Anderson-Dunham, Inc. v. Lee Rubber & Tire Corp.

Court of Appeals of Texas

Anderson-Dunham, Inc. v. Lee Rubber & Tire Corp.

378 S.W.2d 99, 1964 Tex. App. LEXIS 2119

CourtCourt of Appeals of Texas

DecidedMarch 27, 1964

Docket16321

StatusPublished

Cited by9 cases

This text of 378 S.W.2d 99 (Anderson-Dunham, Inc. v. Lee Rubber & Tire Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Anderson-Dunham, Inc. v. Lee Rubber & Tire Corp., 378 S.W.2d 99, 1964 Tex. App. LEXIS 2119 (Tex. Ct. App. 1964).

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Opinion

DIXON, Chief Justice.

Appellee Lee Rubber & Tire Corporation, hereinafter called Lee, sued appellant Anderson-Dunham, Inc., for alleged conversion of a large number of truck tires, on which Lee claims a chattel mortgage lien superior to a chattel mortgage lien claimed by appellant. Seago Contracting Company, mortgagor, hereinafter called Seago, was also made a party defendant, but the cause as to Seago was severed from the cause as to Anderson-Dunham.

After a trial before the court without a jury judgment was rendered for Lee for $9,132.62, the balance due by Seago, to whom the tires had been sold by Lee.

On three different occasions Lee sold tires to Seago: 200 tires on April 4, 1959; 118 tires on August 25, 1959; and 60 tires on October 6, 1959, a total of 378 tires. On each occasion Lee took a chattel mortgage to secure payment and filed its mortgage for registration.

On July 28, 1959 Anderson-Dunham sold Seago 25 dump trailers and the 200 tires with which the trailers were equipped. Anderson-Dunham took a chattel mortgage to secure payment and filed its mortgage for registration. This mortgage provided that it should cover “all attachments, replacements, substitutions and additions” referred to as equipment.

Seago defaulted in its payments due Anderson-Dunham with the result that on or about June 22, 1960 Anderson-Dunham repossessed the trailers together with the 200 tires with which the trailers were then equipped.

Soon after learning of the above repossession Lee informed Anderson-Dunham that the tires were subject to prior mortgages held by Lee and demanded possession of the tires. Anderson-Dunham refused the demand, claiming that its mortgage was superior. On June 29, 1960 this suit was filed.

Lee’s first mortgage, that of April 4, 1959, does not state the generic name of property to be covered. It refers to “Branch Invoice #8206.” In a space for “Serial Number of Merchandise” there is typed “See ‘Schedule A’ on reverse side of this contract.” On the reverse side is this: “Schedule ‘A’: 1000.20 12 PLY S.D. HWY —RAYON.” Following the above recital is a list of 200 numbers. Nowhere in the mortgage, front or back, is the word “tires” to be found.

Lee’s second mortgage, that of August 25, 1959, is similar in general to the first mortgage. It refers to Invoice No. 8206. Nowhere in it is the word “tires” to be found.

Lee’s third mortgage, that of October 6, 1959, is similar in general to the other two mortgages, but it differs in one important particular. On its reverse side under the heading “Schedule A” there is the following: “60-1000x20-12 PR SUPER DELUXE HWY NYLON TIRES" (Emphasis ours.)

Certified copies of Lee’s three mortgages were filed with the court papers in this cause and are referred to in Lee’s First Amended Petition “as though same were fully set forth here.”

In its first and second points on appeal appellant says that the trial court erred in overruling its Special Exceptions Nos. 1 and 2, which attack the sufficiency of the description of the mortgaged property in Lee’s first and second mortgages.

In its first counter point Lee asserts that (1) the descriptions are sufficient on their face and (2) if they are ambiguous, the record is such as to excite inquiry and it *102 was the duty of Anderson-Dunham to pursue the inquiry which would have cleared up the ambiguity.

We are of the opinion that appellant’s first two points on appeal should be sustained. The descriptions in the mortgages of April 4, 1959 and August 25, 1959 are not in themselves sufficient. It is true that Lee’s pleadings are to the effect that the first two mortgages cover tires. But when we examine the mortgages themselves we find that they do not mention the word “tires.” It is the mortgages themselves, made part of the pleadings as exhibits by reference, not the allegations in the pleadings, which'must control. Pyron v. Grinder, 25 Tex.Supp. 159, 160; Cawley v. Security State Bank & Trust Co., Tex.Civ.App., 126 S.W.2d 715; Paul v. Houston Oil Co., Tex.Civ.App., 211 S.W.2d 345; De-Muth v. Flossie Head (opinion dated March 13, 1964, not yet reported).

' We do riot agree with' Lee’s argument that if the mortgages be considered ambiguous, the record is such as to incite an inquiry by Anderson-Dunham which inquiry would have cleared up the ambiguity.

' Iii the first place Lee did not plead any ambiguity, but in its pleading relied on the wording of the mortgages themselves. It did not plead that an inquiry would have disclosed a sufficient description of the property, nor did it, when confronted with .appellant’s exceptions, ask leave to amend its pleadings, Ross v. Burleson, Tex.Civ.App., 274 S.W.2d 105;. Jones v. Dumas Dev. Co., Tex.Civ.App., 229 S.W.2d 936; C. A. Bryant Co. v. Hamlin Ind. School District, Tex.Civ.App., 18 S.W.2d 750; Totten v. Houghton, Tex.Civ.App., 2 S.W.2d 530; 13 Tex.Jur.2d 648.

In the second place the rule of law on which Lee relies is not applicable here. It is true that, as between a mortgagee and third persons, if a- defective description in a chattel mortgage suggests an inquiry which, if pursued, will disclose the property intended to be covered by the mortgage, the description will be adjudged sufficient. But to make the rule applicable it is necessary that (1) the clue to the proper inquiry must be such as is suggested by the mortgage itself, and (2) the inquiry must be directed to others than the parties to the mortgage. Highland Park State Bank et al. v. Continental Nat’l Bank of Ft. Worth, Tex.Civ.App., 300 S.W.2d 304; Walker v. Johnson, 108 Mont. 398, 91 P.2d 406, 124 A.L.R. 937; 12 Tex.Jur.2d 34-37; 14 C.J.S. Chattel Mortgages § 9, p. 600; 10 Am. Jur. 752, and 1963 Cumulative Supp.

Lee’s first two mortgages refer to invoices which Lee says would have cleared up any ambiguity as to the property description in the mortgages themselves. However, to have examined the invoices, Anderson-Dunham would have had to make inquiry of one or the other of the parties to the Lee mortgages, and the rule does not require it to do so.

Appellee Lee also says that an examination of the County Clerk’s Index of Chattel Mortgages would have disclosed a memorandum made by the clerk describing the property as “tires.” But the mortgages themselves do not refer to the index, hence put no one on notice as to what the index contains as to a description of the property. Furthermore, registration of an instrument is constructive notice only of what appears on the instrument itself as registered. Rheem Acceptance Corp. v. Rowe, Tex.Civ.App., 332 S.W.2d 353; Smith v.

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