Source: https://law.justia.com/cases/federal/appellate-courts/F2/761/1068/277381/
Timestamp: 2019-11-20 04:55:25
Document Index: 387010791

Matched Legal Cases: ['§ 303', '§ 553', '§ 362', '§ 303', '§ 1293', '§ 553']

In the Matter of Texas Mortgage Services Corporation, Debtor.texas Mortgage Services Corporation, Plaintiff-appellee, v. Guadalupe Savings & Loan Association, Defendant-appellant, 761 F.2d 1068 (5th Cir. 1985) :: Justia
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In the Matter of Texas Mortgage Services Corporation, Debtor.texas Mortgage Services Corporation, Plaintiff-appellee, v. Guadalupe Savings & Loan Association, Defendant-appellant, 761 F.2d 1068 (5th Cir. 1985)
US Court of Appeals for the Fifth Circuit - 761 F.2d 1068 (5th Cir. 1985) June 3, 1985
TMSC, a mortgage broker, originates residential mortgage loans for subsequent sale to investors.3 In order to obtain funding for its loans, TMSC executed a Warehousing Agreement with Guadalupe on November 25, 1981. Under the terms of this agreement, Guadalupe was to serve as a source of interim financing for mortgage loans originated by TMSC until TMSC could sell those loans to permanent lenders.4 As consideration for this line of credit, TMSC executed promissory notes to Guadalupe, which were secured in part by the assignment of a reserve account TMSC was to establish with appellant. TMSC was supposed to make deposits of approximately $137,000 in the reserve account concurrently with appellant's advances of funds. TMSC commenced borrowing from Guadalupe on November 25, 1981, as provided in the Warehousing Agreement.5 TMSC was experiencing financial difficulty, however, and failed to make any deposits in the reserve account. TMSC's financial status failed to improve over time. On July 1, 1982, TMSC's creditors instituted Chapter 11 proceedings against it by filing an involuntary petition in bankruptcy court, pursuant to 11 U.S.C. § 303 (1979).
Subsequently, on November 1, 1982, an order for relief was entered in TMSC's bankruptcy proceedings. A week later, on November 8, 1982, Guadalupe setoff $107,737.36 of the $300,000 deposit, which was the amount appellant believed it was owed in delinquent warehousing, commitment, and extension fees. In response to Guadalupe's setoff, TMSC sent a letter to appellant, dated December 14, 1982, demanding that Guadalupe immediately return the full deposit. Guadalupe refused. TMSC then, on December 10, 1982, filed a complaint for the turn over of the deposit in bankruptcy court as a "related action" to its Chapter 11 proceedings. In its answer to TMSC's complaint, Guadalupe asserted a right to setoff, pursuant to 11 U.S.C. § 553 (1979), and filed a counterclaim requesting relief from the automatic stay imposed by TMSC's bankruptcy proceedings under 11 U.S.C. § 362 (1979).
Rule 28(a) (4) has been construed as a mandate that the brief of the appellant contain a statement of the issues presented for review, and an argument portion which analyzes and supports those contentions. 16 C. Wright, A. Miller, E. Cooper & E. Gressman, Federal Practice and Procedure Sec. 3974, at 421 (1977). As a consequence, it has been stated that issues "not raised or argued in the brief of the appellant may be considered waived and thus will not be noticed or entertained by the court of appeals." Id. at 421 n. 1 (emphasis added). We have applied such a waiver in a number of cases. See Smith v. State Farm Fire & Casualty Co., 695 F.2d 202, 206 (5th Cir. 1983); Gaines v. Cuna Mut. Ins. Soc'y, 681 F.2d 982, 985 n. 3 (5th Cir. 1982); In re Mun. Bond Reporting Antitrust Litig., 672 F.2d 436, 439 n. 6 (5th Cir. 1982); see also Cannon v. Teamsters & Chauffeurs Union, 657 F.2d 173, 177-78 (7th Cir. 1981) (issue raised by appellant at oral argument had been waived because appellant failed to argue the issue in its brief); 16 C. Wright, A. Miller, E. Cooper & E. Gressman,supra, Sec. 3974, at 421 (stating that "issues that are not raised in appellant's initial brief at this point will normally not be considered by the [appellate] court," and citing several cases by this Court in support of that proposition).
Assuming that federal law governs post-petition setoff, we nevertheless direct " 'an interested eye' " toward the decisions of the forum state. In re Goodson Steel Corp., 488 F.2d 776, 779 (5th Cir. 1974) (quoting In re A.M. Townson & Co., 283 F.2d 449, 452 (3d Cir. 1960)); see also In re Saugus Gen. Hosp., 698 F.2d 42, 44 (1st Cir. 1983) ("Even those cases that have held that federal standards govern post-petition setoffs under Sec. 68, moreover, have cast those standards ' "with an interested eye" toward the [forum state's] decisions.' " (quoting Goodson) (emphasis in original)). The Supreme Court of Texas has recognized the doctrine of promissory estoppel as set forth in section 90 of the Restatement (First) of Contracts. Preload Technology v. A.B. & J. Constr. Co., Inc., 696 F.2d 1080, 1084 (5th Cir. 1983); Wheeler v. White, 398 S.W.2d 93, 96 (Tex.1965); "Moore" Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 937 (Tex.1973); Fretz Constr. Co. v. Southern Nat'l Bank of Houston, 626 S.W.2d 478, 480 (Tex.1981). Section 90 provides:
The Wheeler court quoted from the United States Supreme Court decision in Dickerson v. Colgrove, 10 Otto 578, 580, 100 U.S. 578, 580, 25 L. Ed. 618 (1880), in which the Court wrote:
Although the Texas Supreme Court reversed the Turcotte decision, it left this basic rule intact. See Turcotte, 564 S.W.2d at 685-86 (holding that it is "a fundamental rule of law" that a person cannot take any beneficial interest under a transaction and then adopt a position, "even if well founded," that would defeat the transaction). We believe appellant's actions fall within this general rule. Guadalupe accepted the deposit on TMSC's terms without protest. Having accepted the deposit on these restricted conditions, appellant now is estopped from rejecting its promise to treat the certificates as trust funds. Any other rule would allow Guadalupe to obtain the benefit of interest from the investors' funds and yet refuse the disadvantageous part of its agreement. See also Central Power & Light Co. v. Del Mar Conservation Dist., 594 S.W.2d 782, 791 (Tex.Civ.App.--San Antonio 1980, writ ref'd n.r.e.) ("A party may not accept the beneficial part of a transaction and repudiate the disadvantageous part. 'One who retains benefits under a transaction ... is estopped to take a position inconsistent therewith.' "); Boiles v. City of Abilene, 276 S.W.2d 922, 924 (Tex.Civ.App.--Eastland 1955, writ ref'd) (a party in "good conscience should not be permitted to reap the benefits of ... contracts and at the same time refuse to pay the consideration therefor"); Mapco, Inc. v. Pioneer Corp., 447 F. Supp. 143, 150 (N.D. Tex. 1978), aff'd, 615 F.2d 297 (5th Cir. 1980) (quoting Turcotte) .
Reba Lee, Executive Vice President for TMSC, also testified on behalf of appellee. In response to the question, "At any time did you advise ... [Guadalupe] that these were trust funds?", Lee stated, "Every time I talked to them." Lee stated that during her conversations with employees of Guadalupe regarding the wire transfers of the funds, she never indicated that the funds were to be used to satisfy the reserve account obligation, as the Guadalupe witnesses had testified. Rather, she testified that " [a]ll of my conversations [with Guadalupe] included that they were trust accounts." In a December 14 letter from Lee to Guadalupe, which was admitted into evidence, Lee wrote, "I am once again making demand that the $300,000 deposited with Guadalupe Savings & Loan be returned. You were told from the beginning these were escrow funds and being sent to your Association on a temporary basis."
These portions of the record provide ample support for the trial court's findings. Guadalupe argues that its testimony concerning the circumstances surrounding the wire transfer is more plausible than TMSC's account of events, but does not offer any compelling reason why the court could not have determined that Andrews' and Lee's testimony was more credible. Although the district court was under no obligation to accept the bankruptcy court's fact-findings,14 it chose to accept those findings when it issued the turn-over order. Moreover, as heretofore indicated, appellant has waived the issue whether the district court erred by failing to hold a de novo hearing to reassess the facts. We will not attempt to reassess the credibility of witnesses whom we have not had an opportunity to see on the stand. United States v. Reddoch, 467 F.2d 897, 898 (5th Cir. 1972) (per curiam); Blum v. Gulf Oil Corp., 597 F.2d 936, 938 (5th Cir. 1979) (per curiam); Harrison v. Flota Mercante Grancolombiana, S.A., 577 F.2d 968, 974 (5th Cir. 1978); Ruiz v. Estelle, 679 F.2d 1115, 1142 (5th Cir. 1982), cert. denied, 460 U.S. 1042, 103 S. Ct. 1438, 75 L. Ed. 2d 795 (1983).
The case was tried by agreement of the parties as a "related" action to TMSC's bankruptcy proceedings, pursuant to Local Rule of the Northern District of Texas Concerning Bankruptcy Cases and Proceedings p (c) (1) (Misc. Order No. 33) (hereinafter "Local Rule"), which provides that " [a]ll cases under Title 11 and all civil proceedings arising under Title 11 or arising in or related to cases under Title 11 are referred to the bankruptcy judges of this district."
This review was made pursuant to the Local Rule at paragraphs (d) (3) (B), (e). Local Rule p (d) (3) (B) provides:
Although TMSC was involved in bankruptcy proceedings, it was permitted to continue operating as a business under 11 U.S.C. § 303(f) (1979), since the proceedings were involuntary and no order for relief had yet been granted
See Local Rule, supra note 2, at p (e) (2) (B)
Although appellant originally had docketed its appeal in the district court, the parties subsequently agreed to a direct appeal to this Court pursuant to 28 U.S.C. § 1293(b) (West Supp.1984). That statute provides:
" [A] court of appeals shall have jurisdiction of an appeal from a final judgment, order, or decree of ... a District court of the United States or from a final judgment, order, or decree of a bankruptcy court of the United States if the parties to such appeal agree to a direct appeal to the court of appeals."
The district court, Judge Buchmeyer, and the bankruptcy court, Judge Roberts, approved the transfer of appeal by their Joint Order issued September 6, 1983. The Joint Order was executed pursuant to our local rule, Fed. R. App. P. 47.4.3, which addresses "Bankruptcy Appeals." That rule provides:
Normally, funds deposited with a bank are general deposits which create a debtor-creditor relationship between the bank and its depositor. Citizens Nat'l Bank of Dallas v. Hill, 505 S.W.2d 246, 248 (Tex.1974); In re Goodson Steel Corp., 488 F.2d 776, 779 (5th Cir. 1974). When the bank and its depositor stand in this relationship, the bank has a right to setoff funds in the general account against indebtedness due from the depositor. See 11 U.S.C. § 553 (1979); Western Shoe v. Amarillo Nat'l Bank, 94 S.W.2d 125 (Tex.1936). Setoff is not permitted, however, if the funds involved are trust funds or if the depositor can show that the bank agreed to maintain the deposit as a trust fund. Citizens First Nat'l Bank of Tyler v. Cinco Exploration Co., 540 S.W.2d 292, 295 (Tex.1976); South Cent. Livestock Dealers, Inc. v. Security State Bank of Hedley, 551 F.2d 1346, 1350-51 (5th Cir. 1977); cf. Essay, The Aftermath of Penn Square Bank: Protecting Loan Participants from Setoffs, 18 Tulsa L.J. 261, 268 (1982) (setoff is not permitted if loan participation funds are held in trust); Note, Classification of Loan Participations Following the Insolvency of a Lead Bank, 62 Texas L.Rev. 1115, 1123 (a banking institution is permitted to setoff funds on deposit only if the funds are not held in trust). Because we have held that Guadalupe is estopped from denying that the transferred money constitutes trust funds, setoff is not permitted and appellant must turn over the funds
If a trial judge fails to make a specific finding on a particular fact, the reviewing court may assume that the court impliedly made a finding consistent with his general holding so long as the implied finding is supported by the evidence. Clinkenbeard v. Central S.W. Oil Corp., 526 F.2d 649, 651-52 (5th Cir. 1976); Swanson & Youngdale v. Seagrave Corp., 561 F.2d 171, 173 n. 5 (8th Cir. 1977); 9 C. Wright & A. Miller, Federal Practice and Procedure Sec. 2579, at 712-13 (1971)
See also Palmer v. Fuqua, 641 F.2d 1146, 1160 (5th Cir. 1981) (To prove the defense of estoppel by silence, it must be shown that the party who failed to speak had a duty to speak.); Champlin Oil & Ref. Co. v. Chastain, 403 S.W.2d 376, 404 (Tex.1965) (holding that objection was called for by the party to be estopped since an " 'estoppel may arise as effectually from silence, where it is a duty to speak, as from words spoken.' "); City of Mesquite v. Rawlins, 399 S.W.2d 162, 167 (Tex.Civ.App.--Tyler 1966, writ ref'd n.r.e.) (" ' "Estoppel is always predicated upon the conception that one pleading it has been mislead [sic ] to his prejudice by some statement, act, or conduct of another who thereafter seeks to assert a right inconsistent with such statement, act, or conduct. The basis of estoppel is deception." ' ").