Jordan v. Greensboro Furnace Co.

• Decision Date: 13 March 1900
• Citation: 35 S.E. 247,126 N.C. 143
• Parties: JORDAN et al. v. GREENSBORO FURNACE CO. et al.
• Court: North Carolina Supreme Court

35 S.E. 247

126 N.C. 143

JORDAN et al. v. GREENSBORO FURNACE CO. et al.

Supreme Court of North Carolina

March 13, 1900

Appeal from superior court, Guilford county; Timberlake, Judge.

Action by J. F. Jordan and others against the Greensboro Furnace Company and others. From a judgment in favor of plaintiffs defendants appeal. Reversed.

Plaintiffs alleged that they had expended a large sum, and were to receive gifts of land from third parties on the operation of a manufacturing plant, in pursuance of an agreement to convey or lease the plant to them, and that they had assigned their interest in the contract to defendants, under a parol agreement that they would cause the plant to be leased to plaintiffs for five years on the formation of a new company that a parol lease for five years was agreed on between plaintiffs and such new company, which it refused to reduce to writing,--which allegations defendants denied. Held, that it was error to allow evidence of such agreement to lease, in an action for failure to execute a lease of the plant, since the agreement was void under the statute of frauds.

J. A Barringer, A. M. Scales, Adams & Douglas, and J. N. Wilson, for appellants.

Bynum & Bynum and King & Kimball, for appellees.

MONTGOMERY J.

This action was brought to recover damages for the alleged failure of the defendants to execute a parol agreement alleged to have been entered into between the plaintiffs and defendants, by which the defendants were to lease to the plaintiffs, for a term greater than three years, the plant of the North Carolina Steel & Iron Furnace Company. The cause of action, as set out in the plaintiffs' complaint, is stated substantially as follows: (1) That in the year 1895 the North Carolina Steel & Iron Furnace Company, a corporation, was unable to meet its indebtedness, amounting to $26,000, and agreed to sell, and the plaintiffs agreed to buy, the plant, and all its belongings, for the amount of the indebtedness. (2) That, before a meeting of the company was called to ratify the sale, J. M. Worth and his associates, defendants, represented to the plaintiffs that they (Worth and his associates) had contributed to the company a large amount of money, which would be entirely lost to them by a sale to outsiders, and asked the plaintiffs to allow him and his associates to purchase the plant from the company. (3) That the plaintiffs had already expended a large sum in trying to effect a sale or lease of the property, and that various persons owning property near the plant had agreed to convey to plaintiffs a large number of valuable lots if the plaintiffs would put the plant in operation, and therefore the plaintiffs could not surrender their interest without some guaranty to receive a lease of it after Worth and his associates should make the purchase. (4) That the defendants then agreed that, if the plaintiffs would assign their interest, he and his associates would lease for a term of five years, after a new company had been formed, to the plaintiffs, upon their making a reasonable proposition, and that the plaintiffs agreed therefor to transfer their right to Worth and his associates, and did so, in writing, and asked the said company to sell and convey to defendants the property. (5) That the company thereupon sold and conveyed to Worth and his associates the entire plant, and they then organized the Greensboro Furnace Company, with Worth and his associates as incorporators. (6) That after the new company was formed the plaintiffs offered a reasonable proposition for a lease of the property according to the previous understanding, which the defendants accepted, but afterwards refused to sign when the lease in writing was tendered.

The defendants, in their answer, denied the main allegations of the complaint, and especially the ninth paragraph, in which was alleged the parol agreement for the lease.

His honor was of opinion that the plaintiffs could recover damages for the amount which they had expended in trying to effect a sale or lease of the property for the company, and also damages for the loss of the lots which they would have received if they had leased the plant and put it in operation (that is, if the proof offered on those heads should satisfy the jury of the truth of the allegations), and he therefore allowed and received evidence on the part of the plaintiffs to prove the parol agreement...