Whittenburg v. Cessna Finance Corp., 1369

• Decision Date: 28 April 1976
• Docket Number: No. 1369,1369
• Citation: 536 S.W.2d 444
• Court: Texas Court of Appeals
• Parties: Edward L. WHITTENBURG, Appellant, v. CESSNA FINANCE CORPORATION, Appellee. (14th Dist.)

Page 444

536 S.W.2d 444

Edward L. WHITTENBURG, Appellant, v. CESSNA FINANCE CORPORATION, Appellee.

No. 1369.

Court of Civil Appeals of Texas,

Houston (14th Dist.).

April 28, 1976.

Rehearing Denied May 19, 1976.

Joel W. Cook, Barry Allan Brown, Schlanger, Cook, Cohn & Mills, Houston, for appellant.

John A. Cavin, Ross, Banks, May, Cron & Cavin, Houston, for appellee.

CIRE, Justice.

This is an appeal from a summary judgment for the plaintiff on a promissory note. The note was executed by appellant Edward Whittenburg in favor of Sawyer School of Aviation and in conjunction with a conditional sales contract for the purchase of an airplane. The face value of the note was $196,200, to be paid on March 24, 1973. Sawyer School of Aviation endorsed the note and assigned the sales contract to appellee Cessna Finance Corporation.

Appellee brought suit on the note asking for the $196,200 principal plus interest and attorney's fees; appellant answered by a plea in abatement and a general denial. Appellee then filed its motion for summary judgment, to which were attached copies of the note and endorsement and of the sales contract, together with the affidavit of appellee's attorney in support of attorney's fees. Appellant's opposition to the summary judgment motion alleged the note might have been paid out of the proceeds of an insurance policy, that appellant was entitled to an offset for breach of warranty, and that appellee was not a holder in due course of the note. Appellant's opposition to the motion was supported by the affidavit of the appellant in which he stated the airplane had crashed and been totally destroyed, and that he believed the crash had resulted from the defective manufacture of the plane. At the time of the crash appellant had sold the plane to Del Rio Springs, Inc., retaining a security interest in it. The summary judgment evidence also included a copy of the judgment of an Arizona court awarding appellant a $310,000 judgment against Del Rio Springs, Inc., for the purchase price of the airplane, and copies of correspondence in which appellant and his attorneys had admitted the existence and default of the $196,000 obligation to appellee. At the time of the sale to Del Rio Springs, Inc. appellant had cancelled an insurance policy protecting the security interest of appellee and taken out a new policy protecting his own security interest. In a later suit against the second insurance company he collected approximately $190,000.

The trial court granted an interlocutory summary judgment for appellee on the note and appellant's claimed offset, and after a separate hearing on attorney's fees, entered final judgment for appellee for $208,200 plus $12,000 attorney's fees.

Appellant contends appellee's motion for summary judgment was defective in that it did not prove appellee was a holder in due course of the note and did not prove there was no fact issue on appellant's claim for an offset for breach of warranty.

Appellee's summary judgment evidence established that appellee was the holder of the note, that the note was in default, and that appellant was the maker of the note. Appellant did not deny the genuineness of his signature or of the endorsement,...