Otto, Inc. v. Cotton Salvage & Sales, Inc., 1756

• Decision Date: 13 November 1980
• Docket Number: No. 1756,1756
• Citation: 609 S.W.2d 590
• Parties: OTTO, INC. v. COTTON SALVAGE & SALES, INC. et al.
• Court: Texas Court of Appeals

Page 590

609 S.W.2d 590

OTTO, INC. v. COTTON SALVAGE & SALES, INC. et al.

No. 1756.

Court of Civil Appeals of Texas, Corpus Christi.

Nov. 13, 1980.

Rehearing Denied Dec. 11, 1980.

W. S. Fly and Frank S. Buhler, III, Fly & Moeller, Victoria, for appellant.

Myrtle McDonald and J. R. Blumrosen, Blumrosen & McDonald, Lubbock, for appellees.

OPINION

BISSETT, Justice.

This is a venue case. Otto, Inc., plaintiff in the trial court, has duly and timely appealed from an order of the District Court of Lavaca County, Texas, which sustained the pleas of privilege filed by Cotton Salvage and Sales, Inc., and W. G. Ripley, defendants in the court below, to be sued in Lubbock County, Texas, where they were domiciled. Plaintiff controverted the pleas of privilege and asserted that venue was properly maintainable in Lavaca County, Texas, under the provisions of Tex.Bus. & Comm.Code Ann., § 17.41 et seq. (Supp.1980), the "Deceptive Trade Practices-Consumer Protection Act," hereinafter referred to as the "DTPA," and under Tex.Rev.Civ.Stat.Ann. Art. 1995, Subdivisions 7, 23, and 29a (1964).

Plaintiff sued to recover damages for fraud under the common law rules of equitable jurisprudence; or, in the alternative, to recover damages for false and deceptive acts within the meaning of the DTPA. In summary, concerning the acts committed by the defendants upon which suit is based, plaintiffs alleged: 1) it had seven (7) contracts with a third party in Taiwan to furnish the latter with certain grades of raw cotton; 2) it entered into a contract with defendants, whereby defendants agreed to furnish the cotton to fulfill plaintiff's contracts with the third party; 3) defendants represented to plaintiffs that they did furnish cotton to the third party of the specified grade; 4) plaintiff, following such representations, paid defendants for the cotton; and 5) the representations, some of which were made in Lavaca County, where "portions" of the negotiations leading up to the making of the contract between plaintiff and defendants were conducted, were false and misleading. Relating to plaintiff's contention that defendant, by virtue of making false representations, committed a deceptive trade practice, it was specifically alleged:

VI.

"In the alternative, and without waiving the foregoing, Plaintiff would show that Cotton Salvage and Ripley have violated the provisions of Sections 14.41, et seq., of the Business & Commerce Code of the State of Texas known as the Deceptive Trade Practices-Consumer Protection Act. Plaintiff alleges that these Defendants, and each of them, have committed deceptive trade practices described in Section 17.46, and specifically, but without limitation, Section 5 and 7 of such Act.

VII.

In the alternative, and without waiving the foregoing, this Plaintiff is entitled to recover against Defendants, and each of them, under the provisions of Section 17.50 of such Deceptive Trade Practices Act."

Plaintiff further alleged that it had been damaged by having "to make settlements for the poor quality of cotton furnished and which was different from the cotton that was agreed to be delivered," and that the defendants "have done business in Lavaca County." It sought a recovery of $171,498.40 as damages and asked that such damages be trebled because of defendants' deceptive trade practices.

We first consider plaintiff's third and sixth points of error, wherein it complains that the trial court erred in not sustaining venue in Lavaca County under the provisions of Section 17.56 of the DTPA.

Plaintiff's original petition was filed on August 15, 1979. Therefore, the 1977 amendments of the DTPA control this case. Section 17.56 of the 1977 amendments of the DTPA provided:

"An action brought which alleges a claim to relief under Section 17.50 of this subchapter may be commenced in the county in which the person against whom the suit is brought resides, has his principal place of business, or has done business."

Other applicable provisions of the 1977 amendments of the DTPA read:

"Section 17.45 Definitions as used in this subchapter:

(1) 'Goods' means tangible chattels or real property purchased or leased for use.

(2) 'Services' means work, labor, or service purchased or leased for use, including services furnished in connection with the sale or repair of goods.

(4) 'Consumer' means an individual, partnership, corporation, or governmental entity who seeks or acquires by purchase or lease, any goods or services."

"Section 17.50 Relief for consumers

(a) A consumer may maintain an action if he has been adversely affected by any of the following:

(1) The use or employment by any person of an act or practice declared to be unlawful by Section 17.46 of this subchapter;

(2) breach of an express or implied warranty;

(3) any unconscionable action or course of action by any person."

To establish venue in Lavaca County under Section 17.56 of the DTPA as the same existed under the 1977 amendments, plaintiff had to initially allege facts sufficient to show that it was a "consumer" of "goods" or "services" within the definitions set out in Section 17.45, and that it had a claim to relief under the Act. United Plastics Co. v. Dyes, 588 S.W.2d 857 (Tex.Civ.App.-Tyler 1979, no writ); Compu-Center, Inc. v. Compubill, Inc., 580 S.W.2d 88 (Tex.Civ.App.-Houston (1st Dist.) 1979, no writ). See also, Delaney Realty, Inc. v. Ozuna, 593 S.W.2d 797 (Tex.Civ.App.-El Paso 1980, writ ref'd n. r. e.). Plaintiff's allegations show that it was either a purchaser of cotton, as "goods," from defendants "for use" by it; a purchaser of the "services" of the defendants in supplying the cotton required in plaintiff's contracts with the third party in Taiwan; or a purchaser of both "goods" and "services" from defendants.

Our first determination will be whether plaintiff purchased the cotton as goods "for use" within the meaning of Section 17.45(1) of the DTPA. In doing so, we are guided by several rules of statutory construction. First, since the Legislature did not specifically define "use," the ordinary meaning of the word will apply. Satterfield v. Satterfield, 448 S.W.2d 456, 459 (Tex.1969); Code of Construction Act, Tex.Rev.Civ.Stat.Ann. Art. 5429b-2, § 2.01 (Supp.1980). Second, we must consider the principles applicable in construing the DTPA. As set out in Pennington v. Singleton, 606 S.W.2d 682 (Tex.1980), those principles are:

"... The primary emphasis is on the intention of the legislature, keeping in view 'the old law, the evil and the remedy.' Legislative intent should be determined from the language of the entire Act and not isolated portions. The court is not necessarily confined to the literal meaning of the words used, and the legislative intent rather than the strict letter of the Act will control. The Act itself provides in § 17.44 that it 'shall be liberally construed and applied to promote its underlying purposes, which are to protect consumers against false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty and to provide efficient and economical procedures to secure such protection.' "

The words "for use" were defined in Beggs v. Texas Dep't. of Mental Health & Mental Ret., 496 S.W.2d 252, 254 (Tex.Civ.App.-San Antonio 1973, writ ref'd) as follows: "to put or bring into action or service; to employ for or apply to a given purpose." In James Stewart & Co. v. Mobley, 282 S.W.2d 290, 294 (Tex.Civ.App.-Dallas 1955, writ ref'd), the court said: "Use" is to employ for accomplishment of a purpose; to apply to one's service; to avail oneself of." Webster's Seventh New Collegiate Dictionary (1963) says that "use" of a thing is "a method or manner of employing or applying something; the legal enjoyment of property that consists in its employment, occupation, exercise, or practice."

None of the above definitions would exclude from "use" one who purchases goods for resale. The purchaser merely converts the goods to his own purpose and enjoys a benefit, primarily financial, from their purchase. The goods, when they are bought for resale, are employed for a definite purpose, that is a resale for profit. We find no clear distinction among these definitions that would prevent plaintiff from qualifying as one who purchases cotton "for use."

Since its enactment in 1973, the DTPA has been amended in every subsequent legislative session. Many of these amendments have been enacted to broaden the scope of the DTPA, and to make its remedies available to consumers who were not able to sue under the original statute. This broadening of the scope of the DTPA is particularly apparent in the definition provision, Section 17.45. Partnerships, corporations and governmental entities have been added to the initial definition of "consumer" in subsection (4). In contrast, the original version of the DTPA only allowed "individuals" to sue under the statute. The definition of "merchant" as a "party to a consumer transaction other than a consumer" was deleted by the 1977 amendments. Also, real property and lease transactions were included in the "goods" definition by the 1975 amendments. And, in 1977, the definition of "services" was changed by deleting "for other than commercial or business use" to bring it in harmony with the "goods" definition of subsection (1).

After considering Section 17.45 as a whole, the amendments that the Legislature has enacted and the legislative history of the DTPA, ¹ we feel that the clear intention of the legislature has been to expand the DTPA into a commercial setting. Some of our fellow courts, however, have been understandably reluctant to extend the scope of the DTPA to retailers or to persons who purchase the goods for the sole purpose of resale.

In Person v. Latham, 582 S.W.2d 246 (Tex.Civ.App.-Beaumont 1979, writ ref'd n. r. e.), a case which was filed prior to the effective date of the 1977 amendments to the DTPA, a purchaser of real estate who intended a resale to a "Mrs....