Duke v. Sears, Roebuck & Co., 354

• Decision Date: 17 October 1968
• Docket Number: No. 354,354
• Court: Texas Court of Appeals
• Parties: Waldo DUKE, Appellant, v. SEARS, ROEBUCK AND CO., Appellee. . Tyler

Page 919

433 S.W.2d 919

Waldo DUKE, Appellant, v. SEARS, ROEBUCK AND CO., Appellee.

No. 354.

Court of Civil Appeals of Texas Tyler.

Oct. 17, 1968.

Rehearings Denied Nov. 14, 1968.

Evans, Pharr, Trout & Jones, John A. Flygare and Carlton B. Dodson, Lubbock, for appellant.

Key, Carr, Carr & Clark, Donald M. Hunt, Lubbock, for appellee.

DUNAGAN, Chief Justice.

The appellant, Waldo Duke, has appealed from an adverse judgment against him in a suit brought by appellee, Sears, Roebuck and Co., to recover the purchase price of numerous items of merchandise obtained at various Sears stores through the unauthorized use by some unknown person of a Sears Charge Account identification card issued to and accepted by appellant.

The facts giving rise to the cause of action are relatively uncomplicated. It is not disputed that in April of 1960, Waldo Duke applied for a charge account with appellee by signing and agreeing to a 'Sears Revolving Charge Account Agreement,' which in pertinent part provided:

'In consideration of your selling merchandise to me on Sears revolving CHARGE ACCOUNT, I agree to the following regarding all purchases made by me or on my Sears revolving CHARGE ACCOUNT identification:'

(Hereafter followed certain terms and conditions regarding payment for the aforementioned purchases.)

Appellant's application was accepted, and Sears issued to him two copies of Sears Credit Card No. 0--80253--69069--9. On the front of these identical plastic cards in raised plastic letters was appellant's name, his account number and a code number assigned to the issuing store in Lubbock, Texas. On the back of each card was a space for the issuee's signature under which it was stated: 'Valid When Signed By Authorized Purchaser.' Also, at various places on the back of the cards were the statements; 'Property Of Sears, Roebuck And Co.'; 'Returnable Upon Request'; and 'Report Loss Or Theft Of Card To Credit Office.'

Appellant accepted and retained these credit cards when sent to him. While he was unable to recall whether he signed his card in the blank space provided or whether he ever used it to make charge purchases, he did testify that his wife signed the card which he gave to her and that she used it periodically to charge purchases at Sears stores.

Circumstantially at least, it appears that appellant's card was unknowingly misappropriated from him on December 13, 1965, while he was attending his employer's sales convention in New York City.

The unauthorized purchase of merchandise through use of appellant's credit card occurred in six Sears stores in various cities in New York and New Jersey beginning December 13, 1965, and ending December 27, 1965. The sales were evidenced by Sixty-four copies of sales tickets, all but three of which ¹ bore the raised letter imprint of appellant's credit card. There was no indication on any of the sales tickets that any of the merchandise involved had been, or still was, retained by the selling store.

Appellant did not discover that his credit card was missing until January 12, 1966, when he received a telephone call from a Mr. Bailey, an employee in the credit department of Sears' Lubbock store, who called as a result of suspicions aroused by the excess activity in appellant's account. As a result of this conversation, appellant discovered that his Sears credit card and a Sinclair credit card were missing. Mr. Bailey was informed of this as well as the fact that appellant had not made the purchases in question and had not authorized the use of his card. The next day, appellant, through his attorney, wrote a letter to the credit department at the Lubbock store, informing it of the same information and demanding that Sears '* * * immediately discontinue any charges made on this credit card, cancel the same, and take whatever procedures you may have to avoid additional charges on the account.'

On the basis of these facts, the case was submitted to a jury which found: (1) that all the charges in question were made on appellant's credit card, but not by him personally and not upon his authorization; (2) that appellant's credit card was either lost or stolen; (3) that he had failed to sign it, but such was not negligence; (4) that appellant did not fail to use ordinary care to prevent the loss or theft of his card; (5) that he did not fail to discover and report loss or theft of the card within a reasonable time; (6) that Sears did not fail to use ordinary care in ascertaining the identity and authority of the persons using appellant's credit card; and (7) that the reasonable and customary charge for the merchandise in question was $1,335.77. The jury failed to answer two issues which inquired if Sears 'did not fail' to become aware of the charges to appellant's account within the time an ordinarily prudent person would have done so and, if they did so fail, if such failure was '* * * a proximate cause of the charges being made to Waldo Duke's account.' Nevertheless, the trial court accepted the verdict and, after overruling appellant's various alternative motions for judgment or mistrial, the court entered judgment for appellee in the amount of $1,254.86, plus interest. ²

Appellant's appeal is predicated upon seven points of error in which it is contended: (1) that the trial court erred in failing to grant appellant's motion for judgment on the verdict because the jury failed to find appellant at 'fault' in any particular regarding the loss of his card and its subsequent misuse; (2) that there is no evidence, or, alternatively, insufficient evidence to support the jury's finding that Sears 'did not fail' to use ordinary care in ascertaining the identity or authority of the card user; (3) that a mistrial should have been granted because of the jury's failure to answer Special Issues Nos. 14 and 15; (4) and, finally, that judgment should have been rendered for appellant because of the finding that he did not sign his card in the space provided thereon.

A. The Significance of Appellant's Lack of Fault.

Appellant does not contend that the revolving sales charge 'agreement' executed by him is invalid or that it is not a binding contract. Since it is that 'agreement' which prompted the issuance of the credit cards in question and governed their use, we hold that the rights and duties between the parties in this matter are controlled by that 'agreement' and that the determination of the legal issues here involved must rest in the law of contracts unfettered by the tort concept of 'fault.' See Union Oil Company of California v. Lull, 220 Or 412, 349 P.2d (1960); Texaco, Inc. v. Goldstein, 34 Misc.2d 751, 229 N.Y.S.2d 51 (Mun.Ct. of N.Y. City, 1962), aff'd. Sup., 241 N.Y.S.2d 495.

While the provisions of the underlying 'agreement' and the statements on the card itself do not as specifically delimit the rights and duties of the respective parties as is often found in such credit card arrangements, ³ we nevertheless believe that, fairly construed, the 'agreement' imposes upon appellant the liability for 'all purchases' made through the use of his card whether authorized or not wherein it provides: '* * * I agree to the following regarding All purchases made * * * On my Sears revolving CHARGE ACCOUNT identification:' (Emphasis added).

Parenthetically, it should be noted that appellant has never contended in this court or in the trial court that the term 'identification' in the above quoted clause referred to anything other than the credit card or 'identification' card which he subsequently received and used to make purchases from Sears stores. As a matter of fact, throughout the record, appellant's lost or stolen card is referred to as his Sears 'identification card' and that phrase was also used in referring to said card in several of the Special Issues submitted.

Furthermore, while we think the phrase 'identification' clearly referred to the card in question, even if it did not, the question would appear to be moot in view of the undisputed fact that not only did appellant without objection receive the card in question as a means to use his account, he also Actually used the card to charge purchases to his account. Thus, if the contract did not contemplate issuance and use of a 'card,' the subsequent action of appellant in receiving and using such card was an acceptance of the same as an integral part of the contractual agreement. Magnolia Petroleum Co. v. McMillan, 168 S.W.2d 881 (Tex.Civ.App., Austin, 1943, n.w.h.). No issue was raised in the trial court as to whether appellant requested the card and there is no testimony as to whether he did or did not.

Anticipating this holding, appellant contends that the above quoted phrase must be read with the proviso 'with my authority' included after the word 'identification.' We believe such a holding would be an unauthorized variance or reformation of the terms of a written contract. Appellate courts, as well as trial courts, are simply not at liberty to create a new contract between parties under the guise of 'construction.' General American Indemnity Company v. Pepper, 161 Tex. 263, 339 S.W.2d 660, 661 (1960); Provident Fire Ins . Co. v. Ashy, 139 Tex. 334, 162 S.W.2d 684, 686--687 (1942); Dorroh-Kelly Mercantile Co. v. Orient Ins. Co., 104 Tex. 199, 135 S.W. 1165, 1167 (1911). A similar contention to so construe the conditions attached to a credit card was rejected in Union Oil Company of California v. Lull, 220 Or. 412, 349 P.2d 243 (1960), where the court held:

'* * * Defendant would have us recast the terms of the contract by limiting the cardholder's liability to cases in which he had authorized the use of the card or where, through his fault, the card was used by one not authorized to do so. There is nothing in the transaction between the plaintiff and defendant which would justify this modification of the conditions clearly expressed on the card.' (349 P.2d 247.)

Accordingly, appellant's numbers 1 and 2 are overruled.

B. ...