Wooldridge v. Groos Nat. Bank

• Decision Date: 24 July 1980
• Docket Number: No. 6105,6105
• Citation: 603 S.W.2d 335
• Parties: 29 UCC Rep.Serv. 1548 Grady E. WOOLDRIDGE, Appellant, v. The GROOS NATIONAL BANK, Appellee.
• Court: Texas Court of Appeals

Page 335

603 S.W.2d 335

29 UCC Rep.Serv. 1548

Grady E. WOOLDRIDGE, Appellant, v. The GROOS NATIONAL BANK, Appellee.

No. 6105.

Court of Civil Appeals of Texas, Waco.

July 24, 1980.

Rehearing Denied Aug. 21, 1980.

John T. Anderson, G. Michael Lawrence, Graves, Dougherty, Hearon, Moody & Garwood, Austin, for appellant.

William A. Jeffers, Jr., Thomas H. Crofts, Jr., Groce, Locke & Hebdon, San Antonio, for appellee.

HALL, Justice.

The defendant, Grady E. Wooldridge, appeals from a summary judgment awarding the plaintiff, The Groos National Bank, recovery against him on a past due note in the principal sum of $73,681.97. Defendant is maker of the note and plaintiff Bank is payee. The note was executed on December 9, 1977, and it was due 120 days thereafter. Attorney's fees contracted for in the note were also awarded to Bank in the judgment, but they are supported by the parties' written stipulation and they are not the subject of complaint on this appeal.

To establish its right to the summary judgment, Bank had the burden of showing that no material fact issues existed in the case and that it was entitled to judgment as a matter of law. Town North Nat. Bank v. Broaddus, (Tex. 1978), 569 S.W.2d 489, 494.

Viewed alone, Bank's pleadings and motion and supporting proof, and the stipulation on attorney's fees, support the summary judgment. Defendant does not dispute that. His contentions on appeal are these:

1. The summary judgment evidence raised an issue of fact concerning his defense that consideration for the note failed.

2. An issue of fact was raised in the evidence concerning his defense that his execution of the note was induced by fraud.

3. The trial court erred in failing to consider his second amended original answer, or, if the court considered the answer, then it erred in granting the summary judgment because the answer was supported by defendant's affidavit and it raised the defense that the execution of the note was induced by fraud.

A detailed chronological listing of the proceedings in the trial court is necessary for an understanding of the parties' contentions.

Bank filed its original petition on June 21, 1978. Defendant filed his original answer, a general denial, on July 21, 1978. On September 20, 1978, Bank filed its motion for summary judgment. The motion was supported by the affidavit of Bank's assistant vice-president, Keith Paul Champagne, which incorporated an attached copy of the note.

On October 11, 1978, defendant filed his First Amended Original Answer, his Motion In Opposition To Summary Judgment, and his affidavit in support of the motion. The amended answer contained a general denial and the following special plea:

"Defendant would show by way of affirmative defense that the consideration for the promissory note upon which plaintiff seeks to recover has failed in whole. Defendant would show that prior to the execution of said promissory note, Plaintiff's Executive Vice-President M. W. Haun, agreed that Plaintiff would not declare said note due and payable until Defendant had first received full payment on two loans which defendant had previously made to Clinton Manges and Perry Horine. In consideration of this agreement, Defendant executed and delivered to Plaintiff the promissory note that is the subject matter of this action. Plaintiff breached its agreement by bringing suit on the note before Defendant received full payment on the loans.

"WHEREFORE, PREMISES CONSIDERED, Defendant prays that upon final trial and hearing hereof, Plaintiff take nothing by its action . . ."

The allegations in defendant's Motion In Opposition To Summary Judgment were these:

"As shown by the pleadings herein and the affidavit submitted in support of this motion, there are genuine issues of material fact which preclude the granting of summary judgment in favor of Plaintiff. In its motion for summary judgment, Plaintiff states that it is entitled to judgment against Defendant as a matter of law because defendant has failed to establish a defense to Plaintiff's action on the promissory note sued upon herein. Defendant's First Amended Original Answer and the affidavit of Defendant Grady E. Wooldridge, attached hereto, indicate that there is an issue of material fact with respect to whether the consideration for said promissory note has failed in whole, thus relieving Defendant of his obligation to pay Plaintiff on the note.

"WHEREFORE, PREMISES CONSIDERED, Defendant Grady E. Wooldridge prays that this Court deny Plaintiff's motion for summary judgment."

Defendant's Affidavit attached to and filed in support of the Motion In Opposition To Summary Judgment set forth these facts:

"During 1976, I was engaged in the performance of certain construction work in Duval County, Texas, pursuant to a written contract with the Duval County Ranch Company. In September of 1976, the Duval County Ranch Company owed me, but was unable to pay, approximately $30,000.00 for construction work previously completed under the contract. At that time, I was informed by Perry Horine, an agent for both the Duval County Ranch Company and Clinton Manges, the controlling shareholder of the Groos National Bank, that Horine could make arrangements to obtain money from the Groos National Bank in an amount sufficient to satisfy my claim against the Duval County Ranch Company. Pursuant to this arrangement, the Groos National Bank would loan money to me in an amount sufficient to satisfy my claim against the Duval County Ranch Company, plus an additional amount for the personal use of Perry Horine and Clinton Manges. After the Groos National Bank had loaned the money to me, I was to loan the money to Perry Horine and Clinton Manges, who would then pay my claim against the Duval County Ranch Company and retain the balance of the loan proceeds for their personal use. When my loan at the Groos National Bank became due, Perry Horine or Clinton Manges would tender full payment to me on their loan, and this money would then be used to satisfy my obligation to the Groos National Bank.

"On or about September 27, 1976, M. W. Haun, the Executive Vice-President of the Groos National Bank, agreed to this arrangement and approved a loan to me in the amount of $69,000.00. Mr. Haun, who was fully aware that I would loan this money to Perry Horine and Clinton Manges, further agreed that the Groos National Bank would not declare its loan to me due and payable until Perry Horine or Clinton Manges had first tendered full payment to me on their loan. In reliance upon this agreement and in consideration thereof, I executed my promissory note to the Groos National Bank on September 27, 1976, in the principal amount of $69,000.00. A true and correct copy of said promissory note is attached hereto, marked Exhibit 'A', and incorporated herein by reference for all purposes. I would not have executed this promissory note to the Groos National Bank absent the bank's agreement that it would not declare this note due and payable until I had first received payment on my loan to Perry Horine and Clinton Manges.

"In March of 1977, the Duval County Ranch Company again owed me money for certain construction work which I had performed for the company. Perry Horine, who was at that time a director of the Groos National Bank, informed me that the Duval County Ranch Company was unable to pay me for this work, but that arrangements could be made with the Groos National Bank for payment of my claim against the company. Under this arrangement, which was virtually identical to the transaction that took place in September of 1976, M. W. Haun approved a loan to me in the amount of $30,000.00. I was to loan this money to Perry Horine and Clinton Manges, who would then apply the loan proceeds to satisfy my claim against the Duval County Ranch Company. When my loan at the Groos National Bank became due and payable, Perry Horine or Clinton Manges would tender full payment to me on their loan, and this money would then be used to pay my loan at the Groos National Bank.

"Both Perry Horine and M. W. Haun agreed that the Groos National Bank would not declare its $30,000.00 loan to me due and payable until Clinton Manges or Perry Horine had first tendered full payment to me on their loan. In reliance upon this agreement and in consideration thereof, I executed my promissory note to the Groos National Bank on March 29, 1977, in the principal amount of $30,000.00. A true and correct copy of said promissory note is attached hereto, marked Exhibit 'B', and incorporated herein by reference for all purposes. I would not have executed this promissory note to the Groos National Bank absent the bank's agreement that it would not declare this note due and payable until I had first received full payment on my loan to Perry Horine and Clinton Manges.

"The promissory notes dated September 27, 1976 and March 29, 1977, were renewed and extended on various occasions by the Groos National Bank with the approval of M. W. Haun. Each such renewal and extension was based upon the agreement between myself, Perry Horine and M. W. Haun that the Groos National Bank would not declare these notes due and payable until I had first received full payment on my loans to Perry Horine and Clinton Manges. The last renewal and extension was made on December 9, 1977, when the two promissory notes were combined into one note dated December 9, 1977, in the principal amount of $73,681.97, which note is the subject of Plaintiff's suit herein. The Groos National Bank has brought suit to collect this debt notwithstanding the fact that I have not yet received full payment on my loans to Perry Horine and Clinton Manges."

On October 20, 1978, after a hearing on the parties' motions, the court orally granted Bank's motion for summary judgment and made the following notation on the inside page of the file jacket of the case: "10/20/78. Motion for S/Judg Granted. Order to come."

On November 13, 1978, Defendant...