Opinion ID: 2373194
Heading Depth: 1
Heading Rank: 2

Heading: Verified Denial

Text: Eid brings a separate application for writ of error, urging that the court of appeals erred in affirming the judgment of the trial court that he was personally liable on the Lee note. Eid contends that he is liable on the note only in his representative capacity as president of Key West, not individually. He first raised this defense to the Lee's cross-claim only three days before trial by verified denial. Eid made no request for leave of court to file the pleading, nor did the Lees file any exception to it. Eid argues that leave of court was not required because the pleading constituted an original answer, or in the alternatively, a supplemental answer, but not an amended answer. The Lees argue that leave of court was required because, under Tex.R.Civ.P. 92, Eid was deemed to have pleaded a general denial in response to the cross-claim. Eid's responsive pleading was therefore an amended pleading, for which leave of court had to be obtained since it was offered for filing within seven days of trial. Tex.R.Civ.P. 63. We agree with the Lees that Rule 63 applies. If a response to a counterclaim or cross-claim filed within seven days were treated as an original answer, requiring no leave of court, parties would be encouraged to wait as close to trial as possible to file an operative answer. This would not serve the ends of justice. Accordingly, responsive pleadings to counterclaims and cross-claims filed within seven days of trial will be treated as answers which amend a Rule 92 general denial. The court of appeals was incorrect in its application of Rule 63, however. As we held in Goswami v. Metropolitan Savings & Loan Assoc., 751 S.W.2d 487 (Tex. 1988), Rule 63 is to be liberally construed. Thus, where the record is silent of any basis to conclude that the amended petition was not considered by the trial court, and inasmuch as [there was no showing of] surprise or prejudice, leave of court is presumed. Id. at 490. As in Goswami, the record here does not reflect whether leave of court was requested or granted, nor is there any indication that the trial court refused leave to file the amended petition. Since there is no basis in the record to conclude that Eid's amended petition was not considered by the trial court, and inasmuch as the Lees did not show any surprise or prejudice, leave of court is presumed. We therefore conclude that the question of Eid's personal liability was properly before the appellate court for review. Accordingly, we reverse the judgment of the court of appeals and remand for that court to consider the issue of Eid's personal liability and to calculate the amount of damages to be awarded to the Lees. MAUZY, J., files a dissenting opinion in which SPEARS and RAY, JJ., join. MAUZY, J., dissenting. The court has this day in Summers v. Consolidated Capital Special Trust, 783 S.W.2d 580 (Tex.1989), construed the provisions of a wrap-around note and deed of trust. For the reasons set out in my dissent in Summers, I dissent to the court's holding under the so-called outstanding balance approach that Key West and Eid are liable to the Lees for the entire amount of the Lee note less the amount bid at foreclosure. I would affirm the court of appeals. SPEARS and RAY, JJ., join in this dissent.