This action was begun on and the chancellor has found that

This action was begun on and the chancellor has found

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This action was begun on March 21, 1955, and the chancellor has found that defendants did turn over all inactive accounts in January; that they allowed plaintiffs' accountants to take information from the original records; that after March 1st delay in delivery was caused by honest differences between the parties to protect their respective interests in the records; that on April 22nd defendants furnished a list of names, addresses, and amounts of the uncollected accounts; that defendants offered photostats of the account at plaintiffs' expense, which were
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rejected; that plaintiffs failed to collect the accounts in suit because they made tardy or no effort to do so; and that the defendants fulfilled their obligation with regard to the uncollected 25% of the accounts. These findings are reasonable under the evidence and justifiable under the law because the plaintiffs sold and delivered the records of the accounts to the defendants, who then were obliged to do no more about what was their own property than to provide reasonable information with which plaintiffs might try to collect the remaining accounts if they cared to. Plaintiffs, in argument, confuse their outright sale of the "customers and records" to defendants with their retention of the account claims, of which the records were only evidence. While defendants acted as agent, Paragraph 7 of the agreement expressly relieved them of guaranteeing the accounts or of being responsible for the collection of any of them. All they undertook was to use their "best efforts diligently to collect", and the court below has found that they did. There is nothing dim or equivocal about the written agreement. Plaintiffs assert that defendants had the duty to account for sales made c.o.d., of which there were apparently a substantial number. The agreement provides, in Paragraph 7, that "any payment received from a customer shall be treated as having been made in respect of the oldest unpaid bills of such customer." Since the whole apparatus of accounts receivable has to do with credit, the quoted provision must refer to accounts where credit was continued and not to those whose credit was so weak that cash on delivery was required to protect the account. Any other interpretation would have increased defendants' accounts receivable and decreased plaintiffs' and would have resulted, in effect, in a guarantee of the latters' accounts, against the provision of the agreement in that particular. Plaintiffs argue that defendant Metropolitan remains liable, presumably as surety, under Paragraph 10(c) of the agreement, which reads as follows: "The Buyer may, at its election and by notice to the [plaintiff] not less than two days prior to the closing, designate one or more persons, firms, or corporations to take title to and purchase and pay for all or a portion of the Acquired Assets, without, however, releasing the
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Buyer of its obligations to acquire and pay for the same hereunder in the event of any default by such person, firm, or corporation."
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  • Spring '15
  • Chancellor, Metropolitan, Gillin

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