Big H Auto Auction, Inc. v. Saenz Motors

• Decision Date: 01 February 1984
• Docket Number: No. C-2267,C-2267
• Citation: 665 S.W.2d 756
• Parties: BIG H AUTO AUCTION, INC., Petitioner, v. SAENZ MOTORS, Respondent.
• Court: Texas Supreme Court

Page 756

665 S.W.2d 756

BIG H AUTO AUCTION, INC., Petitioner, v. SAENZ MOTORS, Respondent.

No. C-2267.

Supreme Court of Texas.

Feb. 1, 1984.

Rehearing Denied April 4, 1984.

Green, Downey, Patterson & Schultz, William T. Green III, Houston, for petitioner.

Cardenas & Whitis, William E. Corcoran, McAllen, for respondent.

CAMPBELL, Justice.

This is a deceptive trade practices case. Saenz Motors, a used car dealer, sued Big H Auto, for damages resulting from the purchase of two vehicles. The trial court held Saenz Motors was not a consumer under the Deceptive Trade Practices Act (DTPA) and rendered judgment for actual damages only. The court of appeals reversed the trial court judgment holding that Saenz Motors was a consumer and awarded treble damages and attorneys' fees. 653 S.W.2d 521. We affirm the judgment of the court of appeals.

In December 1978, Saenz Motors bought from Big H Auto Auction, Inc. a 1976 Dodge Van and a 1979 Ford Thunderbird for $9,340.00. At the sale, Big H told Saenz Motors that the original titles had been lost, and provided certified copies of the original titles. The cars were resold by Saenz Motors and the new owners were refused certificates of title by the Department of Public Safety because the automobiles had been stolen. Saenz Motors then requested Big H to return its money. When Big H refused, Saenz Motors sued Big H for treble damages, attorneys' fees and costs under the DTPA.

Our question is whether a buyer of goods for resale is a consumer under the DTPA. Specifically, the issue is whether resale of goods constitutes "use" as required by the DTPA. The statutory provisions that govern are those in effect at the time the act occurred, 1978. Woods v. Littleton, 554 S.W.2d 662, 666 (Tex.1977). At the time of these actions, the pertinent parts of the DTPA then applicable were:

Sec. 17.45 Definitions

As used in this subchapter:

1) "Goods" means tangible chattels or real property purchased or leased for use.

* * *

* * *

4) "Consumer" means an individual, partnership, corporation, or governmental entity who seeks or acquires by purchase or lease, any goods or services.

Unfortunately the legislature failed to define use and failed to define the scope of the Act. To determine legislative intent we will study the history of the Act.

In 1973, the Act was introduced in the House of Representatives as H.B. 417. The same bill was introduced in the Senate as S.B. 75. Both forms defined goods, services and consumer as:

(1) "Goods" means tangible chattels bought for use primarily for personal, family, or household purposes, including certificates or coupons exchangeable for such goods, and including goods, which, at the time of the sale or subsequently, are to be affixed to real property, as to become a part of the real property whether or not severable.

(2) "Services" means work, labor, and services for other than commercial or business use, including services furnished in connection with the sale or repair of goods.

(3) "Consumer" means an individual who seeks or acquires by purchase or lease, any goods or services for personal, family, or household purposes.

On the Senate floor, Senator Snelson offered an amendment to the proposed Act and stated:

Mr. President and members of the Senate, in reading the definition of "goods," it seems to me that business people also could be the victims of deceptive practices in purchases of various equipment which they use and I don't see the purpose of nailing down the definition to the extent that they have it there because even if I am victimized in my business, I feel that I should have a right to an action under this particular bill. So that's the purpose of it. I think that the definition simply draws it down to what we are talking about and if there has been a deceptive practice in the sale of tangible goods to one that they should have access to the remedy, and that is the whole purpose of it.

Transcript of a Portion of the Floor Debate on S.B. 75, April 13, 1973. The personal, family or household purpose was stricken and the Act passed the Senate with new definitions of "Goods" and "Consumer."

"(1) 'Goods' means tangible chattels bought for use.

"(2) 'Consumer' means an individual who seeks or acquires by purchase or lease any goods or services."

The House of Representatives concurred with the amended Senate Bill and H.B. 417, as amended, was signed by the Governor.

In 1975, the scope of "consumer" was again changed in what we consider to be a broadening of the term. Senate Bill 48 sought to add the word "final" so that "goods" would mean "tangible chattels or real property purchased for final use" and "services" means "work, labor, or service purchased or leased for final use and for other than commercial or business use...." The word "final" was stricken prior to final passage. In support of deleting "final," a representative of the Texas Automobile Dealer Association testified that if "use" were restricted to "final use" automobile dealers would lose their standing to sue companies or individuals who sell products which are intended to be sold to dealers' customers. In Senate floor debate, Senator Mauzy stated that "final" had been inadvertently added by the Senate Human Resources Committee, and that the amendment to delete the word was a committee amendment; that a consumer is a person who makes use of the goods but may not be the final user, and, that inserting the word would be restrictive and less broad than the present law. Senator Meier argued that the purpose of the Act was not to protect those buying goods for further processing or further marketing. Also, the Act was further amended to add to the definition of "consumer" corporations and partnerships. Tex.Laws 1975, ch. 62, § 1 at 149; Tex.Laws 1977, ch. 216, § 1 at 600. By a vote 28 to 3, the amendment passed and "final" was deleted.

In 1977, the Act was again amended. The "commercial or business use" exemption was deleted, thus removing all possible restriction on the word "use." Also, governmental entities were added to the definition of consumer.

The Act, as originally passed in 1973, included a definition of "merchant" as meaning a party to a consumer transaction other than a consumer. Merchant was deleted from the definition section in 1977. With this history, we now have the Act as it existed in 1978.

Sec. 17.45 Definitions

As used in this subchapter:

1) "Goods" means tangible chattels or real property purchased or leased for use.

* * *

* * *

4) "Consumer" means an individual, partnership, corporation, or governmental entity who seeks or acquires by purchase or lease, any goods or services.

Did the legislature intend that goods bought for resale be covered by the DTPA? It is a common statutory construction rule that if the legislature does not define a term, its ordinary meaning will be applied. Satterfield v. Satterfield, 448 S.W.2d 456 (Tex.1969). "Use" was defined in Southwestern Telegraph & Tel. Co. v. City of Dallas, 174 S.W. 636 (Tex.Civ.App.--Dallas 1915, writ ref'd), as follows: " 'Use' means to make use of; to convert to one's own service; to put to a purpose; to hold, occupy, enjoy, or take the benefit of." BLACK'S LAW DICTIONARY (Rev. 4th Ed., 1968) says that in the non-technical sense, the " 'use' of a thing means that one is to enjoy, hold, occupy, or have some manner of benefit thereof." The word "use," as used in The Texas Tort Claims Act, was defined in Beggs v. Texas Dep't of Mental Health & Mental Ret., 496 S.W.2d 252, 254 (Tex.Civ.App.--San Antonio 1973, writ ref'd), as " 'to put or bring into action or service; to employ for or apply to a given purpose.' " However, in Pennington v. Singleton, 606 S.W.2d 682 (Tex.1980), this Court held that in construing the DTPA, a court is not necessarily confined to the literal meaning of the words used and that legislative intent rather than the strict letter of the Act will control. The intent should be determined from the entire Act and not from an isolated...