Court Opinion

ID: 9768149
Source: CourtListenerOpinion
Date Created: 2023-08-29 05:44:21.527929+00
Date Added: 2024-06-11T07:30:33.746757
License: Public Domain

LAGARDE, Justice,
concurring.
I would hold that the issue of whether the assignment of a note operates, as a matter of law, as an assignment of a separate written general guaranty need not be resolved in this case because the trial court properly found that the assignee of the Note failed to prove an essential element of his claim: that he is the owner and holder of the guaranty.1
The existence and ownership of a guaranty may be shown by: the guarantor’s admission that he executed the guaranty (see, e.g., Travelers Ins. Co. v. Bosler, 906 S.W.2d 635, 645 (Tex.App.—Fort Worth 1995, writ denied)); an affidavit attached to sworn copies of the guaranty (see, e.g., id,.; Hooper v. Mercantile Bank & Trust, 762 S.W.2d 383, 385 (Tex.App.—San Antonio 1988, no writ) (bank established guaranty by presenting the guaranty and an affidavit of an assistant vice-president of the bank who stated that he had personal knowledge of the attached true and correct copy of the guaranty); Rhodes v. Interfirst Bank Fort Worth, N.A., 719 S.W.2d 263, 265 (Tex.App.—Fort Worth 1986, no writ)); or proof that the party is the named payee, had possession of the guaranty, produced it in court, and offered it into evidence without objection (see, e.g., Schubiger v. First Newport Realty Investors, 601 S.W.2d 218, 222 (Tex.Civ.App.—Dallas 1980, writ ref'd n.r.e.)).
In Gotcher v. Lamar State Bank, the Beaumont court of appeals reviewed a case in which the record clearly demonstrated that the bank was the owner and holder of the guaranties in question. See Gotcher v. Lamar State Bank, 714 S.W.2d 365, 370 (Tex.App.—Beaumont 1986, writ ref'd n.r.e.). The record in Gotcher contained the following facts: The bank was named in the notes as th'e payee; possessed the guaranties and produced them in court; proved up the signatures, execution, and delivery of the guaranties from the guarantor himself; and proffered the guaranties into evidence. See id. at 370-71. In various detailed findings of fact and conclusions of law, the trial court found that the guarantor was liable to the bank based on the terms of the guaranties. See id. at 371. By necessary inference from the findings of fact and conclusions of law, the court of appeals held that the bank was the holder, owner, and possessor of the guaranties in question. See id.
In this case, Ashcraft did not prove that he was the owner and holder of the guaranty: Lookadoo did not admit executing this guaranty, Ashcraft did not provide an affidavit attached to sworn copies of the guaranty, Ashcraft is not the named payee in the note, Ashcraft did not have possession of the original guaranty, Ashcraft did not produce the original guaranty in court, and Ashcraft offered an unsworn copy of a guaranty into evidence over Lookadoo’s objection. The record reflects the following exchanges:
*915Questions by Ashcraft’s counsel of Ash-craft on direct examination:
Q. Mr. Ashcraft, I’m going to hand you a folder. And with the exception of these being copies in here and with the exception of this file folder not being hole-punched for the Court, this file folder contains plaintiff’s exhibit 24, the asset summary sheet; plaintiffs exhibit 17, the substitute trustee’s deed; plaintiff’s exhibit 23, the lost note affidavit; plaintiff’s exhibit 4, the loan agreement; plaintiff’s exhibit 5, the promissory note; plaintiff’s exhibit 9, modification of promissory note; and some other documents. And can you recall, are—is that file everything that the RTC delivered to you other than the bill of sale which has been marked as plaintiff’s exhibit 22 and the purchase and sale agreement, plaintiff’s exhibit 21, with respect to your purchase of the Looka-doo loan file?
A. I believe it is, yes.
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Q. When did you become first aware that a copy of the guaranty wasn’t provided to you with the documents provided by the RTC?
A. It seems to me you made some mention of it a few days prior to my deposition.
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On cross-examination, Lookadoo’s counsel questioning Ashcraft:
Q. Mr. Ashcraft, were you subsequent [sic] informed by [your attorney] that he had obtained a copy of the guaranty?
A. Yes, sir.
Q. When did that—when did he inform you of that, sir?
A. I believe it was on Saturday.
Q. That would be April 15th? It’s within the last two weeks, isn’t it?
A. That’s correct.
Q. All right. And now, prior to your receiving notice from [your attorney] regarding him locating a copy of the guaranty, you didn’t have the original or a copy of Mr. Lookadoo’s guaranty, is that correct?
A. That’s correct.
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Questions by Lookadoo’s counsel of Looka-)o:
Q. Mr. Lookadoo, you indicated that is a xerox copy of what purports to be a guaranty, Exhibit 7?
A. Yes.
Q. All right. Do you have any reason to believe that the document that’s been identified as Exhibit 7 is not authentic?
A. Yes, I do.
Q. What are those reasons, sir?
A. Over the past twenty-five years, it has always been my practice on any note and guaranty that I sign that I initialed every page other than the signature page.
Q. All right. And what was your reason for that practice, Mr. Lookadoo?
A. I have had pages shuffled on me throughout the years and pages substituted or deleted or added.
[Counsel for Lookadoo]: Your Honor, I object to the exhibit on two grounds. Number one, it hasn’t been authenticated. Number two, it is not the original document. There is a question as to its authenticity; therefore, a duplicate of the document is not admissible under Rule 10.002[sic] or 10.003[sic].
[Counsel for Ashcraft]: Your Honor, I’ll withdraw my request for admission at this time and just go on with the line of questioning before I again re-urge the admission of it.
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[Counsel for Ashcraft]: All right. Your Honor, I move for the admission of plaintiff’s exhibit 7 [the copy of the guaranty].
[Counsel for Lookadoo]: Same objection as previously stated, Your Honor: the original is not here. There has been no *916explanation of why it is not here. There is a question as to its authenticity.
[Counsel for Ashcraft]: Your Honor, the question of why [the original guaranty] is not here goes to the ‘possibility of holding the defendant liable on the obligation, not as to its admissibility. Under the Texas Business and Commerce Code under Section 3.804 talking about lost, destroyed, or stolen instruments, it states that “The owner of an instrument which is lost, whether by destruction, theft, or otherwise, may maintain an action in his own name and recover from any prior party hable thereon upon due proof of his oumership, and its terms. ...” So the fact that, currently, we have not explained why we don’t have the original guaranty is not a good objection to its admissibility. It’s a ground for potentially denying recovery on this claim unless we can provide explanation.
[Counsel for Lookadoo]: Your Honor, that’s not what the Rules of Evidence provide, with respect to Rule 1002,1003, and 1004. Additionally, I’d point out to the Court that that particular portion of the business and commerce code applies to negotiable instruments, because the business and commerce code defines “instrument” as negotiable instruments and, as we ah know, under Texas law, a guaranty is not a negotiable instrument.
[Counsel for Ashcraft]: Your Honor, again, under the rules of evidence, we do have the best evidence rule. We simply do not have the document. Under the common law, we do not have the original of the document. But upon the best evidence rule we do have, we do have a guaranty agreement which Mr. Looka-doo does not recall anything regarding this transaction. He does—
THE COURT: Well, what about 1003?
[Counsel for Ashcraft]: Again, that’s what I was arguing, Your Honor.
THE COURT: Well, there has been a question raised as to the authenticity of the original; whether or not it’s valid or not, there’s been a question raised.
[Counsel for Ashcraft]: Well, Your Hon- or, again, I think the testimony—whether there is in fact a true question raised as to its authenticity, again, Mr. Looka-doo’s testimony, in essence, is he doesn’t recall anything about this transaction. Now, he’s coming back saying, “Well, I’m certain that this one wouldn’t be.” I think that is incredulous [sic]. Simply, he does not recall. We do have a document that bears his signature. He doesn’t have any proof that—other than his bald statement that it probably isn’t his. But he’s already testified he doesn’t recall anything regarding this transaction.
THE COURT: And I take it you have no knowledge as to the whereabouts of the original?
[Counsel for Ashcraft]: The RTC most likely has it—that is the only knowledge I have—and they are unable to locate it. THE COURT: And this original was found where?
[Counsel for Ashcraft]: This copy was found—
THE COURT: I mean, this copy. [Counsel for Ashcraft]: This copy was found in the original closing binder of Jackson Walker, and I will inform the Court that I personally went over to Jackson and Walker and inspected their loan closing file which was represented to me to be their loan closing file on the original loan. This was made—this copy was made, as well as the guarantors’ individual guaranties of the other guarantors, and this is a true and correct copy of the document which came out of Jackson and Walker’s closing loan file. In fact, I will provide the Court with the exact documents which I did obtain from the loan file of Jackson and Walker. They were so kind enough to let me take those documents. That is the document from the Jackson and Walker loan closing file which they retrieved from archives.
[Counsel for Lookadoo]: May I see it, Your Honor?
[Counsel for Ashcraft]: And these other originals which I have been tendering to *917the Court, again, those originals were obtained from that same loan closing file of Jackson and Walker. Therefore, the question as to its authenticity, I do not believe that Jackson and Walker—they have no financial interest or no stake in this whatsoever—would do anything to alter the correct loan file which they prepared at the time of closing this file. I don’t believe there could be any question raised that they would forge signatures, change terms, or do anything else. They are under a legal obligation not only to their clients; but, under federal law, to maintain copies of documents that are true and correct.
THE COURT: Well, [counsel for Ash-craft], I’ll take your representation as an officer of the Court, the same as I would testimony under oath.
[Counsel for Lookadoo]: Your Honor, I think we have a hearsay problem here, with all due respect to [counsel for Ash-craft]. He’s testifying as to what someone at Jackson and Walker has told him. THE COURT: Well, even without considering the hearsay statements, it seems to me that it’s clear that the circumstances under which this was found indicate liability,2 and I believe, even without that, I’m convinced that the duplicates are admissible. I’ll overrule the objections and admit Exhibit 7 [the guaranty],
Ashcraft did not receive an original of the guaranty in the RTC file. Ashcraft produced a copy of the guaranty two weeks before trial, long after filing his pleadings. Ashcraft did not offer testimony from Lookadoo, Metropolitan 3, the RTC 4, Jackson and Walker5, or Ashcraft showing that Ashcraft was the owner and holder of the guaranty. Ash-craft’s attorney contended that he went to Jackson and Walker to obtain the loan file, including a copy of the guaranty. Ashcraft’s attorney, however, is an interested witness. Lookadoo objected to the admission of the evidence based on lack of proof of authenticity. The judge was within his discretion to admit the guaranty into evidence; however, the judge, as the fact finder, was also free to weigh the testimony concerning the procurement of the copy on the issue of ownership of the guaranty.
In the findings of fact and conclusions of law, the trial court concluded that Ashcraft failed to prove an essential element of his claim: that he is the owner and holder of the Lookadoo guaranty. Ashcraft does not challenge the evidence supporting that finding by the trial court. Even if he had, that finding must stand if there is any probative evidence supporting it. Henry S. Miller Residential Service v. Arthur, 671 S.W.2d 670, 671 (Tex. App.—Dallas 1984, no writ). Concluding there is evidence to support the trial court’s fact finding that Ashcraft failed to prove that he is the owner and holder of the Lookadoo guaranty, I would affirm the judgment of the trial court.

. To recover on a suit on a guaranty, the assign-ee of the note must prove 1) the existence and ownership of the guaranty contract, 2) the terms of the underlying contract by the holder, 3) the occurrence of the conditions upon which liability is based, and 4) the failure or refusal to perform the promise by the guarantor. Marshall v. Ford Motor Co., 878 S.W.2d 629, 631 (Tex.App.—Dallas 1994, no writ); Wiman v. Tomaszewicz, 877 S.W.2d 1, 8 (Tex.App.—Dallas 1994, no writ).

. In light of the trial court’s judgment, the use of the word "liability” appears to be a typographical error; we, therefore, read the record to say that the trial court found the "circumstances under which this was found indicate reliability."

. The original holder and payee of the note.

. The first assignee of the note.

. Attorneys for Metropolitan in the loan transaction and later for the RTC as assignee of this note.