Montgomery v. Fuquay-Mouser, Inc.
| Decision Date | 31 May 1978 |
| Docket Number | FUQUAY-MOUSE,No. 8888,INC,8888 |
| Citation | 567 S.W.2d 268 |
| Parties | 24 UCC Rep.Serv. 756 W. W. MONTGOMERY d/b/a Montgomery Tractor Company, Appellant, v., d/b/a Red River Farm Supply, Appellee. |
| Court | Texas Court of Appeals |
D. J. Brookreson, Seymour, for appellant.
Malone & Heatly (Don Ross Malone), Vernon, for appellee.
The holder of an unpaid purchase money lien brought this action for a writ of possession of a tractor against the original purchaser Otis Johnson and a subsequent purchaser W. W. Montgomery d/b/a Montgomery Tractor Company. The seller-lienholder, Fuquay-Mouser, Inc. d/b/a Red River Farm Supply, took a default judgment against Otis Johnson and proceeded against W. W. Montgomery who was in possession of the tractor. Montgomery contested Fuquay-Mouser's right to repossess the tractor, alleging that the plaintiffs had waived their lien and were estopped from asserting it. At trial the jury failed to find either issue in defendant's favor. Accordingly, the trial court entered judgment granting a writ of possession to Fuquay-Mouser. On appeal Montgomery attacks the factual sufficiency of the evidence supporting the jury's negative answers on the issues of waiver and estoppel. We affirm the trial court's judgment.
On June 25, 1975, Fuquay-Mouser sold a Massey-Ferguson tractor and chisel plow to Otis Johnson. Johnson executed a retail installment contract and security agreement for $23,700 creating a purchase money lien on the equipment. After perfecting the lien Fuquay-Mouser assigned it to Massey-Ferguson Credit Corporation.
When Johnson decided to sell the tractor he and Fuquay-Mouser arranged for W. W. Montgomery to sell it at auction. Montgomery was advised of the purchase money lien. When the tractor did not sell at auction Montgomery agreed to purchase it from Johnson for $16,900. Montgomery's check in that amount was payable solely to Johnson. Johnson subsequently paid Massey-Ferguson Credit Corporation $7,900 under the installment contract; however, there is no evidence in the record that Massey-Ferguson knew that Johnson had sold the tractor. After unsuccessfully attempting to obtain further payment from Johnson, Massey-Ferguson reassigned the contract to Fuquay-Mouser who brought this action for possession of the tractor.
A security agreement is effective between parties and against purchasers of the collateral. Tex.Bus. & Comm.Code Ann. § 9.201 (Supp.1978). The security interest continues in collateral after it is sold unless the disposition was authorized by the secured party. Tex.Bus. & Comm.Code Ann. § 9.306(b) (Supp.1978). Thus, absent such authorized transfer, the transferee takes subject to the security interest and the secured party may maintain an action against him. See Comment 3 Tex.Bus. & Comm.Code Ann. § 9.306 (1968) and White-Sellie's Jewelry Co. v. Goodyear Tire & Rubber Co.,477 S.W.2d 658, 661 (Tex.Civ.App. Houston (14th Dist.) 1972, no writ). Among the defenses available to a purchaser of goods encumbered by a security interest are the § 9.306(b) defense that the secured party authorized its disposition and the defense that the security interest was waived. Weisbart & Co. v. First National Bank of Dalhart, Texas, 568 F.2d 391, 396 (5th Cir. 1978).
The defenses asserted in this case were that...
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Thpd, Inc. v. Continental Imports, Inc.
...of its existence."). Both grounds are in the nature of defenses on which Continental had the burden of proof. See Montgomery v. Fuquay-Mouser, Inc., 567 S.W.2d 268, 270 (Tex.Civ.App.-Amarillo 1978, no writ) (terming authorization of collateral disposition free of security interest a "defens......
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...conversion against recipients of collateral when the transfer or retention was not authorized by the lender. Montgomery v. Fuquay-Mouser, Inc., 567 S.W.2d 268, 270 (Tex.Ct.App.1978). The elements of conversion under Texas law are:(1) the plaintiff owned, had legal possession of, or was enti......
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First Interstate Bank of Arizona, N.A. v. Interfund Corp., 90-8188
...1989, no writ). Under Texas law, waiver is a valid defense to an action to enforce a security interest. Montgomery v. Fuquay-Mouser, Inc., 567 S.W.2d 268, 270 (Tex.Civ.App.--Amarillo 1978, no writ); see also MBank Alamo Nat'l Ass'n v. Raytheon Co., 886 F.2d 1449 (5th Cir.1989). The Texas ve......
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Christensen v. Equity Co-op. Livestock Sale Ass'n, 85-1801
...The party asserting the existence of facts that give rise to a waiver has the burden of proving them. See Montgomery v. Fuquay- Mouser, Inc., 567 S.W.2d 268, 270 (Tex.Civ.App.1978). Unless displaced by particular provisions of the code, the common law principles of law and equity supplement......