G.M.C. Hardwoods, Inc. v. American Butcher Block Co.

1981 Mass. App. Div. 214, 2 Mass. Supp. 799, 1981 Mass. App. Div. LEXIS 85

• Court: Massachusetts District Court, Appellate Division
• Decided: September 14, 1981
• Status: Published

Opinion

Staff, J.

This is a civil action in which the plaintiff (GMC) seeks to recover from the defendant, American Butcher Block Co., Inc. (American), the contract price for lumber supplied by GMC to American and from the defendant, Joseph A. La Rosa (La Rosa), by reason of his written guaranty for American’s obligation.

American denies liability on the ground that the goods delivered were defective and rejected by American.

La Rosa denies liability on the ground that there was no consideration for his guaranty.

American counterclaimed alleging damages as a result of GMC’s alleged breach of warranty in delivering defective goods.

The court found for GMC against both defendants in the amount of $8523.26 and for GMC as defendant in counterclaim.

The evidence showed that American is a manufacturer and seller of “butcher block” furniture and that LaRosa is its president and officer responsible for all aspects of the business. The business was formed initially by La Rosa and his father, with the father handling the financial and business aspects of the corporation. At about the time the transactions forming the basis of this action occured or shortly before, the father abandoned the business leaving the son in charge.

GMC was a supplier of lumber to American, and on June 23, 1978, was owed $8523,26 by American as a result of past transactions. La Rosa testified that the lumber delivered by GMC did not meet contract specifications and yielded less usable wood than is acceptable in the trade and that he notified GMC’s representative of his complaints. The evidence as to the quality and amount of lumber and as to complaints made was controverted by GMC.

On August 28, 1978, at a meeting with La Rosa and his wife, GMC’s representative informed La Rosa that his firm was concerned about the overdue debt, that no further credit woiild be given to American by GMC, and that GMC would institute a lawsuit unless some security were given. La Rosa stated that he was seeking a bank loan and that a lawsuit might jeopardize receipt of the loan. The parties discussed a future shipment of lumber which was to be paid C.O .D. At this meeting, LaRosa signed the guaranty which guaranteed the payment of existing and future indebtedness by American to GMC.

Three requests for rulings were filed by the defendants and all denied by the trial judge. The first raises the issue whether there was consideration to support the guaranty given by La Rosa to pay American’s debt to GMC.

If American received a benefit from the execution of the guaranty executed by La Rosa, then the court clearly may infer that the benefit was transmitted to its chief executive officer, La Rosa.

It seems quite obvious that, by the execution of the guaranty, La Rosa staved off the disastrous situation which confronted the corporation, the threat of an imminent lawsuit at a time when refinancing was being attempted.

On the other hand, GMC suffered a legal detriment by agreeing to resume supplying American (even on a C.O.D. basis) and by agreeing to refrain from taking legal action immediately at a time when American was negotiating abank loan. See Sheraton Service Corp. v. Kanavos, 4 Mass. App. Ct. 851, 852 (1976).

The benefit accruing to American and the legal detriment suffered by GMC amply support the finding by the judge that consideration existed for La Rosa’s guaranty.

As to the requests for rulings numbered 2 and 3, both raise factual issues, the evidence was conflicting, the report supports the judge’s findings, and we can find no error of law. Adamaitis v. Metropolitan Life, 295 Mass. 215, 221 (1936).

Accordingly, the report is dismissed.