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The Grocers Supply Company v. Intercity Investment Properties, Inc.

795 S.W.2d 225 (1990)

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The Grocers Supply Company v. Intercity Investment Properties, Inc.

Texas Court of Appeals

795 S.W.2d 225 (1990)

Facts

In February 1989, the Grocers Supply Company, Inc. (Grocers Supply) (plaintiff) was granted and perfected a security interest in the inventory of Grocery Store, Inc. (Grocery). The security agreement provided that a judgment against Grocery or any levy of the collateral would constitute a default, resulting in the immediate acceleration of the entire debt at Grocers Supply’s option. In March 1989, a $36,000 judgment was entered against Grocery in the favor of Intercity Investments Properties, Inc. (Intercity) (defendant). Thereafter, Intercity obtained writs of execution on the judgment. The constable levied the writs on Intercity’s behalf, taking possession of Grocery’s inventory and equipment. Although Intercity knew of Grocers Supply’s prior recorded security interest in the property, Intercity did not attempt to notify Grocers Supply before levying on the property. When Grocers Supply became aware of Intercity’s actions, Grocers Supply brought an action for a determination of rights in the property. The trial court awarded possession to Grocers Supply of the property seized from Grocery, as well as a judgment against Intercity for the transportation and storage expenses incurred by Grocers Supply in connection with regaining possession of the property. Intercity appealed.

Rule of Law

Issue

Holding and Reasoning (Cannon, J.)

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