Universal Credit Co. v. O'Neal

• Decision Date: 15 May 1940
• Docket Number: No. 5159.,5159.
• Citation: 140 S.W.2d 596
• Parties: UNIVERSAL CREDIT CO. et al. v. O'NEAL et al.
• Court: Texas Court of Appeals

140 S.W.2d 596

UNIVERSAL CREDIT CO. et al. v. O'NEAL et al.

No. 5159.

Court of Civil Appeals of Texas. Amarillo.

May 15, 1940.

Appeal from District Court, Lubbock County; E. L. Pitts, Judge.

Action by D. O'Neal and another against the Universal Credit Company and another to recover damages for conversion and loss of use of an automobile. From a judgment for plaintiff and a judgment for named defendant against codefendant for sum recovered against named defendant, defendants and codefendant, respectively, appeal.

Reversed and remanded.

S. L. Lewis, of Dallas, for plaintiffs in error.

G. E. Lockhart and W. R. Porter, both of Lubbock, for defendants in error.

JACKSON, Chief Justice.

The record shows that on November 25, 1938 D. O'Neal, in Washington, Missouri, purchased from H. M. Miller, doing business under the trade name of Miller Motor Company, one 1939 Model Ford De Luxe Tudor Sedan and paid $269.40 of the purchase price in cash and executed and delivered a contract by the terms of which he promised to pay the Universal Credit Company at its office the balance of $630 in eighteen equal monthly installments of $35 each, the first due December 26, 1938 and one due on the 26th day of each month thereafter until the debt was satisfied.

This contract was, in effect, a note and chattel mortgage evidencing the deferred payments on the car and creating a lien thereon to secure the payment of the unpaid purchase price.

The provisions of this mortgage contract, material to this appeal, are in substance that the instrument constitutes the entire agreement between the parties; that the car was not to be used for hire and not to be removed from the State of Missouri without the written consent of the mortgagee unless the indebtedness had been paid; provides that time is of the essence of the contract and failure to pay any installment when due, or if mortgagee deems himself insecure, the mortgage shall be in default and the payments remaining unpaid shall immediately become due at the election of the holder.

On the delivery of the automobile to Mr. O'Neal in Missouri he left and after having driven through several states arrived in Texas. He failed to pay the $35 installment due December 26th and on December 28th he left the car in Lubbock with the Lubbock Body and Fender Company on the insistence and by the direction of Mr. J. W. Livingston. The parties agreed in open court that the mortgage contract was executed by D. O'Neal and H. M. Miller; that the Universal Credit Company never had any right, title or interest in or to the contract or the automobile described therein; that J. W. Livingston in regard to the transaction of December 28, 1938 was acting as the agent of H. M. Miller and the Universal Credit Company relative to said transaction was acting for H. M. Miller.

The appellees, D. O'Neal and G. E. Lockhart, instituted this suit in the District Court of Lubbock County, Texas, and on February 10, 1939 filed a first amended original petition in which they sought to recover against the appellants, the Universal Credit Company and H. M. Miller, the sum of $1,299 as damages for the alleged conversion and loss of use of the automobile here involved in Lubbock on December 28, 1938.

They allege the purchase of the car from Miller by O'Neal, the cash paid by him, his execution of the chattel mortgage contract for the sum of $630 payable in monthly installments of $35 each; that before he purchased the automobile he advised appellant Miller that he was engaged in the business of selling magazines in various states, representing the Union Circulation Company of New York City; had under him at different times from three to five sub-agents from whom he received as a part of his compensation a commission of 50% of the sales made by each sub-agent; that it was necessary for him to use the automobile outside of Missouri and appellant Miller was advised thereof; that the contract he signed did provide that if the automobile was removed from the State of Missouri without written consent that the whole debt could be declared due and the automobile repossessed, but that appellant Miller knew before the sale that the business of O'Neal required him to use the car out of the state and sold the car with the understanding that it would be used in his business; that O'Neal was not in default but tendered the first $35 installment on December 26, 1938 and it was refused; that appellants did not repossess the car on account of any breach of the contract or default by him and they are therefore estopped to assert the right to take the car into their possession because of its removal from the State of Missouri or default in payment or for the reason that they deemed themselves insecure; that because of the unlawful acts of the appellants in taking possession of the automobile appellees were damaged in the sum of $799, the value of the car; that O'Neal was forced to abandon his contract with the Union Circulation Company, was unable to supervise his sub-agents and had to resume the work of a sub-agent himself; that he was making out of his business at the time of the conversion, clear of all expenses, $100 per week, and since the conversion on account of the loss of the use of the car he had been damaged $500.

The appellant Miller answered by general demurrer, numerous special exceptions, general denial, alleged the sale of the automobile in Washington, Missouri, to O'Neal for $899.40; acknowledged the payment in cash of $269.40; pleaded the chattel mortgage contract and the eighteen $35 monthly installments; that the Universal Credit Company refused to buy the mortgage contract; that O'Neal breached the contract by removing the car from the State of Missouri; was in default in his payments; and by reason of these breaches of the contract by O'Neal he felt insecure in the payments and peacefully repossessed the automobile; asked for the foreclosure of the chattel mortgage, for reasonable attorney's fees and for such relief as he was entitled to in law or in equity.

The Universal Credit Company urged a general demurrer, numerous special exceptions, general denial; pleaded in substance the facts alleged by appellant Miller, and in addition averred that it refused to purchase the contract, never acquired the debt or any interest therein, and disclaimed all right, title or interest in the automobile.

In response to special issues submitted by the court...