Ormsby v. Ratcliff

• Decision Date: 07 November 1929
• Docket Number: (No. 854.)
• Parties: ORMSBY et al. v. RATCLIFF et al.
• Court: Texas Court of Appeals

22 S.W.2d 504

ORMSBY et al. v. RATCLIFF et al.

(No. 854.)

Court of Civil Appeals of Texas. Waco.

November 7, 1929.

Rehearing Denied December 5, 1929.

Appeal from District Court, Dallas County; Royall R. Watkins, Judge.

Suit by R. E. Ratcliff trading under the firm name and style of the Ratcliff Rubber Company, against L. D. Ormsby and another, in which H. A. Jandrow, receiver of the business and assets of plaintiff intervened. Judgment for plaintiff, and defendants appeal. Affirmed.

See, also, 298 S. W. 930.

Burgess, Burgess, Chrestman & Brundidge and L. E. Elliott, all of Dallas, for appellants.

Davis & Hatchell, of Dallas, for appellees.

GALLAGHER, C. J.

This is an appeal by L. D. Ormsby and William G. Bell from a judgment against them in favor of R. E. Ratcliff for the sum of $2,556.22. Said judgment provided that all sums collected thereunder should be paid to the intervener, H. A. Jandrow, receiver of the business and assets of said Ratcliff, trading under the name and style of Ratcliff Rubber Company. The parties will be designated as in the trial court.

The plaintiff, Ratcliff, set out a contract between the Republic Rubber Company of Texas, a corporation, and defendants Ormsby and Bell, dated December 31, 1919, by the terms of which said company agreed to ship said defendants on consignment certain automobile tires, and tubes, with the understanding and agreement that all consigned stock so shipped should remain its property until fully paid for, and for which defendants would be responsible and which they agreed to return on demand or pay for at latest invoice prices. According to further terms of such contract, defendants were required to report weekly all tires and tubes sold out of said consigned stock, and the company was to charge them therewith, and defendants were to pay therefor with trade acceptances on the 10th day of the month following such charge. According to further terms of said contract, the proceeds of the sale of consigned stock to the amount charged or to be charged against defendants therefor were to remain the property of the company and to constitute a trust fund and be kept separate from defendants' other funds. All accounts and bills receivable arising out of the sale of consigned stock were to be the property of said company. According to further terms of said contract, defendants, for the purpose of better securing all sums due by them to the company thereunder, transferred and assigned to it all their personal property used in connection with their business, and all moneys owing to them in such connection. Said contract contained further provisions authorizing the company, in certain contingencies, to cancel the same and declare all sums due thereunder immediately due and payable, and to retake possession of said consigned stock without legal process. According to further provisions of said contract, defendants' purchases thereunder were to amount to not less than 250 tires and 350 tubes per month, and, in such event and in the further event that prompt payment therefor was made as provided, such contract should continue as long as mutually satisfactory to both parties. Said contract contained a further provision that defendants were not to be permitted to return said consigned stock without the written consent of the company, and, if returned without such consent, such stock might be sold at public or private sale and the proceeds applied to the satisfaction of defendant's indebtedness to it. Other provisions of said contract will be recited in connection with the issues of law discussed in the opinion.

Plaintiff alleged that the company, during the latter part of October, 1920, notified defendants that it had decided to cancel said contract and that such cancellation would become effective December 31st of that year; that on or about said last-named date an inventory was taken and an audit made of all transactions between said company and defendants, and that, after allowing to them all just and lawful offsets, it was found that they were justly indebted to said company in the sum of $2,556.22; that they had failed and refused to pay the same and had converted said money to their own use. Plaintiff further alleged that said account had been by said company, for a valuable consideration, transferred and assigned in writing to him, and prayed for judgment for the amount of his debt in the sum aforesaid, with interest from January 1, 1922, and for general relief. The pleadings of the parties, so far as necessary to an understanding of the issues discussed in the opinion, will be recited therein.

The case was submitted to a jury on special issues, which issues, with the answers of the jury thereto, are as follows:

"(1) From a preponderance of the evidence, what amount of money, if any, do you find and believe is due by the defendants to the plaintiffs herein; answer in dollars and cents." Answer: "$2,556.22."

"(2) Do you find from a preponderance of the evidence that the consideration for the account sued on wholly failed by reason of defective tires furnished by the Republic Rubber Company of Texas to the defendants?" Answer: "No."

"(3) Do you find from a preponderance of the evidence that the consideration for the account sued on has failed in part by reason of defective tires furnished by the Republic Rubber Company of Texas?" Answer: "No."

The court rendered judgment on the verdict in favor of the plaintiff against the defendants, jointly and severally, for the sum so found by the jury to be due, with legal interest thereon from January 1, 1922.

Opinion.

Defendants contend that the plaintiff's suit as alleged in his pleadings was based solely on a claim for conversion of money belonging to his assignor, Republic Rubber Company of Texas, and that the undisputed testimony showed that any amount due by defendants was for goods sold outright to them by said company under a verbal contract. Based on such contention, they submit as ground for reversal the refusal of the court to instruct the jury at their request to return a verdict in their favor. Plaintiff's testimony showed that tires and tubes had been shipped by the company to defendants from time to time, as provided by said contract, and that defendants had from time to time made payments on account of sales made by them from the goods so shipped; that about the middle of the year 1920 various companies dealing in tires and tubes found themselves overstocked, on account of intensive production during and immediately following the war, and that they desired to convert such surplus stocks into money; that, not desiring to reduce prices generally, they authorized the sale of regular stock at reduced prices, representing the tires and tubes so offered for sale as "not first class," which designation was indicated by the letters "NFC"; that said tires and tubes so designated were not in fact defective; that he, as the representative of the Republic Rubber Company of Texas, explained the situation to defendants, and that they undertook to handle such "NFC" tires and tubes; that under his agreement with them all such tires and tubes shipped to them were not consigned to them for sale for account of such company, but sold to them outright, and that they were at liberty to do what they pleased with them; that most, if not all, the charges sued on were for "NFC" tires and tubes purchased by defendants under such agreement. In determining whether an issue submitted or judgment rendered is supported by the pleadings, the court will consider the pleadings of both parties, and omissions in the pleadings of one party may be supplied by allegations in the pleadings of the other. Ray v. Barrington (Tex. Civ. App.) 297 S. W. 781, 783, and authorities there cited. Defendants pleaded that said contract between them and plaintiff's assignor, while purporting to be for shipping of goods to them on consignment, when properly construed was in fact a contract for the sale to them of all the tires and tubes so shipped, and in that connection further pleaded "that in truth and in fact, the manner in which the Republic Rubber Company and these defendants did business under said contract amounted to a sale of the goods to them, and not a consignment." In view of...