Montavon v. Alamo Nat. Bank of San Antonio, 15710
| Decision Date | 13 July 1977 |
| Docket Number | No. 15710,15710 |
| Citation | 554 S.W.2d 787 |
| Parties | 22 UCC Rep.Serv. 1221 Frank J. MONTAVON and Wife Hermelinda Montavon, Appellants, v. The ALAMO NATIONAL BANK OF SAN ANTONIO, Appellee. |
| Court | Texas Court of Appeals |
P. Keith O'Gorman, San Antonio, for appellants.
John D. Fisch, C. M. Montgomery, San Antonio, for appellee.
This is a suit by Frank J. Montavon and wife, Hermelinda Montavon, against The Alamo National Bank of San Antonio, herein called Bank, for wrongful conversion of two Certificates of Deposit owned by the Montavons which Certificates of Deposit were delivered to the Bank in connection with an investment agreement with Fipco, Inc., under which the Montavons agreed to support a $25,000 line of credit at the Bank.
The Montavons went to the Bank, executed an "Owner's Consent to Pledge" and "Security Agreement Pledge," endorsed the two Certificates in blank and delivered the Certificates to the Bank. The Bank thereafter made advances of $25,000 to Fipco, and Fipco executed and delivered notes for such amount. Ultimately, Fipco defaulted in the payment of this debt to the Bank. After some efforts were made to collect the obligation, the Bank applied the proceeds of the two Certificates of Deposit to Fipco's debt. Suit was brought by the Montavons against the Bank seeking actual damages in the amount of $25,000, the face value of the two Certificates of Deposit, and exemplary damages in the amount of $10,000. The Bank's motion for summary judgment was granted, and judgment entered that the Montavons take nothing.
A chronological summary of the background of this case is as follows:
October 1972: Montavon first became acquainted with Fipco.
October November, 1972: Montavon bought $11,250 of Fipco's stock and agreed to support a $25,000 line of credit to Fipco.
November 21, 1972: The Montavons executed the Owner's Consent to Pledge and a Security Agreement Pledge to the Bank as secured party. Both of these instruments describe the two Certificates of Deposit. At this time, the Montavons also signed the backs of the two Certificates of Deposit and delivered them to the Bank.
November 22, 1972: $15,000 advance was made to Fipco by the Bank.
December 19, 1972: $10,000 advance was made to Fipco by the Bank. Notes were made by Fipco to the Bank for such advances and were periodically renewed thereafter.
October 30, 1974: New documents (an Owner's Consent to Pledge and Security Agreement Pledge) basically similar to the original were executed by the Montavons.
August 1975: A meeting was held between Montavon, Voyles, an officer of the Bank, and Langholz, an officer of Fipco, and documents were drawn up which were never executed.
September 1975: Montavon says that he was informed by the Bank that the Certificates of Deposit were security for Fipco's loan.
September 18, 1975: Montavon wrote to the Bank attempting to revoke the Consent to Pledge.
October 10, 1975: The Bank wrote the Montavons stating that the Certificates of Deposit were being applied against the Fipco debt.
October 31, 1975: The Montavons sued the Bank.
Pertinent written instruments here involved may be summarized as follows:
(a) November 21, 1971 Owner's Consent to Pledge. This instrument is signed by the Montavons and states that for the purpose of enabling Fipco to obtain credit, the Montavons authorized Fipco to hypothecate, pledge and deliver to the Bank the two Certificates of Deposit which are specifically described therein, and the Montavons agree that when so hypothecated, pledged and delivered, the collateral (the two Certificates of Deposit) shall secure all liabilities of debtor to the Bank.
(b) Security Agreement Pledge. The Montavons, "debtor", granted to the Bank, "secured party", a security interest in the two Certificates of Deposit, specifically described therein, to secure performance and payment of all obligations and indebtedness of debtor to secured party of whatsoever kind and whenever or however created or incurred. This instrument is signed by the Montavons.
By two points of error the Montavons assert that the trial court erred in granting the Bank's motion for summary judgment because: (1) the pleadings, depositions and affidavits on file establish genuine issues as to material fact; and (2) Bank is not entitled to a summary judgment as a matter of law.
The Bank asserts that the trial court's judgment is correct because:
(1) The pleadings, depositions, exhibits, and affidavits on file establish that there is no genuine issue as to any material facts.
(2) The Bank is entitled to a summary judgment in its favor as a matter of law.
(3) The agreement between the parties established that the sole and only purpose of the transaction in question was to establish a line of credit for Fipco at the Bank to be secured by the Montavons' Certificates of Deposit, thereby creating an equitable lien in favor of the Bank as a matter of law.
(4) It is undisputed that the Montavons received the benefits of the transaction in question and are estopped to deny the validity and enforceability of a perfected security interest in favor of the Bank.
The summary judgment evidence consists of a number of depositions, an affidavit of Gilbert Langholz, president of Fipco, and numerous written instruments.
By affidavit, Langholz stated that he did not pledge the two Certificates of Deposit owned by the Montavons and that he did not discuss collateralization of Fipco's note with the Bank.
By deposition, Frank Montavon testified that he first became acquainted with Fipco about October 1972; that he had discussions with Langholz about becoming a stockholder in Fipco under which he was to buy 1,125 shares of stock at $10 a share, and support a line of credit for Fipco of $25,000; that he desired to allow Langholz to pledge or do what he needed with the Certificates of Deposit; and that when he deposited the $25,000 in the Bank, it was with an eye to using the money as a part of the Fipco deal. He further testified that at the time the Fipco deal was closed and $11,250 turned over to Fipco, he xeroxed the two Certificates of Deposit (one for $20,000 and one for $5,000) and gave one copy to Langholz, and that Langholz in his presence wrote on the bottom of the xeroxed copies that the Certificates of Deposit were "pledged to the Alamo National Bank to support Fipco, Inc. line of credit." (Emphasis added) He stated that his agreement with Langholz was to deliver the Certificates of Deposit to the Bank for the purpose of making $25,000 available for Fipco; that pursuant thereto he went to the Bank on November 21, 1972 and saw Voyles, an officer of the Bank, who had previously talked to Langholz; that the Bank had prepared some documents...
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