Opinion issued February 19, 2015

In The

Court of Appeals 

For The 

First District of Texas 

————————————

NO. 01-13-00449-CV

———————————

CHARLES R. TIPS FAMILY TRUST, HAZEL W. TIPS FAMILY TRUST,

AND CHARLES T. WATKINS, Appellants

V.

PB COMMERCIAL LLC, Appellee

On Appeal from the 189th District Court

Harris County, Texas

Trial Court Case No. 2012-01406

O P I N I O N

The parties to this appeal entered into a residential loan agreement and 

guaranty for the principal amount of “ONE MILLION SEVEN THOUSAND AND 

NO/100 ($1,700,000.00) DOLLARS.” The loan documentation thus identified the 

amount of the loan in two different ways, with one number favoring the 
2

borrower—one million seven thousand—written out in words and a larger number

favoring the bank—$1,700,000—set out in numerals. The bank alleged a default

on the loan, and litigation ensued. The parties filed competing motions for 

summary judgment, and the trial court rendered a final summary judgment in favor 

of the bank. 

The borrowers and their guarantor appeal, arguing that the written words 

control the meaning of the document and that the note has been satisfied in full. 

Applying the well-settled interpretive rule that “words prevail over numbers” in the 

event of such a discrepancy, we reverse in part, affirm in part, and remand the case 

to the trial court for further proceedings.1

Background

In 2007, the Charles R. Tips Family Trust and the Hazel W. Tips Family 

Trust executed a “Balloon Real Estate Note” in favor of Patriot Bank. The note 

was secured by real property in Harris County pursuant to a “Deed of Trust and 

Security Agreement.” The same day, Charles Watkins, a trustee of both trusts, 

executed a “Guaranty Agreement” in favor of Patriot Bank, obligating himself to 

 1 On August 19, 2014, we issued our original opinion in this case. PB

Commercial filed a motion for rehearing and motion for rehearing en banc. 

We deny the motion for rehearing, but we withdraw our opinion and 

judgment of August 19, 2014, and we issue this opinion and a new judgment 

in their stead. Accordingly, we dismiss the motion for rehearing en banc as 

moot. See, e.g., Brookshire Bros., Inc. v. Smith, 176 S.W.3d 30, 41 (Tex. 

App.—Houston [1st Dist.] 2005, pet. denied).
3

personally pay the loan if the trusts defaulted on their payment obligations. The 

note, the security agreement, and the guaranty agreement all described the 

principal amount of the loan as follows:

ONE MILLION SEVEN THOUSAND AND NO/100 

($1,700,000.00) DOLLARS

This language appears five times in the three documents, in exactly the same form 

each time, and no other language in the documents describes the amount of the 

loan.

Before the note matured, the trusts made payments totaling $595,586. 

Neither the trusts nor Watkins made any further payments, and Patriot Bank 

initiated this action to collect the balance due on the note as well as unpaid interest. 

PB Commercial, LLC (“PBC”) subsequently acquired the note and sold the 

property securing it at auction for $874,125. PBC was then substituted as plaintiff. 

PBC filed a motion for traditional summary judgment, seeking recovery on 

both the note and the guaranty agreement. PBC argued that the original principal 

amount of the loan was $1,700,000, and on that basis it calculated a deficiency 

under the note and guaranty agreement of $815,214.50 after application of all 

payments and the proceeds from the foreclosure sale. PBC attached the note, 

security agreement, and guaranty agreement to its motion, but it made no mention 

of the conflict between the printed words and numerals. It also attached a payment 
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history showing how Patriot Bank applied payments against the loan, treating the 

principal amount as $1,700,000.

The trusts and Watkins responded by amending their answer, filing a 

counterclaim, responding to PBC’s motion for summary judgment, and filing a 

cross-motion for summary judgment. In these filings, the trusts and Watkins 

argued that the original principal amount of the loan under the note and guaranty 

agreement was $1,007,000. They argued that both documents are negotiable 

instruments governed by Section 3.114 of the Texas Business and Commerce 

Code, which provides: “If an instrument contains contradictory terms, typewritten 

terms prevail over printed terms, handwritten terms prevail over both, and words 

prevail over numbers.” TEX. BUS. & COM. CODE § 3.114. According to the trusts 

and Watkins, applying past payments and the foreclosure sale proceeds to the 

lower amount leads to the conclusion that the note was fully satisfied after the 

foreclosure sale and, in fact, PBC has collected a surplus of $189,111 beyond the 

amount to which it was entitled.

The amended answer included a counterclaim, which sought a declaration 

that:

(a) the . . . Note . . . was for the original principal amount of 

$1,007,000; and not $1,700,000;

(b) the Note has been fully paid and satisfied as a result of the 

payments made thereon prior to the Trusts’ alleged default, and the 

amount collected by Plaintiff through the post-default foreclosure 
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upon and sale of the real property pledged as security under the Note;

(c) Watkins is relieved of any further obligation under the Guaranty; 

and 

(d) [PBC] is retaining and holding money obtained through the 

foreclosure sale that is in excess of the amount necessary to fully pay 

and satisfy the amounts due under the Note.

The counterclaim also sought unspecified statutory damages under the Business 

and Commerce Code and an award of attorney’s fees. Notably, however, the crossmotion for summary judgment requested only that the trial court deny PBC’s 

motion and award the trusts the alleged surplus resulting from the foreclosure sale. 

The cross-motion did not mention the claims for attorney’s fees or statutory 

damages, nor did it provide any legal basis or evidentiary support for those claims.

After a pair of hearings, the trial court granted PBC’s motion and denied the 

cross-motion filed by the trusts and Watkins. The trial court’s final judgment 

awarded PBC damages in the amount of $815,214.50, prejudgment and 

postjudgment interest, court costs, and trial and appellate attorney’s fees. The trusts 

and Watkins appeal.

Analysis

This appeal presents one issue: whether the amount of the loan must be 

determined from the printed words in the note or from the entire context of the 

transaction, including evidence of the amount of money that Patriot Bank actually 

made available to the borrowers. Once we have determined the amount of the loan, 
6

the trusts and Watkins ask us to reverse the trial court’s judgment as to PBC’s 

claims and render judgment in their favor or remand for further proceedings. 

This court reviews an order granting or denying a motion for summary 

judgment de novo. Tex. Mun. Power Agency v. Pub. Util. Comm’n of Tex., 253 

S.W.3d 184, 192 (Tex. 2007). When both parties moved for summary judgment 

and the trial court granted one and denied the other, we “review the summary 

judgment evidence presented by each party, determine all questions presented, and 

render judgment as the trial court should have rendered.” Id. We may affirm the 

judgment that the trial court rendered or reverse and render the judgment that the 

trial court should have rendered. See FM Props. Operating Co. v. City of Austin, 22 

S.W.3d 868, 872 (Tex. 2000).

The trusts and Watkins characterize the “Balloon Real Estate Note” as a 

promissory note2 and as a negotiable instrument,3 and PBC does not dispute this 

characterization. To recover on a promissory note on which the borrower has 

defaulted, PBC was required to prove that (1) the note existed, (2) the maker or 

makers of the note signed it, (3) it was the legal owner and holder of the note, and 

(4) a certain balance was due and owing on the note. See, e.g., Wells Fargo Bank, 

 2 A “promissory note” is: “An unconditional written promise, signed by the 

maker, to pay absolutely and in any event a certain sum of money either to, 

or to the order of, the bearer or a designated person.” BLACK’S LAW 

DICTIONARY 1226 (10th ed. 2014).

3 See TEX. BUS. & COM. CODE § 3.104(a)–(d).
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N.A. v. Ballestas, 355 S.W.3d 187, 191 (Tex. App.—Houston [1st Dist.] 2011, no 

pet.); Clark v. Dedina, 658 S.W.2d 293, 295 (Tex. App.—Houston [1st Dist.] 

1983, writ dism’d).

To recover on the guaranty agreement, PBC was required to prove “the 

existence and ownership of the guaranty contract, the terms of the underlying 

contract by the holder, the occurrence of the conditions upon which liability is 

based, and the failure or refusal to perform by the guarantor.” McShaffry v. Amegy 

Bank Nat’l Ass’n, 332 S.W.3d 493, 496 (Tex. App.—Houston [1st Dist.] 2009, no 

pet.); see also Wasserberg v. Flooring Servs. of Tex., LLC, 376 S.W.3d 202, 205 

(Tex. App.—Houston [14th Dist.] 2012, no pet.).

To recover the amount remaining due under the note and guaranty 

agreement after the foreclosure sale, PBC was required to prove “(1) the amount 

due on the note at the time of foreclosure, (2) that proper notice of acceleration had 

been given, (3) that a valid foreclosure sale was made and (4) that [PBC] has given 

credit to the [debtors] for the amount received at the trustee’s sale and any other 

legitimate credits.” Carruth Mortg. Corp. v. Ford, 630 S.W.2d 897, 899 (Tex. 

App.—Houston [1st Dist.] 1982, no writ); see also Collins v. Bayview Loan 

Servicing, LLC, 416 S.W.3d 682, 686 (Tex. App.—Houston [14th Dist.] 2013, no 

pet.). When a party holding a security interest recovers more than the amount of 

the obligation, it must pay out any amounts due to certain third parties, then 
8

account for and pay to the debtor the remaining surplus. TEX. BUS. & COM. CODE 

§ 9.615(d)(1); see also id. § 9.615(a), (c).

If a written instrument is worded in such a way that it can be given a definite 

or certain legal meaning, then the contract may be construed as a matter of law. 

Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). “An unambiguous contract will 

be enforced as written, and parol evidence will not be received for the purpose of 

creating an ambiguity or to give the contract a meaning different from that which 

its language imports.” David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450 (Tex. 

2008); see also Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. CBI Indus., Inc., 907 

S.W.2d 517, 520 (Tex. 1995) (per curiam).

Whether a contract is ambiguous is a question of law, which we review de 

novo. Coker, 650 S.W.2d at 394. When a contract contains an ambiguity, summary 

judgment is precluded because interpretation of the contract becomes a fact issue. 

Id. (citing Harris v. Rowe, 593 S.W.2d 303, 306 (Tex. 1979)).

A simple lack of clarity or disagreement between parties does not render a 

term ambiguous. See DeWitt Cnty. Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 100 

(Tex. 1999). Rather, “[a]n ambiguity arises only after the application of established 

rules of construction leaves an agreement susceptible to more than one meaning.”

Id. “[F]or an ambiguity to exist, both potential meanings must be reasonable.” Id.

“Whether a contract is ambiguous is a question of law for the court to decide by 
9

looking at the contract as a whole in light of the circumstances present when the 

contract was entered.” Coker, 650 S.W.2d at 394. If the contract is ambiguous as a 

matter of law, only then is parol evidence of the parties’ interpretation of the 

contract admissible. Pitts & Collard, L.L.P. v. Schechter, 369 S.W.3d 301, 313

(Tex. App.—Houston [1st Dist.] 2011, no pet.).

Texas law anticipates internal contradictions in both negotiable and nonnegotiable instruments and provides for the resolution of such contradictions. 

Under the Uniform Commercial Code, which governs negotiable instruments such 

as the Note, “[i]f an instrument contains contradictory terms, typewritten terms 

prevail over printed terms, handwritten terms prevail over both, and words prevail 

over numbers.” TEX. BUS. & COM. CODE § 3.114; see also McNeese v. State, 596 

S.W.2d 906, 907 (Tex. Crim. App. [Panel Op.] 1980); Taylor v. State, 672 S.W.2d 

262, 264 (Tex. App.—Waco 1984, no writ). “It is well settled that unambiguous 

written words prevail over arithmetic numbers in promissory notes.” First State 

Bank v. Keilman, 851 S.W.2d 914, 920 (Tex. App.—Austin 1993, writ denied); see 

also Duvall v. Clark, 158 S.W.2d 565, 567 (Tex. Civ. App.—Waco 1941, writ 

ref’d w.o.m.) (“It is elementary that the written words of an instrument control and 

prevail over figures.”). This rule derives from the principle that “writing words 

more likely represents the parties’ true intentions than writing numbers.” 6B LARY 

LAWRENCE, ANDERSON ON THE UNIFORM COMMERCIAL CODE § 3-114:5R (3d ed.
10

rev’d 2003); see also 6 WILLIAM D. HAWKLAND & LARY LAWRENCE, HAWKLAND 

& LAWRENCE UCC SERIES § 3.114:1 (1999) (“Words are preferred because writing 

words more likely effects the parties’ true intentions than writing numbers.”); 

France v. Ford Motor Credit Co., 913 S.W.2d 770, 772 (Ark. 1996) (noting 

application of identical statute when individual wrote both “8,000.00” and “Eight 

dollars and 00/100” on check to creditor, resulting in payment of eight dollars).

The same interpretive rule applies to non-negotiable instruments. See Guthrie v. 

Nat’l Homes Corp., 394 S.W.2d 494, 495 (Tex. 1965).

I. Interpretation of contractual language

A. Unambiguity of loan amount

We first must examine whether the loan agreements are ambiguous. If so, 

then summary judgment was improper for that reason. Coker, 650 S.W.2d at 394; 

Harris, 593 S.W.2d at 306; Simpson v. GEICO Gen. Ins. Co., 907 S.W.2d 942, 945

(Tex. App.—Houston [1st Dist.] 1995, no writ).

The Note, Security Agreement, and Guaranty Agreement each describe the 

original amount of the loan obligation as “ONE MILLION SEVEN THOUSAND 

AND NO/100 ($1,700,000.00) DOLLARS.” The phrase “one million seven 

thousand and no/100 dollars” has a plain, unambiguous meaning, namely the sum 

of $1,007,000.00. Thus, the words and the numerals in the loan agreements are in 

conflict, differing by $693,000. This impact is magnified by the fact that the actual 
11

amount of the loan affects the application of payments, resulting in different sums 

of interest due in each scenario.

In Guthrie v. National Homes Corp., 394 S.W.2d 494 (Tex. 1965), the 

Supreme Court of Texas considered a similar case, in which the instrument in 

question stated that the obligor would pay “$5,780.00,” which was written out as 

“Five Thousand Eighty and 00/100 Dollars.” Guthrie, 394 S.W.2d at 495. The 

Court held that the words “Five Thousand Eighty and 00/100 Dollars” were

unambiguous and controlled the numerals. Id. at 495–96. A jury had returned a 

verdict that, because $5,000 had been paid on the note, the obligor still owed $780.

Id. at 494. In light of the unambiguous written words of the instrument, however, 

there was no fact issue regarding the original amount of the loan for the jury to 

consider, and the Court reduced the award to $80 to match the words of the 

instrument. Id. at 496. The Court recognized that the rule favoring words over 

numerals already applied to negotiable instruments such as promissory notes and 

held that the same rule applies to non-negotiable instruments. Id. at 495–96.

Similarly, in First State Bank v. Keilman, 851 S.W.2d 914 (Tex. App.—

Austin 1993, writ denied), the parties’ agreement stated that interest would be paid 

at the “prime rate . . . plus Two percent (12.5%),” but “12.5%” was crossed out and 

the number “2%” written in. First State Bank, 851 S.W.2d at 920. The court of 

appeals explained that “[i]t is well settled that unambiguous written words prevail 
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over arithmetic numbers in promissory notes.” Id. Thus, even though handwritten 

or typed text ordinarily prevails over printed terms in an instrument, the alteration 

had no effect, as the written words would still control over the interpretation of the 

arithmetic numbers “12.5%” and “2%.” Id.; see also Duvall, 158 S.W.2d at 567 

(handwritten change from “$900.00” to “$930.00” was immaterial because written 

words setting payment at six percent of $15,000 controlled and were not altered).

Under the UCC and Guthrie, the rule that the written words control over 

numerals applies to all of the documents at issue in this dispute, both negotiable 

and non-negotiable instruments. TEX. BUS. & COM. CODE § 3.114; Guthrie, 394 

S.W.2d at 495–96. It does not matter that the discrepancy between the words and 

numbers here is a large one. Neither Section 3.114 nor Texas case law makes a 

distinction on the basis of the size of the obligation or the significance of the 

conflict in terms. Indeed, at least one court has applied the logic of Guthrie in 

holding that words controlled over numbers when a discrepancy was even larger 

relative to the transaction size than it is here. In In re Regency Chevrolet, Inc., 122 

B.R. 60 (Bankr. S.D. Tex. 1990) (mem. op.), the bankruptcy court for the Southern 

District of Texas held that the terms “Seventeen Thousand Five Hundred Dollars 

($10,000.00)” and “Seventeen Thousand Five Hundred Dollars ($14,000.00)” in 

two different leases created two monthly obligations of $17,500.00 each. 122 B.R. 

at 61–62 (citing Guthrie, 394 S.W.2d at 494).
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PBC argues that this case presents a unique circumstance in that the 

omission of a single word transforms “one million seven hundred thousand” into 

“one million seven thousand.” If the former phrase were modified in any other 

way, according to PBC, we would be faced with either an ambiguous term or an 

unambiguous but absurd one. For example, PBC posits a scenario in which a 

scrivener’s error rendered the phrase as “one seven hundred thousand,” omitting 

the word “million.” According to PBC, such an amount would be ambiguous, and 

the court would have to refer to the numerals and extrinsic evidence to resolve the 

ambiguity. But this hypothetical scenario has no bearing on this case because there 

is no ambiguity in the text here. Indeed, in the scenario described by PBC, one 

could not even say that the terms contradict each other within the meaning of 

Section 3.114, as the meaning of one of the potentially conflicting terms would be 

ambiguous.

Alternatively, PBC suggests a scenario in which another scrivener’s error 

replaced “million” with “billion,” resulting in “one billion seven hundred 

thousand.” This, PBC says, would result in the borrowers clamoring for relief and 

asking this court to consider evidence extrinsic to the contract. That may be, and 

the possibility of such an error demands careful review of proposed written 

agreements. But that is no basis upon which we may disregard well-settled and 

binding statutory and case law. We need not and do not express any opinion on 
14

what legal or equitable remedies the parties might have in such a hypothetical 

scenario. On the appellate record before us, the only issue is what the terms of the 

written agreements mean as a matter of law. Neither party sought an equitable 

reformation of the loan in the trial court, so no issue of equitable relief has been 

presented in this appeal. The scenario proposed by PBC thus has no bearing on 

how we must apply the law to the record before us.

Here, the words “one million seven thousand” control over the numerals 

“$1,700,000” to set the amount of the promissory note and guaranty obligations.

B. Irrelevance of extrinsic evidence

PBC also argues that the trial court properly considered evidence before it 

that the borrowers received $1,700,000 from Patriot Bank. But a court may not 

consider extrinsic evidence about a contract’s meaning unless the contract is 

ambiguous. PBC does not contend that the documents are ambiguous; any material 

ambiguity in the contracts would have made summary judgment for PBC improper 

for that reason alone. Coker, 650 S.W.2d at 394; Harris, 593 S.W.2d at 306; 

Simpson, 907 S.W.2d at 945.

A document is ambiguous only if it is susceptible to more than one 

reasonable interpretation after application of all relevant rules of construction. 

DeWitt Cnty. Elec. Coop., 1 S.W.3d at 100. Only one interpretation of the language 

in question is possible in light of controlling law. 
15

The agreements unambiguously set the amounts of the promissory note and 

guaranty obligations at $1,007,000.00 each. Because the amount of principal set 

forth in the Note and Guaranty Agreement is not ambiguous, for purposes of 

interpreting the documents as a matter of law, neither the trial court nor this court 

may consider extrinsic evidence such as the amount of money that actually 

changed hands amongst the parties, and such evidence could not have supported 

the trial court’s judgment. Pitts & Collard, 369 S.W.3d at 313.

II. Application of summary judgment standard

A. Motion for summary judgment filed by PBC

PBC argues that the trial court could have chosen to reform the agreements 

to give effect to what it claims was the substance of the parties’ agreement or, 

alternatively, that we should reform the agreements in that way. PBC correctly 

observes that Texas courts are courts of equity as well as law, and therefore our 

district courts are empowered to “hear and determine any cause that is cognizable 

by courts of law or equity and may grant any relief that could be granted by either 

courts of law or equity.” TEX. GOV’T CODE § 24.008; see also Weaver v. Head, 984 

S.W.2d 744, 745 (Tex. App.—Texarkana 1999, no pet.). From these principles, 

PBC argues that Texas courts need not “follow blindly law that would render an 

unjust result when principles of equity would bring about a just result.” Thus, PBC 

argues that the trial court may have given the Note its proper construction but then 
16

elected to “correct the mistake of fact resulting from the scrivener’s error” by 

reforming it to reflect a loan of $1,700,000.00, and such a reformation would have 

been a valid basis for the trial court’s judgment. As support, PBC relies on the 

dissenting opinion in Guthrie, in which Justice Griffin stated his opinion that the 

majority should have allowed the jury verdict to stand, because he did not agree 

that the case law of that day supported a rule “as a matter of law that typewritten 

words prevail over typewritten figures in a simple contract.” Guthrie, 394 S.W.2d 

at 497 (Griffin, J., dissenting).

We are not persuaded. As previously noted, PBC did not include any request 

for equitable reformation of the agreement in its petition, nor did it present any 

argument for equitable reformation in its motion for summary judgment. As such, 

that could not have been the basis for the summary judgment granted in PBC’s 

favor. See TEX. R. CIV. P. 166a(c); McConnell v. Southside Indep. Sch. Dist., 858 

S.W.2d 337, 339, 341 (Tex. 1993); see also TEX. R. CIV. P. 94 (affirmative 

defenses must be set forth affirmatively in responsive pleadings); CenterPoint 

Energy Hous. Elec. L.L.P. v. Old TJC Co., 177 S.W.3d 425, 430 n.3 (Tex. App.—

Houston [1st Dist.] 2005, pet. denied) (mutual mistake is affirmative defense that 

must be pleaded).

Having determined the terms of the parties’ agreements, we must determine 

whether PBC was entitled to summary judgment. 
17

To recover on the Note, PBC was required to prove that a certain balance 

was due and owing on the Note. Clark, 658 S.W.2d at 295. It has failed to do so 

and did not even address the correct amount of the loan in its motion for summary 

judgment. Further, to recover on the alleged deficiency, PBC was required to prove 

“the amount due on the note at the time of foreclosure.” Carruth Mortg. Corp., 630 

S.W.2d at 899. This it has also failed to do. Instead, PBC’s position depends on 

extrinsic evidence that the amount due should be calculated based on an amount 

other than the amount fixed by the Note. Because the trial court could not have 

considered such evidence, we hold that PBC was not entitled to summary judgment 

on its claims for damages, interest, costs, or attorney’s fees stemming from the 

trusts’ default under the Note.

To recover on the Guaranty Agreement, PBC was required to prove “the 

terms of the underlying contract by the holder.” McShaffry, 332 S.W.3d at 496.

Again, because PBC’s claims depended on a misinterpretation of the unambiguous 

language of the Note, PBC has failed to demonstrate that it was entitled to 

summary judgment against Watkins under the Guaranty Agreement.

Because PBC did not establish each of the elements of any of its causes of 

action, it was not entitled to summary judgment. We will therefore reverse the trial 

court’s judgment insofar as it granted judgment in favor of PBC on its affirmative 

claims.
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B. Motion for summary judgment filed by the trusts and Watkins

Our inquiry does not stop here, however, as the trusts and Watkins argue that 

their motion for summary judgment was wrongly denied. When the parties file 

competing motions for summary judgment, on appeal we “review both sides’ 

summary judgment evidence,” “determine all questions presented,” and “render the 

judgment that the trial court should have rendered.” FM Props., 22 S.W.3d at 872.

We must therefore determine whether the trusts and Watkins were entitled to 

summary judgment.

In their motion, the trusts and Watkins argued that the amount of the Note 

was $1,007,000, resulting in the Note having been completely satisfied by the time 

that the lawsuit was filed. They argue that they made payments of $595,586, 

which, applied to the principal of $1,007,000, should have resulted in application 

of $273,600 to interest and $321,986 to principal. The foreclosure sale yielded an 

additional $874,125. Adding these numbers together yields total payments of 

$1,196,111. Based on a loan amount of $1,007,000, the trusts and Watkins 

conclude that PBC has recovered more than was due and that it now owes them 

$189,111. 

The trusts and Watkins do not provide any explanation or evidentiary 

support for their calculations, either in their motion or in their briefs to this court.

In fact, their motion did not attach any evidence whatsoever. Neither the evidence 
19

in the record nor the parties’ briefs provides any guidance for how the calculations 

are to be performed given the correct loan amount. Rather, the record contains only 

evidence of how the bank applied interest against the incorrect amount; when using 

the correct amount, only the results of the parties’ respective calculations are 

given.

The record before us does not establish the amount of any surplus or that 

such a surplus exists. We have already held that the original amount of the loan as 

specified in the Note, Security Agreement, and Guaranty Agreement was 

$1,007,000, not $1,700,000, and we thus hold that the trusts and Watkins have 

established that they were entitled to summary judgment on their first request for 

declaratory relief, namely a legal declaration that “the . . . Note . . . was for the 

original principal amount of $1,007,000; and not $1,700,000.” The trial court erred 

in denying this relief on the basis of the pleadings and record before it. Because the 

record provides no definitive basis for calculating the amount due at the time of the 

foreclosure sale or at the date of the trial court’s judgment, however, the trial court 

did not err in denying the other declaratory relief requested. We note that even if 

the trusts and Watkins had entirely prevailed on their summary-judgment motion in 

the trial court, the rules of civil procedure would have permitted PBC an 

opportunity to assert the equitable claims that it referenced for the first time in its 
20

appellate briefing. See TEX. R. CIV. P. 63. Accordingly, we will remand the case to 

the trial court for further proceedings consistent with this opinion.

Conclusion

The amount due under the Note, Security Agreement, and Guaranty 

Agreement was determined by the written words therein, not the numerals. The 

judgment of the trial court regarding PBC’s claims for affirmative relief is 

therefore reversed. We also reverse the judgment to the extent that it denied 

summary judgment to the trusts and Watkins on their first claim for declaratory 

relief. Further, because the trusts and Watkins were entitled to judgment on that 

claim, we render judgment that the principal amount of the loan as specified in the 

Note was $1,007,000.00.

We remand the case to the trial court for further proceedings consistent with 

this opinion.

Michael Massengale

Justice 

Panel consists of Chief Justice Radack and Justices Massengale and Huddle.