Suniland Furniture Co. v. Pruitt , 1961 Tex. App. LEXIS 2445 ( 1961 )

WILSON, Justice.

Appellant sued Foreign Trades Corporation for debt representing the purchase price of furniture, but took a non-suit as to this party. It was alleged that this corporation ordered merchandise from appellant; that after credit investigation appellant informed appellee Pruitt (president of the corporation) it would not sell to the corporation alone, but would sell on credit to both the corporation and Pruitt; that the merchandise was delivered at the special instance and request of the two defendants. Alternatively, appellant alleged that after it decided not to sell to the corporation because of its credit standing, appel-lee Pruitt was informed of the decision; that he thereupon “agreed with plaintiff to pay for the furniture so delivered and sold to” the corporation; that the furniture was sold and delivered in consideration of the promise, on which Pruitt was sued.

The alternative allegations were made after appellee Pruitt interposed in bar Sec. 2 of the statute of frauds, Art. 3995, Vernon’s Ann.Civ.Stats., which precludes actions to charge upon a promise to answer for the debt or default of another in the absence of a written promise or agreement. It is conceded that any promise made by Pruitt was oral.

To issues submitted, the jury answered in effect: (1) that prior to the sale of the furniture in question appellee “agreed to pay for the furniture”; (2) that such agreement was that he would pay “only in the event Foreign .Trades Corporation failed to do so.”

Appellant’s motion to disregard the second answer as having no support in the evidence was overruled, as was its objection to the issue on the same ground. Although appellant presents points asserting in form that the evidence on the second issue is insufficient, it concedes that as briefed, “all points relate to whether there was any evidence to support” the answer. It asserts there was none.

As the record and contentions are presented here, if the alleged promise of Pruitt was a direct, primary and original undertaking, it was not within the statute of frauds; if it was a secondary or collateral undertaking, as found by the jury in the second answer, the statute bars the action and the judgment for appellee is to be sustained. Bank of Garvin v. Freeman, 107 Tex. 523, 181 S.W. 187, 191; Muller v. Riviere, 59 Tex. 640, 644; Hacker v. Whitney Dam Lumber & Const. Co., Tex.Civ.App., 225 S.W.2d 225, 227, writ ref.

Appellant’s credit manager testified that investigation in September, 1958 convinced him credit could not be extended to the corporation, and he telephoned Pruitt, the corporation’s president, explaining that the corporation could not meet requirements for credit eligibility on a proposed purchase of furniture, but that appellant “could make the deal” if Pruitt “would sign the contract individually and we looked to him for payment”; that Pruitt “said that he would.” Appellant then requested, and Pruitt furnished his personal financial statement and references. He also testified Pruitt “agreed to sign the contract individually and make payment on it.” Pruitt did not sign the (chattel mortgage or conditional sale) contract. Thereafter, from October 3, 1958 to October 20, 1958, furniture was delivered and charged to the corporation. The credit manager testified that Pruitt advised appellant “he didn’t want any more to go on there without” his consent and approval; that Pruitt never was asked to sign the contract because “the job wasn’t completed”, i. e., it was contemplated that additional merchandise would be delivered; that when a chattel mortgage was executed for the corporation in Houston on December 13, 1959 securing the debt on over $23,000 worth of furniture, Pruitt was in Texas City. Appellant repossessed the furniture at a loss, for which recovery was sought. All appellant’s written records show the merchandise was sold and charged to the corporation; none show sale or charge to Pruitt.

Appellee Pruitt, on the other hand, testified simply that he did not promise payment; that he told appellant “I was not going to assure anything for Foreign Trades Corporation”; and that he “would-n’t sign anything”; that no reference whatever was made to the effect “that they were looking to” him. His testimony was that appellant’s credit manager asked him for “his individual deal on it” and he “told him no.” He said, “I told him that I would not pay for anything that they got.” In short, his position was that he made no promise whatever, collateral or otherwise.

No complaint is made, of course, concerning the answer to the first issue. For our purposes, and as the record stood when appellant’s motion was overruled, it is established that Pruitt agreed to pay for the furniture.

What evidence is there to support the finding on the second issue to the effect that appellee’s promise was a collateral undertaking? Appellee urges that since all appellant’s records show the merchandise was sold and credit extended to the corporation, and not to Pruitt, and since Pruitt did not sign the contract, it is shown tire corporation had primary liability; and hence, Pruitt’s was collateral only. This evidence, it might be argued, relates only to the first issue as to whether Pruitt made any agreement to pay, and is confirmatory only of appellee’s position that he said he “wouldn’t pay for anything that they got.” It might be plausibly reasoned that it is not of probative force on the second finding. That Pruitt did not sign the contract, that he was not even asked to do so, that the furniture was not “sold” to Pruitt, or that it was not charged or billed to him, it may be contended, only sheds light on the question of whether he made any agreement to pay; but not on the question of the nature of, or the condition restricting any obligation he did assume.

Appellant, on the other hand, asks us to hold Pruitt’s testimony that he made no agreement whatever to pay — original or collateral — was a judicial admission, and therefore he will not now be heard to contend there was any evidence supporting the second finding. It argues that he is bound by his testimony that he made no agreement, and therefore he will not be heard to say there is evidence that the agreement the jury found, notwithstanding, was collateral. Again, any such “admission” would be applicable to the first finding only; and if it should be said appellee judicially “admitted” there was no agreement to pay under any circumstances, it would serve only to destroy his adversary’s issue — the first. To be treated as binding in the present sense, it must appear “that the statement is not also destructive of the opposing party’s theory of recovery”, as Justice Norvell said in United States Fidelity & Guaranty Co. v. Carr, Tex.Civ.App., 242 S.W.2d 224, 229, writ ref. In this case the jury simply rejected Pruitt’s testimony (on the first issue) that he made no agreement to pay.

There is evidence from Pruitt to show, however, that when appellant’s credit manager called appellee, he “said that Foreign Trades wanted to buy some furniture, hut they had no credit rating and wanted to know if I would assure payment for them”. To this inquiry Pruitt said he replied, “I told him I wouldn’t until I found out what they was going to buy”. He said he “couldn’t go into a deal of guaranteeing” until he knew what the corporation intended to buy; that he requested appellant to return his financial statement because he “was not going to assure anything” for the corporation; that appellant “wanted me to assure payment”.

The jury was authorized to reject that portion of Pruitt’s testimony relating to the first issue and accept that portion supporting the answer to the second, selecting from conflicting evidence and conflicting inferences that which it considered most reasonable. Benoit v. Wilson, ISO Tex. 273, 239 S.W.2d 792, 797. It could reasonably determine from Pruitt’s testimony that the agreement to ,pay which he did make was in the nature of a guarantee to “assure” payment in event of the corporation’s default, a distinctly collateral undertaking within the statute. Hill v. Frost, 59 Tex. 25; Garza v. Milmo Nat. Bank, Tex.Com.App., adopted, 280 S.W. 548, 551; 20-A Tex.Jur. Sec. 13, p. 282.

The evidence, therefore, adequately supported the verdict, in our opinion, and the judgment is affirmed.