U.S. Gypsum Co. v. Sampson, 8375

• Decision Date: 11 June 1973
• Docket Number: No. 8375,8375
• Citation: 496 S.W.2d 687
• Parties: UNITED STATES GYPSUM COMPANY, Appellant, v. Earl SAMPSON, Appellee.
• Court: Texas Court of Appeals

Page 687

496 S.W.2d 687

UNITED STATES GYPSUM COMPANY, Appellant, v. Earl SAMPSON, Appellee.

No. 8375.

Court of Civil Appeals of Texas Amarillo.

June 11, 1973.

Stone, Stone & Chambers, John C. Chambers, Amarillo, for appellant.

Culton, Morgan, Britain & White, Donald E. Jackson, Amarillo, for appellee.

ELLIS, Chief Justice.

This is an appeal from a take nothing judgment rendered against a plaintiff seeking recovery against a defendant, one of three co-guarantors under a letter of guaranty, when the plaintiff had released another of the co-guarantors from all obligations under the guaranty agreement without advising the defendant-guarantor of such release until after the indebtedness giving rise to this litigation was incurred. Affirmed.

United States Gypsum Company, plaintiff-appellant, instituted suit against Earl Sampson, defendant-appellee, one of three parties who had executed a letter of guaranty to the plaintiff, seeking to recover certain losses accruing by reason of indebtedness incurred by Big A Supply, Inc. The case was submitted to the trial court upon an agreed statement of facts.

On May 5, 1964, the defendant-appellee, Earl Sampson, Jerry D. Caldwell and J. E. Smiley, Jr., executed a letter of guaranty addressed to United States Gypsum Company concerning indebtedness incurred or to be incurred by Big A Supply, Inc. Each of the three parties signatory to the letter of guaranty were either officers, directors or shareholders of Big A Supply, Inc., the debtor corporation.

We note that throughout the entire letter of guaranty language referable to 'the undersigned' is employed in the singular, without any portion thereof containing the frequently used qualification of 'I, we, or either of us,' as the instrument sets out the various provisions relating to the guarantee to pay United States Gypsum Company the indebtedness which Big A Supply, Inc., has heretofore incurred and does hereafter incur for the purchase of merchandise. It contains no express provision pertaining to any circumstances or contingencies that would bring about joint and several liability or proration of liability among the co-guarantors. The instrument is signed by 'Earl Sampson,' 'Jerry D. Caldwell' and 'J. E. Smiley, Jr.' on the lines under the single heading designated 'Guarantor.'

On June 19, 1967, Jerry D. Caldwell requested by letter to United States Gypsum Company that he be released from any personal liability in connection with the guaranty agreement. Caldwell had previously sold his stock in Big A Supply, Inc. to J. E. Smiley, Jr., and had resigned as secretary and treasurer of the company. On July 6, 1967, United States Gypsum Company released Caldwell from all liability under the guaranty agreement. At the time United States Gypsum released Caldwell from such liability, there was no money owing to United States Gypsum by Big A Supply, Inc. All accounts in controversy in the suit were made for purchases made by Big A Supply, Inc., subsequent to the date Caldwell was released from liability and subsequent to his being a stockholder or officer in such debtor corporation.

Sampson, the defendant, was not advised by Caldwell of his letter requesting the release from United States Gypsum. Further, Sampson was not advised by either Caldwell or United States Gypsum that United States, Gypsum had released Caldwell until after the debt giving rise to this suit had been incurred by Big A Supply, Inc. Beginning on September 13, 1967, and continuing through February 27, 1968, United States Gypsum from time to time sold merchandise to Big A until there had aggregated an indebtedness of $6,073.89.

On February 29, 1968, Big A Supply, Inc., executed an assignment for benefit of creditors to J. R. Hollingsworth. On August 29, 1968, United States Gypsum executed an affidavit of acceptance in which it agreed to release Big A Supply, Inc., and all parties privy thereto from further liability upon the account in question. At the time of making the assignment for benefit of creditors, Big A Supply, Inc., was insolvent and has remained insolvent at all times thereafter.

On September 11, 1968, a check in the amount of $1,032.56 was drawn and forwarded by J. R. Hollingsworth, assignee, to United States Gypsum Company, which check represented United States Gypsum Company's pro rata share of the assets of Big A Supply, Inc. According to the agreed statement of facts, the check contained the notation that 'it was submitted in full and final payment of all claims and debts owing UNITED STATES GYPSUM COMPANY by BIG A SUPPLY, INC. and the said check was received, accepted and negotiated by UNITED STATES GYPSUM COMPANY with full understanding that the funds represented thereby were so intended to be in final settlement of all claims of UNITED STATES GYPSUM COMPANY against BIG A SUPPLY INC.'

On January 2, 1973, the trial court entered its judgment that United States Gypsum Company recover nothing against Earl Sampson, and all costs were taxed against the plaintiff. From this judgment, United States Gypsum Company has brought this appeal. Pursuant to plaintiff's request the trial court made its findings of fact and conclusions of law. The findings of fact consist substantially of the agreed statement of facts as above set out. In its conclusions of law, the court found that the obligation of Earl Sampson, defendant, Jerry D. Caldwell and J. E. Smiley, Jr., was a joint obligation and not joint and several; that the release by United States Gypsum of Caldwell had the effect of releasing all of the joint obligors under the guarantly agreement of May 5, 1964; that under the facts an accord and satisfaction was reached by and between Big A Supply, Inc., acting by and through its assignee for benefit of creditors and United States Gypsum Company, and such accord and satisfaction was based upon a valid consideration; that upon receipt by United States Gypsum Company of its pro rata share of the assets of Big A Supply, Inc., the debt of Big A owing to United States Gypsum was satisfied and fully discharged; and that under the terms of the Affidavit of Acceptance all persons privy to Big A Supply, Inc., were released and discharged from further liability on the account.

The appellant contends that the trial court erred in (1) concluding that the responsibility of the parties signatory to the letter of guaranty was joint rather than joint and several; (2) holding that the release of one co-obligor operates to release all obligors; and (3) determining that an accord and satisfaction was reached between the bebtor corporation and appellant which was supported by valid consideration resulting in the satisfaction of the indebtedness owing to the appellant and the appellee's release and discharge therefrom.

Although no Texas case has been cited specifically determining whether the interpretation of language such as that here employed gives rise to joint or joint and several liability, we note that in 13 Tex.Jur.2d 293, Contracts, § 124, it is stated:

'Whether the liability of several promisors, whose interests are separate, is joint or several depends, of course, on the intention of the parties. For instance, the fact that several parties are named as promisors, while several others are named as promisees, is ordinarily indicative of a joint undertaking. Although this prima facie indication will not be controlling if the instrument, when considered in its entirety, discloses a contrary intention, where the instrument provides that 'we or either of us' promise to pay, the liability of the parties will then he deemed to be joint and several.'

From a consideration of the entire instrument we find nothing...