International Shelters v. Corpus Christi St. N. Bank

• Decision Date: 30 December 1971
• Docket Number: No. 664,664
• Citation: 475 S.W.2d 334
• Parties: INTERNATIONAL SHELTERS, INC., Appellant, v. CORPUS CHRISTI STATE NATIONAL BANK, Appellee.
• Court: Texas Court of Appeals

Page 334

475 S.W.2d 334

INTERNATIONAL SHELTERS, INC., Appellant, v. CORPUS CHRISTI STATE NATIONAL BANK, Appellee.

No. 664.

Court of Civil Appeals of Texas,

Corpus Christi.

Dec. 30, 1971.

Schenk & Wesbrooks, Milton E. Douglass, Jr., Wichita Falls, for appellant.

Kleberg, Mobley, Lockett & Weil, Henry Nuss, III, Corpus Christi, for appellee.

OPINION

BISSETT, Justice.

This is a suit on a promissory note. On Autust 13, 1970, International Shelters, Inc., as maker, executed a promissory note to Corpus Christi State National Bank, as payee, in the original sum of $282,819.64, due ninety days after date, with interest thereon as therein specified.

The note was not paid at maturity. Suit was instituted and the bank filed a motion for summary judgment, which was granted by the trial court. Under the judgment entered, Corpus Christi State National Bank (hereinafter called appellee) recovered of International Shelters, Inc. (hereinafter called appellant) the sum of $331,884.05, plus interest as therein provided. Appellant has timely perfected its appeal to this Court. We affirm.

The note obligated appellant to pay 'fifteen per cent additional on full amount due if placed in the hands of an attorney for collection or if suit is brought on same'. Appellee in its petition alleged that the note was past due and unpaid; that the amount then due thereon was $288,590.05, exclusive of attorney's fees; that it had placed said note in the hands of its attorneys for collection; that it had agreed to pay them the 15% Attorney's fees stipulated in the note; and, that the attorney's fees amounted to $43,288.51 and were reasonable. A photographic copy of the note, alleged to be a true copy thereof, was attached to the petition, marked Exhibit 'A' and incorporated by reference in appellee's pleading for all purposes.

Appellant's answer consisted of a general denial only. It did not file any special exceptions to appellee's pleadings nor did it plead any affirmative defenses to the action filed by appellee.

Appellee supported its motion for summary judgment with two affidavits of William C. Clark, a Vice President of appellee bank. Appellant filed three affidavits in opposition to appellee's motion for judgment, two of which were executed by attorneys and the other was executed by Ruble Langston, President of appellant corporation. Mr. Clark, in his first affidavit, certified that the promissory note attached to appellee's petition as Exhibit 'A' 'to be a true and correct copy of the original note'. He stated therein that appellee had agreed to pay its attorneys the attorney's fees stated in its pleading and that such fees are reasonable under all the circumstances. Appellant countered with affidavits by Mr. Joe E. Shaddock and by Mr. H. Dustin Fillmore, each a practicing attorney in this State, wherein each affiant stated that upon a suit on a promissory note $288,590.05 attorney's fees in the amount of $43,288 .51 are unreasonable, that an officer of appellee orally agreed to modify the terms of the note, and that appellee failed to credit appellant and the note with all of the payments that had been made. Mr. Clark, in his second affidavit, stated that a payment of $5,000.00 was made on November 13, 1970, and that the balance, including principal and interest, as of January 13, 1971, amounted to $288,590.05.

Appellant's first and third points of error assert that the trial court erred in granting appellee's motion for summary judgment in that there is a genuine issue of material fact regarding reasonableness of attorney's fees and a general issue of fact regarding partial payments on the note.

Again, we note that appellant filed a general denial only. Appellant did not file any pleadings raising the affirmative defenses of unreasonableness of attorney's fees or of partial payment on the note. Appellant attempts to ruge affirmative defenses for the first time via affidavits in a summary judgment proceeding. This cannot be done. The general rule is that an affirmative defense must be both pled and supported by evidence to make out a fact issue. Texas State Board of Registration for Professional Engineers v. Trimble, 366 S.W.2d 124 (Tex.Civ.App.--El Paso, 1963, writ ref'd n.r.e.); Fisher v. Howard, 389 S.W.2d 482, 486 (Tex.Civ.App.--Dallas 1965, n.w.h.).

The affirmative defense of unreasonableness of attorney's fees must be both pled and proved. This is supported by numerous authorities. In Gardner v. Associates Investment Co., 171 S.W.2d 381 (Tex.Civ.App.--Amarillo 1943, writ ref'd w.o.m.), where the attorney's fees of 15% As specified in the note were allowed, the Court held:

'. . . There was neither pleading nor proof upon the part of appellant that such attorney's fees were unreasonable and thus no issue was presented on this question. This seems to be a matter of affirmative defense, the appellee not being required to offer proof on the issue. . . .' (citing authorities).

Sec also Capps v. Huff, 427 S.W.2d 121 (Tex.Civ.App.--Eastland 1968, n.w.h.); Rychener v. McGuire, 66 S.W.2d 413 (Tex.Civ.App.--San Antonio 1933, n.w.h.); 9 Tex.Jur.2d, Bills and Notes, § 365, p. 401.

In the absence of pleading and proof that the amount of attorney's fees expressed in a promissory note is unreasonable, proof of the reasonableness of the percentage that the maker and payee have fixed by contract is not required. Blankenship v. Citizens State Bank, Slaton, 457 S.W.2d 120 (Tex.Civ.App.--Eastland 1970, writ ref'd n.r.e.); Pine v. Gibraltar Savings Association, 427 S.W.2d 714, 718 (Tex.Civ.App.--Houston 1st 1968, n.w.h.); Kost Furniture Co. v. Los Angeles Period Furniture Co ., 147 S.W.2d 862 (Tex.Civ.App.--Galveston 1941, writ dism'd, jud.cor .).

In Kuper v. Schmidt, 161 Tex. 189, 338 S.W.2d 948 (1960), the trial court granted summary judgment in favor of the holder of a delinquent promissory note, including the 10% Attorney's fees specified in the note. The Supreme Court said:

'It is now settled that as between the legal owner and holder of a promissory note and those who are obligated to pay the same, the former is prima facie entitled to recover the attorney's fees stipulated therein upon the happening of the contingency which makes the same payable. In the absence of an issue affirmatively tendered by the defendant, it is not necessary for the plaintiff to prove an agreement to pay such fee to an attorney or that the same is reasonable. . . .'

In Southwestern Fire & Casualty Co. v. Larue, 367 S.W.2d 162 (Tex.Sup.1963), where payment was not pleaded as an affirmative defense in an action on a promissory note, the opinion states:

'Similarly, Rule 94 provides that other affirmative defenses including that of payment, fraud, release, and the statute of limitations must be affirmatively pleaded. Under Rule 94 and Rule 95, payment is thus an affirmative defense on which the defendant has the burden of proof, which must be specially pleaded, and may not be shown under a general denial.' (citing authorities)

In the case now before us the note stipulated 15% Of the full amount due as attorney's fees in the event of default and suit is filed. Appellee affirmatively pled and proved that it had agreed to pay the 15% So specified as attorney's fees. Fifteen percent of the full amount alleged and proved to be due is $43,288.51. If appellant expected to defeat the motion for summary judgment by showing genuine issues of fact with respect to reasonableness of attorney's fees or partial payment on the note, it was incumbent on it to first affirmatively plead these defenses. This it did not do. Appellant's first and third points of error are overruled.

Appellant, by its second point, contends that appellee's affidavits in support of its motion for summary judgment are insufficient because (a) the affiant had no personal knowledge of the reasonableness of attorney's fees, (b) the affiant was an interested party, (c) papers referred to in the affidavits were not attached or served therewith, and (d) the affidavits 'were not properly sworn to'.

We have already disposed of the contention made in section (a) of appellant's second point. With respect to the evidence from interested witnesses, the Supreme Court, in Great American Reserve Insurance Company v. San Antonio Plumbing Supply Company, 391 S.W.2d 41, 47 (Tex.Sup.,1965), held:

'. . . If such uncontradicted evidence is from an interesed witness, it cannot be considered as doing more than raising an issue of fact, unless it is clear, direct and positive and there are no circumstances in evidence tending to discredit or impeach such testimony. . . .'

To us, the summary judgment evidence by way of the affidavits of William A. Clark, an interested witness for appellee, is clear, direct and positive. An examination of the affidavits of Mr. Clark reveals that he was a Vice President of the appellee bank and was cognizant of the facts stated in each affidavit. We believe that his affidavits show that he was competent to testify to the matters stated therein. Kellum v. Pacific National Fire Ins. Co., 360 S.W.2d 538 (Tex.Civ.App.--Dallas 1962, writ ref'd n.r.e.). The record does not show that there are any circumstances in evidence that tends to impeach such evidence. A number of summary judgments have been upheld upon affidavits from interested witnesses. See Lotspeich v. Chance Vought Aircraft, 369 S.W.2d 705 (Tex.Civ.App.--Dallas 1963, writ ref'd n.r.e.); Nagelson v. Fair Park National Bank, 351 S.W.2d 925, 931 (Tex.Civ.App.--Dallas 1961, writ ref'd n.r.e.); B & B Pharmacy and Drug, Inc. v. Lake Air National Bank of Waco, 449 S.W.2d 340 (Tex.Civ.App.--Waco 1969, writ dism'd). The affidavits of William A. Clark were properly considered by the trial court.

In the instant case, the promissory note was not attached to the affidavits. A photographic copy of the note was attached to and incorporated in appellee's original petition and in its first amended original...