Ferrous Products Co. v. Gulf States Trading Co.
| Decision Date | 17 February 1960 |
| Docket Number | No. A-7374,A-7374 |
| Citation | 160 Tex. 399,332 S.W.2d 310 |
| Parties | FERROUS PRODUCTS CO., Inc., Petitioner, v. GULF STATES TRADING CO., Inc., Respondent. |
| Court | Texas Supreme Court |
Boone & Kraft, Houston, for petitioner.
Witts, Geary, Hamilton & Brice, William C. Koons, with above firm, Dallas, for respondent.
Respondent, hereinafter called Gulf, filed this suit against petitioner, hereinafter called Ferrous, for the recovery of the value of a shipment of steel beams which Gulf had made to Metallic Building Company, but which shipment Gulf alleged Ferrous had appropriated to its own use and benefit.
The facts are summarized as follows:
On or about May 12, 1955, a man named Borden of Houston, Texas, telephoned Mr. Chenowith, who was employed by Gulf in Dallas, Texas, and asked if Gulf would be interested in selling the beams to Metallic Building Company. Chenowith answered that it would, and on the same day directed T. E. Mercer Truck Company to deliver the beams from Gulf's Houston yards to Metallic Building Company, 4601 Holmes Road, Houston. Mercer issued its bill of lading. The bill of lading, dated May 12, 1955, showed the consignor to be Gulf and Metallic Building Company was shown to be the consignee. When the beams were delivered on May 12, 1955 to the address shown, an employee at the warehouse called Mr. Thielemann, vice president and general manager for Ferrous, about the shipment. Mr. Thielemann told him the shipment was for Ferrous. An authorized representative of Ferrous scratched out the name of Metallic Building Company and inserted the name of Ferrous and took delivery of the beams for Ferrous. All of this was unknown to Gulf. Mr. Thielemann explained that on May 10 Ferrous told Borden it would take some beams like those delivered and that at the same time it issued its purchase order to Borden; that when the shipment arrived the receiving clerk had no information about the shipment of Metallic Building Company, but did have a copy of the purchase order issued to Borden by Ferrous. The shipping clerk then telephoned Mr. Thielemann.
On May 16 Gulf sent its invoice to Metallic Building Company. On May 18 Ferrous wrote Gulf that Metallic Building Company had received the invoice, but that Metallic had not ordered the material but Ferrous had, although the order was direct to Borden. Ferrous returned the invoice and sent Gulf a copy of its purchase order to Borden and a copy of the invoice from Mercer for trucking the materials. Ferrous paid the trucking charges.
On May 24 Gulf acknowledged the letter of May 18 and stated that Borden had arranged for the shipment of the beams, but advised them to make out the invoice to Metallic Building Company. It is to be noted, however, that Mr. Chenowith testified that Gulf sold to Metallic and never knew Ferrous was involved with the beams until receipt of the letter of May 18. This date was after Ferrous had taken the beams and sold them on the same day they were received on their own account to a third person.
Since Borden was indebted to Ferrous, Ferrous gave him credit on his account for the value of the beams.
Gulf sued Ferrous for the value of the shipment of the steel beams. Judgment was rendered for Gulf for $1,892.80, together with attorneys' fees of $500. Recovery was allowed by the trial court on the theory of an implied contract since Ferrous had received and disposed of the beams. The findings of fact filed by the trial court were in substance the facts as related and the court found that by changing the bill of lading, taking the goods and appropriating them to its use and benefit, Ferrous agreed to pay the reasonable cash market value of the goods.
Ferrous appealed to the Court of Civil Appeals and that court affirmed the judgment of the trial court. 323 S.W.2d 292.
When Ferrous changed the bill of lading issued to Metallic Building Company without knowledge or consent of Gulf by substituting its own name as consignee, and having received the beams and sold them and appropriated the proceeds thereof, Ferrous became liable to Gulf for the market value of the beams. The liability arises under what the law has come to denominate a quasi contract. Mr. Corbin, On Contracts, says ...
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