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Hardware Wholesalers, Inc. v. Heath

FEBRUARY 28, 1973.




APPEAL from the Circuit Court of Crawford County; the Hon. WILLIAM G. EOVALDI, Judge, presiding.


Plaintiff appeals the dismissal of Count I of its complaint which sought a judgment against defendant Richard J. Heath on the basis of an alleged agreement of guaranty. Count II of the complaint was lodged against Crawford County Cash & Carry, Inc., successor to Reese Building & Industrial Supply, Inc. and is not involved in this appeal. The dismissing of Count I was in response to the motion of defendant Heath, was final, and contained the requisite finding provided in Supreme Court Rule 304. Ill. Rev. Stat., ch. 110A, sec. 304.

The essential allegations of Count I are that during the early part of 1963 Reese Building & Industrial Supply, Inc., now Crawford County Cash & Carry, Inc., and Richard J. Heath, individually, requested that plaintiff supply Reese with hardware, lumber and building materials on credit; that in consideration for the furnishing of such merchandise to Reese on credit plaintiff required the assurance of some responsible person that the cost of said merchandise would be paid; that the defendant Heath, individually, as an inducement to the credit sales, undertook, agreed and promised to answer to plaintiff personally for the debts of Reese and that such undertaking was evidenced by a promise in writing addressed to the assistant secretary and treasurer of plaintiff. A copy of the memorandum was attached and incorporated in the complaint. Count I further alleged that in reliance upon the agreement of defendant Heath the plaintiff made credit sales to Reese, that there is now an outstanding balance which has not been paid despite demand made upon Reese, its successor, and Richard J. Heath, individually. Count I concludes with a prayer for a judgment against Heath individually.

The memorandum referred to in the complaint was in the form of a letter, typed on stationery with the imprinted letterhead: "L.S. Heath & Sons, Inc., America's Finest Candy Bar," and follows in its entirety:

"March 29, 1963

Mr. Welty Bauer P.O. Box 868 Fort Wayne, Indiana

Dear Mr. Bauer:

In regard to our telephone conversation, I would like to give you a little background about the Reese Building and Industrial Supply, Inc. This Corporation was formed on February 15, 1963 with the principal stockholders being the Reeses who own 60% of the stock and Mr. W.J. Chamblin and myself owning 40%. Frank G. Reese, Jr., who is the President, ran this yard for Mr. D.L. Kirtland of Oblong, Illinois for five years and is very experienced in the lumber business.

I am the Treasurer of the Reese Company besides being the Vice President and Treasurer of L.S. Heath & Sons, Inc. I will personally guarantee the Reese Company and I believe the finest reference I could give you would be Mr. James Lentz, Vice President of the Indiana National Bank of Indianapolis. Mr. Art Lodge, President of the Second National Bank in Robinson, Illinois would be another. Dun and Bradstreet can be used also.

We will make a fine company for you and if there are any other questions, please feel free to contact me. I am sending a box of our Heath chips as my reference.

Very sincerely yours, (signed) Richard J. Heath Vice President-Treasurer"

In response to defendant's motion the court below dismissed Count I of the complaint on the grounds (1) that the letter was addressed to someone other than plaintiff, (2) the letter was not a direct promise to pay but a mere recommendation of the Reese company and (3) although in his letter Heath says he will personally guarantee the Reese company he does not say he will guarantee payment. The issue presented by this appeal is whether under the facts alleged defendant's liability is a question of law that may be determined by the court upon the pleadings alone or a question of fact for determination by a jury.

Plaintiff urges that the statement in the letter, "I will personally guarantee the Reese Company," indicates that something more than a mere recommendation was intended and that evidence should be admitted to clear up the ambiguity. Plaintiff also argues that evidence is admissible to show that the individual addressee received the letter, as was intended by Mr. Heath, in his capacity as an officer of the plaintiff company, and that although the letter from Heath is signed by defendant as Vice President and Treasurer of L.S. Heath & Sons evidence is nevertheless admissible to show that Heath signed the letter in his personal capacity. Defendant counters that the trial court was correct in its dismissal for the reasons it stated and in addition that since Heath signed the letter as Vice President-Treasurer on L.S. Heath & Sons, Inc. stationery it is demonstrated that Heath did not personally guarantee the debts of the Reese company but that if there was any guaranty of the debts of the Reese company it was that of L.S. Heath & Sons, Inc. In essence, then, the issue here turns on whether the alleged letter of guaranty is the complete integration of the understanding and agreement of the parties or, on the other hand, is ambiguous and susceptible of differing interpretations so as to require the admission of evidence in order to ascertain the true agreement of the parties. We think that to state the issue thus is to beg the conclusion that the letter is ambiguous and that the trial court was in error in dismissing Count I of plaintiff's complaint.

• 1, 2 At the outset note must be made that by filing a motion to dismiss defendant admitted as true the well pleaded facts of the complaint. We have for determination the question of whether or not as a matter of law Count I of the complaint states a cause of action. That question cannot be resolved in the mix of disputed questions of fact. To make that determination the facts must be assumed to be as they are alleged in the complaint. The position taken by defendant in his argument here is based on an assumption that the admittedly true facts alleged in the complaint do not obtain, that other facts must be recognized and the complaint be then found insufficient. Defendant's position is inconsistent and his ...

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