DLJ Properties/73 v. Eastern Sav. Bank

• Decision Date: 24 March 1977
• Docket Number: No. 4956,4956
• Citation: 549 S.W.2d 754
• Parties: DLJ PROPERTIES/73, Appellant, v. EASTERN SAVINGS BANK, Appellee.
• Court: Texas Court of Appeals

Page 754

549 S.W.2d 754

DLJ PROPERTIES/73, Appellant, v.EASTERN SAVINGS BANK, Appellee.

No. 4956.

Court of Civil Appeals of Texas, Eastland.

March 24, 1977.

Rehearing Denied April 28, 1977.

John W. Davidson, Terry Topham, Sawtelle, Goods, Davidson & Troilo, San Antonio, for appellant.

James D. Baskin, Jr., P. H. Swearingen, Jr., C. M. Montgomery, Matthews, Nowlin, Macfarlane & Barrett, San Antonio, for appellee.

McCLOUD, Chief Justice.

DLJ Properties/73, a New York limited partnership, sued Eastern Savings Bank, a New York corporation, in Bexar County, Texas, for specific performance and damages resulting from Eastern's failure to fund a permanent loan in connection with the construction of an apartment project in San Antonio, Bexar County, Texas.The suit is based upon a Tri-Party Agreement dated November 27, 1973, originally entered into by Richard C. Strauss of Dallas, Texas, as borrower; Cousins Mortgage and Equity Investments, a Georgia unincorporated business trust, as construction lender; and, The Bronx Savings Bank of New York, New York, as permanent lender.Strauss assigned all of his rights under the agreement to plaintiff, DLJ, however, Strauss remained personally liable for completing construction of the apartment project pursuant to the agreement.Strauss filed a plea of intervention seeking specific performance and damages against Eastern.The Bronx Savings Bank is one and the same corporation as Eastern Savings Bank.

Defendant was served under the Texas "Long Arm"Statute, Article 2031b, Vernon's Ann.Tex.Civ.Stat., and filed a special appearance as authorized in Rule 120a, T.R.C.P., for the sole purpose of objecting to the jurisdiction of the court.The trial court sustained defendant's contention and dismissed plaintiff's suit.We reverse and remand.

On April 2, 1973, prior to the Tri-Party Agreement, The Bronx Savings Bank, now doing business as Eastern Savings Bank, executed a commitment letter, subsequently amended, to Crawford-Strauss properties.This commitment was later issued to Richard C. Strauss, individually, by addendum.In the commitment, defendant agreed, subject to certain terms and conditions, to make a permanent first mortgage loan, "covering the fee simple title" to the San Antonio property, in an amount not to exceed $2,175,000.The commitment was incorporated into and made a part of the Tri-Party Agreement sued upon by plaintiff.The agreement provided that Strauss, owner of the land on which the apartments were to be located, desired to borrow money for the construction and permanent financing of a 184-unit apartment project, and that the construction of the apartments were to be in accordance with plans and specifications which had been approved by the construction lender and the permanent lender.In reliance upon the execution of the agreement the construction lender made a construction loan to Strauss.Defendant agreed, subject to the provisions of the Tri-Party Agreement, to buy from the construction lender the construction loan.

We must determine whether the nonresident defendant is amenable to process under the Texas "Long Arm" Statute, Article 2031b, supra, and if so, whether the exercise of personal jurisdiction over the defendant is consistent with the requirements of due process of law under the United States Constitution.Pizza Inn, Inc. v. Lumar, 513 S.W.2d 251(Tex.Civ.App. Eastland1974, writ ref. n.r.e.);Jetco Electronic Industries, Inc. v. Gardiner, 473 F.2d 1228(5th Cir.1973);Atwood Hatcheries v. Heisdorf & Nelson Farms, 357 F.2d 847(5th Cir.1966).

The Texas "Long Arm"Statute provides in Section (3) that a foreign corporation that engages in business in this state without maintaining a place of regular business in the state or a designated agent upon whom service may be made is deemed to have appointed the Secretary of State of Texas as agent upon whom service of process may be made in any suit arising out of such business done in this state.Section 4 provides:

"For the purpose of this Act, and without including other acts that may constitute 'doing business', any foreign corporation, joint stock company, association, partnership, or nonresident natural person shall be deemed doing business in this State by entering into contract by mail or otherwise with a resident of Texas to be performed in whole or in part by either party in this State, or the committing of any tort in whole or in part in this State."

The defendant entered into a contract with a Texas resident, Richard C. Strauss, which was to be performed in part by either Strauss or the defendant in Texas.The commitment...