Schroeder v. Hunter Douglas, Inc.

• Decision Date: 14 November 1984
• Docket Number: No. 68659,68659
• Parties: SCHROEDER v. HUNTER DOUGLAS, INC.
• Court: Georgia Court of Appeals

Page 746

324 S.E.2d 746

172 Ga.App. 897

SCHROEDER v. HUNTER DOUGLAS, INC.

No. 68659.

Court of Appeals of Georgia.

Nov. 14, 1984.

Rehearing Denied Dec. 6, 1984.

Certiorari Denied Jan. 15, 1985.

Michael L. Wetzel, Atlanta, for appellant.

Frank C. Bedinger, III, Atlanta, for appellee.

CARLEY, Judge.

Appellee Hunter Douglas, Inc. brought an action on open account against Superior Discount Materials Corporation (Superior) and its president, appellant Schroeder. Appellee sought to recover the balance due for goods sold and delivered to Superior. Appellee asserted that appellant was individually liable for Superior's debt pursuant to an alleged guaranty agreement, and that he was also liable as the corporation's alter ego. Following a jury trial, judgment was entered in favor of appellee. Appellant appeals from the denial of his motion for a new trial.

1. Contrary to appellant's assertion on appeal, the State Court of Fulton County had subject matter jurisdiction of the present case. The remedy sought by appellee was at law, not in equity. See Ga. Const. of 1983, Art. VI § 3 Par. 1; Williams Plaza v. Sedgefield Sportswear Div., 164 Ga.App. 720, 297 S.E.2d 342 (1982).

2. Appellant enumerates as error the denial of his motion in limine to exclude a certain guaranty agreement from evidence. He asserts that the agreement was unenforceable under the Statute of Frauds.

The evidence shows the following: Crown Aluminum Industries (Crown) manufactured and sold aluminum products. In 1977, Crown was acquired by appellee Hunter Douglas, Inc. Superior was incorporated in 1976, for the sole purpose of acting as the buying agent for Delta Discount Corporation. Appellant Schroeder was president of both Superior and Delta Discount Corporation. During the course of business, Crown extended credit to Superior for its purchase of aluminum products. Subsequently, the following guaranty agreement was executed: "To: CROWN ALUMINUM INDUSTRIES[.] FROM: DELTA DISCOUNT[.] I, Vern Schroeder of Delta Discount, guaranty payment of any and all materials billed to Superior Discount Material Corporation. [Signed] Vern Schroeder." Appellant asserts that this guaranty agreement is unenforceable under the Statute of Frauds because the amount owed by Superior and the terms of payment are absent from the document.

A promise to answer for the debt of another, to be binding on the promisor, must be in writing and signed by the party to be charged therewith. OCGA § 13-5-30(2). Our courts have held that in order to satisfy the Statute of Frauds, the writing relied upon as a guaranty must, either in itself or in connection with other writings, identify the debt which is the subject of the promise, indicate knowledge of both the amount promised to be paid and the time the debt becomes due, and show who is the promisee as well as the promisor. Caldwell v. Rogers, 140 Ga.App. 231(1), 230 S.E.2d 368 (1976); Pearce & Co. v. Stone Tobacco Co., 125 Ga. 444, 54 S.E. 103 (1906); Builder's Supply Corp. v. Taylor, 164 Ga.App. 127, 296 S.E.2d 417 (1982); Graham v. Nash Loan Co., 51 Ga.App. 521, 181 S.E. 105 (1935).

The instant guaranty agreement contained a clear statement of the agreement and identified the subject matter of the debt as well as the promisee and promisor. With regard to the other elements of an enforceable guaranty, appellee introduced invoices which established the exact materials purchased by Superior from Crown or appellee Hunter Douglas, the amounts owed for those purchases, and the term of indebtedness on the open account.

"It is not necessary that the [guaranty agreement] contain in itself all of the requirements which the [S]tatute [of Frauds] embraces.... If the writing, therefore, refer to any other writing which can be identified completely by this reference, without the aid of parol evidence, then the two or more writings may constitute a compliance with the statute." Turner v. Lorillard Co., 100 Ga. 645, 650(2), 28 S.E. 383 (1897). See also Module Mobile, Inc. v. Fulton Nat. Bank, 150 Ga.App. 808, 809(1), 258 S.E.2d 614 (1979).

One can certainly execute a valid contract of guaranty whereby he guarantees the payment of future debts incurred by another party. Pendley v. Stewart, 116 Ga.App. 327, 329(3), 157 S.E.2d 511 (1967). The exact amount and the full terms of the indebtedness on an open account are not determinable at the time of the execution of such a guaranty agreement, and are often necessarily established by subsequent documentation. "[T]he jury in the exercise of common sense could see the logical connection between the [guaranty agreement for payment of materials purchased and the invoices for materials subsequently purchased.] We conclude that the trial court correctly determined that the Statute of Frauds did not apply to [exclude] the [guaranty agreement.]" Module Mobile, Inc. v. Fulton Nat. Bank, supra, 150 Ga.App. at 811, 258 S.E.2d 614. Cf. Ebner v. Gulf Oil Corp., 99 Ga.App. 586, 588(4), 109 S.E.2d 81 (1959). Compare Gibson & DeJournette v. Graham, 24 Ga.App. 496(2), 101 S.E. 194 (1919).

3. In a related enumeration, appellant contends that certain testimony concerning the invoices was erroneously admitted to establish the terms of the guaranty agreement. As we stated in Division 2, the guaranty itself made reference to the indebtedness to be incurred by Superior for materials purchased. The contested testimony was not necessary to explain any of the terms of the guaranty agreement, nor was that its purpose. We find no error in this regard. See generally Module Mobile v. Fulton Nat. Bank, supra, 150 Ga.App. at 809, 258 S.E.2d 614.

4. Appellant asserts that Crown Aluminum's interest in the guaranty agreement was not transferable to appellee and therefore, the trial court erred in denying appellant's motion in limine to exclude the guaranty agreement from evidence.

As previously noted, appellee acquired all of Crown Aluminum's assets relating to the manufacture, distribution and sale of all aluminum products. A transfer of the underlying principal obligation operates as an assignment of the guaranty. Hazel v. Tharpe & Brooks, 159 Ga.App. 415(2), 283 S.E.2d 653 (1981). Compare Hurst v. Stith Equip. Co., 133 Ga.App. 374(3), 210 S.E.2d 851 (1974). Therefore, Crown Aluminum's assignment to appellee of Superior's open account effectively operated as an assignment to it of appellant's obligation.

5. Appellant asserts that appellee was erroneously allowed to ask appellant leading questions. It is also contended that appellant's counsel was thereafter erroneously denied the opportunity to conduct his own cross-examination of appellant.

It is undisputed that appellee called appellant to take the witness stand, and it was not until shortly after questioning had begun that appellee announced that appellant was being called as an adverse witness. In Colwell v. Voyager Cas. Ins. Co., 251 Ga. 744, 747, 309 S.E.2d 617 (1983), the Supreme Court held that "[i]f the adverse party or agent as specified in OCGA § 24-9-81 (Code Ann. § 38-1801) is called, and an announcement is made by the calling party that the witness is being called for cross-examination, but that announcement is not timely made, the calling party may cross-examine the adverse witness and the other party may or may not be allowed to cross-examine the witness, in the discretion of the trial court, depending upon when in the course of the witness' testimony the announcement was made, the relationship and attitude of the witness to the parties and the nature of the testimony given or sought to be elicited."

Accordingly, the trial court in the instant case did not abuse its discretion in allowing appellee to ask leading questions of appellant since he was on cross-examination. Moreover, appellant's contention that his own counsel was not allowed to cross-examine him immediately after appellee's examination is not supported by the record. Even if such were the case, that decision would be within the trial court's discretion. Colwell v. Voyager Cas. Ins. Co., supra. We find no error.

6. In its complaint, appellee alleged that Superior was an empty corporate entity and that appellant was its alter ego. Appellee asserted that the corporate veil...