Taylor & Martin, Inc. v. Hiland Dairy, Inc., 13221

• Decision Date: 22 August 1984
• Docket Number: No. 13221,13221
• Citation: 676 S.W.2d 859
• Court: Missouri Court of Appeals
• Parties: 39 UCC Rep.Serv. 1672 TAYLOR & MARTIN, INC., a Nebraska corporation, Plaintiff-Respondent, v. HILAND DAIRY, INC., a Missouri corporation, Defendant-Appellant.

Page 859

676 S.W.2d 859

39 UCC Rep.Serv. 1672

TAYLOR & MARTIN, INC., a Nebraska corporation, Plaintiff-Respondent, v. HILAND DAIRY, INC., a Missouri corporation, Defendant-Appellant.

No. 13221.

Missouri Court of Appeals,

Southern District,

Division One.

Aug. 22, 1984.

Motion for Rehearing or to Transfer to

Supreme Court Denied Sept. 11, 1984.

Application to Transfer Denied

Oct. 9, 1984.

Kerry D. Douglas, Douglas, Douglas, Lynch & Ashlock, P.C., Bolivar, for plaintiff-respondent.

Flavius B. Freeman, John D. Compton, Richard L. Schnake, Neale, Newman, Bradshaw & Freeman, Springfield, for defendant-appellant.

TITUS, Judge.

In this action plaintiff, Taylor and Martin, Inc., seeks to recover the purchase price of a refrigerated semi-trailer unit sold to defendant, Hiland Dairy, Inc., at an auction conducted by plaintiff in 1976 near Dallas, Texas. Questions for our consideration on appeal include (1) whether plaintiff a Nebraska corporation not registered to do business in Missouri, can maintain this action; (2) whether plaintiff's failure to comply with the Texas Certificate of Title Act rendered the sale void ab initio for all purposes, including passage of the risk of loss; and (3) whether the risk of loss of the trailer, presumably stolen from the vicinity of the auction site before defendant could transport it to its Springfield, Missouri, plant, passed through plaintiff, as agent for the seller, to defendant, as buyer.

Defendant, a Missouri corporation with its principal place of business in Springfield, Missouri, engages in the processing, distribution, and sale of milk and milk products. Plaintiff purports to be the largest auctioneer of tractors, trailers, and like equipment in the United States, holding from 30 to 35 auction sales each year in various states. Plaintiff scheduled one such sale for September 2, 1976, on the grounds of a Holiday Inn near the Dallas-Fort Worth (Texas) Airport. There was a good deal of dispute at trial concerning the precise location of the sale site on the Holiday Inn property. The evidence suggests and the trial court found that, while plaintiff's original plan had been to conduct the sale entirely on an unpaved portion of the motel property, torrential rains during the week just prior to the sale so muddied that area that the adjacent paved lot had to be used to accommodate late-arriving sale items. In any event, the sale took place entirely on property owned by Holiday Inn and made available to plaintiff via "oral license."

Plaintiff's "advance personnel" began to arrive at the sale site the Friday next preceding the sale on Thursday, September 2, 1976. Plaintiff's auctioneers (those actually "calling" the sale) and officers arrived over the weekend. A final crew of employees arrived Tuesday, August 31. Because plaintiff had on previous occasions encountered vandalism to consigned items, some arrangements were made for security at the sale, though the form and extent of these measures is not entirely clear. For example, while the trial testimony of plaintiff's vice president, Lewis Munday, indicates there was more than one guard on duty, plaintiff, in answer to defendant's interrogatories concerning the matter of security at the sale responded that "a security guard was employed." What protection there was commenced Sunday, August 29, and ceased no later than the morning of Friday September 3, the day after the sale. Munday testified that plaintiff made no representations that security would continue beyond that time.

Munday estimated that approximately 700 persons attended the auction, about half of whom formally registered to bid. Prospective bidders registered by completing a form styled "Registration" which required such information as the registrant's name, the name of the company for which he was bidding, and that company's address, telephone number, and bank. The form also provided space where the registrant could indicate the manner in which he intended to make payment in the event he successfully bid. ¹ Immediately beneath this space were listed various "Terms of Sale." These terms were set forth in all-capital red lettering as was the other printed matter on the form but were in slightly smaller type and in a somewhat different style of print. The third enumerated term specified that "The undersigned takes full responsibility for any item purchased at the time it is sold"; the fourth, inter alia, that "[The undersigned] agrees to make complete and full settlement on all purchases within one hour after the conclusion of the auction in American currency or bank certified funds or the equivalent;" and the sixth that "Unless cash, certified funds or cashiers check is used for payment, titles will be attached to check for pick up at your bank." At the bottom of the form was a space for the registrant's signature.

Among those who registered to bid was Ray Eagleburger, an employee of defendant who had come to the sale for the purpose of purchasing some refrigerated ("reefer") semi-trailers for defendant's operations. Upon his arrival at the Holiday Inn, Eagleburger completed a bidder registration form at the sale registration desk set up in the lobby of the motel. He testified that he did so because he thought it necessary in order that he obtain a bidding number. He received bidding number 753 upon completion of the registration form and plaintiff's personnel subsequently procured a room for him at the motel.

The auction was held primarily on the unpaved lot behind the motel. Because of the heavy rains alluded to supra, not all of the items to be sold could be placed on and auctioned from this lot. Consequently the adjacent paved parking lot was used to accommodate the "overflow" goods. Among the more than 100 items up for bids were five 1973 Hobbs refrigerated semi-trailers consigned to plaintiff by Mercury Express, Inc., of Texarkana, Texas. It was this type of unit on which Eagleburger bid, offering up to $14,000 per trailer before being outbid by one Jack Watson of Texarkana, Texas, who offered $14,100 per trailer. ² The Hobbs unit was "struck off" to Watson, who elected to purchase all five of that model. Plaintiff's clerk wrote Watson's bidding number (954) in the upper left corner of an "auction memorandum" as evidence of his successful bid on the trailers. ³ Watson then initialed this document in a space marked "Purchaser."

Shortly after Watson had successfully bid, Eagleburger and Bert Putman, then president of defendant, approached him on behalf of defendant to inquire whether he would sell defendant four of the five Hobbs trailers. He agreed to do so, for $400 more per trailer than he had bid. Putman gave Watson a check for $1600 and Watson and Eagleburger went to plaintiff's "settlement trailer" to complete the transaction with plaintiff. Exactly what transpired there is unclear but it appears that some indication was made to plaintiff's settlement personnel that Eagleburger desired to settle for the trailers instead of Watson. Plaintiff's personnel agreed to this and accepted a sight draft from Eagleburger in the amount of $56,400 as payment for the four trailers. One of plaintiff's employees marked through Watson's bidding number on the auction memorandum and wrote Eagleburger's bidding number beside it; this notation was the only documentary evidence that Eagleburger, rather than Watson, had settled for the trailers. Plaintiff's employee attached to the sight draft the certificates of title to the four trailers and sent these items to plaintiff's bank. The certificates of title were to be sent by plaintiff's bank to defendant at such time as defendant's bank paid the draft. In the event defendant's bank failed to pay the draft, the certificates were to be returned to plaintiff.

Eagleburger testified that he knew of no reason why defendant could not have removed the four trailers from the sale site immediately after settlement, that he knew defendant had a right to take them as of that time. He further related that plaintiff had neither placed any express restrictions on removal of the trailer nor conditioned defendant's right to take them upon payment of the tendered draft. He stated that, although he was told by someone he assumed to be an employee of plaintiff that defendant did not have to move them immediately, he knew defendant could do so. He also indicated that plaintiff made no representation to the effect that items would be guarded after sale.

Because of the muddy condition of the unpaved lot on which the Hobbs trailers rested, their immediate removal was, in Eagleburger's words, "an impossibility." However, transportation arrangements were made the day after the sale. John Gilmore, a "transport driver" for defendant, was engaged by defendant to deliver the trailers from the auction site to Springfield, Missouri. In order to facilitate this task, Gilmore first arranged to have the trailers moved from the muddy, unpaved lot to the adjacent paved area of the Holiday Inn premises. He thereafter transported one of the trailers to Springfield on September 5, returned to Dallas and picked up and delivered another trailer to Springfield on September 6. When he returned to pick up the third trailer on September 7, he discovered the fourth missing.

Upon learning of the fourth trailer's disappearance, defendant directed its bank to stop payment on the sight draft and to hold the certificates of title to the trailers. After negotiation, plaintiff and defendant agreed that defendant would pay for the three trailers that had already been delivered; to that end a new sight draft was drawn and delivered to plaintiff. Defendant did not tender payment for the missing trailer. Because plaintiff guarantees its consignors payment for consigned goods within ten days of the fall of the hammer signalling a successful bid on such goods, plaintiff was obligated to tender payment to Mercury Express, Inc., for all four Hobbs trailers. Plaintiff...