Kane v. Union State Bank
| Decision Date | 20 November 1964 |
| Docket Number | No. 3930,3930 |
| Citation | 384 S.W.2d 358 |
| Parties | David KANE, Appellant, v. UNION STATE BANK et al., Appellees. |
| Court | Texas Court of Appeals |
Levey & Goldstein, San Antonio, for appellant.
Clemens, Knight, Weiss & Spencer, Randle Taylor, Richard Tinsman, San Antonio, for appellees.
Union State Bank sued Bell construction Company, its partners and David Kane on promissory notes executed by them to the bank. Kane answered that the bank represented it had a 'valid' assignment of Bell's contract with San Antonio but that said assignment was invalid. He alleged the bank was negligent in accepting an invalid assignment and representing to Kane that it was valid; that said representation was material and he relied thereon; that if the bank had not been negligence in accepting an invalid assignment payment would have been made to the bank by San Antonio and Kane would not have had to pay the notes sued upon.
Aetna Insurance Company also sued Kane to recover on an indemnity contract the loss it sustained as a surety on Bell's bonds. It alleged that Kane and the Bells executed and delivered to it a general contract of indemnity agreeing to indemnify Aetna against all losses it sustained as a surety for Bell.
It was undisputed that Kane executed jointly with the Bells the notes sued upon by the bank. The amount of the unpaid balance was also undisputed. It was undisputed that Kane executed with the Bells the contract of indemnity sued upon by Aetna. The amount of Aetna's loss as a surety for Bell was also undisputed.
After the close of the evidence Aetnafiled a motion for an instructed verdict. It alleged that the evidence conclusively established that Kane executed the general contract of indemnity and Aetna sustained a loss of $54,730.31 as surety for Bell; that there was no competent evidence that the indemnity contract was to be effective only in the event Aetna executed a surety bond for Bell 'covering a construction job at Fort Sam Houston,' as alleged by Kane, becuse such an agreement violated the parol evidence rule and that there was no evidence that such an agreement was authorized by Aetna; that the evidence established as a matter of law that the unambiguous terms of the written general contract of indemnity executed and delivered by Kane to Aetna covered its loss and there was no competent evidence to vary its terms. The bank filed a motion for an instructed verdict alleging there was no evidence of fraud and that all of Kane's evidence relative to an alleged oral agreement varied the terms and conditions of the unambiguous written promissory notes sued upon, was incompetent, without probative force, and ineffective to change the tenor of the contracts sued upon. It moved to strike all of such testimony. That motion was sustained. The court sustained both motions for instructed verdicts, instructed the jury to render a verdict for the insurance company and the bank, which it did, and rendered judgment accordingly.
In the Bank's case, Kane requested the court to submit issues inquiring whether (1) the bank represented to Kane that the notes were secured by a valid assignment of Bell's contract with San Antonio; (2) such representation was material; (3) Kane relied upon it; (4) such representation was intended to induce Kane to execute the notes; (5) the representation was true; (6) the bank represented to Kane that all amounts due Bell by San Antonio would be paid by San Antonio to the bank; (7) the failure of the bank to require the city to make all payments due Bell to the bank was negligence and (8) a proximate cause of non-payment of the notes. In Aetna Insurance Company's suit, Kane asked the court to submit to the jury whether (9) Kane signed and delivered the contract of indemnity upon the oral condition that it would not be effective unless Aetna executed a particular bond securing a construction project at Fort Sam Houston. The court refused to submit any of said requested issues, sustained the motions for instructed verdicts, rendered judgment for the bank for the unpaid balance of the notes and for Aetna for the amount of its loss as a surety for Bell. Only Kane has appealed.
With reference to the judgment for the bank, Kane's points are that (1) since he alleged and introduced evidence that the bank represented that the notes were secured by a valid assignment of Bell's contract with San Antionio; that said assignment was not valid and that said representation was material and relied upon by him, said issues should have been submitted and the court erred in instructing a verdict for the bank; (2) that since Kane alleged and introduced evidence that the bank was negligent in not requiring San Antonio to make payments due Bell to said bank and that such negligence was a proximate cause of the failure to collect the notes, the court erred in failing to submit such issues to the jury.
Pertinent to the judgment for Aetna Insurance Company, Kane's points are (3) that, since he alleged and introduced evidence that he executed the indemnity contract upon condition that Aetna issue a surety bond 'covering a construction job at Fort Sam Houston' and that such a bond was not issued, the court erred in refusing to submit such issues; (4) that, since Kane alleged and introduced evidence that he executed the indemnity contract in consideration of Aetna's agreement to issue a surety bond 'for a construction job at Fort Sam Houston' and that such a bond was not executed there was failure of consideration and the court erred in failing to submit such issues to the jury.
We shall first consider Kane's complaint of the judgment in favor of Aetna. Aetna's suit against Kane was based upon an unambiguous written general contract of indemnity, executed and delivered by Kane to Aetna, wherein Kane agreed to indemnify Aetna against all losses it sustained as a surety on all bonds it executed for Bell until it was cancelled in accordance with its terms. It was undisputed that Aetna sustained a loss of $54,730.61 as a surety on Bell's bonds. The general contract of indemnity sued on by Aetna contained the following provisions:
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