Olson v. Texas Commerce Bank

• Decision Date: 24 July 1986
• Docket Number: No. 01-85-0457-CV,01-85-0457-CV
• Parties: Paul OLSON, Jerry Feagan, and Gloria Jackson, Appellants, v. TEXAS COMMERCE BANK, National Association, Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 764

715 S.W.2d 764

Paul OLSON, Jerry Feagan, and Gloria Jackson, Appellants, v. TEXAS COMMERCE BANK, National Association, Appellee.

No. 01-85-0457-CV.

Court of Appeals of Texas Houston (1st Dist.).

July 24, 1986.

Rehearing Denied Aug. 28, 1986.

Ron V. Berkowitz, Wilkinson & Berkowitz, Gary D. Jackson, Jackson, Jackson & Loving, Dallas, for appellants.

John K. Schwartz, Liddell, Sapp, Zivley & LaBoon, Houston, for appellee.

Before DUGGAN, LEVY and HOYT, JJ.

OPINION

HOYT, Justice.

This is an appeal from a suit on a guaranty agreement. Appellants were guarantors on a $1,875,000 loan from Texas Commerce Bank ("TCB") to Cimmaron Oil Company ("Cimmaron"), which is presently the subject of Chapter 11 bankruptcy proceedings pending in federal court.

At the time of the loan in March 1981, Cimmaron was an independent oil and gas exploration and production company, whose primary assets consisted of oil and gas properties in Hood County, Texas. These properties were pledged as collateral on the 90-day $1,875,000 note. As additional security for the note, the appellants, officers or shareholders of Cimmaron, agreed individually to guarantee payment of up to $500,000 of the loan. On the date of maturity of the note, Cimmaron filed a petition for protection under the federal bankruptcy laws.

Cimmaron never made any payment on the note to TCB, and after being granted relief from a bankruptcy stay, TCB foreclosed on the oil and gas properties in Hood County pledged as security on the note. Though one of the appellants was present at the sale, only TCB itself bid for the properties, purchasing them for $1,300,000. The proceeds of the sale were applied against Cimmaron's debt, and there remained a principal amount outstanding of over $800,000. The bank after demanding payment from the appellants pursuant to the terms of their guaranty agreement, and receiving no payments, filed the present law suit.

The case was certified for trial on September 4, 1984, at the request of the plaintiff. On September 20, 1984, one of the defendants not a party to this appeal, Ronald Jackson, requested a jury trial and paid a jury fee, complaining that he had not received notice of the trial certification hearing. At a hearing on October 24, 1984, the docket judge denied Ronald Jackson's pro se motion for leave to file jury fee, stating that previous motions for continuance by that defendant's attorney had already delayed the case.

On November 6, 1984, appellant Gloria Jackson, also demanded a jury trial and paid a jury fee. The case went to trial on January 15, 1985, but before proceeding with the case, the court heard the defendants' motions for jury trial. The appellants presented no evidence at the hearing that a jury was available and that a jury trial could be had without any additional delay or inconvenience to the court's docket. After arguments to the court, the trial judge denied appellants' motions, stating that he would not interfere with the docket judge's previous denial of a motion for jury trial, and that he was bound by that ruling.

The appellants presented no evidence in their defense at trial, and their chief point of error on appeal attacks the lower court's refusal to grant the requests for a jury trial after the case had been certified for trial. They argue that because the jury demands were made and jury fees were paid more than 10 days before trial, as required by Tex.R.Civ.P. 216, the trial judges abused their discretion in refusing the defendants a jury trial.

TCB's response is that the request for a jury trial was merely the latest in a series of delaying tactics by the defendants to avoid their obligations under the guaranty agreement. TCB points out that, despite proper notice, none of the appellants appeared at the trial certification hearing, in which the court granted certification on the non-jury docket. Finally, TCB argues that the appellants' absolute right to a jury trial had long since expired when the jury requests were made, and that it was within the discretion of the docket and trial judges to determine that those requests were not made within a reasonable time before trial.

The right to a jury trial is guaranteed by the Texas Constitution, which provides:

The right of trial by jury shall remain inviolate....

Tex. Const. art. I, sec. 15.

For civil cases, the constitution sets certain conditions on the right:

In the trial of all causes in the District Courts, the plaintiff or defendant shall, upon application made in open court, have the right of trial by jury; but no jury shall be empaneled in any civil case unless demanded by a party to the case, and a jury fee be paid by the party demanding a jury, for such sum, and with such exceptions as may be prescribed by the Legislature.

Tex. Const. art. V, sec. 10 (emphasis supplied).

Finally, rule 216 of the Texas Rules of Civil Procedure states specific procedural requirements for a party desiring a jury trial No jury trial shall be had in any civil suit, unless application be made therefor and unless a fee ... be deposited by the applicant with the clerk ... on or before appearance day or, if thereafter, a reasonable time before the date set for trial of the cause on the nonjury docket, but not less than ten days in advance....

Tex.R.Civ.P. 216 (emphasis supplied). From these provisions, it is apparent that the right to a trial by jury in civil cases is not absolute. Indeed, the Texas Supreme Court has held that making demand and paying a jury fee more than 10 days before trial does not necessarily make the payment timely as a matter of law. Texas Oil & Gas Corp. v. Vela, 429 S.W.2d 866, 876-77 (Tex.1968).

There is a line of appellate court opinions that indulges a rebuttable presumption that if the jury fee is paid more than 10 days in advance of trial, it has been paid within a reasonable time, as contemplated by rule 216. See, e.g., Tackett v. Proffitt, 695 S.W.2d 55, 57 (Tex.App.--Corpus Christi 1985, no writ); Hardy v. Port City Ford Truck Sales, Inc., 693 S.W.2d 578, 579 (Tex.App.--Houston [14th Dist.] 1985, no writ); Lopez v. Lopez, 691 S.W.2d 95 (Tex.App.--San Antonio 1985, no writ); McKern v. McCann, 675 S.W.2d 222 (Tex.App.--Austin 1984, no writ); First Bankers Insurance Co. v. Lockwood, 417 S.W.2d 738, 739 (Tex.Civ.App.--Amarillo 1967, no writ).

Those cases generally hold that the right to a jury trial is an important and valuable right in our system of justice that should be guarded zealously by the courts of this State. Hardy, 693 S.W.2d at 579; Lopez, 691 S.W.2d at 97; Jones v. Jones, 592 S.W.2d 19 (Tex.Civ.App.--Beaumont 1979, no writ).

The record before us reflects that none of the appellants requested a jury trial on or before appearance date, September 14, 1981; that appellants caused the case to be removed from state court to federal bankruptcy court where no jury trial was available; that upon remand to the state court and notice of a hearing for nonjury trial certification, none of the appellants requested a jury trial; that four months expired between the notice of the certification hearing, in May 1984, and the actual hearing on ...