Hensley v. Lubbock Nat. Bank

• Decision Date: 09 January 1978
• Docket Number: No. 8828,8828
• Parties: 23 UCC Rep.Serv. 261 Henry W. HENSLEY, Appellant, v. LUBBOCK NATIONAL BANK and Charles W. Craig dba Craig Motor Company, Appellees.
• Court: Texas Court of Appeals

Page 885

561 S.W.2d 885

23 UCC Rep.Serv. 261

Henry W. HENSLEY, Appellant,

v. LUBBOCK NATIONAL BANK and Charles W. Craig dba Craig Motor

Company, Appellees.

No. 8828.

Court of Civil Appeals of Texas, Amarillo.

Jan. 9, 1978.

Walters & Associates (A. Duane Neill), Lubbock, for appellant.

Key, Carr, Evans & Fouts (Yvonne M. Faulks), Clifford, Sims & Kidd (Don R. Kidd), Lubbock, for appellees.

ON MOTION FOR REHEARING

REYNOLDS, Justice.

We grant Lubbock National Bank's motion for rehearing, withdraw our 12 December 1977 opinion, set aside our judgment, and substitute this opinion.

An instructed verdict terminated a multi-ground action brought by a purchaser of two motor vehicles, which he bought for another who could not obtain credit, against the financing bank and the seller to recover statutory penalties for violations of two state and two federal enactments governing credit transactions. The evidence either fails to raise a material fact issue that the transaction did, or establishes that the transaction did not, come within the protection of the enactments. Affirmed.

Henry W. Hensley, formerly a used car salesman and presently in the bail bond business in Lubbock, gave a draft to assist Jim McManus in purchasing a 1968 Oldsmobile automobile. The draft was dishonored at the bank. Hensley prevailed upon Charles W. Craig, d/b/a Craig Motor Company, to honor the draft and finance the purchase through the motor company. McManus defaulted in the payments and Hensley repossessed the automobile, delivering it to the motor company.

Because he had involved Craig in the McManus transaction, Hensley told Craig that he would assist in disposing of the automobile. Hensley then "got into the deal with Tommy Hill to purchase" the 1968 Oldsmobile and a 1970 Ford pickup. According to Hensley, Hill needed a car for his wife, who sold Avon products, to drive and Hill used the pickup in laying carpet.

Hensley had, under his characterization, a business relationship and a friendship with Hill. Hill was a carpet layer who also owned a business named Business Reports Service. Hensley had committed himself to, and did, loan Hill $5,000 for the business. The authorized signatures for the bank account of Business Reports Service were Hensley's and Hill's. Hensley's daughter worked for Hill in the business.

When Craig would not accept the credit of Hill, Hensley signed the instrument, which Craig prepared and upon which Hensley bases his actions, for the purchase of the two vehicles. The instrument, which Hensley admittedly did not read and which was like a "bunch" Hensley had filled out in the past, provided that the deferred payment price was payable in eighteen equal installments.

Hensley testified that he was going to get nothing out of the transaction, and that his purpose in signing the instrument "was just trying to help Tommy Hill out." His testimony is that "I signed a contract where it was sold to Tommy Hill;" that he was, and Craig knew he was, purchasing the vehicles for Hill; that Hill, and not Hensley, was to make the payments; and that, when the vehicles were paid for, Hensley was going to assign the titles to Hill. In elaboration, Hensley was asked and answered as follows:

Q In any event at the time that deal was made for Tommy Hill, Mr. Hensley, you weren't going to use that car for your own use were you, either one of them?

A Neither one of them.

Q And you had no intentions of driving either car yourself?

A No Q It was not for your personal use, nor for your household use, nor for any agricultural purposes was it?

A No, it wasn't.

Q What you intended to do in getting involved with Tommy Hill on the thing, you intended to buy the cars and then when they were paid for you were going to transfer the titles over to him?

A Correct.

Q So you were buying the cars to be resold to Tommy Hill?

A I wasn't making any profit off of it if that's what you mean.

Q I'm not saying you was going to make a profit, but that's what you was going to do. You was going to buy it and then resell it to Tommy Hill.

A I was going to assign the titles to him, correct.

Q And that's what you intended to do when you make the deal?

A Correct.

Q Now let's talk about what your performance was. You considered this to be Tommy Hill's car, didn't you, and his pickup?

A Yes, I did.

Q So there is no question that these cars weren't bought for your use?

A No, they wasn't.

Q Because the cars were actually bought for that business (Business Reports Service). Is that what you are telling me?

A No. The cars were actually bought by Tommy Hill.

The instrument Hensley signed was assigned to the Lubbock National Bank. Of the eighteen installments, Hill paid only four, three of which were paid after Hensley loaned Hill the money to pay them. The loans were included in the $5,000 Hensley loaned Hill. Repossession of the motor vehicles was agreed upon by Hill, Hensley and Craig. Hill took the pickup to the motor company; Hensley got the automobile and delivered it. Hensley thought Craig would sell the vehicles "and we was going to come out on them."

Thereafter in Lubbock National Bank's suit against Hensley for a balance claimed due on the purchase price of the vehicles, Hensley asserted actions against both the bank and Craig. He alleged that the bank and Craig had violated the provisions of, and were therefore liable to him for the statutory penalties provided in, the Texas Consumer Credit Code, Texas Revised Civil Statutes Annotated, Article 5069-7.01, et seq., and the federal Consumer Credit Protection Act, generally known as the Truth-in-Lending Act, 15 U.S.C.A., Section 1601, et seq. Additionally, Hensley alleged that the bank failed to give him notice that the repossessed pickup would be sold as required by the Texas Uniform Commercial Code, V.T.C.A., Bus. & C. § 9.504(c) (Supp.1976-77); that Craig violated the odometer requirements of the federal Motor Vehicle Information and Cost Savings Act, 15 U.S.C.A., Section 1901, et seq.; and that each was liable for the statutory penalty provided for the violation each committed. ^*

After the repossessed vehicles were sold, the bank nonsuited its cause, and the parties were realigned with Hensley as plaintiff. To make a submissible case for each of his actions, Hensley presented his testimony and that of Craig as an adverse witness, together with the written instrument of the transaction.

Following the presentation of Hensley's evidence, the bank and Craig moved for instructed verdicts against Hensley. The grounds common to both motions were that the proof shows as a matter of law that Hensley was not a "retail buyer" or "buyer" under the Texas Consumer Credit Code or a "consumer" within the meaning of the federal Truth-in-Lending Act. The bank's motion further asserted that notice to Hensley of the intended sale of the pickup was established as a matter of law and, in any event, Hensley had produced no evidence of any loss, while Craig's motion included the ground that Hensley failed to prove a prima facie case of violation of the federal odometer provisions.

The court, finding "that no disputed fact issue exists in this cause," withdrew the case from the jury and decreed that Hensley take nothing. Hensley has appealed from the take-nothing judgment.

Because the court can instruct a verdict if there are no fact issues raised by the evidence, In re Price's Estate, 375 S.W.2d 900, 904 (Tex.1964), Hensley recognizes that he must assume the appellate burden of showing that the peremptory instruction cannot be supported on the grounds set out in the motions. McKelvy v. Barber, 381 S.W.2d 59, 62 (Tex.1964). In this regard, Hensley contends that he introduced evidence that he was a person to whom the enactments apply and that the instrument he signed failed to meet the requirements of those enactments.

In view of the instructed verdict, any evidence supporting Hensley's position must be accepted as true and all conflicts and inconsistencies must be resolved in his favor, Adams v. Slattery, 156 Tex. 433, 295 S.W.2d 859, 865 (1956), as well as every inference that may properly be drawn from the evidence. Echols v. Wells, 510 S.W.2d 916, 919 (Tex.1974). Notwithstanding, an instructed verdict is correct if there is no evidence to prove a necessary part of plaintiff's case. Glenn v. Prestegord,456 S.W.2d 901, 902 (Tex.1970). Moreover, if a litigant unqualifiedly admits positive and definite facts which, if true, defeats his cause of action, he is bound by his admissions and cannot successfully complain if the court directs a verdict against him. Stanolind Oil & Gas Co. v. State, 136 Tex. 5, 133 S.W.2d 767, 145 S.W.2d 569, 570 (1940). Accord, Griffin v. Superior Insurance Company, 161 Tex. 195, 338 S.W.2d 415, 418-19 (1960).

Texas Consumer Credit Code

To bring himself within the protection of Chapter 7 of the Texas Consumer Credit Code, which relates to motor vehicle installment sales, Hensley was required to produce evidence that he was a retail buyer or buyer. Vernon's Ann.Civ.St. art. 5069-7.01(b) specifies that:

"Retail Buyer" or "Buyer" means a person who agrees to buy or buys a motor vehicle other than principally for the purpose of resale, from a retail seller in a retail installment transaction. (Emphasis added.)

Hensley's declaration that his purpose in entering into the transaction was to help Hill out is clarified by his testimony establishing that the true purpose of the transaction was to effect a sale of the motor vehicles to Hill, who could not secure credit to purchase them in his own name. The method employed was a sale to Hensley with the understanding that the vehicles actually were bought by Hill, who could become the owner only through a resale by, or a gift from, Hensley. There is no testimony or inference of an intended gift. Instead, Hensley's testimony is that Hill, not Hensley, used the motor vehicles; Hill, not Hensley, was to make the payments; and when Hill made the payments,...