*3 BUTTS, DIAL, Before TIJERINA and JJ. gross
OPINION оr to negligence jury’s point award exemplary damages; eigh- BUTTS, Justice. partial teen error in the asserts court exclu- appeal This is an from a re- judgment sion of Franklin T. Graham’s deposition; scinding a collateral exe- point incurably proclaims improper nineteen appellee, cuted William B. jury argument; point twenty alleges to Pan American Bank of Browns- error the rescission ville, appellant, awarding prejudg- pledge agreement because Nowland did not $30,000 exemplary ment interest of request pleadings. in his that relief $25,000.00, damages denying further two brings error con- recovery Pan American tending, the trial respectively, court erred de- by appellee-third-party American’s motion to disre- granting fendant, George K. Wilcox, for trustee judgment gard special issues and non appeals Nowland. Nowland the denial of obstante as to ninе1 veredicto issues *4 which were the attorney’s by fees awarded and eleven.2 the by but set aside trial court. We Inc., Rio, a Texas corporation Condo is part affirm in and reverse and render in develop a duly formed to condominium part. Brownsville, 6, project Texas. On in March brings (20) points Pan American twenty Rio, Inc., of Condo in- shareholders predicates error: Point of error one error cluding Voting executed Trust on overruling of motions for instructed policy Agreement to exist under definite judgment and for counter- verdict on the majority “to union of a of the secure a Nowland) (against claim and cross-action develop properly interests in order to (against trustee) since the conclu- evidence corporation.” business opportunities sively established Nowland’s on the liability George K. Wilcox was named trustee. note; points through eight two promissory Agreement The of the operative period are premised on the existence of the defens- the date of execu- years extended five from ratification, es waiver estoppel; and authority dis- tion. included The trustee’s points assert nine and ten execute loans in the power to cretionary evi- evidence rule mandated exclusion of agreement provid- name of The the Trust. terms of varying dence the collateral entered into obligations ed all through pledge agreement; eleven trustee, or collectively shareholders thirteen claim that individual fraud of Pan or including obligations, debt sureties “all and pled American was not there was no joint shall be and guarantee agreements, or insufficient evidence to several as to the shareholders.” finding; points through such a fourteen Agree- of the proclaim seventeen there was no evidence execution Soon after the ment, Nowland initiated evidence to insufficient establish the trustee Pan American. Pan willfully guilty negotiations loan Pan American acted or was cents, any, if Special in the 1. issue number nine: Answer in dollars blanks; appropriate you preponderance find from a of the Do fees, any, begin- Attorney’s from 1. if plaintiff evidence that the William B. Nowland judgment: ning through trial and of the claim presented Amer- his claim to the defendant Pan $31,000.00 thirty (30) days prior filing of ican Bank fees, any, through Attorney’s final 2. if 1976? such the letter dated November Appeals: judgment of Civil of the Court Answer, do or we do we not. $7,500.00 We We the answer: do. fees, any, through Attorney’s refusal of 3. if application error to Texas Su- or writ of you preponderance 2. What do find from preme Court: necessary the evidence to be and reasonable $43,500.00 attorney’s Daniel R. fees for Rutherford fees, any, through Attorney’s final rendered, if legal ren- services or which Supreme judgment Court: Texas future, him on William dered behalf of $1,500.00 prosecution of this case? B. Nowland
883 agreed $337,- Knight American loan trustee so as to effectuate that intent. Corp., 000.00 Harvester Credit collateralized dollar for dollar. International (Tex.1982). The intention $237,000.00 The loan was S.W.2d bifurcated into language found in the of the stаtute $100,000.00 to be May commitments. On Associates, itself. Jones v. Del Andersen & 1976, Nowland collateral (Tex.1976). agreement which assigned to Pan American pro- amendatory supra, act to article $100,000.00 his savings deposit account on vides, pertinent part: the Southwest Texas National Bank of San 20,1976, 2. This remedial in May Antonio. On Sec. Act is character the trustee exe- $100,000.00 apply pending and is intended to to all cuted a actions, regardless time and future to the order of Pan American. After the thereof or the accrual of institution trustee verified affidavit that Agree- any cause of action asserted. ment still operative, Pan American trustee, $100,000.00 loaned the on Tex.Gen.Laws, ch. at 718. strength of the pledge agreement. statutory language clearly indicates recovery legislative intent to sanction 1977, Nowland, In April, after accepting attorneys’ at the litigаtion pending fees in a commission for the use his account amendatory time of the enactment. An collateral and personally making one inter- action suit is from the time of “pending” est payment note, the promissory inception its until the rendition of final brought against suit ob- Pan American to Dictionary Black’s Law judgment. tain the return of savings *5 1979). (5th ed. in- We find that account, claiming the collateral pledge litigation pending stant constitutes a action agreement subject was to an oral condition contemplated Ac- Legislature. precedent that the commitment 2226, supra, article cordingly, applicable. was to be disbursed only first and then 2226, supra, Article does not re upon the of collateralization the entire sum quire presentment of claim to be made of money. sought American to fore- specific in any King Optical manner. v. close the collateral and further Dallas, Inc., Processing Automatic Data of against Wilcox, cross-acted trustee, 213, 542 (Tex.Civ.App. S.W.2d 217 counterclaimed — Waco against seeking Nowland 1976, n.r.e.). writ ref’d must claimant on recovery the promissory note executed however, prove, claim and a for request by the Agreement. trustee for the payment thirty (30) and a to pay failure for We first address Nowland’s of two Insur days. Fidelity Huff v. Union Life error which assеrt the impropriety of the Co., 433, 493, ance 158 Tex. 312 500 S.W.2d trial court’s denial of attorneys’ fees. Con- (1958). sequently, initial determination is the plaintiff’s claims exhibit that applicability in this of suit Tex.Rev.Civ. a to an twenty, demand letter addressed Stat.Ann. art. (Vernon 2226 Supp.1982) American, officer of Pan satisfied provides which for the recovery of attor- 2226, presentment of requirements article neys’ fees. Nowland filed suit to establish At supra. trial Nowland’s counsel testified: of an precedent breach oral condition to Exhibit, my I hold in hand Plaintiff’s [contract] 10, 1976, letter dated November ad- 4,1977. April By origi- his second amended Kazynski, dressed to Mr. John Pan Amer- 21, petition, 1980, nal filed May Bank, 2179, Brownsville, ican P.O. Box sought to recover attorneys’ his fees under original of was Texas which 2226, supra, article which had been amend- me, signed by original and the which ed, 1979, 6, June effective to allow correctly ad- placed wrapрer, was in a recovery attorneys’ fees in a suit founded post- dressed with the correct amount of on an oral or written contract. de- age placed into United States This court must look to the intent to be for the mail pository United States Legislature construing Kazynski. the statute to Mr. John delivered 884
He prior did not state to the which denies or con person- efficacy that he law ally relating to the temporaneous expressions mailed the letter. The addressee of subject matter as that encom letter identical testified that he never received the final written contract be passed in the subject letter. Nowland contends parties. tween the Hubacek v. Ennis State testimony uphold counsel’s was sufficient to Bank, 166, 30, 159 Tex. 317 32 S.W.2d an inference letter such (1958); Ray, 2 R. Texas Law of Evi received the addressee. (3rd 1980). dence ed. The purpose § Direct testimony that a letter memorializing an is to defi was properly envelope enclosed in an and to exclude all oral nitely settle its terms was correctly stamped, addressed and de Hobbs understandings contrary. posited in gives the mail rise to a rebuttable Co., Inc., Arnett Trailers v. J.T. Grain presumption duly it was received. (Tex.1977). the execu Upon S.W.2d Greenwade, Southland Life Insurance Co. v. integrated agreement of a valid tion 450, 159 (1942). 138 Tex. 856-57 S.W.2d mаtter, respect particular necessary mailing It is that the of the letter rule the enforcement of precludes evidence proved, may and this direct evi contemporaneous prior inconsistent person dence. If no direct shows a Lewis v. East Texas Finance agreements. mailed the in question, letter an inference Co., 136 Tex. 146 S.W.2d mailing by showing be raised negotia (1941). Prior conversations and customary mailing practiсe in connection they are deemed tions are inadmissible since Hall, Cooper with the sender’s business. writing. McPherson v. merge 415 (Tex.Civ.Ap p S.W.2d Johnson, —Amaril n.r.e.). lo writ ref’d For reliance on ref’d —Amarillo writ office custom to the inference of adoption of the Uni Subsequent mailing, party offering the letter must Code, form Tex.Bus. & Com. Commercial present corroborating sup circumstances to Ann. 1.101 et seq. (Tex. Code U.C.C.) port the inference thаt the custom has been an instrument (1968), categorization Employers carried out. Texas Insurance law, statutory determined which rules *6 Wermske, 540, Association v. 162 Tex. 349 decisional, of govern admissibility would 90, (Tex.1961). S.W.2d 92 The statements extrinsic in commercial trans negotiations made by Nowland’s counsel at an in-cham Pacific Products v. Great Western actions. hearing “regular bers pursuant 286, 528 291 Plywood, S.W.2d he practice” “put it in the United [letter] 1975, writ). —Fort no Nowland con Worth pres States mail” were made outside the rule as modi parol tends that the evidence such, ence of the and not jury, as do consti chapters dealing fied and defined mailing. tute direct evidence of actual Fur Tex.Bus. & Com. paper, with commercial ther, any record is of evidence (Tex. U.C.C.) Ann. Code 3.101-3.805 §§ devoid corroborating mailing interests, of the letter Tex. (Vernon 1968), security and proof mailing custom of the sender’s Ann. 9.101-9.507 Bus. & Com.Code §§ 1968), govern U.C.C.) (Vernon (Tex. office. We find that there was no direct regard extrinsic evidence mailing; admissibility evidence of that the of presumption evidence; pledge agreement. collateral ing the instant receipt was not raised agree. We do not and that correctly trial court set aside We, issues nine and eleven. accord considered a writing A to be points overrule Nowland’s of error. ingly, with comport instrumеnt must negotiable 3.104, supra, in enunciated requirements § of error Pan American’s are, pertinent part: in premised nine and ten are on the contention negotiable instru- (a) writing to be a Any vary parol that the admission of evidence to chapter this must ment within pledge agree the terms of the collateral drawer; the maker or parol (1) signed by ment violated the evidence rule. The be rule is a rule of substantive parol evidence
885 (2) an contain or if it is consist- promise precedent only unconditional oral condition order pay a sum of the written money certain in the terms contract. ent with promise, order, Hall, 633, and no other Tex. v. 144 193 S.W.2d obligation Denman power given (1946); Baker, the maker or v. 143 Tex. 515, drawer Baker 516 except 724, (1944). Evidence authorized this chapter; 183 S.W.2d oral agreement is not contemporaneous where it contravenes terms (3) admissible be payable on demand or at a defi- time; unambiguous of an written instrument. nite McPherson, supra at 932. The (4) be payable to order to bearer. agreement executed pledge It can assignment be seen that assigned.” language “hereby contained the savings account by appellant prae- indicates an act in “hereby” term favor of appellee was not made “to Huckaby, senti. v. 474 S.W.2d Westerfeld order” or “to bearer” and hence is not (Tex.1971). alleged We find the negotiable Mill, instrument. Ralls-Tex Inc. oral precedent incongruent condition Co., Plains White Truck 446 S.W.2d the terms of the collateral Accord- pledge. 919 (Tex.Civ.App. 1969, writ — Amarillo ingly, parol relating evidence collat- Further, ref’d n.r.e.). assignment aof eral under the not admissible savings account does security not create a precedent exception parol condition interest since transfer an interest evidence rule. any deposit account is not considered a se cured 9.104(12) (Vernon transaction. § may be ad Extrinsic Supp. 1982-83), We, supra. therefore, find vitiating a writ purpose missible the probative effect of extrinsic ten contract where there has been fraud evidence regarding the collateral pledge Beggs v. Texas Electric inducement. governed by common law Co., (Tex.Civ. Service S.W.2d 1.103, principles. supra. § Worth writ ref’d App. — Fort conceptual essence of parol requires showing Fraudulent inducement prevent fraud, therefore, evidence rule is to trickery, or device. type some artifice exceptions to the equally rule are well rec Broaddus, Town Bank v. North National ognized when enforcement of the rule (Tex.1978). Although inequitable would be or result in fraud. note, Town North involved Reid v. Ragland, 156 (Tеx.Civ. S.W. application 3.306(2), supra, court’s App. Antonio writ). Excep no — San the holding applicable makes to the instant tions to the evidence rule 3.306(2) states in case. Id. at 491. Section given effect when there can shown deliv pertinent part: ery of the instrument upon a condition *7 rights he holder in Unless has the of the precedent, fraud, accident, or mistake course, instru- any person due takes the duress. Crozier See v. Horne Children subject ment to Trust, Maintenance & Educational of (2) any party all defenses 422 (Tex.Civ.App.—San ton An on a would be available an action io writ ref’d Appellant as contract, simple [emphasis added.] serts that extrinsic evidence to introduced piodify the pledge written was ad properly Nowland claims that officers of Pan Ameri- mitted pursuant exceptions the based agreed can not his savings to use account uрon delivery conditional and fraud. collateral until the entire loan was collater- discussed, the contends collateral alized. As terms of already the pledge agreement subject was to an pledge agreement oral the caused it to become precedent condition assignment that the of operative immediately upon by execution savings the account would not oper become Wе find that failed to appellee. ative until the total was completely any loan to elevate adduce evidence sufficient collateralized. It is well settled that any representations extrin of Pan American the sic evidence is admissible to an trickery, establish level of fraud device. We hold by respective of shares held shareholder.
that extrinsic evidence was not admissible shareholders held a total of one in the induce- The seven exception under the of fraud (114) fourteen shares. Now- hundred and holding ment. Because of that our May shares. possessed land seven On upon by facts relied Nowland to establish promissory signed the trustee pledge oral agreement to the collateral $100,000.00 made principal sum of rule, by are barred we Pan American. The to the order of jury find there is no evidence to “George signed was K. Wil- рromissory note three, one, two, findings issues cox, Jr., Immediately prior to the Trustee.” four ten and six.3 Points error nine and note, de- Pan American execution of are sustained. an affida- that the trustee execute manded Pan con- point American’s first error representative capacity his setting vit forth conclusively tends that the evidence estab- Agree- validity of and the continued on the liability lished Nowland’s individual he did this. ment. The recоrd shows by note executed the trustee pursuant Agreement. Agree- made an signature may A be signed ment was Nowland and the other authority sign may his agent and Rio, participating shareholders Condo of representa as in other cases established Inc., for an provided on March Ann. 2.403 tion. Tex.Bus. & Com.Code (5) of five operative period years. 1968). negotiable A U.C.C.) (Vernon (Tex. Agreement the trustee to exe- empowered agent for and instrument executed an banks, lending cute “loans from and other is as if authority principal of his with the institutions or individuals in the name Lucas v. principal himself. provided “obliga- the Trust” and that all Whiteley, 550 S.W.2d Agreement n.r.e.). Except this tions entered into under writ ref’d —Amarillo par immediate joint ... the trustee ... shall be as established between however, representative ties, several as to the The indi- an authorized shareholders.” an instrument shareholders tо own name to liability signs vidual seven who his the instru obligated if personally each to the number proportionate other was preponderance Special you of the find from a issue no. 1 Do Defendant, American evidence that you preponderance Do find from a of the Brownsville, agreed in trust to hold Bank of Plaintiff, evidence that the William B. Nowland collateral William Nowland’s Defendant, of Browns- Pan American Bank security had been de- of the ville, until the balance concerning a entered into an oral contract Defendant, posited Pan American $237,500.00 loan? $237,500.00 Bank, loan? to secure the We do or we do not. ANSWER: answer, not. jury We do or we do ANSWER: We the we do. answer, Special we do. We the issue no. you preponderance Special find from a no. 6 Do issue Defendant, you preponderance evidence that Pan American Do find from a Brownsville, Defendant, the terms of that Bank of violated Pan American evidence that Brownsville, represented oral contract? the Plain- Bank of tiff, ANSWER: We do or we do not. his collateral B. William answer, We the we do. an not be used until would Special issue no. 3 security had been additional you preponderance Do find from a Bank, placed deposit American with the Pan Defendant, evidence that Pan American material, representation was and that such Brownsville, delivery accepted Bank of false; repre- representation said said Plaintiff, William *8 B. Nowland’s intention of not made with the sentation was $100,000.00 pledge partial for se- as it, representation fulfilling was made such that $237,500.00 curity George Wil- for a loan to K. Nowland, Plaintiff, the B. for William to cox, Trust and that Trustee Condominium him,to purpose inducing the loan enter into said would not be used until Plaintiff, agreement, William B. Now- and that deposit- security an additional was entering land, representation upon in relied ed with bank? agreement? loan into that ANSWER: We do or we do not. do or we do not. ANSWER: We answer, We the we do. answer, we do. We Special issue no. 4 to ment does not name the there is no evidence person represented We also conclude although showing representative that judgment of rescission signed in representative capacity. We, Id. at agreement. perforce, (b). 2.403(a)(2), together with the judgment set that aside prejudgment award interest and exem- Agreement The authorized against plary damages Pan American. The trustee to incur debt was extant at the part in this also reversed and judgment is time of the execution rendered. note the trustee. Pan American and the We the trial court’s of at- affirm denial trustee wеre the immediate parties to fees. Costs divided torney’s are promissory note. We find that the affida equally between Nowland and Pan Ameri- vit prior the trustee established can. knowledge representative trustee’s capacity and exonerates the from trustee personal any liability on the An note. DIAL, Justice, concurring.
agent liability has no representative I concur the result. capacity distinct liability from the of his principal. Co., testimony attorney Talmadge Tinsley Inc. v. The of Nowland’s Kerr, (Tex.Civ.App.— signed he the demand letter “which Dallas writ n.r.e.). ref’d We hold placed was in a ad wrapper, correctly Nowland, a signatory as Agreement postage dressed with the correct amount empowering debt, the trustee to incur is placed depository into United States individually liable on note. mail,” for the direct evi United States raising presumption denсe the rebuttable Additionally, Nowland’s liability is was the letter received. Southland not terminated by Tex.Bus. & Com.Code Greenwade, Life v. Insurance Co. 138 Tex. U.C.C.) 3.606(a)(2) (Tex. (Vernon Ann. § (1942). pre 159 S.W.2d 1968) which discharges any party to the sumption disappeared when evidence upon unjustifiable instrument impairment nondelivery given, upon was but the facts of collateral the holder. was in presumption which the remain in based the posture of the maker of the Tex. evidence for trier of consideration Bus. & (Tex. 3.413(a) Com.Code Ann. § County facts. v. Commonwealth Sudduth U.C.C.) (Vernon 1968), 3.606, supra, and § Co., Mutual Insurance 454 S.W.2d applies to Hooper sureties and not makers. Hall, (Tex.1970); Cooper 489 S.W.2d v. Ryan, 581 S.W.2d writ (Tex.Civ.App. — Amarillo 1979, writ). —Waco no Point of error one jury’s ref’d answer to is sustained as to Nowland’s liability. issue number nine should not have been We conclude that as one of the disregarded. participants seven to the Agreement joint created and several obligations of the
shareholders, is individually liable on the
promissory note executed trustee
during period the operative Agree-
ment. Accordingly, we find it was reversi-
ble error for trial deny court
American’s motion judgment non ob- predicated
stante veredicto individu-
al liability of signatory
Agreement authorizing the trustee incur judgment
debt. The part this is reversed
and rendered.