. When it came to the matter of closing the transaction, the defendant Dillard made known to the plaintiff that, instead of paying him the whole $6,000.00 in cash, it would better suit his convenience to pay $4,000.00 in cash and give him the note of the Swiss Cleaners with Dillard as endorser for $2,000.00. This was accepted by the plaintiff and, on August 21, 1947, an agreement was entered into between them in writing, signed and witnessed. The note sued on was likewise on that occasion executed by defendant signing the name of the Swiss Cleaners, Inc., by defendant Dillard as president, and at the same time endorsing the note with a waiver of demand, notice and protest. It then developed that the defendant Dillard desired to consult his lawyer with respect to the transaction, and they all went to the office of defendant's lawyer who happened to know that a few shares of the stock, to wit, twenty shares were owned and held by George R. Copeland who was a minor. And so it became necessary or appropriate to redraft some feature of the contract which had been written and signed by the parties and witnessed. That was done, to the extent here material, by taking out of the contract certain sheets thereof and inserting others which included a provision that the twenty shares of stock standing in the name of George R. Copeland should be transferred and conveyed to the purchaser on or before September 20, 1947, when the $11,000.00, the balance of the purchase price, was payable, and in default of same the sum of $2,706 should be deducted and retained out of said $11,000.00 by the said Jesse L. Dillard. The contract was in fact not re-executed or witnessed but, with the consent of all parties concerned, the new sheets containing the added features were inserted before the last page containing the signatures, so that it appeared to be over the signatures as it was originally executed. It was...