Goodpasture, Inc. v. M/V Pollux
| Decision Date | 12 October 1982 |
| Docket Number | No. 80-2216,80-2216 |
| Citation | 688 F.2d 1003 |
| Parties | 34 UCC Rep.Serv. 1165 GOODPASTURE, INC., Plaintiff-Appellee Cross-Appellant, v. M/V POLLUX, ETC., Defendant-Appellant Cross-Appellee, and NEGOCIOS DEL MAR, S.A., etc., Defendant-Third Party Plaintiff-Appellant Cross-Appellee, v. EMPAC GRAIN CO., etc., Defendant-Appellee, and A Shipment of Wheat of 19,067.949 Metric Tons, etc., Third-Party Defendant- Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Royston, Rayzor, Vickery & Williams, Kenneth D. Kuykendall, Houston, Tex., for defendant-appellant cross-appellee.
Michael D. Sydow, Houston, Tex., for Goodpasture.
Osvaldo Grzesik, President, Empac Grain Corporation, Inc., pro se, for Empac Grain.
Appeals from the United States District Court for the Southern District of Texas.
Before COLEMAN, POLITZ and GARWOOD, Circuit Judges.
We again address the claims arising out of an aborted sale of approximately 20,000 metric tons of number two hard red winter wheat. The factual setting of this involved dispute is essentially detailed in our prior opinion, Goodpasture, Inc. v. M/V POLLUX, 602 F.2d 84 (5th Cir. 1979). On remand, additional facts were developed. Subject to one minor modification, we perceive no clearly erroneous factual finding and find no error of law in the trial court's disposition. Accordingly, we modify and affirm.
Goodpasture, Inc., a Texas corporation engaged in wheat transactions, contracted with Empac Grain Corporation, Inc., a New York corporation, for the sale of the noted quantity of wheat. Empac was to acquire the wheat for Idema, a Colombian governmental entity. The agreement ultimately negotiated provided for payment to Goodpasture under an assignment of proceeds of an irrevocable letter of credit established for Empac by Idema. Goodpasture was designated as Empac's agent to gather the documents necessary for payment under the letter of credit. 1
Empac entered into a time charter party with Negocios del Mar, S.A., a Peruvian shipping concern, for the M/V POLLUX, which was to transport the grain from Houston, Texas to Buenaventura, Colombia. After certain delays and difficulties which are not of immediate relevancy, the vessel arrived and Goodpasture loaded the grain. The ship's master, acting under revised instructions from the owner, insisted on payment consistent with the charter party and refused to sign freight prepaid bills of lading. Without that documentation, Goodpasture could not effect payment under the letter of credit. Goodpasture had loaded its wheat aboard the POLLUX, the vessel was prepared to depart, but Goodpasture, obligated to pay its vendor for the wheat, could not secure payment. Goodpasture filed an in rem suit resulting in the arrest of the vessel, later amended to seek personal judgment against Empac and Negocios.
Shortly after the seizure, Goodpasture moved for discharge of the grain. Several weeks later, after due hearing and the posting of security as demanded by Negocios, the grain was removed from the POLLUX. The district court initially concluded that the refusal by Negocios to sign freight prepaid bills of lading did not constitute conversion of the wheat and that Goodpasture had no in rem rights against the vessel. The district court ordered the seizure released and Goodpasture's suit dismissed. On appeal, we reversed and remanded. 602 F.2d 84. The district court had found that title to the grain had not passed from Goodpasture to Empac. Consistent therewith, we held that the POLLUX had no claim against Goodpasture to support the maritime lien it had asserted against the cargo composed exclusively of Goodpasture's wheat. We further held that Negocios' seizure of Goodpasture's wheat as security for its claim against Empac was a maritime tort which gave rise to Goodpasture's in rem claim against the POLLUX.
On remand, the district court, because of Negocios' contention that further litigation as to the title to the wheat was not foreclosed by our decision, held evidentiary hearings at which Negocios was permitted to offer evidence relative to the title issue. Thereafter the district judge, in a scholarly, detailed and comprehensive opinion, found and concluded that, assuming the law of the case doctrine did not preclude further consideration of the title issue, the additional evidence supported and confirmed the conclusion that the POLLUX had exercised wrongful dominion over Goodpasture's wheat. Damages were awarded to Goodpasture, and counterclaims against Goodpasture and the cargo of wheat were rejected.
As a general rule, "a decision of a legal issue or issues by an appellate court establishes the 'law of the case' and must be followed in all subsequent proceedings in the same case in the trial court or on a later appeal in the appellate court ...." White v. Murtha, 377 F.2d 428, 431-432 (5th Cir. 1967). An exception to this rule arises when " '(1) the evidence on a subsequent trial was substantially different, (2) controlling authority has since made a contrary decision of the law applicable to such issues, or (3) the decision was clearly erroneous and would work manifest injustice.' " Morrow v. Dillard, 580 F.2d 1284, 1290 (5th Cir. 1978) (quoting from White v. Murtha, 377 F.2d at 432).
Negocios' primary argument is that our prior opinion erroneously interpreted the provisions of the Texas Uniform Commercial Code 2 with respect to passage of title. An examination of the Texas U.C.C. quickly reflects that parties may control passage of title as between themselves by contractual agreement. 3 Tex. Bus. & Com. Code Ann. tit. 1, § 2.401(a) (Vernon); J. White & R. Summers, Uniform Commercial Code at 139 (1980). See Heinrich v. Wharton County Livestock, Inc., 557 S.W.2d 830 (Tex. Civ. App. 1977). Moreover, as the district court noted, a "usage of trade," defined as "any practice or method of dealing having such regularity of observance in a place ... or trade as to justify an expectation that it will be observed with respect to the transaction in question," Tex. Bus. & Com. Code Ann. § 1.205(b) (Vernon), should be read as giving "particular meaning to and supplement(ing) or qualify(ing) terms of an agreement." Section 1.205(c). 4 We affirmed the district court's finding that the custom and usage in the grain trade called for title to pass upon payment and that Empac and Goodpasture had agreed to this arrangement. Our earlier opinion does not fall within the clearly erroneous exception. Concluding that the other exceptions are inapplicable, we are constrained to conform to the law of the case rubric and decline further review of this claim. 5
The district court awarded Goodpasture damages in the amount of $224,198.40, representing the difference in the amount Goodpasture was to receive for its services under the Empac contract and the amount ultimately received pursuant to a subsequent sale to Dreyfus Corporation. In reaching this conclusion, the court referred to the basic principles that damages in a conversion action should compensate for the loss actually sustained as a result of the tortfeasor's wrong, Standard Oil Co. v. Southern Pacific Co., 268 U.S. 146, 45 S.Ct. 465, 69 L.Ed. 890 (1924), and a plaintiff may generally recover the reasonable market value of the goods converted, as of the time and place of conversion, Harrington v. Texaco, Inc., 339 F.2d 814 (5th Cir.), cert. denied, 381 U.S. 915, 85 S.Ct. 1538, 14 L.Ed.2d 435 (1964); Restatement (Second) of Torts § 222A (1965). In determining market value, the court must focus on the market to which the damaged party would resort in order to replace the subject goods. Restatement (Second) of Torts § 911, Comment 6 (1965).
The district court applied these principles to Goodpasture's claims. It found Goodpasture engaged in the grain handling business, routinely receiving payment from its customers for elevating, grading and performing other services involved in the delivery of grain to a common carrier. Typically, Goodpasture would be compensated for its services through the payment of a premium over and above the market price of wheat. The record reflects, and the district judge so found, that this premium market fluctuated in the same manner as the commodities market itself.
The district court credited the testimony of Robert Steele, executive vice-president and general manager of Goodpasture, explaining his company's method of operation. Steele testified that in a typical transaction a customer would acquire grain futures for Goodpasture's account, enabling Goodpasture to purchase the grain. When delivered, Goodpasture would elevate, grade and load the grain upon a designated carrier and would be paid a sum equal to the "flat" price of the grain and the premium agreed upon for Goodpasture's services.
In the case at bar, Goodpasture contracted to sell Empac 700,620 bushels of wheat, priced at "74 cents over Kansas City May." This contract obligated Empac to pay Goodpasture, after the wheat was elevated, graded and loaded, the amount of the May quotation for delivery in Kansas City plus 74 cents per bushel for Goodpasture's services. 6 The sale was never consummated and payment was never made.
After the collapse of the Goodpasture/Empac transaction and the discharge of the grain from the POLLUX, Goodpasture sold the wheat to another purchaser under a contract which provided for a premium of 42 cents per bushel. There is no dispute in the record that the prevailing premium for handling grain at the time of the resale was 42 cents per bushel. Finding that the flat price of the wheat was not the relevant factor in computing loss, that factor typically being a wash-out, the district court awarded Goodpasture damages composed of the difference between the amount of the premium payment it would have received under the Empac contract and the amount actually received in the subsequent sale. 7
Negocios contends that the...
To continue reading
Request your trial
-
Alliance for Good Gov't v. Coal. for Better Gov't
...v. Murtha , 377 F.2d 428, 432 (5th Cir. 1967) ; Morrow v. Dillard , 580 F.2d 1284, 1290 (5th Cir. 1978) ; Goodpasture, Inc. v. M/V Pollux , 688 F.2d 1003, 1005-06 (5th Cir. 1982). Clear error is a familiar legal standard for reviewing prior decisions that applies across various contexts. Fo......
-
Tatro v. State of Tex.
...injustice." White v. Murtha, 377 F.2d 428, 432 (5th Cir.1967) (footnote omitted; enumeration added); see Goodpasture, Inc. v. M/V Pollux, 688 F.2d 1003, 1005-06 (5th Cir.1982); United States v. McClain, 593 F.2d 658, 664 (5th Cir.), cert. denied 444 U.S. 918, 100 S.Ct. 234, 62 L.Ed.2d 173 (......
-
Todd Shipyards Corp. v. Auto Transp., S.A.
...that the challenged holdings of the prior panel are "clearly erroneous and would work an injustice." Goodpasture, Inc. v. M/V Pollux, 688 F.2d 1003, 1005-06 (5th Cir.1982), cert. denied, 460 U.S. 1084, 103 S.Ct. 1775, 76 L.Ed.2d 347 (1983); White v. Murtha, supra, at 432. In the absence of ......
-
U.S. v. Rivera-Martinez
...U.S. ----, 110 S.Ct. 2209, 109 L.Ed.2d 535 (1990); United States v. Mazak, 789 F.2d 580, 581 (7th Cir.1986); Goodpasture, Inc. v. M/V Pollux, 688 F.2d 1003, 1006 n. 5 (5th Cir.1982), cert. denied, 460 U.S. 1084, 103 S.Ct. 1775, 76 L.Ed.2d 347 We appreciate and respect the district judge's i......