International Harvester Co. v. Glendenning

505 S.W.2d 320 (1974)

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Nature of the Case

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Facts

P brought this action against Glendenning (D) for conversion. P was the holder of a duly perfected security interest in three new International Harvester tractors. P obtained the security agreements from Jack L. Barnes, doing business as Barnes Equipment Company, an International Harvester dealer. P alleged that Barnes and D had entered into a fraudulent conspiracy wherein D had wrongfully purchased the three tractors from Barnes; that D was not a buyer in the ordinary course of business; that he did not act in a commercially reasonable manner and did not act honestly, therefore taking the tractors subject to P's security interest. P alleged that D acquiesced in falsifying a retail order form so that it was made to indicate receipt of $16,000 in cash and the trade-in of two used tractors allegedly worth a total of $8,700, while in fact both D and Barnes knew that D had only paid the sum of $16,000 in cash, a sum far below the market value of the tractors. P alleged that the used tractors were never traded in on the new purchase. D then took the new tractors to Louisiana where he sold the same and converted the proceeds to his own use and benefit. P sought damages in the sum of $24,049.99 which was alleged to be the reasonable value of the tractors on the date of conversion. D claimed he was a BFP without any knowledge of any security interest held by P. The only issue before the court was whether D was a buyer of the tractors in the ordinary course of business. The court instructed the jury that the term 'buyer in ordinary course of business' means 'a person who in good faith and without knowledge that the sale to him is in violation of the ownership rights or security interest of the third party in the goods buys in the ordinary course from a person in the business of selling goods of that kind.' The court instructed the jury that by the term 'good faith' means 'honesty in fact in the conduct or transaction concerned.' D got the verdict and P appealed.