Estes v. Continental Bank & Trust Co., 16975

• Court: Texas Civil Court of Appeals
• Writing for the Court: DIXON
• Citation: Estes v. Continental Bank & Trust Co., 421 S.W.2d 158 (Tex. Ct. App. 1967)
• Decision Date: 20 October 1967
• Docket Number: No. 16975,16975
• Parties: Burnett ESTES, Appellant, v. CONTINENTAL BANK & TRUST CO., Appellee. . Dallas

Page 158

421 S.W.2d 158

Burnett ESTES, Appellant, v. CONTINENTAL BANK & TRUST CO., Appellee.

No. 16975.

Court of Civil Appeals of Texas Dallas.

Oct. 20, 1967.

Rehearing Denied Nov. 17, 1967.

Sam Rodehaver, of Hooks & Wyrick, Dallas, for appellant.

Frank L. Skillern, Jr., of Strashurger, Price, Kelton, Martin & Unis, Dallas, for appellee.

DIXON, Chief Justice.

Burnett Estes has appealed from a summary judgment against him for $525,000 based on a contract of guaranty.

On October 5, 1964 Clarence H. Everett & Co., Inc. and Clarence H. Everett individually executed a promissory note in the amount of $500,000 to appellee Continental Bank & Trust Co. of Houston, Texas, said note being payable on demand, or if no demand, in 90 days from date and providing for reasonable attorneys' fees.

The note was secured by collateral held by appellee Bank including three building construction contracts, a first lien note, a second lien note, corporation stock in Clarence H. Everett & Co., Inc. and other items which need not be described in detail.

On the same date, October 5, 1964, appellant Burnett Estes in connection with the above loan executed a guaranty contract whereby he did 'guarantee to the Bank * * * the prompt payment at maturity of any and all indebtedness that is now, or at any time hereafter may become, owing to the Bank from the borrower' not to exceed $500,000. The agreement also provided for 10 per cent attorney's fees if placed in the hands of an attorney for collection, etc.

Unfortunately Clarence H. Everett & Co., Inc. became involved in financial difficulties. It was unable to complete performance of its three contracts for the construction of certain buildings. The surety on its performance bond had to complete construction of the buildings. Clarence H. Everett & Co., Inc. and Clarence H. Everett, individually, defaulted in payment of the $500,000 note. Suit was filed against them and appellant on the note and contract of guaranty.

On June 1, 1965 appellee filed a motion for partial summary judgment against Clarence H. Everett & Co., Inc. and Clarence H. Everett individually for a balance of $448,743.46 principal plus interest at 6 1/2 per cent from January 9, 1965. This motion was sustained and partial summary judgment rendered by agreement against the two above named defendants.

On November 11, 1966 appellee Bank filed a motion for summary judgment against Burnett Estes. This motion was supported by the affidavit of a vice-president of the Bank, by the pleadings, by answers to requests for admissions and by answers to interrogatories . Hearing of this motion was set for November 23, 1966.

The above affidavit itemized the payments advanced to the borrowers pursuant to the terms of the note and also the payments made and credited to the borrowers. It also stated the status and disposition made of the collateral which had been left with appellee .

On November 21, 1966 appellee filed what may be regarded as a supplemental affidavit in support of its motion. Richards v. Allen, 402 S.W.2d 158 (Tex.Sup.1966). This affidavit amplified the statements in the first affidavit by including copies of a ledger sheet, bank deposit slips and cancelled checks.

The court did not render judgment on November 23, 1966, the date of the hearing, but took the matter under advisement. On November 28, 1966 appellee's motion was sustained and judgment rendered against appellant for the sum of $500,000 plus $25,000 attorneys' fees.

Appellant's first point on appeal is that the court erred in permitting appellee to file an affidavit in support of its motion for summary judgment after the date of the hearing without notice to him and without giving him an opportunity to controvert the affidavit.

The challenged affidavit was filed on November 28, 1966, the date final summary judgment was rendered following the hearing on November 23, 1966. There is no showing that appellant had knowledge of the filing of the affidavit or that he was given an opportunity to controvert it.

We think it was error to permit the filing of the affidavit and to render summary judgment on the same by without notice to appellant and without giving him an opportunity to file a controverting affidavit. However, the statements made in the affidavit, whether true or not, are immaterial to the outcome of this case either in the trial court or on appeal. The affidavit asserts that appellant's attorney well knew that appellee was about to release part of the collateral and even agreed to the particular releases. As we shall point out in our consideration of appellant's second point on appeal, the question of prior notice...