Title: Buenger v. Pruden

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Buenger v. Pruden1986 WY 25713 P.2d 771Case Number: 85-176Decided: 01/30/1986Supreme Court of Wyoming
ROBERT L. BUENGER, D/B/A BUENGER CONSTRUCTION COMPANY, D/B/A 
BUENGER LEASING COMPANY, APPELLANT (DEFENDANT),

 
 
v.

 
 
VARCO PRUDEN, APPELLEE 
(PLAINTIFF).

 
 
Appeal from the District Court,ParkCounty, John T. Dixon, 
J.

 
 
 
 
Representing 
Appellant:

Joseph E. Darrah, 
Powell.

 
 
Representing 
Appellee:

James M. Guill of 
Goppert, Day & Olson, Cody.

 
 
Before THOMAS, C.J., and 
BROWN, CARDINE, URBIGKIT and MACY, JJ.

 
 

URBIGKIT, 
Justice.

 
 

[¶1.]     Through appeal by the 
purchaser, we consider the effect of F.O.B.-destination on the seller's 
responsibility for freight costs, and reverse the trial-court decision charging 
the buyer.

 
 

[¶2.]     The issues raised by 
the appeal are the F.O.B.-destination effect on freight costs and prejudgment 
interest charged if a contested nonliquidated claim is involved in the 
litigation.

 
 

[¶3.]     Appellant Robert L. 
Buenger (Buenger) entered into detailed purchase documents with appellee Varco 
Pruden, to purchase certain buildings for erection at jobsite by shipment from 
Evansville, Wisconsin, to Gillette, Wyoming. Controversy arose about the account 
status, with freight charges and prejudgment interest questions now coming to 
this court by appeal.

 
 

[¶4.]     The agreement documents 
provided for F.O.B.-destination or F.O.B.-jobsite, and were then confirmed by 
seller by letter in explicit terms "Correction to my letter dated May 26, 1982. 
The referenced jobs will be shipped FOB destination."1

 
 

[¶5.]     The trial court charged 
freight to Buenger as buyer, and by opinion letter stated:

 
 
"Defendant, in his 
Counterclaim, asserts that he is entitled to several credits. He points to the 
contract provision which states the buildings are to be delivered `FOB jobsite' 
as supporting his claim to a credit for freight charges paid by him. Under the 
Uniform Commercial Code, FOB destination does not mean that the seller is 
agreeing to pay for freight costs, but merely that the seller is accepting the 
risk to the goods during shipment. W.S. § 34-21-236 
(1977)."

 
 

[¶6.]     We find § 34-21-236, 
W.S. 1977 (U.C.C. § 2-319 (1964)) to be determinative in a contrary fashion to 
the trial-court decision:

 
 
"(a) Unless otherwise 
agreed the term F.O.B. (which means `free on board') at a named place, even 
though used only in connection with the stated price, is a delivery term under 
which:

 
 
"(i) When the term is 
F.O.B. the place of shipment, the seller must at that place ship the goods in 
the manner provided in this article (section 2-504 [§ 34-21-252]) and bear the 
expense and risk of putting them into the possession of the carrier; 
or

 
 
"(ii) When the term is 
F.O.B. the place of destination, the seller must at his own expense and risk 
transport the goods to that place and there tender delivery of them in the 
manner provided in this article (section 2-503 [§ 34-21-251]); * * 
*."

 
 

[¶7.]     The Practical Lawyer's Glossary - 
"F.O.B.", The Practical Lawyer, Vol. 31, No. 7, October 15, 1985, p. 56, 
summarizes the subject:

 
 
"When a shipment is to be 
F.O.B. (`free on board') the place of shipment, the seller bears the expense and 
risk of putting the goods into the carrier's possession, at which point, the 
risk of loss passes to the buyer. . . . If the shipment is to be F.O.B. the 
place of destination, then the shipment is at the seller's expense, and the risk 
of loss is on the seller until the goods are duly tendered to the buyer in 
accordance with U.C.C. section 2-503. R. HENSON, THE LAW OF SALES 65 (ALI-ABA, 
Philadelphia, 1985)"

 
 

[¶8.]     Official comments are 
in accord. See U.C.C. § 2-319 (1964); 3 Anderson, Uniform Commercial Code, 3d ed., § 
2-319:13.

 
 

[¶9.]     In the terminology of 
the industry, the differentiation is between a destination or shipment contract. 
The agreement of the parties controlled by the designation used and this case is 
clearly a destination agreement whereby freight charges remain with seller. In re Charles T. Stork & Co., 271 
Fed. 279 (2 Cir. 1921); Sheffield Furnace 
Co. v. Hull Coal & Coke Co., 101 Ala. 446, 14 So. 672 (1894); Belvedere Sand & Gravel Company v. 
Heath, 259 Ark. 767, 536 S.W.2d 312 (1976), overruled on other grounds by Foote's Dixie Dandy, Inc. v. McHenry, 
270 Ark. 816, 607 S.W.2d 323, 21 A.L.R.4th 565 (1980); Droukas v. Divers Training Academy, 
375 Mass. 149, 376 N.E.2d 548, 24 U.C.C. Rep Serv 118 (1978); Matter of Isis Foods, Inc., 38 B.R. 48, 
38 U.C.C. Rep Serv 1134 (1983); A.M. 
Knitwear Corp. v. All   America Export-Import Corp., 20 
U.C.C. Rep Serv 581 (1976); Marmond 
Spring Co. v. Triangle Instrument Co., Inc., 4 U.C.C. Rep Serv 302 
(1967).

 
 

[¶10.]  Under the purchase documents, the seller, 
Varco Pruden, owed costs for freight to Gillette for the buildings, and amounts 
paid by Buenger to secure freight release upon delivery are chargeable by offset 
and counterclaim.

 
 

[¶11.]  As a second issue, Buenger contests 
$215.10 of charged prejudgment interest. The freight credits apparently exceed 
the prior judgment entered, and consequently no basis for assessment of interest 
remains. The required liquidated indebtedness status does not exist. State Highway Commission of Wyoming v. 
Brasel & Sims Construction Co., Inc., Wyo., 688 P.2d 871 (1984); Rissler & McMurry Co. v. Atlantic 
Richfield Co., Wyo., 559 P.2d 25 (1977).

 
 

[¶12.]  The decision of the trial court is 
reversed and remanded for entry of the judgment in accord with this 
opinion.

 
 

[¶13.]  Reversed.

 
 

1 Seller's exhibit showed: 
"f.o.b. trucks, jobsite, Gillette, Wyo." The purchaser's exhibits contained the 
same notations, with an invoice stating "JOBS ARE TO BE SHIPPED FREIGHT 
PREPAID." Apparently all freight was collected from Buenger at delivery, and 
exhibits show some credit memoranda for a portion of the total freight charge. 
The bill of lading form from Varco to Buenger contained a notation, "PLEASE BILL 
FREIGHT CHARGES TO: Varco Pruden," with a further blank space included as 
"Prepaid."