Tousley-Bixler Construction Co. v. Colgate Enterprises, Inc.

429 N.E.2d 979 · Indiana Court of Appeals · 1982

Facts

Tousley-Bixler Construction Co. needed clay for a sanitation project and agreed to purchase it from Colgate Enterprises, Inc.'s property. After a purchase order was exchanged, Tousley-Bixler attempted to cancel due to a dispute over brush removal, but Colgate insisted the agreement stood. Tousley-Bixler failed to remove the clay, leading Colgate to sue for breach, and the trial court instructed the jury using both common law and UCC provisions.

Procedural history

Colgate Enterprises, Inc. brought an action against Tousley-Bixler Construction Co., Inc. for breach of agreement. The trial court instructed the jury under both common law and the UCC, and the jury returned a verdict of $42,500 in favor of Colgate. Tousley-Bixler appealed this verdict, arguing the trial court erred in applying the UCC. This court reversed the trial court's decision and remanded the case for a new trial.

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 by the buyer, was not a "sale of goods" within the meaning of UCC § 2-107?

Holding

Yes, the trial court committed reversible error. The court reversed the jury verdict and remanded for a new trial, concluding that the sale of clay to be severed by the buyer was not a sale of goods under the UCC.

Rule

Under UCC § 2-107(1), a contract for the sale of minerals or the like to be removed from realty is a contract for the sale of goods only if they are to be severed by the seller. If the buyer is to sever, such transactions are considered contracts affecting land, not goods.

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Case brief last reviewed 2026-04-18. Prepared by CaseReader from the published opinion.