Climber Motor Corporation v. Fore

• Decision Date: 14 May 1925
• Docket Number: (No. 3072.)
• Parties: CLIMBER MOTOR CORPORATION v. FORE et al.
• Court: Texas Court of Appeals

273 S.W. 284

CLIMBER MOTOR CORPORATION v. FORE et al.

(No. 3072.)

Court of Civil Appeals of Texas. Texarkana.

May 14, 1925.

Rehearing Denied May 21, 1925.

Appeal from District Court, Dallas County; T. A. Work, Judge.

Action by the Climber Motor Corporation against R. M. Fore, the Dallas Storage & Warehouse Company, S. J. McFarland, and another, with cross-actions by defendant Warehouse Company and defendant McFarland against defendant Fore and against all parties to suit. Judgment entered in favor of defendant Warehouse Company and defendant McFarland against defendant Fore, with foreclosure of lien against all parties, subject to prior lien of defendant Warehouse Company, and that plaintiff take nothing, except as against defendant Fore, subject to judgments in favor of defendant Warehouse Company and defendant McFarland, from which plaintiff appeals. Reversed and rendered.

The appellant, a corporation, brought the suit against the appellees R. M. Fore, the Dallas Storage & Warehouse Company, a corporation, the Security National Bank of Dallas, a banking corporation, and S. J. McFarland. The suit was to recover the possession of 15 automobiles alleged to be wrongfully withheld from appellant, the owner, or, in the alternative, for damages as for conversion. The appointment of a receiver was also asked for, to take charge of the automobiles during the litigation, and an order to that effect was made. The receiver sold the property, and the money is being held subject to the order of the court to take the place of the property itself.

The Security National Bank of Dallas disclaimed any and all interest in the automobiles or warehouse receipts, and pleaded general denial. The Dallas Storage & Warehouse Company answered, pleading that S. J. McFarland was the legal holder of warehouse receipts covering the specific automobiles deposited in the warehouse, and, by the terms of the receipts and of the law of the state, he, and not the appellant, was entitled to the possession of the automobiles sued for; and by cross-action sought to recover against R. M. Fore the amount of storage charges alleged to be due and unpaid, and for foreclosure of the lien for storage against all the parties to the suit. S. J. McFarland answered pleading that he was the legal holder of warehouse receipts duly issued by the Dallas Storage & Warehouse Company for the specific automobiles, and which were negotiated in the regular course of business by R. M. Fore to secure a series of notes executed by R. M. Fore, all of which were held by S. J. McFarland; and by cross-action sought to recover against R. M. Fore on the notes executed by him, and to foreclose his lien against all the parties. R. M. Fore made no answer, so far as the record shows.

The Climber Motor Company is a private corporation, organized under the laws of Arkansas and doing business in Little Rock, engaged in the manufacture and sale of automobiles and trucks. On September 1, 1920, the motor company sold to S. B. Murr, an automobile dealer in Port Arthur, Tex., six automobiles, and at about the same time sold to L. W. Judd, an automobile dealer in Dallas, Tex., nine automobiles. The terms of sale were cash on delivery at destination. These 15 automobiles are the ones in suit. It appears that when the automobiles shipped to the two parties mentioned arrived at their respective destinations, neither Mr. Judd nor Mr. Murr was financially able to pay for same, and therefore each of the parties agreed with the motor company to cancel the contracts of sale, which was mutually done, and the motor company to take possession of the property. It appears that Mr. Judd unloaded from the cars the nine automobiles shipped to him, and deposited them in the warehouse of the Dallas Storage & Warehouse Company, and took warehouse receipts for them. The warehouse receipts were issued in the name of Mr. Judd, and were to be delivered to him or his order. Mr. Judd indorsed the warehouse receipts in blank and delivered them to the Climber Motor Company. It appears, in respect to the six cars shipped to Mr. Murr, that the Climber Motor Company sent the bill of lading to appellee R. M. Fore at Dallas, Tex., with directions to have the six automobiles forwarded to Dallas for resale by him. The six automobiles were loaded in two cars. On instructions the railway company routed the two cars from Port Arthur to Dallas, with a large expense bill for demurrage and freight charges. The bill of lading recited, "Consignee, R. M. Fore," and, "Full name shipper, Climber Mot'r Company." On arrival of the two cars at Dallas Mr. Fore procured the Dallas Storage & Warehouse Company to pay the freight bill, which was done, and to place the six automobiles in storage, which was done. R. M. Fore, it appears, had previously entered into a written agreement with the Climber Motor Company, of date December 26, 1919, whereby he was to sell 2000 certain automobiles during 1920 at the compensation of $6 for each automobile sold, payable when the car was delivered and paid for. By the contract Fore was to sell the automobiles to dealers and at any place in the state of Texas. He was a sales agent, and not a dealer. It was expressly agreed "that the party of the first part is to receive his commission only on cars actually sold by him." The sale of the 15 automobiles was a special arrangement. As pertains to the particular automobiles in suit, the secretary of the motor company testified, as material:

"After these cars were stored in Dallas with the Dallas Storage & Warehouse Company, Mr. Fore was to place these cars with dealers, in Dallas or elsewhere in Texas, and that was the purpose of his being sent by the Climber Motor Company. They were turned over to Mr. Fore to resell them. At that time and after the cars had got to Dallas, they were in Mr. Fore's hands, that is, so far as the Climber Motor Company was concerned. The Climber Motor Company was at the time in possession of all the warehouse receipts. The Climber Motor Company never did sell these cars to Mr. Fore. We told Mr. Fore to come to Dallas and sell or place these cars with some dealer, and that we would pay his expenses, and also pay the expense incident to the handling of the cars, and in taking care of them. * * * We had the possession of the bills of lading covering the six cars until we turned them over to Mr. Fore. After that the warehouse receipts were turned over to Mr. Fore so that he could handle the cars."

The general manager of the Dallas Storage & Warehouse Company testified, as pertinent:

"In June, 1920, the cars (nine) were carried on the books of the warehouse company in the name of L. W. Judd; the receipts were made to L. W. Judd, and the charge for the storage was made to the Climber Motor Company. In June, 1920, Mr. Fore came to me with the receipts for the Judd cars, and I then took up those receipts. I did not issue any receipts to Mr. Fore covering those cars — we simply stored the cars. The only charge on our ledger was a charge entered against the Climber Motor Corporation covering storage. We drew a draft on the Climber Motor Company for that month's storage and credited it, as directed by Mr. Fore. That charge was not made against the Climber Motor Corporation because I understood that company owned the cars, but it was because Mr. Fore told us to charge it to them. The charges were made to the Climber Motor Corporation, and the bills receipted to that company; Mr. Fore paid the charges and I billed it like he said. * * * I did not understand from Mr. Fore that the cars in fact belonged to the Climber Motor Company. I did not know anything about the arrangement that they had. The only thing I knew was he handled all the business for them. I did not know whose cars they were. Mr. Fore asked me to issue receipts to the Security National Bank, and I delivered them to my brother or Mr. Fore, and he delivered them to the bank. * * * There is a balance due of $1,313 on storage of these cars. * * * I am a brother of S. J. McFarland."

It appears that R. M. Fore went to the Security National Bank of Dallas and applied for a loan of money, and represented to the vice president that he owned the cars in the warehouse, and wanted to establish his business as a dealer. The vice president afterwards phoned to the manager of the Dallas Storage & Warehouse Company and inquired respecting the cars, and was informed that the cars were there in storage, but the manager did not state who owned or claimed to be the owner of the property. Thereupon, it appears, the vice president undertook to effect a loan, and did so, for Mr. Fore through other banks outside of Dallas. Mr. Fore executed the six notes, aggregating $5,900, signed by himself and payable "to the order of myself," and reciting, "payable at the office of Security National Bank of Dallas. Texas." Mr. Fore indorsed each note in blank. Attached to each note and executed by Mr. Fore was a collateral agreement reciting:

"Having executed and delivered to Security National Bank, Dallas, Tex., the aforesaid promissory note, and for the purpose of securing the said note, do hereby pledge, transfer and deliver to said Bank or holder the following securities, to wit:" (describing them).

One note describes the securities as "6 Climber touring cars, represented by warehouse receipts of the Dallas Storage & Warehouse Company, with policies of insurance attached." The second note describes the securities as "six Climber touring cars, warehouse...