Voorhees, Miller & Co. v. Porter

• Decision Date: 05 April 1904
• Citation: 47 S.E. 31,134 N.C. 591
• Parties: VOORHEES, MILLER & CO. v. PORTER et al.
• Court: North Carolina Supreme Court

47 S.E. 31

134 N.C. 591

VOORHEES, MILLER & CO. v. PORTER et al.

Supreme Court of North Carolina

April 5, 1904

Appeal from Superior Court, Buncombe County; E. B. Jones, Judge.

Action by Voorhees, Miller & Co. against J. A. Porter, as trustee and others. From a judgment as of nonsuit in favor of defendant Porter, plaintiffs appeal. Reversed.

Where the purchaser of goods agreed, in consideration of the transfer, to pay the debts of the seller, and a third person covenanted that the purchaser should faithfully perform the contract, such person was an absolute guarantor of payment and a creditor of the seller might sue him without first proceeding against the principal.

Action to recover a debt due to the plaintiffs by C. D. Blanton and, for that purpose (1) to set aside an assignment by him to J. D. Brevard alleged to be fraudulent, (2) to enforce a trust as to certain funds in the possession of Brevard under a contract with Blanton that he would pay the same to Blanton's creditors, and (3) to recover against J. A Porter and J. B. Bostic the amount of plaintiffs' debt upon their covenant given to Blanton by which they guarantied a performance of said contract by Brevard and the payment of the money by him to the creditors. In November, 1892, Blanton was indebted to the plaintiffs in the sum of $3,445.50 for goods sold and delivered, and for which Blanton gave the plaintiffs his two several promissory notes, with Cobb, Bostic, and W. M. Blanton as sureties. Plaintiffs obtained judgment on these notes in the federal court, but were unable to collect any part of the amount due upon the judgment, because of the insolvency of the defendants. On December 30, 1903, Blanton executed to J. D. Brevard an instrument in writing, by which he sold and conveyed to him his stock of goods, wares, and merchandise at their cost, less 12 1/2 per cent., and, in consideration thereof, Brevard agreed that, after retaining $3,000 to pay a debt due to him from Blanton, he would hold the purchase money, and apply the same to the payment of (1) all debts due by Blanton on which Brevard is surety or indorser, and (2) all the other debts owing by Blanton upon which Bostic or Cobb is surety. It was then provided that the surplus, if any, should be paid to Blanton. On the same day Bostic and Porter executed their guaranty, by which they agreed that Brevard should "faithfully keep and perform all the covenants and agreements to be by him kept, done and performed according to the terms of the foregoing contract, dated this day, between him and Blanton," and "that he will pay faithfully the price of the goods sold to him by said contract according to the terms thereof and as therein stated," and they did "jointly and severally guaranty such performance and payment." There was a provision in the contract between Blanton and Brevard that the goods sold and conveyed to Brevard should be inventoried so as to describe and identity the goods more definitely, and so as to ascertain the exact amount of the purchase price to be held by Brevard for the creditors and to be paid to them. An inventory was accordingly made, and the net amount of the purchase money ascertained to be $18,158.47. On March 3, 1904, J. D. Brevard made a general assignment to J. A. Porter of all his property for the benefit of his creditors. There was evidence tending to show the execution of the several instruments above mentioned, and also to show that Cobb, Bostic, C. D. Blanton, and W. N. Blanton are insolvent. The plaintiffs allege that Porter had received the property assigned to him by Brevard, and sold it, and had failed to execute his trust by paying the proceeds of the sale or the price of the goods to the creditors of Brevard as required to do by the assignment, and "that neither the said Brevard, the said Bostic, nor the said Porter has ever paid anything to the plaintiffs, although the plaintiffs were entitled to be paid by virtue of the terms of said contract, and although they have repeatedly demanded payment," and that, while the assets received by Porter under the assignment amounted to $30,000, he has not paid out exceeding $5,000 to the creditors of Brevard, nor has he accounted for the proceeds of sale received by him, as it was his duty as assignee to do. The defendants in this suit are Bostic, Cobb, and Brevard, and J. R. Porter, individually and as assignee of J. D. Brevard. The prayer of the complaint is as follows: "(1) That the deed of assignment from the defendant J. D. Brevard to the defendant J. A. Porter be declared to be fraudulent and void, and that the said Brevard and Porter account for the said assets and proceeds thereof. (2) For judgment against the said Porter and the defendant J. B. Bostic upon the contract mentioned in paragraph 7 of the complaint. (3) For such other and further relief," etc. At the close of the plaintiffs' evidence, the defendant Porter, individually and as assignee of Brevard, moved to dismiss the complaint, and for judgment as in case of nonsuit. Motion granted, and plaintiffs excepted and appealed from the judgment.

Merrimon & Merrimon, for appellants.

F. A. Sondley and Tucker & Murphy, for appellee.

WALKER J. (after stating the case).

It appears in the record that the court below was of the opinion the plaintiffs could not recover because they were not in privity with the parties to the contract of December 30, 1902, by which Blanton conveyed his stock of goods to Brevard, and the plaintiffs therefore could not sue upon the contract, but were excluded from doing so by the rule laid down in Morehead v. Wriston, 73 N.C. 398, and Peacock v. Williams, 98 N.C. 324, 4 S.E. 550, and much of the argument in this court was addressed to this feature of the case. It is also stated in the record that in the argument of the motion to nonsuit in the lower court the plaintiffs' counsel admitted that there was no cause of action for subrogation, nor was any such equity claimed by the plaintiffs under the contract between Blanton and Brevard of December 30th, and that counsel further argued that while said contract was a bill of sale it constituted Brevard a trustee of the purchase price for the purpose of paying it to the creditors of Blanton, and that the plaintiffs had a primary equity to have it so applied, and that to enforce that equity they could sue Brevard and Porter directly, and also sue Porter on his guaranty hereinafter mentioned. It was argued by the defendants' counsel in this court that "there is no allegation in the complaint of any contract between Blanton and Brevard to any extent for the benefit of the plaintiffs," and that the plaintiffs in their pleading simply assert the right to follow the goods in the hands of Brevard as trustee, and do not aver that Brevard is individually the creditor of the plaintiffs.

We simply mention these matters for the purpose of stating that we are not bound here by any argument that counsel made below. We hear the case upon the facts alleged in the pleadings, and if the plaintiffs have set forth in their complaint such facts as entitle them to relief they will not be restricted to the relief demanded in their prayer for judgment, but may have any additional and different relief which is not inconsistent with the facts so alleged in their complaint, it being the pleadings and the facts proved which determine the measure of relief to be administered. Knight v. Houghtalling, 85 N.C. 17. In this case, it makes no difference, if such is the fact, that the plaintiff does not distinctly claim that the contract between Blanton and Brevard was for the benefit of the plaintiffs, and that he does claim only that Brevard held the goods in trust, and makes no claim against Brevard individually. He simply sets forth the facts of the case according to his version of them, which is the proper way to do, and upon those facts he prays for an accounting from Brevard and Porter "for the said assets and the proceeds thereof," meaning the assets received under the contract and assignment, and for judgment against Porter and Bostic as guarantors of the performance by Brevard of the contract, and for such other and further relief as they may be entitled to have in the premises. We cannot, therefore, agree with the learned counsel for the defendants that the plaintiffs are not entitled to call for a showing from Brevard and Porter as to the administration of their several and respective trusts under the contract and assignment, if the facts justify such relief, even though the plaintiffs may not have made any special or particular claim for that relief; but it is our opinion that the facts are sufficiently set forth in the complaint to entitle them to such relief, and, if Brevard and Porter have committed a breach of their trusts, they are further entitled to judgment against them respectively for any damages they have sustained by reason thereof.

The case, in one aspect of it, turns upon the question whether the plaintiffs can sue Brevard for failing to pay over to them their share of the price he agreed to pay for the property sold to him by Blanton, and we are unable to see why he cannot do so. The case is not like Morehead v. Wriston supra. In that case the substance of the agreement was that Wriston, the incoming partner, would indemnify the old firm against the payment of its debts, and this view of the case is fully explained and made clear by Smith, C.J., in Peacock v. Williams, 98 N.C. 324, 4 S.E. 550, in which he says: "The agreement is in substance one for the indemnity of the owner of the property against its being subjected to the asserted lien, and is solely between the parties to it, with whom the plaintiff is not in privity. Here there is no promise to pay the plaintiff, and the defendant has no...