An attorney called me last week to ask what her client, a trainer, should do about a prospective buyer who had picked up a horse from the trainer to "try out" but failed to bring the horse back after the trial period. The trainer had been hired by the horse’s owner to find a buyer for the horse. After months of trying to make contact with the prospective buyer, the trainer finally made contact to learn that the horse had allegedly died of colic while in the prospective buyer’s care. There were no written agreements between the owner and trainer or owner/trainer and prospective buyer.
The first thing I asked was whether they called the police or sheriff when the horse was not returned. In potential theft situations, it is always advisable to call law enforcement and get a copy of their report. I also suggested a bit of investigative work to determine if the horse was, in fact, dead. They had called the vet the prospective buyer usually uses, but the vet had no record of seeing the horse. I suggested that they send a letter to the prospective buyer asking for proof that the animal was euthanized and asking him to pay the asking price for the horse. The next step was to file suit if he did not pay (I suggested that she make the trainer and owner joint plaintiffs).
Under Texas law, the trainer and owner in this situation have a colorable claim for conversion and theft under the Texas Theft Liability Act (the "TTLA") against the potential buyer. People with ownership or possessory rights have standing on both claims. And assuming the trainer spent money to take care of the horse while in her care and was going to get a commission on the sale, the damages element is also satisfied as to the trainer. Attorneys’ fees and costs are recoverable by the prevailing party under the TTLA.
Is the trainer liable to the owner in this situation? The trainer would only be liable to the owner under the “principal-agent” theory if the trainer acted without actual authority when she gave the horse to the prospective buyer to try out.
What’s the lesson here? The trainer and owner would have been in a better position if they had obtained a written agreement with the prospective buyer containing a "risk of loss" provision, whereby the prospective buyer would agree to pay the owner if the horse died or was injured in the prospective buyer’s care. The trainer could have also required the prospective buyers to make payment in escrow for the horse, and agreed to return the money if and when the horse was returned.