Kneip v. Unitedbank-Victoria
| Decision Date | 30 June 1987 |
| Docket Number | A,No. 13-86-291-CV,UNITEDBANK-VICTORI,13-86-291-CV |
| Citation | 734 S.W.2d 130 |
| Parties | Cecil E. KNEIP, Sylvia A. Kneip and Gary Kneip, Appellants, v.ppellee. |
| Court | Texas Court of Appeals |
Ken Mackey, Austin, for appellants.
Mark D. Wilson, Houston, for appellee.
Before NYE, C.J., and KENNEDY and DORSEY, JJ.
Appellants, Cecil and Sylvia Kneip and their son, Gary, sued Unitedbank-Victoria for fraudulently inducing them to enter into a loan agreement with the bank. The bank counterclaimed for recovery on the promissory note issued by the Kneips in exchange for the loan from the bank, and for foreclosure on the deed of trust securing the loan. The Kneips received favorable jury findings on all special issues. However, the trial court disregarded the jury's findings concerning the bank's counterclaim and entered judgment that the Kneip's recovery for fraud be offset by the amount of the bank's loan to them. The result was a judgment that the Kneips pay $47,546.55 to the bank, and that the deed of trust in favor of the bank would remain in effect. Both parties appeal.
The Kneips owned and operated a small business which was liquidated in 1983. After selling all its assets, the business still owed the bank over two hundred thousand dollars which it could not repay. This debt was unsecured, although Cecil and Gary Kneip were personal guarantors for the full amount that their company owed to the bank.
Unable to satisfy this debt, the Kneips and Tom Tyng, president of the bank, worked out the following deal. The bank loaned $269,000.00 to Cecil and Sylvia Kneip, which Gary Kneip personally guaranteed to be repaid. They immediately used this new loan to pay off the amount owed to the bank by their family business.
The parties dispute the remaining terms of the deal. The bank stands by the written provisions of the promissory note and deed of trust. The deed of trust provides that the new loan is secured by an undeveloped sixty-acre tract of land owned by Cecil and Sylvia Kneip. Tyng admitted that the net effect of the new transaction was that the bank was no longer an unsecured creditor, but was now a secured one. 1
All three Kneips testified that they had an oral agreement with Tyng that the bank would never actually look to the sixty-acre tract for repayment of the loan. 2 The Kneips contend that Tyng agreed, on behalf of the bank, that the sole collateral for the new loan was to be Cecil Kneip's life insurance policies proceeds, totalling $500,000.00, that the bank would pay the premiums as they came due, and that the listing of the sixty acres as collateral in the deed of trust was merely to appease government bank examiners. They also contend that Tyng promised that the note and accumulated interest would be automatically renewed at the end of each year, until Cecil died, when the life insurance proceeds would be used to satisfy the debt.
Tyng denied making these oral agreements but admitted that he orally committed the bank to paying several of Cecil Kneip's monthly insurance premiums, which the bank did in fact pay. When a new bank president replaced Tyng, he refused to abide by the supposed oral agreement and demanded that the Kneips begin making payments, whereupon the Kneips brought this suit for fraud.
The Kneips bring three points of error. Their first and second points of error complain that the trial court improperly disregarded the jury's answers concerning the Kneips' defense of estoppel to the bank's counterclaim for recovery on the promissory note and for foreclosure under the deed of trust.
The parties actually argue in terms of "promissory estoppel," which is merely one type of equitable estoppel or estoppel in pais. Promissory estoppel is not applicable in the case at bar for two reasons. First, the elements of promissory estoppel were not submitted to the jury. See Fretz Construction Co. v. Southern National Bank, 626 S.W.2d 478, 480 (Tex.1981). Second, promissory estoppel is ordinarily unavailable where, as here, a written contract between the parties exists which governs the subject matter of the promise. See Wheeler v. White, 398 S.W.2d 93, 97 (Tex.1965). However, as we note below, the Court did properly instruct the jury on the elements of equitable estoppel in general.
By its answer to Special Issue No. 7, the jury found that the bank represented to the Kneips that it would look only to the life insurance proceeds, and not to the sixty acres of land, for repayment of the note. By Special Issues Nos. 8 and 9, the jury found that the bank was estopped from foreclosing on the land under the deed of trust and from recovering from Gary Kneip under his personal guarantee. The trial court disregarded these findings and entered judgment that the bank recover on its counterclaim for the debt and that the deed of trust would remain in full force and effect.
A trial court may disregard only those special issue findings which are immaterial or which have no support in the evidence. Eubanks v. Winn, 420 S.W.2d 698, 701 (Tex.1967); Mail Box, Inc. v. Communicators, Inc., 703 S.W.2d 783, 784 (Tex.App.--Corpus Christi 1985, no writ); Tex.R.Civ.P. 301. Clearly, the estoppel findings were material to the Kneips' defense to the bank's counterclaim and are amply supported by the evidence. However, estoppel is an equitable question, and it is not for the jury to determine the expediency, necessity, or propriety of equitable relief. State v. Texas Pet Foods, Inc., 591 S.W.2d 800, 803 (Tex.1979); Merrick v. Evergreen Helicopters, Inc., 649 S.W.2d 807, 808 (Tex.App.--Corpus Christi 1983, no writ) (injunction cases); Tex.R.Civ.P. 693 (injunctions). Rather, only ultimate issues of fact should be submitted to the jury on equitable issues. Texas Pet Foods, Inc., 591 S.W.2d at 803.
The purpose of estoppel is to prevent inconsistency and fraud resulting in injustice, and to protect those who have been misled by that which on its face was fair. Kuehne v. Denson, 148 Tex. 54, 219 S.W.2d 1006, 1009 (1949); see also Roberts v. Haltom City, 543 S.W.2d 75, 80 (Tex.1976). The trial court in the instant case properly instructed the jury in its charge on the elements of equitable estoppel, then globally submitted the question of estoppel to the jury. The elements of estoppel are: (1) a false representation or concealment of material facts; (2) made with knowledge of the facts; (3) the party to whom it was made must have been without knowledge or the means of knowledge of the real facts; (4) it must have been made with the intention that it should be acted on; and (5) the party to whom it was made must have relied or acted on it to his detriment. Traylor v. Gray, 547 S.W.2d 644, 652 (Tex.Civ.App.--Corpus Christi 1977, writ ref'd n.r.e.).
While we find ample evidence to support the jury's implicit findings that the elements of estoppel were satisfied, we are also aware that the imposition of the estoppel doctrine is ultimately a question of law for the trial court, exercising its chancery powers. Alamo Title Co. v. San Antonio Bar Association, 360 S.W.2d 814 (Tex.Civ.App.--Waco 1962, writ ref'd n.r.e.); see Jones v. English, 268 S.W.2d 686 (Tex.Civ.App.--San Antonio 1954), aff'd, 154 Tex. 132, 274 S.W.2d 666 (1955). Whether to impose the equitable remedy of estoppel is a question to be determined by the trial court, applying established principles of equity, with which the jury is not presumed to be familiar. See Jones v. English, 268 S.W.2d at 690. Without a showing that inequity resulted, the judgment of the trial court should not be disturbed. Nilsen v. Bonugli, 220 S.W.2d 178, 180 (Tex.Civ.App.--San Antonio 1949, no writ); see Foust v. Hanson, 612 S.W.2d 251, 253 (Tex.Civ.App.--Beaumont 1981, no writ); Scott v. Scott, 347 S.W.2d 288, 290 (Tex.Civ.App.--Waco 1961, writ ref'd n.r.e.). The trial court perceived that the most equitable result was to allow the bank to maintain its right to collect the amount of the note and retain its security interest in the appellants' real property. We overrule the Kneips' first and second points of error.
The Kneips complain in their third and final point of error that the trial court erred in failing to award them prejudgment interest on their damages. Cavnar v. Quality Control Parking, Inc., 696 S.W.2d 549 (Tex.1985). However, because the Kneips did not specifically plead for prejudgment interest, they have waived their right to complain on appeal. Benavides v. Isles Construction Co., 726 S.W.2d 23 (Tex.1987) (); Texas Industries, Inc. v. Lucas, 715 S.W.2d 683, 686-87 (Tex.App.--Houston [14th Dist.] 1986, writ requested) (); Merit Drilling Co. v. Honish, 715 S.W.2d 87, 94 (Tex.App.--Corpus Christi 1986, writ ref'd n.r.e.). The Kneips third point of error is overruled.
The bank raises nine points of error on appeal. The first seven concern the jury's award of damages to the Kneips.
The jury awarded the following damages:
1) For "pecuniary loss proximately caused by" the Bank's conduct:
Cecil Kneip: $40,000.00
Sylvia Kneip: $40,000.00
Gary Kneip: $30,000.00
2) For mental anguish:
Cecil Kneip: $40,000.00
Sylvia Kneip: $40,000.00
Gary Kneip: $30,000.00
3) Exemplary damages for the Bank's "malicious" conduct:
Cecil Kneip: $40,000.00
Sylvia Kneip: $40,000.00
Gary Kneip: $30,000.00
The trial court entered judgment in accordance with the jury's findings on these damages issues.
By its first four points of error, the bank avers that there is no evidence or insufficient evidence to support the jury's award for the Kneips' "pecuniary losses." In essence, the bank argues that, aside from the mental anguish evidence, the Kneips presented no evidence to establish any other injury.
In considering a "no evidence" or ...
To continue reading
Request your trial
-
Sanchez v. Johnson & Johnson Medical, Inc.
...in a fraud action. Only one Texas case had expressly allowed recovery of mental anguish damages in a fraud action. Kneip v. UnitedBank-Victoria, 734 S.W.2d 130, 136 (Tex.App.--Corpus Christi 1987, no writ). In Kneip, the court based its holding on the well-settled rule espoused by the Texas......
-
Med Center Bank v. Fleetwood
...In an equity action, the trial court's decision will not be reversed without a showing that an inequity resulted. Kneip v. Unitedbank-Victoria, 734 S.W.2d 130, 133 (Tex.App.--Corpus Christi 1987, no writ); Davis v. Carothers, 335 S.W.2d 631, 641 (Tex.Civ.App.--Waco 1960, writ dism'd by agr.......
-
Haralson v. State Farm Mut. Auto. Ins. Co.
...writ dism'd) (plaintiff's testimony, standing alone, held sufficient to support award of mental anguish damages); Kneip v. Unitedbank-Victoria, 734 S.W.2d 130, 134-36 (Tex.App.-Corpus Christi 1987, no writ) The court reaches a different conclusion with respect to the jury award for loss of ......
-
Brownsville Pediatric Ass'n v. Reyes
...577, 580 (Tex.App.-Houston [1st Dist.] 1993, writ denied) (violations of limine order can amount to incurable error); Kneip v. United bank Victoria, 734 S.W.2d 130, 136-37 (Tex. App.-Corpus Christi 1987, no writ) (court suggested improper testimony could be as incurable as jury 8. We note t......