United States Court of Appeals,

Fifth Circuit.

No. 92-5652.

COMMONS WEST OFFICE CONDOS, LTD., Plaintiff,

v.

RESOLUTION TRUST CORPORATION, in its capacity as Receiver for Bexar Savings

Association, Defendant-Third Party Plaintiff-Appellee,

v.

Clinton WEILBACHER, Third-Party Defendant-Appellant.

Oct. 22, 1993.

Appeal from the United States District Court for the Western District of Texas.

Before POLITZ, Chief Judge, REAVLEY and EMILIO M. GARZA, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

Clinton Weilbach er was found liable by the district court for 1007 of the outstanding

indebtedness on a promissory note that he executed as general partner, on behalf of Commons West

Office Condos, Ltd. (the "partnership"). Weilbacher appeals, claiming that he executed a guaranty

agreement which limited his liability to 257 of the indebtedness. Finding no error, we affirm.

I

On behalf of the partnership, Weilbacher, a general partner, executed a promissory note (the

"Note") in the amount of $936,000.00 to Bexar Savings Association ("Bexar Savings"). The Note

was secured by a deed of trust, which granted to Bexar Savings a lien on property owned by the

partnership. The partnership, by and through Weilbacher as its general partner, also entered into a

loan agreement with Bexar Savings. Contemporaneously, Weilbacher, in his individual capacity,

executed a guaranty agreement (the "Guaranty"), guarantying payment of 257 of the principal of the

Note, as well as 1007 of all interest, expenses, and costs associated with the guarantied indebtedness.

The partnership and Weilbacher defaulted on the Note and Guaranty. Subsequently, Bexar Savings

posted the property securing the note for foreclosure, and the trustee auctioned t he property for

$256,500, leaving a deficiency of $913,983.97. The partnership brought suit against Bexar Savings,1 Subsequently, the partnership filed a notice of bankruptcy in federal district court. As a

result, the RTC filed a motion to sever its claims against the partnership from its main cause

against Weilbacher, which the district court granted.

2 The Guaranty states that it is to be construed under Texas law. seeking a declaration that it had not defaulted. Subsequently, Bexar Savings was placed into

receivership. The Resolution Trust Corporation ("RTC"), as receiver for Bexar Savings, filed a

counterclaim against the partnership and a third party action against Weilbacher, individually and as

general partner of the partnership, seeking a deficiency judgment for the amounts due under the Note

and Guaranty, as well as attorney's fees. 1 The RTC filed a motion for summary judgment, arguing

that Weilbacher was 1007 liable for the deficiency balance, because under state law general partners

are liable for the partnership's debts. Weilbacher claimed that the Guaranty limited his liability to 257

of the deficiency. The district co urt granted summary judgment for the RTC, and ordered that

Weilbacher pay the RTC int erest in the amount of $101,552.38, attorney's fees in the amount of

$13,384.67, and expenses totalling $1,743.80, along with post-judgment interest. The district court

took under advisement the issue concerning the extent of Weilbacher' s liability for the deficiency

amount. The district court later found that Weilbacher was liable for 1007 of the deficiency balance,

and ordered Weilbacher to pay the RTC damages in the amount of $913,983.97. Weilbacher appeals.

II

Weilbacher argues that the district court erred in finding him liable for 1007 of the deficiency

balance under the Note because the Guaranty limit ed his l iability to 257 of the deficiency balance.

The district court found that, under state law, Weilbacher was "liable for 1007 of the deficiency

balance as general partner of the borrower, independent of his 257 liabilit y as guarantor." We review

the district court's interpretation of state law de novo. S ee Salve Regina College v. Russell, 499 U.S.

225, ----, 111 S.Ct. 1217, 1221, 113 L.Ed.2d 190 (1991).

Weilbacher argues that the Guaranty is ambiguous, and that therefore, we should interpret

the Guaranty in a manner most favorable to the guarantor. 2 "Ambiguity in a contract is a question

of law." W

alker v. Horine, 695 S.W.2d 572, 577 (Tex.App.—Corpus Christi 198 5, no wri t). "A

contract is ambiguous when it is reasonably susceptible to more than one meaning, in the light of thesurrounding circumstances and after applying established rules of construction." Watkins v. PetroSearch, Inc., 689 F.2d 537, 538 (5th Cir.1982) (applying Texas law). A fact issue is created only if

the court finds that the contract is ambiguous. Id. Furthermore,

[i]n the construction of written contracts, it is a firmly established rule that the intention of

the parties must be determined primarily from the body of the written instrument it self.

Accordingly, if the terms of an instrument clearly invest it with a definite legal meaning, all

necessity for inquiry as to the intent of the parties is then at an end. Therefore, where ... a

written contract is clear and certain, and where there is no showing of fraud or mistake, the

instrument alone will be deemed to express the intention of the parties and will be enforced

as written no matter what their actual intention ma y have been. It is objective, and not

subjective intent that controls the meaning of the contract.

Madari aga v. Morris, 639 S.W.2d 709, 712 (Tex.App.—Tyler 1982, writ ref'd n.r.e.) (citations

omitted). We construe the Note and Guaranty toget her because both were executed

contemporaneously as a part and parcel of the same transaction. S ee Walter E. Heller & Co. v. Allen,

412 S.W.2d 712, 717 (Tex.Civ.App.—Corpus Christi 1967, error ref'd n.r.e.); T exas Water Supply

Corp. v. Reconstruction Finance Corp., 204 F.2d 190, 194 (5th Cir.1953).

We find no ambiguity in the language of the Guaranty. The Guaranty states that "the personal

liabilit y of the Guarantor[ ] is hereby expressly limit ed to twenty-five percent (25%) of the principal

balance of the "Guaranteed Indebtedness'...." The Guaranty is silent as to the Texas statute imposing

joint and several liabilit

y on partners for partnershi p debts, s ee infra, and makes no mention, or

reference to Weilbacher qua general partner. The Guaranty mentions Weilbacher only in his capacity

as guarantor. In addition, the Note does not state that Weilbacher limited his liabilit y as general

partner under the Note. The Guaranty is reasonably susceptible to only the meaning that Weilbacher,

in his capacity as guarantor, was limit ing his liabilit

y to 257. Consequently, we find no ambiguity in

the language of the Guaranty. Therefore, Weilbacher's contention that he intended the limitation of

liabilit y clause in the Guaranty to limit his liabilit y as general partner under the Note is irrelevant. S ee

Madariaga, 639 S.W.2d at 712 ("It is objective, and not subjective intent that controls the meaning

of the contract.").

"General partners of a limit ed partnership are personally liable to creditors for t he limited

partnership's debts the same as a partner in a general partnership." S unbelt Servic e Corp. v.

Vandenburg, 774 S.W.2d 815, 817 (Tex.App.—El Pa so 1989, writ denied); s ee also3 In Nance, the court found that Nance incurred two separate and distinct liabilities apparently

because the guaranty specifically stated that the obligations of the guarantor (Nance, individually)

were independent of the obligations of the borrower (the partnership). See Nance, 803 S.W.2d at

334. Although the guaranty in this case did not specifically state that Weilbacher's obligations as

guarantor were independent of the partnership's as borrower, we find Nance indistinguishable,

because a guaranty obligation is, by its very terms, an obligation independent of the obligation of

the borrower under a note. See United States v. Little Joe Traw lers, Inc., 776 F.2d 1249, 1252

(5th Cir.1985) (applying Texas law) ("While the extent of a guarantor's liability certainly does not

exceed the maker's underlying obligation, the actual liability of the guarantor may exist even

when the maker himself is not liable on the note."); Southw est Savings Assoc. v. Dunagan, 392

S.W.2d 761, 766 (Tex.Civ.App.—Dallas 1965, writ ref'd n.r.e.) ("A guaranty obligation, is by its

very terms, a secondary obligation dependent upon the existence of a principal obligation."); 68

Tex.Jur. § 141, at 506 ("[T]he respective undertakings of the principal promisor and the promisor

of guaranty, are distinct in spite of the factual inter-relationship between these undertakings.").

4 Although the partnership filed for a discharge in bankruptcy, there is nothing in the record

indicating that Weilbacher filed for bankruptcy individually. He, therefore, remains liable for 1007

of the partnership's debt. See Rohdie v. Washington, 641 S.W.2d 317, 320 (Tex.App.—El Paso

1982, error ref'd n.r.e.). Tex.Rev.Civ.Stat.Ann. art. 6132a-1, § 4.03(b) (Vernon Supp.1993). Under general partnership law,

all partners are jointly and severally liable for all debts and obligat ions of the partnershi p.

Tex.Rev.Civ.Stat.Ann. art. 6132b, § 15 (Vernon Supp.1993). The Guaranty did not reduce or alter

the separate and distinct liability of Weilbacher in his capacity as general partner. By executing the

Guaranty in addition to t he No t e, Weilbacher incurred liability in two separate and distinct

capacities—as general partner under the Note and as guarantor under the Guaranty. See N ance v.

Resolution Trust Corp., 803 S.W.2d 323 (Tex.App.—San Antonio 1990, writ denied) (where general

partner of a partnership, on behalf of the partnership, executed a promissory note in favor of a bank,

and signed a guaranty of payment in his individual capacity, whi ch limited his liability under the

guarant y t o 507 of the principal of the promissory note, court stated: "Nance is liable for one

hundred percent (100%) of the deficiency balance as General Partner of the Borrower, independent

of his f ift y percent (50%) liability as Guarantor."); 3 FDIC v. Singh, 977 F.2d 18 (1st Cir.1992)

("[T]he non-recourse provision limits the liabilities incurred under the 1987 Note by the appellants

acting as partners of Bandon Associates; it does not limit the separate and distinct liabilities incurred

by the appellants in their capacities as guarantors."). The district court correctly found that

Weilbacher was 1007 liable for the entire deficiency as general partner of the partnership, independent

of his 257 liability as guarantor. 4III

For the foregoing reasons, we AFFIRM the district court's judgment.