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CAPITAL ASSOCIATES, INC. v. SALLY SOUTHLAND

JULY 20, 1988

CAPITAL ASSOCIATES, INC.
v.
SALLY SOUTHLAND, INC., D/B/A SUNFLOWER OF BROOKHAVEN AND FRANK MALTA



EN BANC.

HAWKINS, PRESIDING JUSTICE, FOR THIS COURT:

Sally Southland, Inc. (Southland), and Frank Malta (Malta), Southland's major if not sole shareholder, were sued by Capital Associates (Capital) in the circuit court of Lincoln County upon a lease agreement executed by Southland unto Capital, and upon which Malta executed a personal guaranty. Capital appeals from a judgment in favor of these defendants.

Because Capital was entitled to a judgment as a matter of law, we reverse and render judgment in favor of Capital on the lease contract, and remand for assessment of the amount due under the Lease Agreement.

 FACTS

 In 1981 Malta purchased a Sunflower Super Market (Sunflower) in Brookhaven. Around June of 1982 Malta was approached by Wilford Welch (Welch), an employee of Stanco Communications (Stanco), to purchase or lease surveillance equipment. Because Malta was moving the Sunflower Store to

 another location across town, he decided the surveillance equipment was necessary for a "dead spot" in the store. On June 23, 1982 Malta executed a lease agreement with Capital for sixty months at $250 per month. Welch, who carried blank copies of Capital's lease forms, filled out and witnessed the Capital/Southland lease agreement. At the same time, Malta also executed a guaranty for Southland. The lease was approved by Capital in Atlanta, Georgia, and a copy later returned to Malta.

 Also on June 23, 1982, Malta acknowledged delivery and acceptance of 20 "dummy" cameras, one live camera, one VCC box, one 19 "monitor, and one 9" monitor. The "dummy" cameras usually have a red light to give the appearance to the public that they are live cameras; they, however, contain no inner workings. Malta testified that he did not want "dummy" cameras, but accepted them because of Welch's assurance that the "dummy" cameras would do the job and further because he was given a 100% trade-in on inactive cameras for live cameras. The equipment was installed in the Sunflower in approximately one and one-half days.

 Malta testified that he was never satisfied with the "dummy" cameras but did continue making payments through February of 1984. Malta made requests to both Capital and Stanco to upgrade the cameras. At one time, someone did come to the store to look, but no new cameras were put into the building. Malta continued making payments, but did request with several of the payments that the equipment be upgraded. Finally, Malta decided that he would get a response if he quit paying. He, therefore, made his last payment in February of 1984. Capital then notified Malta that the lease payments were still due and that the lease was non-cancellable. Malta was also notified that his agreement to upgrade the equipment was with Stanco and not with Capital.

 In March Malta began to negotiate a sale of the Sunflower store. The sale finally became effective April 14, 1984. The buyers of the store decided to create a new decor inside the store and chose to take down the cameras. At trial Malta testified he believed the cameras were then packed and stored somewhere in the store.

 Capital filed suit on September 29, 1984, to recover $9,500 unpaid balance and seeking $862 (residual), $587.15 (state sales tax), $105.64 (late charges), $344.80 (personal property tax) for a total of $11,399.59 plus $3,799.86 as attorney's fees for a grand total of $15,199.45, plus interest. On the day of trial, without notice to Capital, Southland and Malta moved to dismiss Capital's claim. The

 motion stated that Capital is a foreign corporation, incorporated in the state of Florida. Capital had obtained a certificate of authority to do business in Mississippi on January 4, 1982, but the certificate was suspended on November 4, 1985. Southland and Malta believed that pursuant to Miss. Code Ann. 27-13-27 and 79-3-247 (1972) Capital was barred from prosecuting this action. The circuit judge overruled the motion, stating:

 This matter coming on to be heard on motion to dismiss, and appears to the court that the plaintiff, Capital Associates, Inc., is a Florida corporation, foreign to the State of Mississippi, and on January 4, 1982, obtained a Certificate of Authority to do business in the State of Mississippi, that the contract entered upon in this case was executed on September 23, 1982, and the suit was filed on September 29, 1984. It further appears that on November 4, 1985, the plaintiff was suspended by order of Commission of Franchise Tax and that as of January 17, 1986, the records of the Office of the Secretary of State of the State of Mississippi did not reveal that said suspension has been set aside. The court has considered Section 27-13-27 and Section 79-3-247. However, this case was pending and the contract suit was executed at a time when the plaintiff had apparent authority to do business in the State of Mississippi. The Court holds tha [sic] the suspension of the authority to do business in the State of Mississippi by a foreign corporation by order of Commission of Franchise Tax of the Office of the Secretary of State of the State of Mississippi does not cause the pending cases to abate or to be terminated. Therefore, the motion to dismiss is overruled.

 Trial proceeded with the pertinent portions of the lease introduced into evidence as follows:

 IMPORTANT: Vendor and its representatives are not the agents of Lessor. Neither Vendor nor its representatives can waive, vary or alter any of the Terms and Conditions hereof. Lessor does not warrant merchantability or fitness for any particular use of equipment and disclaims any other warranty, express, implied or ...


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