R & P Enterprises v. LaGuarta, Gavrel & Kirk, Inc.
| Citation | 596 S.W.2d 517 |
| Decision Date | 26 March 1980 |
| Docket Number | No. B-8802,B-8802 |
| Parties | R & P ENTERPRISES, Petitioner, v. LaGUARTA, GAVREL & KIRK, INC., Respondent. |
| Court | Supreme Court of Texas |
DeLange, Hudspeth, Pitman & Katz, Eugene J. Pitman, Houston, for petitioner.
Sheinfeld, Maley & Kay, William A. Jackson and Thomas A. Collins, Houston, for respondent.
Petitioner, R & P Enterprises, brought this suit against LaGuarta, Gavrel & Kirk, Inc., for deficiency on a promissory note after a trustee's sale of land securing the note. The trial court granted the plaintiff's motion for summary judgment and denied the defendant's motion for summary judgment. The court of civil appeals reversed and remanded. 584 S.W.2d 587. We reverse the judgment of the court of civil appeals and affirm the judgment of the trial court.
R & P Enterprises was the payee and holder of a renewal promissory note made by LaGuarta, Gavrel & Kirk, Inc., hereinafter referred to as LaGuarta, for $699,726. By the terms of the note, the first two years' payments were for interest only, and it was secured by a vendor's lien on certain described real property. A deed of trust on this property was executed from LaGuarta to Eugene Pitman, trustee, which provided for a trustee's sale upon default. There was default on the note's first anniversary; the trustee sold the property at public sale to R & P Enterprises for $500,000; R & P then brought this suit for the deficiency, attorneys' fees, 10% interest from the note's maturity, and ad valorem taxes owing on the property.
R & P moved for a summary judgment with supporting proof, LaGuarta filed both a response and a cross motion for summary judgment. Both of LaGuarta's instruments alleged that the note unambiguously prohibited an action for a deficiency following a foreclosure sale. LaGuarta's response to the summary judgment also alleged that if the note was determined to be ambiguous an issue of fact as to its proper construction had been raised. The trial court granted R & P's motion for summary judgment and denied that of LaGuarta. The court of civil appeals held that the note was ambiguous and reversed and remanded the case to the trial court.
The pertinent paragraph of the note reads:
Notwithstanding any contrary terms expressed or implied by the provisions of this note, it is expressly stipulated and agreed that the maker shall have personal liability for payment of this promissory note for and during the period ending with the second anniversary of the date of said note, after which time, all obligatory payments having been made prior to said date, the maker shall have no personal liability for the payment of any balance owing upon this note, and the payee, or other owner and holder or holders of said note shall thereafter look solely to the enforcement of the liens securing the payment hereof for satisfaction of the balance owing hereon, it being expressly agreed that upon any enforcement of the liens securing payment hereof, the maker shall have no liability for any deficiency remaining unpaid or unsatisfied thereafter, should same fail to fully satisfy and pay the unpaid balance then owing.
It is the position of R & P, the petitioner, that all the language following "after which time" relates only to events occurring after the second anniversary of the note. The words preceding that phrase provides for personal liability of the maker if the default occurs within the first two years of the making of the note. The remainder of the paragraph provides that no personal liability exists if default occurred after two years. R & P concludes that since it is undisputed that default by LaGuarta occurred on the note's first anniversary LaGuarta is personally liable for the deficiency. It is the position of respondent LaGuarta that R & P, holder of the note, is barred as a matter of law by the terms of the quoted paragraph of the note from recovering a deficiency. The argument is that the phrase "it being expressly agreed that upon enforcement of the lien securing payment...
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