Lyco Acquisition 1984 Ltd. Partnership v. First National Bank of Amarillo

860 S.W.2d 117, 1993 Tex. App. LEXIS 2453, 1993 WL 77278
CourtCourt of Appeals of Texas
DecidedAugust 26, 1993
Docket07-92-0263-CV
StatusPublished
Cited by45 cases

This text of 860 S.W.2d 117 (Lyco Acquisition 1984 Ltd. Partnership v. First National Bank of Amarillo) 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
Lyco Acquisition 1984 Ltd. Partnership v. First National Bank of Amarillo, 860 S.W.2d 117, 1993 Tex. App. LEXIS 2453, 1993 WL 77278 (Tex. Ct. App. 1993).

Opinions

POFF, Justice.

Appellants Lyco Acquisition 1984 Limited Partnership and Lyco Energy Corporation (collectively Lyco), as an overriding royalty interest owner in seven Moore County oil wells since August 1984, sued the operator of the wells, Jelmo Oil Company, for $195,-050.47 in unpaid casinghead gas proceeds. On April 30, 1991, Lyco deposed Jelmo’s president, Wallace L. Bruce. Through Bruce’s deposition, Lyco learned (1) that Jel-mo had actually issued 25 cheeks totaling $188,854.46 payable to Lyco as the owner of the overriding royalty interest; (2) that on March 10, 1986, Jelmo had forged Lyco’s endorsement on each of the 25 checks and then deposited the checks into various escrow accounts at the First National Bank of Amarillo; and (3) that in November 1989, Bruce and Robert C. Dallas, a Jelmo shareholder and director, converted the money in the escrow accounts to their personal use. The checks were never delivered to Lyco. Based on this information, Lyco amended its original petition to add the First National Bank of Amarillo (the Bank), appellee, as a defendant. Lyco alleged a cause of action [119]*119against the Bank for conversion. The Bank, however, moved for summary judgment and the trial court granted the Bank’s motion, severing Lyco’s cause of action against the Bank from Lyco’s cause of action against Jelmo and others. From the trial court’s final order of summary judgment, Lyco appeals by a single point of error in which it claims the court erred in granting summary judgment. We will overrule Lyco’s point of error.

The trial court’s order of summary judgment did not state the specific grounds upon which it was granted. Accordingly, to prevail on appeal, Lyco must show that each of the independent arguments alleged in the Bank’s motion for summary judgment is insufficient to support the summary judgment order. Rogers v. Ricane Enters., 772 S.W.2d 76, 79 (Tex.1989); Hayes v. E.T.S. Enters., 809 S.W.2d 652, 655 (Tex.App.—Amarillo 1991, writ denied). The Bank urged two grounds for summary judgment. First, the Bank advanced a statute of limitations defense. Second, the Bank contended that a cause of action for conversion could not be maintained because the 25 checks were never delivered to Lyco. We will initially address the statute of limitations question for if we find limitations has run, the question of the delivery of the checks need not be addressed.

Pursuant to Tex.Civ.Prae. & Rem.Code Ann. § 16.003 (Vernon 1986), a person must bring suit for conversion of personal property no more than two years after the day the cause of action accrues. Hansler v. Mainka, 807 S.W.2d 3, 5 (Tex.App.—Corpus Christi 1991, no writ). An instrument is converted when it is paid on a forged endorsement. Tex.Bus. & Com.Code Ann. § 3.419(a) (Vernon 1968). It is uncontroverted that the Bank paid on a forged endorsement on March 10, 1986, when the 25 checks were deposited into one or more escrow accounts at the Bank. The question before us is whether Lyco’s cause of action for conversion necessarily accrued at that time.

If the two-year statute of limitations began to run on March 10, 1986, then Lyco would have had to sue the Bank for conversion no later than March 10, 1988. Lyco did not file suit against the Bank until May 9, 1991. Lyco contends, however, that the statute of limitations did not begin to run until April 30, 1991, the date it acquired actual knowledge of the conversion. We cannot agree with Lyeo’s contention.

Absent allegations of fraud, the discovery rule does not apply to toll limitations in cases grounded solely in a commercial paper context. Cathey v. First City Bank of Aransas Pass, 758 S.W.2d 818, 822 n. 3 (Tex.App.—Corpus Christi 1988, writ denied).

[T]he “discovery rule” does not apply to toll the statute of limitations where a bank is sued for conversion on a forged endorsement. In such cases, limitations can only be tolled by proof of the bank’s fraudulent concealment of the transaction.

Southwest Bank & Trust Co. v. Bankers Commercial Life Ins. Co., 563 S.W.2d 329, 332 (Tex.Civ.App.—Dallas 1978, writ ref'd n.r.e.).

The summary judgment record contained no evidence of any fraudulent concealment on the part of the Bank. Accordingly, the discovery rule does not apply to toll the statute of limitations in this case. Lyco’s cause of action against the Bank for conversion was filed too late. Having found Lyco’s conversion action to be barred, we need not address the Bank’s lack-of-delivery defense. We therefore find the trial court did not err in granting the Bank’s motion for summary judgment. Lyco’s solitary point of error is overruled.

Having found that the court’s order of summary judgment was proper, we reach a contention by the Bank, advanced in three points of error, that the trial court erred in finding the Bank was not entitled to recover attorney’s fees. The Bank contends that attorney’s fees were recoverable under the Uniform Declaratory Judgments Act, Tex. Civ.Prac. & Rem.Code Ann. § 37.009 (Vernon 1986), as well as under the Texas Trust Code, Tex.Prop.Code Ann. § 114.064 (Vernon Supp.1993). We will first discuss the recovery of attorney’s fees under the Uniform Declaratory Judgments Act.

[120]*120In response to the suit brought by Lyco, the Bank filed an answer as well as a counterclaim for declaratory judgment. Reduced to its essence, the Bank’s counterclaim for declaratory judgment requested the court to declare that it had no liability to Lyco upon the claims asserted by Lyco. This was also the essence of the Bank’s answer. Therefore, the Bank had no need whatsoever to file a declaratory judgment action. In fact, a declaratory judgment was not available to the Bank. As we declared in In re Estate of Kidd, 812 S.W.2d 356, 359 (Tex.App.—Amarillo 1991, writ denied):

The proposition has long been settled that an action for declaratory judgment may not be entertained if there is pending, at the time it is filed, another action between the parties in which the same issues may be adjudicated. A counterclaim presenting no new controversies, but brought solely to pave the way for recovery of attorney’s fees, is improper.

See also John Chezik Buick Co. v. Friendly Chevrolet Co., 749 S.W.2d 591, 594 (Tex.App.—Dallas 1988, writ denied); Johnson v. Hewitt, 539 S.W.2d 239, 240-41 (Tex.Civ.App.—Houston [1st Dist.] 1976, no writ); Joseph v. City of Ranger, 188 S.W.2d 1013, 1014-15 (Tex.App.—Eastland 1945, writ refd w.o.m.). There is no question that in this case the Bank attempted to invoke the Uniform Declaratory Judgments Act to deter-, mine rights in a suit that was already pending.

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Bluebook (online)
860 S.W.2d 117, 1993 Tex. App. LEXIS 2453, 1993 WL 77278, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lyco-acquisition-1984-ltd-partnership-v-first-national-bank-of-amarillo-texapp-1993.