O'Neil v. Mack Trucks, Inc., 6467

• Decision Date: 31 December 1975
• Docket Number: No. 6467,6467
• Citation: 533 S.W.2d 832,19 UCCRep.Serv. 984
• Court: Texas Court of Appeals
• Parties: 1976-1 Trade Cases P 60,902, 19 UCC Rep.Serv. 984 Truman O'NEIL, Individually and d/b/a Mesa Mack Sales, Appellant, v. MACK TRUCKS, INC. and Mack Financial Corporation, Appellees.

Page 832

533 S.W.2d 832

1976-1 Trade Cases P 60,902, 19 UCC Rep.Serv. 984

Truman O'NEIL, Individually and d/b/a Mesa Mack Sales, Appellant, v. MACK TRUCKS, INC. and Mack Financial Corporation, Appellees.

No. 6467.

Court of Civil Appeals of Texas El Paso.

Dec. 31, 1975.

Rehearing Denied Jan. 21, 1976.

Renner & Snell, Robert B. Snell, Lamesa, Clark, Thomas, Winters & Shapiro, Donald Scott Thomas, Jr., Barry Bishop, Austin, for appellant.

Stubbeman, McRae, Sealy, Laughlin & Browder, Harrell Feldt, David K. Brooks, Midland, for appellees.

OPINION

WARD, Justice.

Mack Trucks, Inc. and Mack Financial Corporation brought this suit to recover on various debts arising from a manufacturer-dealer relationship between Mack Trucks, Inc. and the Appellant, Truman O'Neil. The Appellant defended by contending that the dealership contract was void as it violated the Texas antitrust laws; that a foreclosure sale of thirteen trucks and the method of crediting the sales proceeds violated the Business and Commercial Code; and that certain real property was not subject to foreclosure as it constituted the Appellant's business homestead. Trial was to the District Court of Midland County without a jury, and judgment was rendered in favor of Mack Trucks and Mack Financial on all issues. We affirm the judgment except as to that part which awarded a foreclosure of a lien on certain Midland County land claimed by the Appellant as his business homestead.

Three separate causes of action arising from the manufacturer-dealer relationship are involved. First, Appellees sued on a promissory note dated July 10, 1970, in the principal amount of $71,364.10 executed by O'Neil in settlement of various debts then owing to Mack Trucks and Mack Financial. Second, Mack Trucks sued on a sworn account in the amount of $13,746.60 for parts sold and delivered to O'Neil. And third, Mack Financial sued on a series of promissory notes executed by O'Neil pursuant to a dealer's floor plan financial arrangement under which Mack Financial financed thirteen new trucks. These trucks had been repossessed at O'Neil's request and sold, and Mack Financial sued for the deficiency in the amount of $22,516.01. O'Neil did not deny that he had executed the various notes, nor that he had received the parts made the basis of a sworn open account, and agreed that he has not paid any of these obligations. Defenses hereinafter discussed were raised in the trial Court. The trial Court entered judgment in favor of the two Appellees in the principal sum of $107,626.71 together with the sum of $35,239.79 as interest accrued to the date of judgment and attorney's fees in the total amount of $14,349.63.

The appellant's first point is that the trial Court's implied finding that the claims did not arise from an illegal transaction under the antitrust laws of the State is contrary to the great weight and preponderance of the evidence.

No findings of fact nor conclusions of law were requested or filed. 'When findings of fact and conclusions of law are not requested or filed, the judgment of the trial court must be affirmed if it can be upheld on any legal theory that finds support in the evidence.' Seaman v. Seaman, 425 S.W.2d 339 (Tex.1968). Also, it will be assumed by the appellate court that every disputed fact issue that was involved in the case was found by the trial Court in such a way as to support the judgment rendered. Construction and General Labor Union, Local No. 688 v. Stephenson, 148 Tex. 434, 225 S.W.2d 958 (1950); 4 McDonald, Texas Civil Practice, Presumptions on Appeal § 16.10 at 30.

Because of the 'great weight' point, the whole trial record has been considered and weighed. O'Neil sold Mack Trucks in Texas for twenty-one years and operated under a written distributorship contract. The territory assigned to him was defined as being the area of the 'Distributor's Primary Sales and Service Responsibility.' This was defined to be that he use his 'best efforts actively and vigorously to sell Mack Products, and to promote and develop energetically the potentiality for the sale of Mack Products within the Territory.' There was no provision in the contract that granted any exclusive sales rights in the territory nor restricted O'Neil from selling outside that area.

A contract by which a distributor obtains an exclusive territory for the resale of articles purchased from a supplier, and by which the distributor is given a contractual right to prevent sales by the supplier to others in that territory, violates the antitrust laws of Texas and is unenforceable in the courts. Sherrard v. After Hours, Inc., 464 S.W.2d 87 (Tex.1971). Though there was no competing distributor of Mack Products assigned to the same territory, there was no contract commitment which established that exclusive right. A manufacturer may legally choose to place one distributor in a particular area. Ford Motor Co. v. State, 142 Tex. 5, 175 S.W.2d 230 (1943). The written contract did not violate antitrust law.

The Appellant contends in this regard that in spite of the written terms, there was an understanding and course of dealing between the parties which established the exclusive dealership and territorial restriction. O'Neil's area was reduced on two occasions over the years, and Mack secured releases of those areas from O'Neil on both occasions. From this, and from other practices, the Appellant interpreted his contract as restricting his sales area and likewise as showing that it was exclusively his own.

Appellees introduced evidence all contrary to the position of the Appellant. It was shown that Mack and other Mack dealers frequently made direct sales into the territory in competition with O'Neil and that all dealers, including O'Neil, regularly sold outside of their own territories. The designated area of prime responsibility were assigned only to assure adequate coverage in those given areas without being of any binding effect. The implied findings were supported by ample evidence that no exclusive territories had been assigned or created. The first point is overruled.

The Appellant complains of the implied finding of the Court regarding the legality of the foreclosure sale of the thirteen trucks. The point is that the implied finding of the trial Court that the sales of the collateral were commercially reasonable was contrary to the great weight and preponderance of the evidence. In 1970, Mack Financial, at O'Neil's request and under the terms of its trust receipts, took possession of the thirteen vehicles and disposed of them by private sale to Mack Trucks. No written notice of the proposed sale was given to the Appellant. On the notes involved, the Appellant was credited with $216,137.00 on the repossession. In the present suit, the trial Court allowed a recovery of $22,516.01 as the deficiency remaining on the notes and trust receipts after the foreclosure sale. O'Neil's argument is that the evidence showed that Mack Financial's disposition of the collateral was unreasonable under the Uniform Commercial Code as no notice was given of the sale and the sales price was unreasonably low. Section 9.504(c) Tex.Bus. & Comm. Code Ann.

Appellees contend that reasonable notification of the sale was not required because the Mack trucks were of 'a type customarily sold on a recognized market' and were within the exceptions set out in Section 9.504(c). This argument is not accepted as the term 'recognized market' within the meaning of the U.C.C. is most restrictive. Cases which have considered 'used cars' are authority for this ruling. 'Thus a 'recognized market' might well be a stock market or a commodity market, where sales involve many items so similar that individual differences are nonexistent or immaterial, where haggling and competitive bidding are not primary factors in each sale, and where the prices paid in actual sales of comparable property are currently available by quotation.' Norton v. National Bank of Commerce of Pine Bluff, 240 Ark. 143, 398 S.W.2d 538 (1966); Alliance Discount Corp. v. Shaw, 195 Pa.Super. 601, 171 A.2d 548 (1961); Nelson v. Monarch Investment Plan, 452 S.W.2d 375, 377 (Ky. Appeals 1970).

Appellees next contend that O'Neil waived his right to any notice of the private sale because of his request that Mack Financial repossess the trucks and stop the interest accruing on his notes. While O'Neil might not have wanted to participate in the bidding, he might well have been interested in securing other buyers. There is no showing to the contrary. The argument on waiver is rejected. Under Sections 9.501(c) and 9.504(c) as now written, the problem may not present itself again as...