Estes v. Republic National Bank of Dallas
| Decision Date | 11 November 1970 |
| Docket Number | No. B--2017,B--2017 |
| Citation | 462 S.W.2d 273 |
| Parties | Burnett ESTES et al., Petitioners, v. REPUBLIC NATIONAL BANK OF DALLAS, Respondent. |
| Court | Texas Supreme Court |
Elgar Robertson, Coke & Coke, Dallas, for petitioners.
White, McElroy & White, B. Thomas McElroy, Dallas, for respondent.
The Respondent sued the Petitioners seeking judgment on a series of promissory notes aggregating the sum of approximately $600,000.00. One of the notes, dated April 17, 1961, is in the sum of $30,000.00. Simultaneously with the execution of this note, Petitioner Burnett Estes, executed a deed of trust on 396 acres of land situated in Denton County, Texas. After the execution and delivery of the $30,000.00 note and deed of trust to the bank, Estes conveyed the land to Everett & Company and that Company later conveyed the land to Petitioner Dan Gibbs, subject to the payment of the $30,000.00 note. Thereafter, Gibbs' tender of payment of the balance due on the $30,000.00 note and demand for a release of the deed of trust was rejected by the bank. This suit followed. The bank sought recovery from Estes of the balance due on all indebtedness and the foreclosure of the deed of trust lien in accordance with its terms. Estes and Gibbs defended on the ground that the bank, through ita authorized agent, orally agreed that the deed of trust was to secure the payment of the $30,000.00 note only and that when such note was paid the land described in the deed of trust was to be free of all indebtedness due the bank. Estes further pleaded that by accident or mutual mistake a 'dragnet' clause remained in the printed form of the deed of trust, whereas the true agreement was that when the $30,000.00 note was repaid the land would be released. Evidence offered to establish this alleged agreement was excluded upon objection. At the close of all the evidence, the Court instructed the jury to return a verdict in favor of the bank for the total sum sued for and, thereafter, judgment was entered that the bank recover of Estes the sum of $600,000.00 and for the foreclosure of the deed of trust lien. The Court of Civil Appeals affirmed. 450 S.W.2d 397. We affirm.
The principal question presented for our decision is whether parol evidence is admissible to establish that the true intention of the parties was to provide in the deed of trust that the lien therein afforded was to secure payment of the $30,000.00 note only, rather than to secure all indebtedness in accordance with the 'dragnet' clause which provided that:
'This Deed of Trust shall secure, in addition to the said Note, ($30,000.00) all funds hereafter advanced by Beneficiary to or for the benefit of Grantors, as contemplated by any covenant or provision herein contained or for any other purpose, And all other indebtedness, of whatever kind or character, owing or which may hereafter become owing by Grantors to Beneficiary, whether such indebtedness is evidenced by note, open account, over-draft, endorsement, surety agreement, guaranty, or otherwise, It being contemplated that Grantors may hereafter become indebted to Beneficiary in further sum or sums.' (Emphasis added.)
The deed of trust further provided that Estes would not sell all or any portion of the mortgaged property unless the purchaser shall either:
'(a) expressly agree to assume the payment of the indebtedness hereby secured or (b) expressly agree that the title and rights of such purchaser are and shall remain subject to all and every the terms of this Deed of Trust for the complete fulfillment of all obligations of the Grantors hereunder, and unless, also, the deed shall expressly set forth the said agreement of the purchaser. * * *'
It is admitted that Estes, both before and after the $30,000.00 transaction, had entered into many loan agreements by executing promissory notes payable to the bank. Some of the notes, if not all, were renewals of notes dated prior to the execution of the critical note and deed of trust. Petitioners wished to establish that when Estes executed that note and deed of trust, the true agreement was that it would be entirely separate and isolated from his other obligations to the bank. This of course is inconsistent with the terms of the 'dragnet' clause in the deed of trust quoted above, and testimony at variance with that clause was excluded.
The law presumes that a written agreement correctly embodies the parties' intentions, and is an accurate expression of the agreement the parties reached in prior oral negotiations. While it is true...
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