De Shazo v. Wool Growers Central Storage Co.

• Decision Date: 20 May 1942
• Docket Number: No. 7907.,7907.
• Citation: 162 S.W.2d 401
• Parties: DE SHAZO v. WOOL GROWERS CENTRAL STORAGE CO. et al.
• Court: Texas Supreme Court

Page 401

162 S.W.2d 401

DE SHAZO v. WOOL GROWERS CENTRAL STORAGE CO. et al.

No. 7907.

Supreme Court of Texas.

May 20, 1942.

Error to Court of Civil Appeals of Third Supreme Judicial District.

Suit by H. C. De Shazo against Wool Growers Central Storage Company and the Central National Bank of San Angelo to recover damages for the alleged wrongful conversion of wool. Judgment for defendant was affirmed by Court of Civil Appeals, 153 S.W.2d 206, and plaintiff brings error.

Judgment of Court of Civil Appeals and of district court reversed and remanded.

J. D. Burns and T. R. Johnston, both of San Angelo, for plaintiff in error.

Collins, Jackson, Snodgrass & Blanks of San Angelo, for defendants in error.

CRITZ, Justice.

This suit was filed in the District Court of Tom Green County, Texas, by H. C. DeShazo against Wool Growers Central Storage Company and the Central National Bank of San Angelo, Texas, both private corporations, to recover damages, actual and exemplary, totaling $1,610.41, for the alleged conversion by the defendants of 2,347 pounds of wool, alleged to have been stored by DeShazo with the Storage Company. It is alleged that the Storage Company was in possession of the wool as a warehouseman. The case was tried in the district court with the aid of a jury, but at the close of the evidence the court, on motion of the defendants, withdrew the case from the jury and entered judgment for the defendants. This judgment was affirmed by the Austin Court of Civil Appeals. 153 S.W.2d 206. DeShazo brings error.

We treat the pleadings of all parties as sufficient to raise all questions of law here presented. Since the trial court withdrew the case from the jury and entered judgment for the defendants, we must view the evidence in the most favorable light for DeShazo. Also, all disputed issues of fact must be resolved in DeShazo's favor. So viewed and regarded, the evidence in this case shows:

That the Storage Company during all the time here involved was a public warehouseman, doing business in San Angelo, Texas, and holding itself out to the public as such; that DeShazo produced the 2,347 pounds of wool here involved, and stored it with the Storage Company, as a warehouseman, for the purpose of obtaining a Commodity Credit Corporation Loan on it, under the provisions of the Federal Agricultural Adjustment Act, to mature as later shown. The loan was handled through and made by the Bank, in conformity with the above Act.

The Storage Company was, during all the time here involved, a warehouseman, duly holding itself out as such. The defendant bank is a banking corporation, doing business in San Angelo, Texas, and was such during all the time here involved. DeShazo during the time here involved was a stock farmer, living near San Angelo, Texas. During the year 1939 DeShazo kept sheep, from which he produced wool. On May 16, 1939, DeShazo stored with the Storage Company 653 pounds of wool. Again, on May 18, 1939, he stored with the same company 1694 pounds of wool. On each occasion the Storage Company issued to DeShazo a warehouse receipt, which expressly stated that the number of pounds of wool shown therein had been stored by DeShazo in the warehouse of the Storage Company, in San Angelo, and that such warehouse was duly licensed as such under the United States Warehouse Act and the regulations for wool warehouses thereunder. DeShazo obtained a loan for $325. Such loan was made by the abovenamed bank. DeShazo executed his note to the bank, in the principal sum of $325, due ten months after date, or on May 31, 1940, whichever was earlier. This note was secured by a pledge to the bank of the two warehouse receipts above mentioned. The Storage Company handled the transaction with the bank, delivered the note to it, and received payment therefor. The Storage Company then mailed its check to DeShazo for the proceeds of the note.

On September 1, 1939, long before DeShazo's note to the bank was due, the Storage Company, without any authority from DeShazo, and without his knowledge or consent, and in violation of his rights, took DeShazo's wool and sold it to a purchaser in Boston, Massachusetts. In this connection, it is shown that neither the Storage Company nor the bank consulted DeShazo in regard to making such sale. It is further shown that neither the bank nor the Storage Company had any authority to sell the wool at the time it was sold.

After the above sale was made the Storage Company received the proceeds thereof, and after paying the note at the bank it sent to DeShazo its check in the sum of $116.88, for the balance remaining, after paying itself a commission of $11.46. Accompanying the check of the Storage Company to DeShazo was a statement which showed that his wool had been sold for a gross amount of $458.30, that a commission of $11.46 had been charged by the Storage Company, and that the sum of $329.96 had been paid on the government loan, including interest. This was the loan made by the bank.

When DeShazo received the check from the Storage Company, with enclosed statement showing that his wool had been sold, he went immediately to the Storage Company's office, and talked with Mr. Kinney and Mr. McKnight, who seem to have been in charge. We here quote DeShazo's testimony as to what then occurred:

"A. I was talking to Mr. Kinney and Mr. McKnight was there, and I believe it was Mr. Kinney who said they had sold it. I asked why they sold it and he said they sold everybody's wool, and I asked why they sold my wool and they said they sold all of it just alike. I said, `You didn't have any right to sell my wool,' and he said they did. I said, `What right,' and he said, `That is the way we do business.' I said, `You didn't have any right to sell my wool because I had a Government loan on it,' and he said, `That don't make any difference, they sold it anyway.' They argued they were not a storage house but a commission house.

"Q. Did you make an investigation about that? A. Everything I found was Wool Growers Central Storage Company; I didn't find anything about commission.

"Q. Did you look in the papers to see? A. Yes, and they said when I put the wool in there it was on consignment and that they had a right to sell it at any time. I said, `You don't have any right to sell wool with a Government loan on it,' and they said, `Yes, it is all the same.' I said, `You know good and well you don't have the right to sell the Government wool, and I don't figure you had that in your charge at all; it was stored by the Government,' and Mr. McKnight said, `You might have something there.' He laughed and said, `Maybe you can get a chance at us some day.'"

Later, in DeShazo's evidence, appears the following testimony:

"Q. Mr. DeShazo, when did you go back to the wool house after that? A. I went twice that same day; as soon as I got the letter and then talked to different parties and...