Southern Stone Company, Inc. v. Singer

665 F.2d 698 (5th Cir. 1982)

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Nature of the Case

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Facts

In 1974, Sam Singer helped his daughter, Susan Singer, and her fiancé, D, to organize S&M. Susan Singer and d each held 49% of S&M's stock, and Sam Singer held 2%. Sam Singer was S&M's president and chairman of the board. D was S&M's vice president and managed S&M's daily operations. Susan Singer was S&M's secretary-treasurer and kept S&M's books. S&M's business was the hauling and selling of agricultural lime purchased from P. S&M was unprofitable. Sam Singer obtained S&M's pledge of all its assets, including future accounts receivable for S&M's sale of lime. In November and December 1976, S&M continued to purchase lime on account from P. S&M ceased operations on December 31, 1976. D started his own corporation, TM, Inc. in order to continue in the business of hauling and selling lime purchased from P. TM ran up a sizeable account with P. D went to the office of P and signed a personal note for the account due from TM. P also sent D a letter allegedly recounting some statements that D had made concerning the final months of S&M's operations and the date of Sam Singer's decision to end S&M's business. The end of the letter requested that D respond to the letter if anything in the letter was incorrect. The letter was basically an admission that D and others were responsible for S&M’s debts. D never replied to the letter. After D failed to pay on the note, P sued him. On August 31, 1978, as part of the settlement of that suit, P issued a release to D. P then sued for the monies due from S&M. The district court permitted the introduction into evidence of the letter from P to D as an adoptive admission. P got the verdict and D appealed.