Miller & Miller Auctioneers, Inc. v. Mersch

442 F. Supp. 570, 23 U.C.C. Rep. Serv. (West) 626, 1977 U.S. Dist. LEXIS 16119
CourtDistrict Court, W.D. Oklahoma
DecidedApril 29, 1977
DocketCIV-75-0493-D
StatusPublished
Cited by4 cases

This text of 442 F. Supp. 570 (Miller & Miller Auctioneers, Inc. v. Mersch) is published on Counsel Stack Legal Research, covering District Court, W.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Miller & Miller Auctioneers, Inc. v. Mersch, 442 F. Supp. 570, 23 U.C.C. Rep. Serv. (West) 626, 1977 U.S. Dist. LEXIS 16119 (W.D. Okla. 1977).

Opinion

MEMORANDUM OPINION

DAUGHERTY, Chief Judge.

In this case Plaintiff Millér & Miller Auctioneers, Inc., seeks judgment against Defendants Paul Grayson Mersch (Mersch), an individual, and Keystone Exploration, Inc. (Keystone), in the amount of $45,583.39. Plaintiff alleges it sold Defendants at public auction' sale at Seguin, Texas, an oil drilling rig with accessory equipment; Defendants’ check in payment of said rig was returned marked insufficient funds; Plaintiff’s efforts to cause Defendants to honor and pay said check were without avail; Plaintiff, as auctioneer, was required to and has paid the owners of the property bought by Defendants at Seguin and is subrogated to their position; that pursuant to the Uniform Commercial Code (see Note 2) Plaintiff thereafter resold said rig and accessory equipment on notice to Defendants in a commercially reasonable manner at Hennessey and Oklahoma City, Oklahoma and as a result of the resale was short $45,-583.39 in covering the sale price of said rig and accessory equipment as sold to Defendants at Seguin with hauling and sales expenses added thereto. 1

By way of defense Defendant Mersch individually asserts that he was not personally and individually involved in the Seguin sale and hence the deficiency figure above mentioned should not be entered as a judgment against him. It is the position of Defendant Mersch that the Seguin purchase was accomplished, if at all, by the corporate Defendant Keystone; by way of further defense the Defendants assert that Plaintiff did not discharge its duty to ascertain the authority of Ray Dennis when he claimed to be the agent of Defendants in purchasing the rig at Seguin, Texas; that Ray Dennis exceeded his authority in pur *573 chasing the rig in that he did not accomplish the purchase in the manner or for the amount directed by Defendants and that the rig was not sold in a reasonably commercial manner by Plaintiff after the check presented in payment therefor by Ray Dennis was not honored but returned marked insufficient funds.

In response to the foregoing defenses, Plaintiff asserts that said rig and accessory equipment was purchased individually by Defendant Mersch or if the same was purchased by the corporate Defendant the corporate veil should be pierced so as to make Mersch responsible in that Mersch, the sole owner and president of said Defendant corporation, used the corporation in an improper manner in said sales transaction and as a facade for his own individual actions and thus Defendant Mersch should be held individually responsible with reference to said sale. Also Plaintiff asserts it made a proper and reasonable inquiry as to the authority of Ray Dennis to purchase the rig and accessory equipment as agent for Defendants in that at the time Ray Dennis registered in for the sale and before the auction sale started Plaintiff called Defendant Mersch directly by long distance telephone and ascertained that Dennis was there as his agent with authority to purchase an oil drilling rig with accessory equipment with the open ended (or blank) check which had been presented to Plaintiff by Dennis and signed by Defendant Mersch on a Keystone bank account in the University Bank in Stillwater, Oklahoma. Plaintiff also asserts that when Defendants failed to pay for said rig with accessory equipment it sold the same on proper notice to Defendants and sold the same in a commercially reasonable manner; that the price differential was due to. a decline in the oil drilling business from the time of the sale of the rig and equipment at Seguin, Texas on February 27,1975 until the noticed sale at Hennessey, Oklahoma on May 2, 1975 arid the subsequent sale at Oklahoma City; that the Hennessey sale was an auction sale well advertised and properly conducted.

From the evidence presented the Court makes the following findings of fact and conclusions of law:

Defendant Mersch authorized Ray Dennis to proceed to Seguin, Texas and purchase an oil drilling rig and accessory equipment. Mersch gave Dennis a check without the amount thereof being filled in. The check was on the Keystone bank account in the University Bank in Stillwater, Oklahoma. It was signed by Mersch without Mersch designating his representative capacity as the signer of the check. 2 At the time the *574 check was signed by Mersch and given to Dennis and at the time of the Seguin sale the Keystone bank account was not capable of satisfying this check and Mersch knew this. Mersch gave Dennis $200.00 in cash as expense money to be used in proceeding to the auction sale to be conducted on February 27, 1975 at Seguin, Texas by the Plaintiff. This sale which was well publicized offered oil drilling equipment to the public at auction. Dennis registered in to the sale as Ray Dennis — Agent for P. G. Mersch— d/b/a Keystone Exploration. Dennis presented the above mentioned blank check to representatives of Plaintiff. Dennis had no letters of credit from a bank. As a result of the above a representative of Plaintiff called Defendant Mersch and inquired as to the status and authority of Dennis. Mersch advised Harold Stephens, this representative of Plaintiff, that Dennis was his agent; that he had authority to bid on and purchase an oil drilling rig with accessory equipment; that no bidding limitation was disclosed or discussed; that no discussion was had regarding Keystone. With this information Dennis was permitted by Plaintiff to bid at the sale. Dennis bought an oil drilling rig with certain accessories which did not include drill pipe. After the sale Dennis undertook to settle up with the Plaintiff and asked one of Plaintiff’s representatives to fill out the Mersch check in the amount of the purchase price, namely $108,342.00, which was done. Dennis was given an invoice for what he had purchased by Plaintiff, the invoice being made in the name of Keystone Exp. In the process of settling up a representative of Plaintiff called Mr. Tom Workman, Vice President of the University Bank in Still-water, Oklahoma regarding the validity of the Mersch check as the same had been filled out in the amount of $108,342.00. Workman advised Thompson (the representative of Plaintiff) that the bank would not honor this check as funds were not available to do so. Thompson then called Defendant Mersch and informed Mersch that the bank had informed him that the check would not clear whereupon Mersch advised Thompson not to worry as he would take care of everything and make it good, that this was just a misunderstanding, that he was then en route to the bank. In this conversation Thompson informed Mersch of the bid of Dennis and the purchase price involved. Thompson said that the rig and equipment could be put up for resale but Mersch instructed him not to do so. Further Mersch did not object to the sale price that was then disclosed by Thompson.

Thereafter considerable efforts were made by Plaintiff in contacts with Mersch to cause the check to be honored. Calls were also made to the University Bank in Stillwater. These efforts were to no avail and the check was never honored. In due course Plaintiff sold the rig and equipment as aforesaid.

Mersch testified he does not recall the telephone call from Stephens to him about the authority of Dennis prior to the sale. Stephens testified in detail regarding such conversation and Plaintiff produced a telephone bill indicating the call was made.

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Bluebook (online)
442 F. Supp. 570, 23 U.C.C. Rep. Serv. (West) 626, 1977 U.S. Dist. LEXIS 16119, Counsel Stack Legal Research, https://law.counselstack.com/opinion/miller-miller-auctioneers-inc-v-mersch-okwd-1977.