Lee County Nat. Bank v. Nelson

• Decision Date: 01 December 1988
• Docket Number: No. 09-87-201-CV,09-87-201-CV
• Citation: 761 S.W.2d 851
• Parties: LEE COUNTY NATIONAL BANK, Appellant, v. Wayne NELSON and Nelson Marine Service, Inc., Appellees.
• Court: Texas Court of Appeals

Page 851

761 S.W.2d 851

LEE COUNTY NATIONAL BANK, Appellant, v. Wayne NELSON and Nelson Marine Service, Inc., Appellees.

No. 09-87-201-CV.

Court of Appeals of Texas,

Beaumont.

Dec. 1, 1988.

Rehearing Denied Jan. 1, 1989.

Daniel W. Bishop, II, Austin, for appellant.

Jon B. Burmeister, Beaumont, for appellees.

OPINION

BURGESS, Justice.

Appellees sought damages against appellant bank for breach of contract, deceptive trade practice, fraud and conversion. A jury resolved all the factual disputes in favor of appellees, found damages of $20,000 and awarded exemplary damages of $75,000. Appellant urges five points of error.

In early 1983, the parties entered into a series of loan transactions with Wayne Nelson borrowing an initial $50,000 for the purchase of a tug boat, the "Jo Ann K." He then borrowed an additional $18,000 using the boat as collateral. The boat was insured for $75,000. Several other loan transactions occurred between the parties with various motor vehicles being used as collateral. In December 1983, Nelson borrowed $35,000 to make repairs on the boat, which had sunk, pledging as collateral the insurance claim on the boat and twenty-nine acres of land.

In June 1984, Nelson decided to sell the boat to Frank Revia, its original owner, for $100,000. The bank agreed to finance 100 percent of the purchase price with the boat as collateral and the personal guaranties of Nelson and Revia. On August 7, 1984, the bank foreclosed on the twenty-nine acres of land, receiving $70,100 which paid off every loan Nelson owed the bank. Therefore, the only obligation Nelson had to the bank at that point was the personal guaranty on the Revia note. On August 20, 1984, Nelson borrowed $3,000 from the bank. A note and a security agreement was mailed to Nelson. Nelson executed the instruments and retained a copy. Nelson's copy of the security agreement listed a 1984 Ford pickup and a 1982 Lincoln Continental as collateral. The bank's copy of the security agreement listed the vehicles and the insurance proceeds from the tug boat. The $3,000 note was paid off in November 1984 from the sale of the Ford pickup. The proceeds were approximately $2,000 more than the payoff. The bank, however, withheld the $2,000 and the title to the Lincoln claiming the August 20, 1984 security agreement secured Nelson's liability as guarantor on the Revia note. Nelson claimed the guaranty agreement on the Revia note was only for the first $20,000 and when the note was reduced to $80,000, the guaranty was extinguished.

In the meanwhile, Nelson had filed suit against the insurance company for proceeds under the policy and the bank intervened. The insurance claim was settled for $15,000 which was deposited into the registry of the court. Appellees then filed a counterclaim against the bank.

Two of appellant's points of error allege legal and factual insufficiency concerning the jury's finding that the bank committed conversion with respect to withholding the title to the 1982 Lincoln. It is important to note that the conversion found was the withholding of the title and not that the vehicle itself was actually converted. Conversion is the unauthorized and wrongful exercise of dominion and control over another's personal property to the exclusion of or inconsistent with the rights of the owner. Anchor Mortg. Serv., Inc. v. Poole, 738 S.W.2d 68 (Tex.App.--Fort Worth 1987, writ denied). Here, the evidence is clear that the bank did not exercise dominion over the vehicle; however, it did refuse to surrender the title when requested, and the jury found the withholding was a conversion of the title. Such was also the case in Nueces Trust Co. v. White, 564 S.W.2d 798 (Tex.Civ.App.--Corpus Christi 1978, no writ). These points of error are overruled.

Two other points of error challenge the jury's answer to the damage issue. The first point alleges "no evidence" but concedes there is evidence from which the jury could have found $2,000. Obviously, this "no evidence"...