Wynne v. McCarthy

• Decision Date: 15 August 1938
• Docket Number: No. 1638,1639.,1638
• Citation: 97 F.2d 964
• Parties: WYNNE et al. v. McCARTHY et al. McCARTHY et al. v. WYNNE et al.
• Court: U.S. Court of Appeals — Tenth Circuit

97 F.2d 964 (1938)

WYNNE et al. v. McCARTHY et al.

McCARTHY et al. v. WYNNE et al.

Nos. 1638, 1639.

Circuit Court of Appeals, Tenth Circuit.

May 31, 1938.

Rehearing Denied August 15, 1938.

Paul G. Darrough, of Oklahoma City, Okl., and Rayburn L. Foster, of Bartlesville, Okl., for H. C. Wynne and American Exchange Bank of Henryetta, Okl.

Stephen Chandler, Richard W. Fowler, John W. Swinford, and Tomerlin, Chandler, Shelton & Fowler, all of Oklahoma City, Okl., for J. T. McCarthy, Jr., and G. L. Meholin.

Before LEWIS, PHILLIPS, and BRATTON, Circuit Judges.

PHILLIPS, Circuit Judge.

In July, 1924, H. C. Wynne was appointed liquidating agent of the Colonial Supply Company, hereinafter referred to as Colonial, a corporation engaged in the business of selling oil well supplies. It operated stores at Henryetta and Wewoka, Oklahoma. An inventory was made of the stock of oil well supplies in the stores as of August 4, 1924. Thereafter, Wynne made sales from the stock in the regular course of trade.

In December, 1924, negotiations were entered into between Wynne and J. T. McCarthy, Jr., for the purchase by the latter of Colonial's stock of oil well supplies. Wynne furnished McCarthy with a copy of the August 4, 1924, inventory, which fixed the value of the stock at approximately $34,000. Wynne estimated that the sales made subsequently to August 4, 1924, would amount to approximately $10,000, and so advised McCarthy. McCarthy examined the inventory and inspected the stock in the two stores. Thereafter, and on December 19, 1924, Colonial and McCarthy entered into the written contract set out in note¹.

On April 13, 1925, Colonial assigned the contract to Wynne.

A controversy arose between Wynne and McCarthy and in December, 1930, Wynne instituted a suit against McCarthy in the district court of Tarrant County, Texas. Issues were joined and the matter referred to a special master who took the proofs and made findings of fact and conclusions of law. McCarthy excepted to each of the findings of fact and conclusions of law and demanded a jury trial of the issues of fact. Thereafter, and on March 16, 1933, Wynne instituted this suit against McCarthy in the district court of Oklahoma County, Oklahoma. It was duly removed to the United States District Court for the Western District of Oklahoma.

In his petition and an amendment thereto Wynne pleaded the contract of December 19, 1924, and alleged it was agreed in the contract: that "approximately 65% of the stock shipped * * * should be sold * * * to the defendant and the balance of 35% thereof should be consigned to the defendant for sale by him for and on account and for the use and benefit of" Colonial; that the portion of the stock to be sold and the portion to be consigned should be designated and specifically agreed upon at the time the stock was removed from the cars at Wortham, Texas; that McCarthy should pay for the portion purchased 75 per cent. of the factory price; that the freight thereon should be paid by Colonial; that McCarthy should sell the consigned stock in the regular course of trade and beginning January 1, 1925, should furnish Colonial each month with a list of the supplies sold; that Colonial should render McCarthy invoices thereof at the prevailing factory price less 15 per cent; that McCarthy should pay each invoice within 60 days from its date; that Colonial should have the right to sell any part of the consigned stock, and that McCarthy should receive as a handling charge 5 per cent of the prevailing factory price of supplies sold by Colonial, or the actual handling costs in the event they should exceed such 5 per cent.

Wynne further alleged that on April 13, 1925, all of the rights of Colonial in the stock and in the contract were duly assigned and transferred to him; that pursuant to the contract Colonial's entire stock of oil well supplies of the factory price and value of $35,436.95 was shipped to McCarthy and received by him; that it was mutually agreed between Colonial and McCarthy that the portion of the goods to be purchased by him and the portion to be held by him "on consignment for the account of" Colonial and sold for its account should not be selected and agreed upon as the goods were removed from the cars but "such selection and designation should be made at a later date to be agreed upon between the parties"; that McCarthy neglected and failed to fix a time and place to make such selection though frequently requested so to do by Wynne; that McCarthy after receiving invoices for the goods delivered to him, advised Wynne by letter dated April 9, 1925, the amount of goods was greatly in excess of the amount contemplated by the contract and he would not purchase and pay for 65 per cent of the total amount of goods received by him, but would purchase and pay for 65 per cent of the amount of goods contemplated by the contract and hold the remainder on consignment for sale for the account of Wynne in the manner provided in the contract with respect to the consigned goods; that such proposal was accepted by Wynne; that in September, 1925, McCarthy furnished Wynne with a list of goods received by him and designated a portion thereof as goods he would purchase and a portion thereof as goods he would hold on consignment but in the letter transmitting the list McCarthy stated it was hurriedly made and a more complete list would be furnished in the future; that in December, 1925, McCarthy furnished Wynne with a list of the goods which he would hold on consignment and in January, 1926, furnished Wynne with a list of the goods which he would purchase, and stated the lists were subject to correction and approval by Wynne; that the lists furnished did not embrace all of the goods shipped to and received by McCarthy, and that the prices extended on the lists were less than the factory prices; that thereafter Wynne visited McCarthy's store at Wortham, Texas, and inspected the stock and found a number of items on hand shipped by Colonial to McCarthy that were not included in either list furnished by McCarthy; that Wynne advised McCarthy of such omissions; that McCarthy agreed to investigate and if there were omissions to make and furnish a new statement; that McCarthy failed and neglected to furnish a new statement; that in June, 1927, it was mutually agreed between Wynne and McCarthy that the factory prices should be determined by Bovaird Supply Company of Tulsa, Oklahoma, that Wynne and McCarthy would abide by the prices thus fixed, that McCarthy would make a new selection of the goods which he would purchase on the basis of 75 per cent of Bovaird's prices and that the remainder of the goods should be held on consignment; that Wynne caused the factory prices to be determined by the Bovaird Supply Company and furnished them to McCarthy and requested him to make selection of the goods to be purchased, but that McCarthy failed and refused so to do; that no selection of the goods purchased and the goods to be held on consignment was ever made by McCarthy and agreed to by Wynne; that title to no part of the goods passed to McCarthy; that he should be deemed to hold the entire stock on consignment for the use and benefit of Wynne; and that the amounts paid by McCarthy should be considered as credits on the consigned goods.

Wynne prayed for an accounting by McCarthy of the goods sold and those remaining unsold and for judgment for the amount which the accounting should show to be due.

In his answer and cross-complaint McCarthy set up pleas of laches and the statute of limitations.

He admitted that the goods were shipped pursuant to the contract and received by him.

He alleged that his delay in selecting the goods to be purchased and those to be held on consignment was due to the failure of Wynne to furnish a list of the goods shipped; that he received invoices of the goods shipped about April 9, 1925; that he then agreed with Wynne to make the selections; that errors in the invoices necessitated checking and caused delay; that as soon as possible after the invoices were corrected he made selection of the goods to be purchased and the goods to be consigned. He denied that he had asserted the goods shipped were in excess of the amount contemplated by the contract, and that he agreed to accept factory prices of Bovaird Supply Company, to make a new selection of goods to be purchased and to hold the remainder as consigned stock.

McCarthy alleged that the prevailing factory prices of the goods shipped at the time of the shipment, excluding goods of the value of $966.71 returned to Wynne, amounted to $22,089.85; that Wynne as agent of Colonial agreed McCarthy should be credited with a 5 per cent allowance for freight which amounted to $1,104.49, leaving a net factory price value of $20,985.36; that the value of the goods purchased, less the 5 per cent freight allowance, was $14,990.01; that the factory price of the goods received on consignment was $5,995.35, and that he was obligated to pay therefor 85 per cent of the factory price less 5 per cent freight deduction, if, as and when sold; that he had paid Wynne on the goods purchased $11,800.82, or $558.33 in excess of 75 per cent of the factory price thereof; that in 1926 and 1932 he tendered consigned goods to Wynne, accompanied by a detailed list showing the factory price thereof of $2,836.55, or a net factory price after freight deduction of $2,694.72; that he still tenders such goods to Wynne; that the goods remaining in his hands have no market value; that after deducting the consigned goods tendered back to Wynne there remains a balance of consigned goods for which he must account of $3,300.63; that 85 per cent of the factory price thereof amounts to $2,805.53.

He further alleged that it was necessary to move the consigned goods from store to store and that Wynne agreed that McCarthy should be allowed the freight charges incurred in so moving the consigned goods; that he incurred freight...