Argys v. McGlothlen

276 P.2d 983, 130 Colo. 490, 1954 Colo. LEXIS 320
CourtSupreme Court of Colorado
DecidedNovember 22, 1954
DocketNo. 17,359
StatusPublished
Cited by1 cases

This text of 276 P.2d 983 (Argys v. McGlothlen) is published on Counsel Stack Legal Research, covering Supreme Court of Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Argys v. McGlothlen, 276 P.2d 983, 130 Colo. 490, 1954 Colo. LEXIS 320 (Colo. 1954).

Opinion

Mr. Justice Knauss

delivered the opinion of the Court.

George E. Cowan conducted a business known as Cowan Coal and Feed Yard; he departed this life in [491]*491October, 1944, and pursuant to the laws of descent and distribution his estate passed to his wife, Dorothy Cowan, and his daughter, Patricia Brooks. In December, 1946, his wife filed with the county clerk and recorder an affidavit concerning the ownership of the business operated under the trade name of Cowan Coal and Feed Yard and designated herself and Patricia Brooks as sole owners of said business.

On January 7, 1947, Mrs. Cowan and her daughter, Mrs. Brooks, entered into an agreement with F. D. Mc-Glothlen, which agreement recited that the Cowan heirs were the owners of certain real estate, motor vehicles and equipment, together with P.U.C. certificates of conveyance and necessity and certain merchandise and personal property which comprised the physical property of the Cowan Coal and Feed Yard and which they agreed to sell and McGlothlen agreed to purchase pursuant to the terms of the agreement. This agreement further provided that the title to all the business, trucks, trailers, equipment and P.U.C. certificates should remain in the name of Cowan Coal and Feed Yard; McGlothlen agreed that he would keep all equipment in good order and repair; that any new equipment by him purchased would become the property of the Cowan Coal and Feed Yard. McGlothlen agreed that he would save the widow and daughter harmless on account of any obligations by him incurred in connection with the operation of the business. Mrs. Cowan and her daughter agreed that when the purchase price had been paid in full they would make and deliver all instruments or documents necessary to convey title to all of the property embraced in the contract to McGlothlen. This contract was recorded June 25, 1948.

Pursuant .to the agreement, McGlothlen went into possession of the property; he conducted the business until the month' of December, 1950. In that month Patricia Brooks advised McGlothlen that by reason of his failure to make certain payments under the contract, [492]*492she, on behalf of her mother and herself, would have to take the business over and repossess the property. There is evidence in the record that Mrs. Brooks told McGlothlen, at the time of the repossession, that as he did not have any cash assets she would take over the accounts receivable, collect the same and pay the outstanding bills. At that time there were some seven thousand dollars worth of outstanding accounts. McGlothlen surrendered possession; turned over the accounts receivable; signed a statement on his purchase contract with Mrs. Cowan and Mrs. Brooks reciting: “I hereby surrender my rights under this contract.” Thereafter he made no attempt to collect any of the accounts receivable.

In July, 1952, plaintiffs in error, hereinafter referred to as plaintiffs, instituted an action against “F. D. Mc-Glothlen, Dorothy Cowan and Muriel Patricia Brooks, doing business as Cowan Coal and Feed Yard,” alleging defendants owed plaintiffs $1,426.96 for goods sold and delivered to defendants between January 9, A. D. 1950 and January 11, A. D. 1951. They demanded judgment for this amount. Defendant McGlothlen, though served with process, failed to appear and default judgment was entered against him. Mrs. Cowan and Mrs. Brooks filed an answer denying they were engaged in business with McGlothlen; denied they ever contracted for the purchase of any of the material or labor for which plaintiffs sought recovery; set forth they sold the business to McGlothlen in January, 1947; that he operated it as his own; that any obligations by McGlothlen created were without the knowledge of the answering defendants, and denied any liability to plaintiffs.

It appears from the record that in December, 1952, one of counsel for Mrs. Cowan and Mrs. Brooks paid plaintiffs the sum of $600.00. This six hundred dollar payment represented the purchase price of certain tires and tubes purchased by McGlothlen. When these items were repossessed they were practically new and Mrs. [493]*493Cowan and Mrs. Brooks paid for them because, as they said, they were used in their operation of the business. This left a claimed balance of $641.45 for which plaintiffs on the trial sought recovery against all defendants. Defendants Cowan and Brooks on the trial admitted liability in the sum of $185.47 for merchandise by them purchased after McGlothlen surrendered possession.

Trial was to the court and resulted in a finding against Mrs. Cowan and Mrs. Brooks in the sum of $185.47 (the amount they admitted to be due) and against McGlothlen in the sum of $641.45. Upon these findings judgment was entered and plaintiffs bring the cause here by writ of error, contending that Mrs. Cowan and Mrs. Brooks are equally liable with McGlothlen for the balance of the account.

When McGlothlen surrendered the property and can-celled the agreement between himself and the defendants Cowan and Brooks, these accounts were his property and were not embraced in the contract of purchase and sale.

The liability, if any, of the defendants Cowan and Brooks must be predicated upon the obligation assumed when they took over the accounts receivable and agreed to make payment of the debts incurred while McGlothlen operated the business. Liability of defendants in error under the bulk sales law is not here urged and accordingly is not considered.

Referring to the testimony offered by plaintiffs concerning the “agreement to pay the bills” of McGlothlen outstanding at the time Mrs. Brooks took over the property embraced in the contract of purchase and sale of the accounts receivable, the trial court stated: “Now, that was after the accounts were contracted; they were due; they were a liability to somebody. But the court doesn’t consider that as an obligation to pay these debts. No consideration for it that I can see. It was a voluntary statement, in any event. And I don’t think that it [494]*494is binding upon this defendant even though she has said positively that she would pay.”

F. D. McGlothlen when called as an adverse witness, testified as follows: “Well, Mrs. Brooks, came to me and told me that she would have to take it over. And she said, since you don’t have the money, are in no position to pay the bills, that she would take over the books or accounts receivable and collect the accounts receivable and pay the bills.”

The witness, Melville C. Kaess, fixed the date of his conversation with Mrs. Brooks as the first or second day after she took over possession from McGlothlen. He testified as follows: “I walked in and Mrs. Brooks was there, and I asked where Speed was, and she said that she had taken over the business. And I said he had an old account with me, and I wanted to see about collecting my account. And she told me at that time that she was taking over the business and was going to collect all the accounts receivable and pay all the bills just as soon as she could. And I possibly had asked her three or four times in the matter of a week or so, and each time she told me the same thing, that she was paying on them as fast as she could.” We quote from the examination of defendant Brooks: “Q. Didn’t you tell McGlothlen at that time you would accept the accounts receivable, collect those and pay all the outstanding bills? Did you or did you not tell him that at that time? A. I did.”

There is ample evidence in this record of a consideration for the agreement testified to by witnesses and admitted by Mrs.

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Bluebook (online)
276 P.2d 983, 130 Colo. 490, 1954 Colo. LEXIS 320, Counsel Stack Legal Research, https://law.counselstack.com/opinion/argys-v-mcglothlen-colo-1954.