Craftworld Interiors Inc v King Enterprises Inc [2000] GUSC 19; 2000 Guam 17 (2 June 2000)

IN THE SUPREME COURT OF GUAM

CRAFTWORLD INTERIORS, INC.,
Plaintiff-Appellant

vs.

KING ENTERPRISES, INC.,
Defendant-Appellee.

OPINION

Supreme Court Case No.: CVA97-043
Superior Court Case No.:CV0914-94

Filed: June 2, 2000

Cite as: 2000 Guam 17

Appeal from the Superior Court of Guam
Argued and submitted May 7, 1998
Remanded June 25, 1998
Resubmittted May 25, 1999
Hagåtña, Guam

For Plaintiff-Appellant: William C. Bischoff, Esq. 134 Chalan Santo Papa, Suite 202 Hagåtña, Guam 96910

For Defendant-Appellee: Ana Maria G. Gabriel, Esq. Gayle & Teker A Professional Corp. 330 Hernan Cortes Ave., Suite 200 Hagåtña, Guam 96910

BEFORE: BENJAMIN J. F. CRUZ, Chief Justice[1]; PETER C. SIGUENZA and, JANET HEALY WEEKS[2]; Associate Justice.

CRUZ, J.:

[1] The Appellant, Craftworld Interiors, Inc. (hereinafter ACraftworld@), and the Appellee King Enterprises, Inc. (hereinafter AKing@), entered into an agreement, the nature of which was the dispute in this case. Craftworld raises the following issues on appeal: (1) whether the trial court erred in its factual findings, and (2) whether the trial court erred in allowing the introduction of parol evidence to explain or supplement the terms of the agreement between the parties. We determine that the trial court did not err in its factual findings and that the parol evidence was appropriately introduced.

FACTUAL AND PROCEDURAL BACKGROUND

[2] Craftworld, a manufacturer of rattan furniture among other goods, entered into an agreement with King, a furniture retailer, regarding some rattan furniture. Craftworld filed a complaint on June 21, 1994 after King stopped payment on a check issued to Craftworld as a result of that agreement regarding the rattan furniture. An oral agreement was entered into by the parties via Craftworld's and King's presidents, James Uy and Taro Lin[3], respectively, for the sale of furniture. The dispute is whether the agreement was an outright sale of the goods or a consignment agreement.

[3] Initially, Craftworld began to sell its furniture out of one of Lin's furniture stores, but then the parties subsequently made the agreement which is now the subject of this litigation to have King sell the goods for Craftworld. Eight (8) invoices were prepared by Neri Fernandez, the manager for King's store, listing the merchandise and prices totaling $49,466.80. Each invoice was signed by Fernandez and under his signature it is noted, AReceived the above goods in good order and condition and agree with the terms and conditions.@ Craftworld claims that this transaction was an outright sale of the furniture to King. Two post-dated checks were issued by King to Craftworld, one for 90 days and the other for 180 days following the date of the agreement, November 30, 1993. Two days after receiving the checks, Uy delivered to King a ACash/Charge Sales Invoice.@ No one at King ever signed that document. The first check was cashed and cleared. However, King stopped payment on the second check after it claimed they were unable to sell the furniture.

[4] A bench trial was held on June 10, 1996 and Craftworld attempted to exclude any evidence of a consignment sale as inadmissible parol evidence.[4] Craftworld also contended that it was a holder in due course of the second unpaid check. The trial court ruled in favor of King finding that Craftworld was not a holder in due course, that the parol evidence rule did not bar the introduction into evidence of oral agreements relating to the transaction, and that the doctrine of course of dealing established that the agreement was actually a consignment. The Judgment was entered and dated September 23, 1997, and a timely notice of appeal was immediately filed.