Gulf Liquid Fertilizer Co. v. Titus

• Citation: 354 S.W.2d 378,163 Tex. 260
• Decision Date: 28 February 1962
• Docket Number: No. A-8431,A-8431
• Parties: GULF LIQUID FERTILIZER CO., d/b/a Western Chemicals, Petitioner, v. James TITUS, Respondent.
• Court: Supreme Court of Texas

Page 378

354 S.W.2d 378

163 Tex. 260

GULF LIQUID FERTILIZER CO., d/b/a Western Chemicals, Petitioner, v. James TITUS, Respondent.

No. A-8431.

Supreme Court of Texas.

Feb. 28, 1962.

Dennison & Naylor, Pecos, for petitioner.

Russell & Tomlin, Pecos, for respondent.

GREENHILL, Justice.

The opinion heretofore rendered on November 15, 1961, is withdrawn and the following is substituted therefor.

The Statute of Frauds states, among other things, that no action shall be brought in any court to charge any person upon a promise to answer for the debt, default, or miscarriage of another unless the promise be in writing. ¹ In this case, James Titus was sued by Gulf Liquid Fertilizer Company for merchandise which he purchased for the 'Titus & Stracner Farm,' a partnership, and also on his oral promise to pay al pre-existing debt of his partner, Lonzo Stracner. Lonzo Stracner was also sued, but he filed no answer and did not appear. The trial court, sitting without a jury, rendered judgment against Titus and Stracner, jointly and severally, for the merchandise Titus had purchased and also for the debt of Stracner. Titus alone appealed. The El Paso Court of Civil Appeals, in effect, reversed and rendered that judgment as to Titus on the Statute of Frauds point. It held that Titus's oral promise to pay the debt of his partner Stracner was unenforceable under the Statute of Frauds, and that the payments on the Stracner note out of the funds of the Titus and Stracner partnership were invalid. 345 S.W.2d 422.

The facts are these: Lonzo Stracner accumulated an indebtedness of $7,183.58 with Gulf Liquid Fertilizer Company, for merchandise purchased in connection with his 1957 crop. On January 29, 1958, he gave his note to Gulf Liquid to evidence this debt. The note was payable in four installments of $1,500 on the 15th of each month, beginning in July, 1958. The fifth and last payment, in an odd amount, was due on November 15, 1958.

Early in 1958, Stracner and Titus entered into a farming partnership. On March 15, 1958, a check was drawn from the account of the 'Titus & Stracner Farm' (the partnership) for $1,500. It was prepared by Titus's wife who kept the books for the partnership, and was signed by Stracner. The only notation on the check was that it was for 'fertilizer.' On June 5, 1958, a second check, in the amount of $1,303, was sent to Gulf Liquid. It was signed by Titus. The check bore a notation that it was for 'fertilizer and poison for June.' Up to this point, the partnership had made no purchases. The amounts of these checks were credited as received by Gulf Liquid on the note of Stracner.

On June 24, 1958, the partnership made its first purchase of $339.60 on account from plaintiff, Gulf Liquid, doing business as Western Chemicals.

On July 9, 1958, a third check was sent to Gulf Liquid. It was drawn on the 'Titus & Stracner Farm' account for $1,500 and was executed by Titus. The only notation on the check was that it was for 'fertilizer and poison.' It likewise was credited on the Stracner note.

After June 24, 1958, Titus made various purchases on open account from Gulf Liquid for fertilizer and poisons. The total amount purchased on credit in 1958 was $5,000.80. This account forms part of the amount in litigation, but there is no dispute as to the amount purchased or the charges made thereon. At least a part of this sale on credit in 1958 was made before Titus's oral promise to pay the Stracner note. Titus contends that the two checks for $1,500 and the third check for $1,303 should not have been credited on Stracner's note, but should have been applied on the debt created by the open account purchases on and after June 24, 1958. He concedes that there was no agreement to pay in advance for 1958 purchases. Ferguson, assistant manager of Gulf Liquid, testified that there was no agreement that the partnership would pay in advance; that no one told him or his company to do otherwise than to credit the payments on the Stracner note.

During 1958 Stracner disappeared, and Titus was left to run the farm and the partnership. The time of his departure was not fixed with certainty. Titus admitted that Stracner was not back when he had his conversation with Ferguson. It was during this conversation that the oral promise was made by Titus. Titus testified that this conversation took place on or about July 15, 1958. Ferguson testified that it was earlier, at least as early as July 9, 1958 (by which time the partnership and purchased $725 of goods on credit).

Ferguson testified that in this conversation Titus specifically agreed to pay the Stracner note; that the promise was made in return for a continuation of credit by Gulf Liquid for the Titus & Stracner partnership for the 1958 crop year and for an extension of additional credit at the end of 1958 if needed. He also testified that Gulf Liquid would not have continued credit except for Titus's promise to pay the Stracner note, and at that time he had to decide whether to file suit. At another place in his testimony, Ferguson testified that Titus agreed 'to take care of' the Stracner debt; that 'he would pay that (note) out * * * and * * * if he needed additional credit, I agreed to give it to him.' At another place, Ferguson testified that Titus promised that he would 'see that the note was paid.' Then again on direct examination, Ferguson said Titus said 'I will pay' the note.

Titus testified that he agreed only to see that the Stracner note was paid, and that he meant by this that he would see that Stracner himself paid it; that he, Titus, was not going to get himself obligated, but that he would see that Stracner paid his debt. He also testified that he had no discussion with the officers of Gulf Liquid concerning credit for the partnership's 1958 crop or of credit being stopped if the promise to pay the Stracner note was not given; that he had no knowledge of the Stracner note until it was showed to him by Ferguson in mid-July of 1958, when he had already started buying on credit from Gulf Liquid; that it was not necessary for him to establish credit with Gulf Liquid because the financing of the 1958 crop had already been arranged with Western Cotton Oil Company which had advanced money to the partnership for the 1958 crop, and that a budget for fertilizer and insecticides and a bank account had already been set up.

The findings of fact of the trial court were these: that Stracner executed the note on January 29, 1958; that prior to June 24 1958, (when Titus first purchased merchandise from Gulf Liquid for the partnership) the only debt owed by either Stracner or Titus to Gulf Liquid was the Stracner note; that the Stracner note was given in satisfaction of an open account owing by Stracner to Gulf Liquid for fertilizer and insecticides purchased during 1957; that at the beginning of the 1958 cotton crop year, Stracner and Titus entered into a farming partnership for the 1958 crop year; that the 'Titus & Stracner Farm' partnership paid by check $1,500 on March 3, 1958, and $1,303 on June 5, 1958, on the Stracner note; and that on those dates, neither Stracner nor Titus owed any debt other than the Stracner note to Gulf Liquid; that the 'Titus & Stracner Farm' paid $1,500 by check on July 9, 1958, on the Stracner note, and that on that date Stracner and Titus were indebted to Gulf Liquid for $725 on open account and not otherwise except on the Stracner note; that there was no agreement between Gulf Liquid and Titus & Stracner that the latter would pay in advance for insecticides and fertilizers used during the 1958 corp year; that the balance at the time of trial owing on the Stracner note was $2,880.58 together with interest and attorney fees; that Gulf Liquid continued to sell Titus & Stracner fertilizer and insecticides from June 24, 1958, throughout the 1958 crop year on credit, and that the amount owing at the end of the 1958 cotton crop year was $5,000.80.

Regarding the oral promise of Titus, the court made these findings of fact:

'5. That Plaintiff Gulf Liquid Fertilizer Company, through its authorized employee, W. T. Ferguson, Jr., informed the Defendant James Titus that it did not desire to sell insecticides and fertilizer to the partnership of Lonzo Stracner and James Titus during the 1958 crop year on a credit basis until the indebtedness owing by Lonzo Stracner, represented by the promissory note dated January 29, 1958, had been taken care of and satisfied.

'6. That the Defendant James Titus, in order to obtain credit for the partnership of Stracner and Titus from Plaintiff during the 1958 crop year, agreed to pay to Plaintiff the indebtedness represented by the said note dated January 29, 1958, in the sum of $7,183.58, or to see that same was paid. (Emphasis ours.)

'9. On June 24, 1958, Plaintiff Gulf Liquid Fertilizer Company, relying upon the agreement of Defendant James Titus to pay the said note dated January 29, 1958, or to see that same was paid, and the partial performance by Defendant James Titus of said agreement began to sell fertilizer and insecticides to the partnership of James Titus and Lonzo Stracner on credit and continued to do so during the 1958 cotton crop year.'

The trial court's conclusions of law were that the Stracner note is a valid obligation; that the agreement of Titus to pay the Stracner not is not barred by the Statute of Frauds because it has been fully performed by Gulf Liquid and partially performed by Titus; that Gulf Liquid is entitled to judgment against Titus and Stracner for the sums specified in the judgment.

Because of their importance, these additional conclusions of law are set out in full:

'2. That the Defendant James Titus made an unconditional promise to pay the indebtedness owing to Plaintiff by Defendant Lonzo Stracner as evidenced by said note dated January 29, 1958.

'3. That the promise of Defendant James Titus to pay the indebtedness owing by Defendant Lonzo Stracner on said note...