Fuller v. Texas Western Financial Corp.

Decision Date13 May 1982
Docket NumberNo. 1533,1533
Citation635 S.W.2d 787
Parties34 UCC Rep.Serv. 496 Danny FULLER d/b/a Danny's Factory Outlet, Appellant, v. TEXAS WESTERN FINANCIAL CORPORATION, Appellee.
CourtTexas Court of Appeals

Charles H. Clark, Tyler, for appellant.

Harry J. Martin, Jr., Hunter, Drake, Stewart, Salzberger & Vineyard, Dallas, for appellee.

McKAY, Justice.

Texas Western Financial Corporation (Texas Western) brought suit against Danny Fuller d/b/a Danny's Factory Outlet (Fuller) for certain goods, wares and materials, alleging that Texas Western was an assignee of Amcrest Textiles, Inc. (Amcrest). After generally denying the allegations, Fuller pled that there was no proper pleading or notice of assignment to Texas Western, and that the manner in which Fuller did business was by consignment only. After trial before a jury judgment was rendered for Texas Western for $4,516.07, and Fuller brings this appeal.

The jury found (1) the balance due Texas Western from Fuller on account of transactions between Texas Western, Amcrest and Fuller was $4,516.07; (2) the sum of money to compensate Texas Western's attorneys was "0"; and (3) the merchandise received by Fuller from Amcrest was received under a consignment agreement. The jury refused to find that Texas Western gave Fuller notice of Amcrest's assignment of his account.

Fuller brings two points of error: the trial court erred (1) in overruling his motion that the court render a take-nothing judgment against Texas Western, and (2) in rendering judgment for Texas Western for $4,516.07. We overrule both of these points of error.

Fuller opened a business known as Danny's Factory Outlet in Mineola, Texas, in February, 1976, and approximately sixteen days later the contents of the building were destroyed by fire. Some of Fuller's inventory had been obtained from Amcrest, and Texas Western claimed to be the owner of Amcrest's accounts. Amcrest also did business under the name of Prints Charming, Inc. Fuller's business was also known as Danny's Drapery Outlet. Fuller received $15,000 from his insurance carrier as a result of the fire.

A number of invoices from Amcrest addressed to Fuller were introduced in evidence. Most of them were dated in January and February, 1976. The invoices below the invoice number contained the words "PAY BY THIS INVOICE" and "STATEMENT UPON REQUEST." Under "Terms" was typed in "net 30." At the bottom of the invoice was printed "no returns will be accepted unless authorized in writing by this office."

Fuller made a claim for insurance for loss of merchandise in the fire and listed as a loss goods itemized on some of Amcrest's invoices. He further said the goods listed in invoices 1034, 1035, 1036 and 1037 were not in the store when it burned because they had been picked up for Amcrest by Jerry Brooks, but they were the only invoices he had and he was told to submit them with his claim for insurance. He said his total loss was $50,000 but he received only $15,000 from insurance. He testified that his agreement with Amcrest was: "Anything that I sold I would get a percentage of. It was on consignment." He further said he paid only for the goods he sold, and if he could not sell them Frank Johnson (whom he said worked for and owned Amcrest) would pick them up.

Texas Western sued Fuller for the sum of $12,838.97 and introduced invoices which total that amount. Fuller disputed some of the invoice items, and the jury concluded that the balance due Texas Western was $4,516.07.

It is Fuller's position that the finding by the jury of the existence of a consignment agreement covering all of the merchandise received from Amcrest defeats the cause of action of Texas Western, and he argues that the goods involved here were not sold or leased but instead were placed with Fuller on consignment under an agreement that goods sold would be paid for and those not sold would be returned to Amcrest. It is our view that the transaction was a sale as a matter of law under arts. 2.326(c) 1 and 2.327(b)(1) and (2), 2 of the Tex.Bus. & Comm.Code Ann. (Vernon 1967), and therefore title passed to Fuller. Collier v. B & B Parts Sales, Inc., 471 S.W.2d 151, 153 (Tex.Civ.App.-Tyler 1971, no writ). Neither Fuller's exhibit No. 1 listing the percentage of the sale price to be retained by him nor Texas Western's exhibit No. 5 listing invoices and percentages constitute a consignment. The intention of the parties no longer seems to determine whether a transaction was a sale or consignment under the U.C.C. Bufkor, Inc. v. Star Jewelry Co., 552 S.W.2d 522, 524 (Tex.Civ.App.-Beaumont 1977, writ ref'd n.r.e.); Collier v. B & B Parts Sales, Inc., supra.

The record reveals that Fuller maintained a place of business at which he dealt in goods of the kind Amcrest dealt, under a different name from the supplier. The record does not show that Fuller was known by his creditors to be substantially engaged in selling goods of others or that a consignor's interest was evidenced by a sign.

In 50 Tex.Jur.2d Sales, § 22, pp. 276-77 is found this language:

Under pre-code law, where there was a consignment, an owner of goods placed them in the possession of another under a contract for their sale and the return of the proceeds of sale, less a commission or discount, or for the return of the goods in case they remained unsold. The distinguishing characteristics of a consignment were that the consignee did not take title to the goods and was not obliged to pay the price unless he sold or otherwise disposed of them....

Under the Uniform Commercial Code, many transactions that might have been regarded as consignments under former law will be regarded as sales. This is because of a code provision stating that where goods are delivered to a person for sale and he maintains a place of business where he deals in goods of the kind involved, under a name other than that of the person making delivery, the goods are deemed to be on sale or return, as regards claims of creditors of the person conducting the business.

In the pre-UCC case of Concordia Fire Ins. Co. of Milwaukee v. McCarty Motor Co., 45 S.W.2d 446, 447 (Tex.Civ.App.-Amarillo 1931, writ dism'd), the court stated that a contract is known as "sale or return" contract where the property is sold, but could have been returned to the seller at the option of the buyer. The court held that a transaction vests title in the buyer and the buyer deals with the goods as his own.

The court in Montgomery Ward & Co. v. State, 141 Tex. 626, 175 S.W.2d 218, 222 (1943) quoted a Kansas case:

There are two rules with reference to this general type of sales. One is known as a contract of sale or return, that is, where the sale is made with an option to return. In those cases the title passes to the buyer and the sale is completed upon delivery to the carrier regardless of the fact that the customer has a...

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6 cases
  • Belmont Intern., Inc. v. American Intern. Shoe Co.
    • United States
    • Oregon Supreme Court
    • April 23, 1992
    ...is deemed to have title in the consigned goods. See In re Miller, 119 B.R. 660 (W.D.Ark.1990) (so holding); Fuller v. Texas Western Financial Corp., 635 S.W.2d 787, 789 (Tex.App.), aff'd 644 S.W.2d 442 (Tex.1982) (same); Annot., Consignment Transactions Under the Uniform Commercial Code, 40......
  • Armendariz v. Hudgens
    • United States
    • Texas Court of Appeals
    • July 27, 2020
    ...to the goods and was not obliged to pay the price unless he sold or otherwise disposed of them .... Fuller v. Texas Western Fin. Corp. , 635 S.W.2d 787,789 (Tex. Civ. App.--Tyler 1982), writ ref'd n.r.e. , 644 S.W.2d 442 (Tex. 1982), quoting 50 TEX.JUR. 2 D Sales , § 22.American Jurispruden......
  • Graziadei v. D.D.R. Mach. Co., Inc.
    • United States
    • Texas Court of Appeals
    • October 19, 1987
    ...Quality was a sale, as a matter of law, and not merely a return of stored property. The Graziadeis rely on Fuller v. Texas Western Financial Corp., 635 S.W.2d 787 (Tex.App.--Tyler), writ ref'd n.r.e., 644 S.W.2d 442 (Tex.1982), as the sole authority for their position that the transaction w......
  • Minor v. Stevenson
    • United States
    • California Court of Appeals Court of Appeals
    • February 28, 1991
    ...the transaction is a sale or consignment. (See Escrow Connection, supra, at p. 1645, 235 Cal.Rptr. 200; Fuller v. Texas Western Financial Corp. (Tex.App.1982) 635 S.W.2d 787, 789, affd. 644 S.W.2d 442, citing Bufkor, Inc. v. Star Jewelry Co. (Tex.Civ.App.1977) 552 S.W.2d 522, 524; Limor Dia......
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