Ferrous Products Co. v. Gulf States Trading Co.

323 S.W.2d 292, 1959 Tex. App. LEXIS 2340
CourtCourt of Appeals of Texas
DecidedApril 9, 1959
Docket13269
StatusPublished
Cited by25 cases

This text of 323 S.W.2d 292 (Ferrous Products Co. v. Gulf States Trading Co.) 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.

Bluebook
Ferrous Products Co. v. Gulf States Trading Co., 323 S.W.2d 292, 1959 Tex. App. LEXIS 2340 (Tex. Ct. App. 1959).

Opinion

BELL, Chief Justice.

Appellee sued appellant for the value of certain steel beams. He recovered judgment for $1,892.80 together with attorney’s fees of $500. Recovery was allowed by the Trial Court on the theory of an implied contract, the appellant having received and disposed of the beams.

There is no real dispute in the facts. On or about May 12, 1955, a man named Borden contacted Mr. Chenowith, who was employed by appellee, and asked if appel-lee would be interested in selling the beams to Metallic Building Company. Borden was in Houston and Chenowith was in Dallas. Chenowith answered that it would, and on the same day directed T. E. Mercer Truck Co. to deliver the beams from ap-pellee’s Houston yards to Metallic Building Company, 4601 Holmes Road, Houston. Mercer issued its bill of lading. The bill of lading showed the consignor to be ap-pellee and Metallic Building Company was shown to be the consignee. When the beams were delivered to the address shown, an employee at the warehouse called Mr. Thielemann, Vice-President and General Manager for appellant, about the shipment. Mr. Thielemann told him the shipment was for appellant. An authorized representative of appellant scratched out the name of Metallic Building Company and inserted appellant’s name and took delivery of the beams for appellant. All of this was unknown to appellee. Mr. Thielemann explained that on May 10 appellant told Borden it would take some beams like those delivered and that at the same time it issued its purchase order to Borden; that when the shipment arrived the receiving clerk had no information about the shipment to Metallic Building Company, but did have a copy of the purchase order issued to Borden by appellant. The shipping clerk then contacted Mr. Thielemann.

On May 16 appellee sent its invoice to Metallic Building Company. On May 18 appellant wrote appellee that. Metallic Building had received the invoice, but that Metallic had not ordered the material but appellant had, though the order was direct to Borden. Appellant returned the invoice and sent appellee a copy of its purchase order to Borden and a copy of the invoice from Mercer for trucking the materials. Appellant paid the trucking charges.

On May 24 appellee acknowledged the letter of May 18 and stated Borden had arranged for the shipment to appellant but advised them to make out the invoice as they did, that is, to Metallic Building Co, It is to be noted, however, that Mr. Cheno-with testified that appellee sold to Metallic and never knew appellant in the matter until receipt of the letter of May 18. This date was after appellant had taken the beams and sold them on their own account to a third person.

Since Borden was indebted to appellant, appellant gave him credit on his account for the value of the beams.

*295 The findings of fact filed by the Trial Court were in substance the facts above related and the Court found that appellant by changing the bill of lading, taking the goods and appropriating them to its use and benefit, agreed 'to pay the reasonable cash market value of the goods.

Appellant contends as follows:

1. Since Ferrous made an express contract with Borden for the steel beams, there can be no implied contract, an implied contract existing only if there is no express contract.

2. Title passed out of Gulf States when the goods were shipped and there could be no conversion of the property as to Gulf States.

3. The evidence shows that Ferrous never intended to pay Gulf States but intended to pay Borden and there can be no implied agreement to the contrary.

There are really eleven points of error assigned, but the above represent the substance of appellant’s contentions.

The fact situation with which .we are faced is just this. Gulf States, at the instance of Borden, shipped its merchandise to Metallic Building Company by way of T. E. Mercer Trucking Co. The bill of lading showed on its face that Gulf States was consignor and Metallic Building Company was consignee. When the material arrived at its destination, a warehouse used by Ferrous and Metallic, there was nothing in the hands of the receiving clerk to show an order by Metallic. The clerk contacted the Vice-President and General Manager of Ferrous, who told him the material was for Ferrous. ' This, despite the fact that such officer knew at the time that the bill of lading showed on its face that Gulf States had shipped the material not to Ferrous and not to Borden. Ferrous took the material and immediately sold it and appropriated the proceeds of the sale to its use and benefit by giving Borden credit on the debt he owed Ferrous. It is true that Ferrous had ordered similar material from Borden. This was unknown to Gulf States until after Ferrous had sold the material. It is true also that after the appropriation and sale Ferrous wrote Gulf States stating they ordered from Borden and would deal with Borden direct, thus evidencing the absence of an intention to pay Gulf States. Then Gulf States, in an effort to collect for materials belonging to it, invoiced Ferrous.

We have concluded the trial court was correct in rendering judgment for Gulf States for the market value of the steel beams.

Title had not passed out of appellee at the time appellant appropriated the materials, because Metallic had not in fact ordered the material and appellee intended at that time to sell only to Metallic. Appel-lee had not sold to Borden or Ferrous. If Metallic had in fact ordered the merchandise, it being shipped on a straight bill of lading, title on shipment would, as contended by appellant, have passed to Metallic.

When Ferrous took the merchandise and appropriated it to its own use, it was guilty of a conversion. It wrongfully exercised dominion and control over the property of appellee to the exclusion of the exercise of such rights by the owner. This amounts to a conversion. France v. Gibson, Tex.Civ.App., 101 S.W. 536, no writ history; Zerr v. Howell, Tex.Civ.App., 88 S.W.2d 116, no writ history; Stidham v. Lewis, Tex.Civ.App., 23 S.W.2d 851, no writ history; Compton v. Farrington, Tex.Civ.App., 16 S.W.2d 345, no writ history; Forrest v. Burns, Tex.Civ.App., 57 S.W.2d 1111, error dismissed.

The fact that Ferrous may have acted in good faith in thinking this material was that ordered by them from Borden is not material. Good faith of the person does not prevent the appropriation from amounting to a conversion. Moore v. Conway, *296 Tex.Civ.App., 108 S.W.2d 954, no writ history, and numerous authorities there cited; 14 Tex.Jur. p. 512.

The conversion amounted to tor-tious action on the part of appellant. However, the appellee is not confined to his remedy in tort. He may waive the tort and sue on the contract implied in law, or, more accurately, quasi-contract. At common law the tort action to recover the value of the goods was trover. However, at common law the owner could waive this remedy" and sue in assumpsit on the promise implied in law. Gould v. Baker, 12 Tex.Civ.App. 669; 35 S.W. 708; Hitson v.

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323 S.W.2d 292, 1959 Tex. App. LEXIS 2340, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ferrous-products-co-v-gulf-states-trading-co-texapp-1959.