Court Opinion

ID: 9862971
Source: CourtListenerOpinion
Date Created: 2023-09-25 02:38:08.522848+00
Date Added: 2024-06-11T11:45:34.585733
License: Public Domain

ON MOTION FOR REHEARING
In Fuller’s motion for rehearing he argues that art. 2.326(c)1 of the Tex.Bus. & Comm.Code applies only to creditors of the person conducting the business and that appellee Texas Western was never a creditor of appellant. Fuller therefore argues the provisions of art. 2.326(c) do not apply, and that the transaction was not a sale as a matter of law.
Appellee responds that even though it was not a direct creditor of Fuller, Amcrest (appellee’s assignor) was a creditor of Fuller, and that appellee is now in Amcrest’s shoes.
The question, therefore, is whether an assignee of a prior creditor is a creditor within the provisions of art. 2.326(c). The Tex.Bus. & Comm.Code defines “creditor” as follows:
“Creditor” includes a general creditor, a secured creditor, a lien creditor and any representative of creditors, including an assignee for the benefit of creditors, a trustee in bankruptcy, a receiver in equity and an executor or administrator of an insolvent debtors or assignors estate. Tex.Bus. & Comm.Code Ann. art. 1.201(12) (Vernon 1967).
The security agreement between Texas Western and Amcrest provides as follows:
*7912.1 To secure the payment of Borrower’s [Amcrest’s] Liabilities and Borrower’s prompt, full and faithful performance and observance of all of the provisions to be kept, observed or performed by Borrower under this Agreement and the Other Agreements, Borrower hereby grants to Lender [Texas Western] a security interest in and to all of Borrower:
(a) existing and future accounts, chattel paper, contract rights and instruments (sometimes hereinafter individually and collectively referred to as “Accounts”), whether accounts are acceptable or unacceptable to lender and whether accounts are scheduled to lender on Schedules of Accounts or not, and all goods whose sale, lease, or other disposition by Borrower has given rise to any accounts and which goods have been returned to or repossessed or stopped in transit by Borrower;
Texas Western filed a Financing Statement designating it as a secured party due to this transaction with Amcrest.
Since Texas Western held Fuller’s accounts by virtue of an assignment from Amcrest, it is a secured creditor under art. 1.201(12), and thus, comes within the definition of “creditor” under art. 2.326(c). Moreover, by filing a Financing Statement, Texas Western complied with Code provisions relative to perfecting its security interest in the accounts it was assigned by Amcrest. Amcrest, therefore, became a secured creditor under provisions of the Code and is a creditor of Fuller for purposes of applying the “on sale or return” language of art. 2.326(c).
The motion for rehearing is overruled.

. Where goods are delivered to a person for sale and such person maintains a place of business at which he deals in goods of the kind involved, under a name other than a name of the person making delivery, then with respect to claims of creditors of the person conducting the business the goods are deemed to be on sale or return....