Hudnall v. Tyler Bank & Trust Co.

448 S.W.2d 503, 1969 Tex. App. LEXIS 2168
CourtCourt of Appeals of Texas
DecidedDecember 4, 1969
DocketNo. 455
StatusPublished
Cited by1 cases

This text of 448 S.W.2d 503 (Hudnall v. Tyler Bank & Trust Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hudnall v. Tyler Bank & Trust Co., 448 S.W.2d 503, 1969 Tex. App. LEXIS 2168 (Tex. Ct. App. 1969).

Opinion

MOORE, Justice.

This is an appeal from a summary judgment. Appellee, Tyler Bank & Trust Company, hereinafter referred to as the “bank,” instituted suit against appellant, J. S. Hud-nall, seeking judgment on a promissory note dated February 9, 1967, in the principal sum and amount of $160,000.00, together with interest and attorney’s fees. Appellant, J. S. Hudnall, answered with a general denial; a sworn plea of failure of consideration; and a cross-action for damages alleging that the bank had breached its agreement to place the proceeds of the aforesaid note in a special account and had breached its agreement to supervise the disbursement therefrom in accordance with said agreement.

In substance, appellant alleged in his answer that during the latter part of 1963 he learned, either through J. Harold Stringer, the president of the bank, or through John W. Hardin, president of Clanahan Construction Company, that Clanahan Construction Company had entered a bid for the construction of an addition to the Mother Frances Hospital in Tyler and that in order for it to be eligible for the issuance of a performance bond, the bonding company had required Clanahan to show financial responsibility in the sum and amount of $160,000.00. He further alleged that subsequent to this time, J. Harold Stringer, president of the bank, suggested that he guarantee the availability of the sum of $160,000.00 to be used by Clanahan Construction Company in completing the contract with Mother Frances Hospital; that Stringer suggested to him that he execute and deliver his unsecured promissory note in said sum to the bank, bearing interest at the rate of six per cent per annum, and that Clanahan Construction Company execute and deliver an unsecured promissory note in a like amount payable to the order of Hud-nall, bearing interest at six per cent per annum, and payable at the same date as Hudnall’s note to the bank; that Clanahan Construction Company pay the interest on both of said notes as the same became due and payable; and that Hudnall execute and deliver to Transamerica Insurance Company an agreement whereby Hudnall subordinated his right and claims against Clanahan Construction Company by reason of said note payable to him, to the claims, rights and demands of Transamerica Insurance Company, as surety, upon the performance bond of Clanahan Construction Company mentioned above. He alleged that after several conferences between him and the president of the bank, he agreed to such an arrangement and executed and delivered to the bank his promissory note on January 7, 1964, in the principal sum of $160,000.00, bearing interest at the rate of six per cent per annum, payable on “4— 15-66 or on demand” provided and upon [506]*506the condition that the funds represented by his note payable to the bank should be held by the bank for the specific purpose and no other of providing funds to the extent of $160,000.00 to be used and made available to Clanahan Construction Company for the sole and only purpose of completing the construction contract between it and Mother Frances Hospital in the event, and only in the event, that Clanahan Construction Company could not complete said contract without using such funds or some portion thereof; that the bank agreed to accept this note and to advance the funds and expressly agreed to hold the funds represented thereby upon and subject to the conditions stated above and for the sole purpose theretofore alleged, or, in the alternative, that the bank accepted the note under the circumstances stated above and thereby impliedly consented and agreed to the said directions and conditions given and made by him; that the deposit of said note and the funds represented thereby with the bank thus constituted a deposit for a specific, special, limited and particular purpose. He further alleged that notwithstanding said agreement the bank, in furtherance of a planned design course of action and of a conspiracy with Clanahan Construction Company to secure funds to be used by Clanahan Construction Company to pay its debts to the bank, deposited the sum of $160,000.00 represented by Hudnall’s note to the unrestricted, general checking account of Clanahan Construction Company, and thereby commingled said funds with the funds of Clanahan Construction Company, thus making said funds available for use by Clanahan Construction Company, which was not in accordance with the terms of the agreement. Thereafter, he alleged that Clanahan Construction Company drew checks on the account in excess of $100,000.00, payable to the bank, in payment of notes which it owed the bank. He further alleged that the contract between Clanahan and Mother Frances Hospital had been completed and that no portion of the funds made available for the limited purpose of guaranteeing the completion of the contract by Clana-han was used or required to be used in completing the contract; that because of such facts, he demanded the bank to cancel and deliver to him the promissory note, which he had theretofore executed, together with all renewals thereon, but that the bank refused and instituted this action to enforce payment of the note. His answer concluded with a prayer, praying that the bank take nothing by its suit and that the note be cancelled for failure of consideration, and alternatively, he prayed for damages in the sum and amount of $160,000.00 with interest thereon, from the date of the execution of the original note.

Appellee, Tyler Bank & Trust Company, filed its unsworn motion for summary judgment alleging that the pleadings, together with the depositions and exhibits, show that there is no genuine issue as to any material fact and that the bank was entitled to a judgment for full recovery upon its cause of action against appellee Hudnall as a matter of law.

Appellant, J. S. Hudnall, replied to the motion for summary judgment by filing an unsworn pleading alleging in substance that the pleadings, depositions and exhibits on file in the cause were sufficient to create disputed issues of material fact and prayed that the bank’s motion for summary judgment be denied.

After a hearing upon the motion, the trial court entered a summary judgment in favor of the bank against appellant for the sum of $206,088.76, together with interest thereon from the date of the judgment at the rate of ten per cent per annum together with all costs of suit and further decreed that the appellant take nothing against the bank by reason of his cross-action. From this judgment, appellant has duly perfected his appeal.

By the first point of error, appellant contends that the trial court erred in granting a summary judgment because the proof fails to show that the bank was the present [507]*507owner and holder of the note in that neither the original note nor a sworn certified copy thereof was attached to any of the hank’s pleadings, nor was there any deposition testimony showing the bank to be the present owner and holder of the note. Therefore, appellant contends that his general denial was sufficient to create a genuine issue of material fact as to whether the bank was the present owner and holder of the note, citing the holding in Alexander v. Houston Oil Field Material Company, 386 S.W.2d 540 (Tex.Civ.App., Tyler, 1965, writ ref., n. r. e.).

The record shows that the original note dated January 7, 1964, was renewed from time to time with the last renewal having been executed by appellant through his attomey-in-fact on February 9, 1967. A copy of the last renewal note was attached to the bank’s unsworn original petition.

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Related

Hudnall v. Tyler Bank and Trust Company
458 S.W.2d 183 (Texas Supreme Court, 1970)

Cite This Page — Counsel Stack

Bluebook (online)
448 S.W.2d 503, 1969 Tex. App. LEXIS 2168, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hudnall-v-tyler-bank-trust-co-texapp-1969.