Guilford Builders Supply Co. v. Reynolds

107 S.E.2d 80 (1959)

249 N.C. 612

GUILFORD BUILDERS SUPPLY COMPANY, Inc. v. George W. REYNOLDS, J. T. Reynolds, Rachel L. Reynolds, Varina M. Reynolds and Edythe Reynolds.

No. 598.

Supreme Court of North Carolina.

February 25, 1959.

Rollins & Rollins; Smith, Moore, Smith, Schell & Hunter, and Richmond G. Bernhardt, Jr., Greensboro, for plaintiff.

Hoyle & Hoyle, and J. Sam Johnson, Jr., Greensboro, for defendants.

DENNY, Justice.

The appellant's only exceptions and assignments of error are directed to the allowance of the defendants' motion for judgment as of nonsuit as to the respective defendants on behalf of whom the motion was sustained.

In addition to the evidence set out above, the plaintiff introduced adverse examinations of all the defendants. These adverse examinations established the fact that Oakmont, Inc. never held any corporate meetings after the meeting of 21 March 1947, at which meeting the incorporators elected J. T. Reynolds, G. W. Reynolds, and Edythe Reynolds, directors of the corporation. On the same day, the directors elected J. T. Reynolds, President; G. W. Reynolds, Vice President; and Edythe Reynolds, Secretary-Treasurer.

It appears from the adverse examination of Mrs. Rachel L. Reynolds that she owned some real estate on which her husband built some houses and that Mrs. Reynolds signed deeds conveying the property in accordance with the request of her husband; that she has never received any payment for property transferred by her; that the only money she has received from her husband over the period in question has been for her support.

The appellants contend (1) that all these defendants who were stockholders of Oakmont, Inc. are liable individually and as partners to the plaintiff, because at the time the materials were furnished, such parties were trading under the name of Oakmont, Inc., a purported corporation, whose charter had been suspended on 2 February 1948 and whose existence for all purposes expired by law on 2 February 1953, G.S. § 105-230 and G.S. § 105-232; and (2) that there is sufficient evidence to be submitted to a jury on the issue that Rachel L. Reynolds was liable as a partner with some or all the defendants, or that she was liable as an undisclosed principal of the defendant J. T. Reynolds.

*83 Under certain circumstances, stockholders, officers and directors may be held liable as individuals or partners when such stockholders, officers and directors permit the charter of the corporation to expire, and continue to obtain credit for and on behalf of a purported but nonexistent corporation.

In Volume 13 of Fletcher Cyc. of the Law of Private Corporations, section 6648, page 1378, et seq., we find the following: "Members of a pretended corporation which is neither a de jure nor a de facto corporation are generally held personally and individually liable, unless otherwise provided by statute, for the debts of the pretended corporation, unless the creditor is estopped to attack the corporate existence of the apparent corporation, without any reference to whether the persons sought to be held liable, actively participated in contracting the debt," citing Wood v. Staton, 174 N.C. 245, 93 S.E. 790, 794, which holds that where a claimant has extended credit to an alleged corporation, "unless there is one either de jure or de facto, the members can, ordinarily, be held liable as partners."

In the instant case, however, there is not a scintilla of evidence tending to show that the defendants obtained the materials from the plaintiff on the credit of Oakmont, Inc. Plaintiff's evidence is expressly to the contrary. It was agreed between the president of the plaintiff corporation and the defendant J. T. Reynolds that the plaintiff corporation would not extend credit in any amount to Oakmont, Inc., but that credit would be extended to J. T. Reynolds; that it was extended to him and that he and he alone was the one to whom the plaintiff looked for its money. Therefore, the plaintiff's first contention is without merit.

As to the second contention, we find nothing in the evidence that would justify a holding that Rachel L. Reynolds is liable as a partner or otherwise for debts arising out of the contract between the plaintiff and the defendant J. T. Reynolds. Rothrock v. Naylor, 223 N.C. 782, 28 S.E.2d 572.

The ruling of the court below in sustaining the defendants' motion for judgment as of nonsuit as to all the defendants, except J. T. Reynolds, is

Affirmed.