Truscon Steel Co. v. Thirlwell Electric Co.

• Decision Date: 23 June 1936
• Citation: 96 S.W.2d 1023,265 Ky. 414
• Parties: TRUSCON STEEL CO. v. THIRLWELL ELECTRIC CO.
• Court: Kentucky Court of Appeals

96 S.W.2d 1023

265 Ky. 414

TRUSCON STEEL CO. v. THIRLWELL ELECTRIC CO.

Court of Appeals of Kentucky

June 23, 1936

Rehearing Denied Oct. 30, 1936.

Appeal from Circuit Court, Jefferson County, Common Pleas Branch Third Division.

Action by the Truscon Steel Company against the Thirlwell Electric Company. Judgment for defendant, and plaintiff appeals.

Reversed and remanded for a new trial.

Wm. T Baskett and Morris B. Gifford, both of Louisville, and A. C Ruihley, of Youngstown, Ohio, for appellant.

Trabue, Doolan, Helm & Helm, Huston Quin, and Blakey Helm, all of Louisville, for appellee.

CLAY Chief Justice.

The Truscon Steel Company brought this suit against the Thirlwell Electric Company to recover $1,050 due on a contract, and obtained a general order of attachment. The defendant pleaded a novation. On a trial before a jury the court, at the conclusion of the evidence, sustained defendant's motion for a peremptory instruction. Plaintiff appeals.

The facts are: Prior to April 1, 1932, appellee contracted with the Louisville Baseball Company to floodlight Parkway Field, and ordered the steel for the towers from appellant. Before filling the order, appellant required the Louisville Baseball Company to guarantee the credit of appellee. The Louisville Baseball Company did this by letter which was received by appellant, and in reply to which it wrote the following:

"As our Mr. A. B. Greene explained to Mr. Knebelkamp the foregoing will not mean we will sell this material and labor to you direct, but only serves to guarantee that if Thirlwell Electric Company does not pay us the $2,100.00 involved, you will do so."

After the delivery of the material to appellee, appellant attempted to collect its account from both appellee and the Louisville Baseball Company. On October 27, 1932, the Louisville Baseball Company wrote to appellant's attorney in regard to the indebtedness, and sent its note for the amount of the account payable in sixty days, saying in the letter: "We are attaching hereto our 60 day note, as suggested by you, to take care of our account," and "We thank you for this consideration, which will permit us to make some deals at the December baseball meeting, to enable us to take care of our current indebtedness." The note granted appellant the right to have judgment confessed by any attorney in the state of Ohio or elsewhere, and waived other rights not subject to waiver in Kentucky. Appellee was not a party to the note in any way.

Following the appointment of a receiver for the Louisville Baseball Company, appellant filed with the receiver verified proof of its claim upon the note issued to it by the Louisville Baseball Company. Appellant was paid $1,050 on the note, but has received no further payment.

The contract price for the entire work performed by appellee was $12,930.90. Of this amount appellee received only $1,000, which it had paid out for labor and material during the work. Appellant did not notify appellee that it had received the sixty-day note from the Louisville Baseball Company. Appellee went to that company for the purpose of having it issue notes to materialmen, and then learned that the sixty-day note had been given to appellant of which it approved. After giving all the notes, the baseball company still owed appellee $2,771.74.

Appellant wrote appellee on June 13, June 23, and June 30, 1932, in regard to payment of the account. Appellee did not answer these letters, and appellant then took the matter up with the baseball company, and on October 27, 1932, obtained the sixty-day note for $2,100. No other correspondence seems to have passed between appellant and appellee during the year 1932. However, the sixty-day note not having been paid, appellant telegraphed appellee on January 10, 1933, asking for payment. In answer to the telegram, appellee wrote that they had delayed answering as they were trying to get in touch with the president of the Louisville Baseball Club to see if they could not make some arrangement with him so that the account may be closed, and added, "We also beg to state that we have not received our money from the Louisville Baseball Club, and that any suit entered at this time would be very disastrous as it might mean only a few cents on the dollar to the creditors, whereas a few months more time might iron this entire matter out satisfactory to all parties." On February 7, 1933, appellant again wrote to appellee and on the next day sent a telegram. On February 11, 1933, appellee answered both the letter and telegram, and referred in the letter to the fact that the Louisville Baseball Company was trying to settle with its creditors by giving bonds, and stating that he could not take the bonds off appellant's hands. The letter also contained the following: "We would only be too glad to see this matter settled, and wish we were in a financial position to do so."

In the spring of 1933 appellant put the matter in the hands of its attorney, and he wrote appellee several letters insisting on the payment of the account....