Miles v. Starks, 18145
| Decision Date | 08 November 1979 |
| Docket Number | No. 18145,18145 |
| Citation | 590 S.W.2d 223 |
| Parties | 27 UCC Rep.Serv. 1298 John MILES, Jr., Appellant, v. Robert K. STARKS d/b/a Western Cattle Company and d/b/a Saginaw Cattle Company and Hartford Accident & Indemnity Company, Appellee. |
| Court | Texas Court of Appeals |
This is an appeal from a portion of a judgment that the seller of cattle take nothing against the surety of the buyer on a livestock dealer's bond. The primary question on appeal is whether the transaction in question constituted a purchase within the terms of the bond and federal law authorizing and requiring the bond.
We reverse and render.
John Miles, Jr., raises cattle on a ranch near Cresson, Texas. Robert Starks is a bonded livestock dealer who is an Illinois domiciliary. Hartford Accident & Indemnity Company is the surety on his livestock dealer bond issued pursuant to the Packers & Stockyards Act, 7 U.S.C.A. § 204 (Supp.1979). On April 20, 1976 Starks visited Miles at his ranch and entered into a written contract on a form supplied by Starks. The contract provided in pertinent part as follows:
The agreement provided for delivery of the cattle in three lots during three designated delivery periods. The price agreed upon was $45.00 per hundred weight with cattle to be driven dry and weighed upon shipment. After the date of the contract but before the first delivery period the market price of cattle dropped below the contract price. By agreement of the parties the first delivery of cattle was postponed. The market, however, did not improve and before any shipment was made Starks informed Miles that he could not pay for the cattle and would not accept delivery.
Miles and Starks worked together to sell the cattle to other buyers. Each party approved the sales, which were all for a price lower than the contract price. Miles credited Starks with the proceeds from the sales and the $14,300.00 Starks had already paid leaving a deficiency of $25,580.23. On September 21, 1976 Miles made a claim on Starks's livestock dealer's bond which was denied. Miles then filed suit against Starks and Hartford for the deficiency.
After a trial to the court, judgment was rendered against Starks for the deficiency. The court also rendered judgment that Miles take nothing against Hartford. The portion of the judgment against Starks has not been appealed.
Miles prosecutes this appeal on the take nothing portion of the judgment by five points of error. Miles's basic contention in all points is that the trial court erred in concluding that the transaction in question did not constitute a purchase within the terms of the bond. The bond provides in pertinent part as follows:
The form and language of the bond are as prescribed by the federal regulations under the Packers and Stockyards Act found at 9 C.F.R. § 201.27 (1978).
In its findings of fact and conclusions of law the trial court found that the contract in this case was one for a future purchase, rather than of a contract of purchase. Thus, the court found that there was no purchase as the term is used in the bond and applicable federal and Texas law. The court also found that Miles retained title to the cattle at all material times and that Hartford is not liable on the bond. Further, Hartford is not liable because the bond only applies where one has parted with his cattle and the purchaser fails to pay the price agreed upon for them. Miles's points of error and arguments dispute each of the pertinent findings and conclusions.
Neither the act nor the regulations thereunder define "purchase". However, we decide that if the contract and transaction in question resulted in a sale it follows A fortiori that there was a purchase within the ambit of the bond and controlling law. After a thorough examination of the contract and record in this case, we conclude there was a sale of the cattle and a corresponding purchase.
Note that the contract states that the seller Hereby sells and agrees to deliver. This manifests the present intent to sell. In the context here, sell is the transfer of title to and property rights in the cattle for a price. Hartford correctly states that Tex.Bus. & Comm.Code Ann. § 2.401(b) (1968) dealing with the sale of goods provides title passes to goods at the time and place at which the seller completes his performance with reference to physical delivery of the goods. Where, as here, the delivery agreement did not require the seller to deliver the goods at destination, title passes to the buyer at the time and place of shipment. We note the contract provided for shipment F.O.B. seller's ranch.
Hartford would have us apply this section of the U.C.C. and hold that there was no purchase or sale of the cattle because they weren't shipped. However, § 2.401(b), which requires physical delivery, applies only where the parties have not otherwise...
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