Hickory Novelty Co. v. Andrews

• Decision Date: 21 June 1924
• Docket Number: 474.
• Citation: 123 S.E. 314,188 N.C. 59
• Parties: HICKORY NOVELTY CO. v. ANDREWS.
• Court: North Carolina Supreme Court

123 S.E. 314

188 N.C. 59

HICKORY NOVELTY CO. v. ANDREWS.

No. 474.

Supreme Court of North Carolina

June 21, 1924

Appeal from Superior Court, Catawba County; Webb, Judge.

Action by the Hickory Novelty Company against D. W. Andrews. From a judgment of nonsuit, plaintiff appeals. Reversed.

The facts material are:

The plaintiff is a corporation doing business in Hickory, N. C prior to and since January 1, 1920. The defendant is a citizen of Durham, N. C., residing there prior to and since January 1, 1920. On January 3, 1920, and prior thereto, C. W Andrews & Bros. were doing business in Durham, N. C., and in connection with their business purchased lumber, boxes, and other lumber products, and also sold to the trade such products. The Hickory Novelty Company deals in lumber of various kinds, manufacturing moulding and other wood products for the trade.

The firm of C. W. Andrews & Bros. was composed of C. W. Andrews and several other sons of the defendant, D. W. Andrews. Plaintiff contends that D. W. Andrews was a member of this firm, which was denied by him. This firm, prior to January 3 1920, was doing business with plaintiff and Hutton & Bourbonnais Company, and had become indebted to Hutton & Bourbonnais Company, and contends that--

"The defendant, D. W. Andrews, desiring that the said firm of C W. Andrews & Bros. should continue to do business with the said plaintiff, and with a view of making the then-existing debt secure, did, on January 3, 1920, guarantee to the Hutton & Bourbonnais Company the then existing and outstanding account of $3,509.68, as well as to guarantee to the plaintiff and the Hutton & Bourbonnais Company the payment of all debts and obligations of C. W. Andrews & Bros. that might be created or become due in the future by reason of business transactions to be conducted between the firms."

The defendant, in answer says:

"The defendant admits that C. W. Andrews and two of his other sons, under the firm name of C. W. Andrews & Bros., had been doing business with plaintiff and Hutton & Bourbonnais Company prior to January 3, 1920, and had become indebted to plaintiff and said company in the sum of $3,509.68, and did write the firm of Hutton & Bourbonnais a letter under date of January 3, 1920."

The letter is as follows:

"This will advise that I am interested in C. W Andrews & Bros., and will personally see that all business transactions between C. W. Andrews & Bros. and Hutton & Bourbonnais Company and Hickory Novelty Company are settled and adjusted satisfactorily entirely with your concerns. I am inclosing herewith a letter from the Home Savings Bank of Durham, N. C., which will show to you that I am personally responsible for all outstanding accounts up to this date, and all accounts which will follow. If this is not entirely satisfactory with you, I will forward as soon as you advise other letters or credentials, which I am sure will be entirely satisfactory with you. The outstanding account, which amounts to $3,509.68, will be paid January 11, 1920, and from now on, if there is anything pertaining to this business which is questionable, please advise me personally at once, and I will straighten out the matter entirely to your satisfaction. We have in view a large volume of business for the future, and trust that you will give it your personal attention upon receipt of same. Thanking you for past favors, and trusting that you are enjoying the best of health.

Yours very truly, D. W. Andrews."

The Home Savings Bank letter inclosed, is as follows:

"Messrs. Hutton & Bourbonnais, Hickory, N. C.--Gentlemen: We wish to advise you in regard to the financial standing of Messrs. C. W. Andrews & Bros., of this city. We have been doing business with these gentlemen for a number of years and have always found them to be prompt, reliable, and fully able to carry out their financial obligations. They stand well in our community and can get any reasonable amount of credit they desire. You will be safe in extending them a line of credit to $10,000 for thirty or sixty days, should they ask it. Mr. D. W. Andrews of the firm is worth over $30,000. Should you care to have further information regarding these gentlemen, will be glad to have you write me.

Very truly yours,

Home Savings Bank,

T. B. Price, Cashier."

The plaintiff further contends:

"That after said letter of credit or guaranty of D. W. Andrews, along with a letter of the Home Savings Bank of Durham, N. C., was received by plaintiff and the Hutton & Bourbonnais Company, the said firm of C. W. Andrews & Bros. continued to do business with plaintiff during the remainder of the year 1920, and continued on through 1921, and for a portion of the year 1922." That about June 10, 1922, the firm of C. W. Andrews & Bros owed plaintiff a balance of $3,924.12 and interest.

The total sales of goods to C. W. Andrews & Bros., after the letter of January 3, 1920, of D. W. Andrews, was $15,939.89, which, with credits, left on June 10, 1922, above amount ($3,924.12) due. A. B. Hutton testified that the amount of the old account mentioned in D. W. Andrews' letter, of $3,509.68, had been paid. The record shows that A. B. Hutton was interested in the plaintiff, Hickory Novelty Company, and was acting for plaintiff. The amount sued on has never been questioned as being inaccurate, as far as the amount is concerned. C. W. Andrews & Bros. delayed making payment, and plaintiff wrote D. W. Andrews, reminding him of his obligation.

On July 21, 1922, D. W. Andrews wrote from Durham, N. C., the following letter to A. B. Hutton, at Hickory, N. C.:

"I am in receipt of your letter again calling my attention to the account of C. W. Andrews & Bros. and have discussed the matter with C. W. Andrews, and feel that they will be in a better position within a short time to cancel this indebtedness. They are to mail you a check for $500 so that you will have it not later than the 1st of August, and too they will mail you a check every 15 days after August 1st to take care of this account. In the event that they do not carry out the above plans, kindly notify me and I will see that they are carried out to your satisfaction. This plan will enable them to cancel this indebtedness sooner than the note plan would. I believe and feel that it would be more satisfactory in the long run for them. With kind personal regards, I am, very truly yours."

On July 1st a check for $500 was paid on the account by C. W. Andrews & Bros., and on August 5th a check for $250 was paid on the account, reducing the indebtedness to $3,174.12 and interest.

On August 1, 1922, A. B. Hutton wrote to D. W. Andrews a letter to Durham, N. C., as follows:

"Your esteemed favor of July 21st has been received, and I thank you for satisfactory reply. I note in your letter that the firm of C. W. Andrews & Bros. is to send the Hickory Novelty Company $500 August 1st and $500 every fifteen days thereafter until the account is paid and discharged in full. I further note that you will be responsible for this agreement being carried out to my satisfaction, which is in accordance with your former guaranty to us, made on January 3, 1920, to which I referred in my former letter to you. I wish to assure you that I have, and our firms have, the kindest feeling for you, and wish you and your business the greatest success, but you appreciate that we must ask that the arrangement suggested by you be carried out, as we really need the money. I will expect the $500 you say will be paid August 1st by tomorrow, the 2d, so please see that I am not disappointed, as up to this time we have not had remittance. With kind personal regards, I am, yours very truly."

The plaintiff contends that--

"By reason of the guaranties of defendant to plaintiff, and by reason of the guaranties made by defendant, causing plaintiff to delay in the collection of its debt, all of which, taken together and singly, the plaintiff alleges makes defendant liable for its debt against C. W. Andrews & Bros., and it asks judgment against defendant accordingly."

The defendant contends that the firm copartnership doing business under the name of C. W. Andrews & Bros. was dissolved on February 1, 1921; that C. W. Andrews, being chief stockholder, and several of his brothers, with D. W. Andrews, organized a corporation as C. W. Andrews & Bros., Inc., and the corporation is due the sum contended for by plaintiff, and not the defendant, and that the corporation, at the time of the institution of this suit, was in the hands of a receiver, and has since been put into bankruptcy; that he never guaranteed to plaintiff "any indebtedness due it by said corporation, and is advised, believes, and alleges that the letter written by him on January 3, 1920, does not in any way make him responsible for the debts or obligations of said corporation."

The articles of incorporation were filed in the office of the Secretary of State January 29, 1921, and in the clerk's office at Durham, N. C., February 9, 1921. C. W. Andrews & Bros., and the corporation formed, have become insolvent. It was admitted that the entire account is filed in the bankruptcy proceeding against C. W. Andrews & Bros., Inc.

C. H. Cline, secretary of Hickory Novelty Company, and bookkeeper and office man, testified:

"I thought all the time I was dealing with C. W. Andrews & Bros., the people we started with. I had no information of any change in the firm. I ran the account in that way; charged everything to C. W. Andrews & Bros., and credited everything as of the date of the check I received; everything was entered on this book that way."

D. W. Andrews, testified in part:

"After I wrote that letter to the head of the Hutton & Bourdonnais Company I never received any reply. I have been...