Southern Glass Co. v. Dairy Service Co.

HOUSER, P. J.

As far as are necessary to a consideration of the decisive questions presented on this appeal, in substance it appears that one Dave Marx, who was operating a business under the fictitious name of Dairy Service Co., had been engaged in the business of supplying trade-marked milk bottles to' several different dairies; that with some variations in the price, dependent upon size of container and fluctuating market conditions, as a general proposition, at the outset Marx bought such bottles from the plaintiff at a price of about 5% cents per bottle, and distributed them to dairies at a price (or rental) of 4% cents per bottle. As bottles became lost and were collected by other dairies, eventually they were sent to, or received by, a bottle exchange, from which establishment they were recovered by Marx, who paid to such bottle exchange 3 cents per bottle. Thereupon, at the original price or rental of 4% cents per bottle, he again delivered the bottles to his respective customers,—from which course of transactions he expected to realize a profit. His business having increased to considerable proportions, Marx together with some, but not all, of his customers, formed a corporation that was known and desig

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nated by a name identical with that theretofore used by Marx as a fictitious business name, excepting that the abbreviation “Ltd.” was added thereto, and the corporate name thus became “Dairy Service Co. Ltd.” From approximately the commencement of the transaction of business under the fictitious name of Dairy Service Co., Marx became indebted to the plaintiff; and after the organization of the corporation, the indebtedness which theretofore had been incurred by Marx was so largely increased as against the corporation, or possibly against “Dairy Service Co.”, that in order to insure its payment a promissory note secured by a chattel mortgage on the business and equipment of the corporation was executed and delivered by it to the plaintiff. Thereafter, on the failure by the corporation to pay the note when it became due, the plaintiff instituted a suit against the corporation on said note, in which suit a prayer was included for the foreclosure of the chattel mortgage, and which suit resulted in a recovery by the plaintiff of a judgment against said corporation. In execution of the judgment, on foreclosure sale, the plaintiff bought the business and equipment of the corporation for less than the amount of the judgment and thereupon became entitled to a deficiency judgment for the difference between the amount of the original judgment and the amount for which the property of the corporation was sold on foreclosure sale thereof. Thereupon, on the theory that the stockholders of the corporation and all its customers constituted but an association of persons both before and after the incorporation of Dairy Service Go. Ltd., of which at all times in question Dave Marx was the managing agent, the plaintiff instituted the instant action to recover against all such persons a judgment for- the unpaid balance on the account which theretofore had existed between the plaintiff and Dairy Service Co. and Dairy Service Co. Ltd. Based on substantial evidence, the trial court found as facts that no association, as such, had ever existed; that at all times in question, the plaintiff had had full knowledge of the facts regarding the relationship that existed among the several parties, including the plan and mode of operation of the business originally conducted by Marx under the fictitious name of Dairy Service Co., and later by the corporation known as Dairy Service Co. Ltd.; and that after a full investigation by the plaintiff of the credit-standing both of Marx and Dairy Ser