White v. Kincaid

WILBUR, J.

The plaintiff sued, as assignee of Clark Brothers Lumber Company, a corporation, for lumber alleged to have been sold by said corporation to the defendant. Clark Brothers, a copartnership, for more than twenty years had transacted business with the defendant. For three years previous to October 10, 1913, they had operated a lumber-yard in Los Angeles. In July, 1913, the copartnérship owed the defendant about six thousand dollars, evidenced by a promissory note. At that time it entered into an agreement with the defendant to sell and deliver him lumber, and the

defend-,

ant agreed to credit the purchase price thereof on the promis

[136]

sory note of the copartnership. The defendant procured lumber from time to time at the lumber-yard operated by the copartnership, and on October 14, 1914, a settlement was had whereby the sum of three thousand three hundred dollars was credited on said note. The controversy in this' case arises over the fact that on October 10, 1913, a corporation was formed under the name and style of ‘ Clark Brothers Lumber Company, ’ ’ with a capital stock of 750 shares. W. E. Clark, one of the Clark Brothers, held 459 shares, B. W. Clark, the other member of the copartnership, one share, and, in addition to these shares of stock, 21 shares were issued. W. E. Clark was president, B. W. Clark vice-president, and Robert P. Holmes manager. Robert P. Holmes was manager of the copartnership and continued to manage the same yard for the corporation. The lumber herein sued for was delivered to the defendant at the lumber-yard by Holmes. The defendant testified that he was never notified of any change in the management of the lumber-yard and that he continued to get lumber at the yard believing that the same was being delivered to him by the copartnership. Both of the Clark brothers testified that the lumber was delivered to the defendant with the understanding that it was to be charged to the copartnership, but was to be carried on the hooks of the corporation in the name of the defendant merely for convenience of the copartnership. The trial court found that the lumber was purchased by the defendant from Clark Brothers, a copartnership, and was paid for by giving credit upon the note due from the copartnership to- the defendant, and that nothing was due from the defendant to the corporation. Respondent correctly claims that, upon the view most favorable to the appellant, Clark Brothers were the agents for the undisclosed principal, the corporation, and that having settled with the agent he is no longer liable to the principal; citing