Hernandez v. Bexar County Nat. Bank of San Antonio

• Decision Date: 17 April 1986
• Docket Number: No. 13-85-306-CV,13-85-306-CV
• Parties: 2 UCC Rep.Serv.2d 759 Dr. Roger HERNANDEZ, Appellant, v. BEXAR COUNTY NATIONAL BANK OF SAN ANTONIO, Appellee.
• Court: Texas Court of Appeals

Page 684

710 S.W.2d 684

2 UCC Rep.Serv.2d 759

Dr. Roger HERNANDEZ, Appellant, v. BEXAR COUNTY NATIONAL BANK OF SAN ANTONIO, Appellee.

No. 13-85-306-CV.

Court of Appeals of Texas,

Corpus Christi.

April 17, 1986.

Rehearing Denied June 5, 1986.

Warren Weir, Weir & Alvarado, San Antonio, for appellant.

James R. Cliffe, Robert Etlinger, San Antonio, for appellee.

Before NYE, C.J., and BENAVIDES and KENNEDY, JJ.

OPINION

BENAVIDES, Justice.

Republic Bank San Antonio, National Association (formerly Bexar County National Bank) sued Dr. Roger Hernandez on his contract to guarantee the repayment of loans made by the Bank to Lotus Southwest, Inc. Hernandez appeals the trial court's judgment in favor of the Bank and the court's denial of his counterclaim for fraud. The Bank cross-appeals for attorney's fees and interest. We reverse the judgment in favor of the bank, and affirm the remainder of the trial court's judgment.

Hernandez, Robert Smith, and R. Larry Thompson signed an agreement to guarantee the repayment of loans (up to $144,900.00) to be made by the Bank to Lotus Southwest, Inc., a corporation formed by Smith to sell Lotus automobiles. Hernandez's liability, however, was specifically limited to "one-third ( 1/3) of the outstanding principal balance of the above amount."

Lotus Southwest defaulted on two notes totalling $78,520.00. The Bank then repossessed six Lotus automobiles, which represented the remaining collateral for the loans. The Bank and Thompson (one of the guarantors) worked out an arrangement for Thompson to pay two-thirds of the amount due. The Bank then released the collateral to Thompson and sued Hernandez for the remaining one-third of the amount due on the notes. Thompson eventually sold the automobiles for $21,500.00, which was credited to the balance due on the notes.

Hernandez denied liability and counterclaimed against the Bank for, among other things, fraud and impairment of collateral. At Hernandez's request, the court joined, as co-defendants, Smith, Thompson, Lotus Southwest, and Vance Graham (the Bank's officer who had been involved in the negotiations between the parties to the guaranty agreement). Hernandez then filed a third-party complaint against these four new parties, alleging fraud and contribution rights.

The case was tried before a jury. At the conclusion of the evidence, the court granted an instructed verdict denying Hernandez's claims against Smith, Graham, Thompson, and Lotus Southwest. The court's judgment on the verdict credited Hernandez with one-third of the sale price of the released collateral and gave the Bank judgment against Hernandez for $19,006.66 [one-third of ($78,520.00 minus $21,500.00) ]. The Bank's request for attorney's fees and interest, which it claimed were due under the guaranty agreement, was denied.

Hernandez raises fourteen points of error on appeal. Some of these points are not argued or are scarcely argued, and either contain no authority or contain one or two authorities which are not on point.

Hernandez's fifth, sixth and seventh points of error are stated, restated and presented together with two short paragraphs which neither present nor direct argument nor contain any citation of authority. Points of error not supported by arguments and authorities are waived. See Leckey v. Warren, 635 S.W.2d 752, 753 (Tex.App.--Corpus Christi 1982, no writ) and authorities cited therein. We overrule Hernandez's fifth, sixth and seventh points of error.

Hernandez's second and eighth points are very similar. In his second point of error, Hernandez cites Tanenbaum v. Economics Laboratory, Inc., 628 S.W.2d 769 (Tex.1982), and asserts that the Bank impaired the collateral underlying the contract of guaranty by releasing the Lotus automobiles to Thompson. Hernandez apparently argues that since he did not receive notice of this disposition of the collateral, the Bank improperly "impaired" the collateral and so released Hernandez from his liability. However, in his eighth point of error, Hernandez complains of the trial court's granting a deficiency judgment because of the Bank's failure to give notice to him of its disposition of the repossessed collateral. He cites Tanenbaum for support of his second point, and both Tanenbaum and TEX.BUS. & COM.CODE ANN §§ 9.504, 9.505 (Vernon Supp.1986), for support of his eighth point. Tanenbaum is authority for the proposition that notice of disposition to the debtor must be given, under Section 9.504, before a creditor can sue for a deficiency. The Bank did not allege or prove that it provided notice of the sale of the secured items to Hernandez pursuant to Section 9.504(c). The Bank does not deny that it made a disposition of the collateral to Thompson without notice to Hernandez. It argues on appeal (as it did in its response to appellant's motion for judgment) that it did not sell the collateral, that the notice requirement of Section 9.504(c) does not extend to a guarantor, and that the contract of guarantee provided that the bank could release the collateral. The Bank cites Roylex, Inc. v. E.F. Johnson Co., 617 S.W.2d 760 (Tex.Civ.App.--Houston [14th Dist.] 1981, no writ) and Schubiger v. First Newport Realty Investors, 601 S.W.2d 218 (Tex.Civ.App.--Dallas 1980, writ ref'd, n.r.e.). Schubiger involves realty and not consumer goods or collateral under TEX.BUS. & COMM.CODE ANN. Article 9. Roylex was decided before Tanenbaum and was expressly disapproved by Tanenbaum, 628 S.W.2d at 771.

Hernandez, as a guarantor of a secured transaction, is a debtor under Section 9.504, and suit is barred absent notice to the debtor. Peck v. Mack Trucks, Inc., 704 S.W.2d 583 (Tex.App.--Austin, 1986, no writ); Gentry v. Highlands State Bank, 633 S.W.2d 590 (Tex.App.--Houston [14th Dist.] 1982, writ ref'd). While the guarantee may have purported to waive notification, we agree with the reasoning of the Austin Court in Peck that a guarantor of a secured transaction may not waive his rights to notice of sale or disposition under Section 9.504 prior to default. Since the Bank did not give Hernandez notice of its intended disposition of the collateral, his eighth point of error is sustained. To the extent his second point of error tracks his eighth point, it too is sustained. ¹

Hernandez's eleventh point of error and part (e) [there is no part (d) ] of his thirteenth point of error complain of the Bank's failure to introduce a balance sheet into evidence. In his eleventh point, Hernandez complains that the trial court failed to instruct the jury that no balance sheet existed when, during deliberations, the jury allegedly asked the trial court whether a balance sheet existed. Hernandez does not cite to the page in the record where the jury's question and the judge's answer can be found, nor are we able to find such an exchange; there is thus no error for us to address. In point of error number 13(e), Hernandez refers to an incident which supposedly occurred during closing argument, where the Bank's counsel allegedly referred to a nonexistent balance sheet. Appellant did not request the jury argument to be included in the record for this Court's review. He has therefore waived any error involving jury argument. See Hydro-Line Manufacturing Co. v. Pulido, 674 S.W.2d 382 (Tex.App.--Corpus Christi 1984, writ ref'd n.r.e.); TEX.R.CIV.P. 413. We overrule his eleventh point and part (e) of his thirteenth point.

Parts (a), (b) and (c) of Hernandez's thirteenth point of error assert three reasons why the trial court erred in admitting into evidence the two notes representing Lotus Southwest's debt to the Bank. In part (a), Hernandez argues that the notes were inadmissible because they were hearsay, because they amounted to a conclusion rather than being competent evidence, and because they denied him due process since notes cannot be cross-examined. He made none of these objections at trial but only objected on the ground that he had not received notice of the Bank's intent to introduce them. Hernandez may not raise on appeal objections not voiced at trial. See, e.g., PGP Gas Products, Inc. v. Fariss, 620 S.W.2d 559 (Tex.1981); O'Shea v. Coronado Transmission Co., 656 S.W.2d 557 (Tex.App.--Corpus Christi 1983, writ ref'd n.r.e.). In any event, no error is shown. Part (b) argues that the Bank did not prove up its account by competent accounting evidence. Hernandez does not explain what he means by "competent accounting evidence" and does not cite any authority, except for a case dealing with summaries of voluminous records, which is not on point. Part (c) alleges that the trial court erred in not forcing the Bank to deliver its entire file to Hernandez. The court did, however, grant Hernandez's request that the Bank turn over to him everything it had in its file concerning the notes, and the Bank's attorney testified that he complied with that order. We find no indication that the Bank violated the order. We overrule Hernandez's thirteenth point of error.

Hernandez's first point of error...