Tousley-Bixler Construction Co. v. Colgate Enterprises, Inc.
429 N.E.2d 979 · Indiana Court of Appeals · 1982
Facts
Tousley-Bixler, a construction company, contracted to purchase clay soil from Colgate's property for a sanitation project. The agreement stipulated that Tousley-Bixler, the buyer, would be responsible for removing the clay. A dispute arose over additional terms and brush removal, leading Tousley-Bixler to attempt cancellation, but they ultimately failed to remove any clay. Colgate sued for breach, and the trial court instructed the jury using both common law and Uniform Commercial Code (UCC) provisions, resulting in a verdict for Colgate.
Issue
Did the trial court commit reversible error by instructing the jury under the Uniform Commercial Code (UCC) when the sale of clay soil, which was to be severed from the realty by the buyer, did not constitute a 'sale of goods' within the meaning of UCC § 2-107(1)?
Holding
Yes, the trial court committed reversible error by giving conflicting jury instructions based on the UCC. The court held that the sale of clay to be severed by the buyer was not a sale of goods under UCC § 2-107(1), and therefore, the UCC instructions were inappropriate. The case was reversed and remanded for a new trial.
Rule
Under UCC § 2-107(1), a contract for the sale of minerals or the like to be removed from realty is considered a 'sale of goods' only if the seller is to sever them. If the buyer is responsible for severance, the transaction is treated as a contract affecting land, not a sale of goods under the UCC.
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