
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN





NO. 03-95-00297-CV





Edwayne G. Priesmeyer, Appellant


v.


Pacific Southwest Bank, F.S.B., Appellee





FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT

NO. 93-15261, HONORABLE MARY PEARL WILLIAMS, JUDGE PRESIDING





PER CURIAM

	Appellant Edwayne G. Priesmeyer appeals the grant of a summary judgment in
favor of appellee Pacific Southwest Bank, F.S.B..  We will reverse the trial-court judgment.
	On December 31, 1984, Thomas and Myrna Kielman executed a $400,000.00 note
payable to Southwest Security Financial Corporation ("Southwest").  On January 7, 1985,
Southwest conveyed its interest in the note and deed of trust to Independence Savings and Loan
Association ("Independence").  On October 4, 1985, Priesmeyer assumed the Kielman's
obligations under the note and deed of trust pursuant to an assumption agreement executed by
Priesmeyer, the Kielmans, and Independence.  On November 17, 1987, Independence and
Priesmeyer renewed, extended, and modified the terms of the original note and deed of trust by
virtue of a contract of renewal and extension.
	On December 29, 1988, Independence failed and the Federal Savings and Loan
Insurance Corporation ("FSLIC") was appointed its receiver.  That same day, Pacific Southwest
Bank ("Pacific") acquired substantially all of Independence's assets by a transfer and assignment
agreement executed by Pacific and by the FSLIC as receiver for Independence.
	The note matured on December 15, 1989, and Priesmeyer defaulted.  Pacific
foreclosed on the property secured by deed of trust.  The foreclosure sale garnered $236,250.00,
leaving a net deficiency of $167,373.00.  In this cause, Pacific seeks to obtain a judgment against
Priesmeyer for the deficiency.
	The standard for reviewing a motion for summary judgment is well established: 
(1) the summary judgment movant has the burden of showing that no genuine issue of material
fact exists and that it is entitled to judgment as a matter of law; (2) in deciding whether there is
a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true; and (3) every reasonable inference must be indulged in favor of the
non-movant and any doubts resolved in its favor.  Nixon v. Mr. Property Management Co., 690
S.W.2d 546, 548-49 (Tex. 1985).  
	To obtain a summary judgment on the note, Pacific must have proven as a matter
of law that it is the note's holder or owner.  Clark v. Dedina, 658 S.W.2d 293, 295 (Tex.
App.--Houston [1st Dist.] 1983, writ dism'd).  Pacific is not a "holder" because the note is not
indorsed to it.  Lawson v. Finance Am. Private Brands, Inc., 537 S.W.2d 483, 485 (Tex. Civ.
App.--El Paso 1976, no writ); compare Tex. Bus. & Com. Code § 3.201(b) (West Supp. 1996)
(negotiation of order instrument requires transfer of possession and indorsement).  Pacific must
therefore prove the transfer by which it acquired the note.  Northwestern Nat'l Ins. Co. v.
Crockett, 857 S.W.2d 757, 758 (Tex. App.--Beaumont 1993, no writ); Jernigan v. Bank One,
Tex., N.A., 803 S.W.2d 774, 776-77 (Tex. App.--Houston [14th Dist.] 1991, no writ).
	One may prove a note's transfer by testimony rather than by documentation. 
Christian v. University Fed. Sav. Ass'n, 792 S.W.2d 533, 534 (Tex. App.--Houston [1st Dist.]
1990, no writ).  However, to obtain a summary judgment, affidavit testimony must affirmatively
show that it is based on personal knowledge.  Tex. R. Civ. P. 166a(f); see Brownlee v. Brownlee,
665 S.W.2d 111, 112 (Tex. 1984).  The mere recitation that the affidavit is based on personal
knowledge is inadequate if the affidavit does not positively show a basis for such knowledge. 
Radio Station KSCS v. Jennings, 750 S.W.2d 760, 761-62 (Tex. 1988).
	Pacific did not submit any documents showing the transfer of the note from
Independence to the FSLIC or from the FSLIC to Pacific, nor could it locate the original note. 
Pacific based its motion for summary judgment on the affidavit of Barbara Briggs, a senior vice
president at Pacific.  Briggs averred that Pacific became the owner of the note pursuant to a
transfer and assignment agreement executed by the FSLIC as receiver for Independence Savings
and Loan Association.  The blanket transfer and assignment agreement, a copy of which was
attached to Brigg's affidavit, did not list individual notes.
	Additionally, in response to Priesmeyer's motion for new trial, Pacific submitted
a spreadsheet it prepared in March of 1989, and a second spreadsheet it prepared in October of
1989, both showing that Pacific counted the Priesmeyer note among the assets transferred to it
from the FSLIC.  Priesmeyer protests that the spreadsheets are not proper summary judgment
evidence because they were submitted in response to his motion for new trial rather than with
Pacific's motion for summary judgment.  We agree.  Summary judgment evidence must be
submitted, at the latest, by the date summary judgment was rendered.  See, e.g., Leinen v.
Buffington's Bayou City Serv. Co., 824 S.W.2d 682, 685 (Tex. App.--Houston [14th Dist.] 1992,
no writ); Gandara v. Novasad, 752 S.W.2d 740, 743 (Tex. App.--Corpus Christi 1988, no writ). (1)
	We know from the evidence that Independence failed, that the FSLIC took its
assets, and that the FSLIC transferred its assets to Pacific.  At issue is whether the Priesmeyer
note was among the assets of Independence when it failed.
	Briggs testified that the Priesmeyer note was among the assets transferred from the
FSLIC to Pacific but did not describe how she personally knew that fact.  Indeed, her affidavit
is devoid of any facts showing personal knowledge of the note, other than her calculation of
interest due.  Nor did Briggs state any facts indicating that she personally knew that the note was
among the assets of Independence when it went into receivership.  We cannot conclude from this
evidence that Pacific is the note's owner.
	Pacific's reliance on Christian v. University Fed. Sav. Ass'n, 792 S.W.2d 533 (Tex.
App.--Houston [1st Dist.] 1990, no writ), is misplaced.  The Christian court held that a vice-president's testimony was sufficient to prove the note's transfer from the failed bank to the FSLIC
to the new bank.  Id. at 534.  But, in Christian, the record showed that the vice-president had
personally been responsible for the note at both the failed bank and at the assignee bank; the issue
was not whether he had personal knowledge, but whether he had to prove the transfer by
documentary evidence.  Id. at 534-35.  In this case, nothing in the record indicates that Briggs was
personally familiar with the note at the failed bank or with its transfer to the FSLIC.
  	We are also unpersuaded by Resolution Trust Corp. v. Camp, 965 F.2d 25 (5th Cir.
1992), which held that the testimony of individuals who did not personally know that the
particular note had been transferred was sufficient to establish the Resolution Trust Corporation's
(RTC's) right to summary judgment since there was no "legitimate fear" that the RTC was not
the holder.  Id. at 29.  Camp is not persuasive authority because federal summary judgment
practice differs widely from Texas summary judgment practice.  Casso v. Brand, 776 S.W.2d
551, 556 (Tex. 1989).  
	In Texas, summary judgments are used merely "to eliminate patently unmeritorious
claims and untenable defenses" and "we never shift the burden to the non-movant unless and until
the movant has 'established his entitlement to a summary judgment on the issues expressly
presented to the trial court by conclusively proving all essential elements of his cause of action
or defense as a matter of law.'"  Casso, 776 S.W.2d at 556 (citing City of Houston v. Clear Creek
Basin Auth., 589 S.W.2d 671, 678 n.5 (Tex. 1979)).  Camp does not technically shift the burden
of proof, but rather allows a presumption to be made that a note that was once held by a failed
bank was transferred to the FSLIC and then to the new bank, unless something in the record
affirmatively suggests that the note may have gone elsewhere. (2)  We decline to follow Camp
because Texas summary judgment procedure requires that we resolve all doubts in favor of the
non-movant.  Nixon, 690 S.W.2d at 548-49.  Also, under Texas procedure, the nonmovant is not
required to produce evidence to avoid summary judgment unless the movant has proven its case
as a matter of law.  McConnell v. Southside Sch. Dist., 858 S.W.2d 337, 343 (Tex. 1993); City
of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979).
	Pacific has not conclusively proven its cause of action because it has not proven,
as a matter of law, that it is the note's owner.  It is especially important that Pacific prove that
the note was among the assets transferred to the FSLIC since it could not produce the original
note.  Further, in contrast to the situation in Camp, Priesmeyer's note had not matured when the
FSLIC took over Independence's assets; an unmatured note could have been more easily
negotiated.  See Tex. Bus. & Com. Code Ann. § 3.302(a)(2)(C) (West Supp. 1996) (creditor is
not holder in due course if it had notice that instrument was overdue).
	We hold that Pacific did not prove as a matter of law that it was the owner of the
note.  We sustain point of error one.  Given this disposition, we do not address Priesmeyer's other
point of error.  We reverse the trial court judgment and remand the cause to the trial court.

Before Justices Powers, Aboussie and Kidd
Reversed and Remanded
Filed:   March 13, 1996    
Publish
1.        Further, even if we considered the late-filed evidence, it would not change our
disposition of this case.  The lack of stated facts upon which personal knowledge was
based, and the failure to prove the note's transfer, was not cured by the second affidavit.
2.        For example, subsequent federal cases have held that the presumption is destroyed
if the failed bank's assets, as a whole, were split among different entities.  See, e.g.,
Federal Deposit Ins. Corp. v. McCrary, 977 F.2d 192, 195 (5th Cir. 1992).

niversity Fed. Sav. Ass'n, 792 S.W.2d 533 (Tex.
App.--Houston [1st Dist.] 1990, no writ), is misplaced.  The Christian court held that a vice-president's testimony was sufficient to prove the note's transfer from the failed bank to the FSLIC
to the new bank.  Id. at 534.  But, in Christian, the record showed that the vice-president had
personally been responsible for the note at both the failed bank and at the assignee bank; the issue
was not whether he had personal knowledge, but whether he had to prove the transfer by
documentary evidence.  Id. at 534-35.  In this case, nothing in the record indicates that Briggs was
personally familiar with the note at the failed bank or with its transfer to the FSLIC.
  	We are also unpersuaded by Resolution Trust Corp. v. Camp, 965 F.2d 25 (5th Cir.
1992), which held that the testimony of individuals who did not personally know that the
particular note had been transferred was sufficient to establish the Resolution Trust Corporation's
(RTC's) right to summary judgment since there was no "legitimate fear" that the RTC was not
the holder.  Id. at 29.  Camp is not persuasive authority because federal summary judgment
practice differs widely from Texas summary judgment practice.  Casso v. Brand, 776 S.W.2d
551, 556 (Tex. 1989).  
	In Texas, summary judgments are used merely "to eliminate patently unmeritorious
claims and untenable defenses" and "we never shift the burden to the non-movant unless and until
the movant has 'established his entitlement to a summary judgment on the issues expressly
presented to the trial court by conclusively proving all essential elemen