Court Opinion

ID: 8885426
Source: CourtListenerOpinion
Date Created: 2022-11-26 21:43:12.15848+00
Date Added: 2024-06-11T17:06:53.440028
License: Public Domain

GODBOLD, Circuit Judge
(concurring in part and dissenting in part):
I must dissent in part.
“It was the duty of the trial court to reconcile the testimony of all the witnesses, if possible, without imputing perjury to any of them.” Williams v. Cambridge Mutual Fire Ins. Co., 230 F.2d 293, 296 (5th Cir. 1956). Once that is done in this case what becomes clear is that fertilizer and irrigation equipment were not within the “special contract” for items sold on open account, so that as to them the statute of limitations had expired. This result squares with the evidence as a whole, with common sense and with business practice. Most important of all, it squares with the testimony of the Kerr-McGee employees who handled all the credit arrangements made by Harris.
The evidence supports — just barely— a conclusion that a “special contract” was made relating to Harris’ open account with Kerr-McGee, within the meaning of the “special contract” provision of Art. 5526, Rev.Civ.Stat.Ann. of Texas.1 But considering and reconciling all the evidence, it is plain to me— as it was to the two Kerr-McGee employees who dealt with the Harris purchases and testified in this case — that only some of the items to be purchased were to be charged to the open account, while fertilizer and irrigation equipment were to be for cash, which was described as payment within 30 days. Most of the cash items were not timely paid, but this is not to say that as a consequence they became the subject matter of the special contract for credit.
In the spring of 1966 Harris arranged with Davis, the manager of the local Kerr-McGee store, to purchase goods and supplies for his 1966 cotton crop. Previously Harris had purchased merchandise from Kerr-McGee under many different arrangements. The two men talked about credit. Davis filled out an information form on Harris, containing information required of any customer establishing credit, headed “Credit Information — Plant Food Operations.” He obtained from Harris at least some of *1115the information. Davis testified of this form that it had nothing to do with the terms of credit to be arranged but was information on which a credit search could be based. In short, it was a source of information and not an application. Harris signed the form. In the space headed “Approximate Fertilizer Purchased Annually” appear the notations: “Fert. 5,000.00 Weed Killer 5000.00 Seed 5000 Jan. 15th.” There was no testimony by Davis, who made these entries, explaining what they meant. We do not know whether they refer to estimates of past purchases or future purchases, or whether they were Harris’ application for credit for merchandise shown and in the amounts shown or references to past credit. The trial court recognized the ambiguity.
Harris’ connection with payment arrangements terminated at this point. Subsequent actions were intra-company dealings of Kerr-McGee. But they make clear that fertilizer was excluded from the credit arrangement. At or near the same time that he filled out the information form Davis completed and executed Kerr-McGee’s “Credit Application” form, which, by its own terms, is completed and executed not by the potential buyer but by Kerr-McGee’s employee. The information on this form was that which Davis, as store manager, would submit to the Kerr-McGee credit department for approval of credit to be extended the customer by Kerr-McGee for the year. Much of the data came from the information sheet Harris had signed. Davis estimated the annual purchases at $15,-000-$20,000 and recommended a credit line of $20,000. Under the heading “Additional Information and Remarks on local Fertilizer Credit Practices,” Davis made this entry: “Will pay cash for fertilizer — chemical fall term (%-l% after 90 days).” (Emphasis added.)
The testimony of all Kerr-McGee employees as to fertilizer is precisely consistent with what Davis wrote on the application. Davis testified that he (Davis) “made different and separate arrangements [with Harris] on the fertilizer.” He stated that when he (Davis) sent the credit application form in he was putting down that Harris wanted credit but would pay cash for fertilizer. The credit application went to the regional credit office of Kerr-McGee in Oklahoma City where it was handled by Miller, the credit supervisor. Miller testified that he approved credit of $20,000 for Harris on terms of 3% thirty days, net 90, with a service charge thereafter, final due date January 15, 1967, on the basis of the information in the application. Miller acknowledged that his understanding of the application was that Harris would pay cash for fertilizer when he received it and that this was the agreement which Davis had with Harris. Yet Miller testified that when he approved the application he was approving it for anything that Harris would buy. This is no conflict in his testimony, rather a recognition that he approved a credit arrangement broader in scope than that applied for. Miller’s subjective and wholly unilateral departure from what had been agreed upon between Davis and Harris and what was applied for on the application, made in a Kerr-McGee office hundreds of miles away, was not shown to have been communicated to Harris. It was not until June 17, after seventeen of the total of twenty-two purchases had been made (in amount, more than $10,-000) that Kerr-McGee mailed to the Levelland store its form authorization approving a $20,000 line of credit under “harvest terms” without differentiating as to types of goods to which it applied. There is no evidence or contention that Harris ever saw this form or had any knowledge of it. This untimely and unilateral action by the Kerr-McGee credit office could not bring within the credit arrangements merchandise agreed to be paid for in cash and thereby subject it to the special contract made for credit sales.
Also Miller and Harris agree that irrigation equipment was to be paid for in cash and not covered by credit terms. Harris paid cash for some purchases of irrigation equipment, and they were not *1116picked up in the account. But his other purchases of irrigation equipment have been added into the account and included in the judgment given by the District Court and affirmed by the majority.
Harris and Kerr-McGee could have entered into an agreement that cash items, if not promptly paid, would become credit items and thereby subject to the special contract. But this is not what the evidence showed. In fact, Miller’s candid explanation is 180 degrees to the contrary.
Harris — hard of hearing and inarticulate — was vague, wandering and inconsistent about the terms that were agreed on for his purchases for which payment was to be deferred until the end of the season. Davis and Miller were candid in acknowledging that an application for credit of limited scope was unilaterally treated as plenary. The penalty to Harris, and the bonus to Kerr-McGee, is a judgment for $4,130.49 for items sold for cash, not paid for, and sued on after the statute of limitations had run. This may discourage inconsistency and reward candor, but not in an authorized manner.

. Art. 5526 provides:
“There shall be commenced and prosecuted within two years after the cause of action shall have accrued, and not afterward, all actions or suits in court of the following description:
* * * * #.
“Actions upon * * * open accounts * * *. In all accounts * * * the respective times or dates of the delivery of the several articles charged shall be particularly specified, and limitation shall run against each item from the date of such delivery, unless otherwise specially contracted.”
However, the conclusion of a “special contract” strains considerably the plainly articulated Texas policy that the two-year statute on open account is not to be “frittered away,” Smyth v. Walton, 5 Tex.Civ.App. 673, 24 S.W. 1084 (1893). See also Roberts v. Vernon Mud Company, 324 S.W.2d 237 (Tex.Civ.App. 1959), holding that local custom or usage, if not wholly pointless, cannot be treated as part of the “special contract” unless pleaded and supported by proof that the defendant had knowledge of it and agreed to it.