                                                                                      ACCEPTED
                                                                                  12-14-00344-CV
                                                                     TWELFTH COURT OF APPEALS
                                                                                   TYLER, TEXAS
                                                                             4/27/2015 1:58:05 PM
                                                                                    CATHY LUSK
                                                                                           CLERK

                          NO. 12-14-00344-CV

                IN THE TWELFTH COURT OF APPEALS                FILED IN
                                                        12th COURT OF APPEALS
                                                             TYLER, TEXAS
                          AT TYLER, TEXAS               4/27/2015 1:58:05 PM
                                                             CATHY S. LUSK
                                                                 Clerk

                        VICTOR LISSIAK, JR.,

                                Appellant

                                   V.

                          SW LOAN OO, L.P.,

                                Appellee

     On Appeal from the 7th Judicial District Court, Smith County, Texas
The Honorable Kyle Russell Presiding in Trial Court Case Number 12-0384-A



                        APPELLANT’S BRIEF


                                        THE HOLMES LAW FIRM, INC.
                                        Robert H. Holmes
                                        SBN 09908400
                                        3401 Beverly Drive
                                        Dallas, Texas 75205
                                        Telephone: 214-384-3182
                                        Facsimile: 214-522-3526
                                        Email: rhholmes@swbell.net

                                        ATTORNEYS FOR APPELLANT
                   IDENTITY OF PARTIES AND COUNSEL

   Appellant submits the following list of all parties to the trial court’s judgment, and
the names and addresses of all trial and appellate counsel pursuant to Tex, R. App.
P. 38.1(a)

Appellant (defendant in the trial court): Victor Lissiak, Jr.

Represented by (In Trial and On Appeal):        The Holmes Law Firm, Inc.
                                                Robert H. Holmes
                                                SBN 09908400
                                                3401 Beverly Drive
                                                Dallas, Texas 75205
                                                Telephone: 214-384-3182
                                                Email: rhholmes@swbell.net

Appellee (Plaintiff in Trial Court):            S.W. LOAN OO, L.P.

Represented by (In Trial and On Appeal):        Stephen Sakonchick II
                                                Stephen Sakonchick II, P.C.
                                                6501 Canon Wren Drive
                                                Austin, Texas 78746
                                                Telephone: 512-329-0375
                                                Facsimile: 512-697-2859
                                                Email: sakon@flash.net




              APPELLANT’S REQUEST FOR ORAL ARGUMENT

       Appellant, Victor Lissiak, Jr., respectfully request the opportunity to present
oral argument in connection with this appeal.



                                           ii
                                            TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

APPELLANT’S REQUEST FOR ORAL ARGUMENT. . . . . . . . . . . . . . . . . . . . ii

TABLE OF CONTENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

TABLE OF AUTHORITIES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

ISSUES PRESENTED FOR REVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi

STATEMENT OF THE NATURE OF THE CASE. . . . . . . . . . . . . . . . . . . . . . . . xii

INDEX OF ABBREVIATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii

STATEMENT OF FACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
    A. Underlying Transaction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
    B. Underlying Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

SUMMARY OF ARGUMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
       A. Appellee did not meet its Burden of Proof on the Elements
of its Claim; Therefore, the Burden Never Shifted to Appellant .. . . . . . . . . . . . . . 7
       B. Alternatively, Appellant Raised Disputed Issues of Material Fact on
       Elements of Appellee’s Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
       C. Appellant Pled Affirmative Defenses, Supported by Competent Summary
       Judgment Proof, to Which Appellee did not Submit Competent Summary
       Judgment Proof to Disprove at Least One Element of All Affirmative Defenses
       .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
       D. Appellee’s Summary Judgment Proof was not Competent Summary
       Judgment Evidence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
       E. The Trial Court Abused its Discretion. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

ARGUMENT AND AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
    A. STANDARD OF REVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
    B. ISSUES PRESENTED FOR REVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . 12



                                                               iii
ISSUE NO. 1. The trial court erred in granting a summary judgment
because the were disputed fact issues on elements of Appellee’s
claim; therefore, the burden never shifted to Appellant. . . . . . . . . . . . . . . . . . . . . 14

       ISSUE NO. 1A. Holder in Due Course. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

       ISSUE NO. 1B.Validity/Authenticity of Signature. . . . . . . . . . . . . . . . . . . . . 16

       ISSUE NO. 1C. Failure of Consideration.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

       ISSUE NO. 1D. Cancellation of Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

       ISSUE NO. 1E. Doctrine of Estoppel.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

ISSUE NO. 2. Alternatively, The trial court erred in granting a
summary judgment because Appellant raised disputed issues
of material fact on elements of Appellee’s claim. . . . . . . . . . . . . . . . . . . . . . . . . . 24

       ISSUE NO. 2A Holder in Due Course Status. . . . . . . . . . . . . . . . . . . . . . . . . 24

       ISSUE NO. 2B. Authenticity/Genuineness of Appellant’s Signature. . . . . . . 24

       ISSUE NO. 2C. Failure of Consideration.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

ISSUE NO. 3. The trial court erred in granting a summary judgment
because Appellant submitted competent summary judgment proof
to create issue of the affirmative defenses pled by Appellant. . . . . . . . . . . . . . . . 25

       ISSUE NO. 3A. Appellee Was Not a Holder in Due Course.. . . . . . . . . . . . . 26

       ISSUE NO. 3B. Authenticity/Genuineness of Appellant’s Signature. . . . . . . 26

       ISSUE NO. 3C. Failure of Consideration.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

       ISSUE NO. 3D. §3.401, Texas Business & Commerce Code,
       Cancellation of Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27



                                                           iv
        ISSUE NO. 3E. Promissory Estoppel.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

        ISSUE NO. 3F. Material Alteration/Cancellation by Payment Extension. . . 28

        ISSUE NO. 3G. §3.401, Texas Business & Commerce Code,
        Discharge of Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

ISSUE NO. 4. The trial court erred in granting a summary judgment
because Appellee’s summary judgment proof was not competent
summary judgment evidence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

ISSUE NO. 5. The trial court erred in granting a summary judgment
because the trial court abused its discretion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

        ISSUE NO. 5A. By Failing to Rule on Appellant’s Objections to
        the Summary Judgment Proof Offered by Appellee. . . . . . . . . . . . . . . . . . . 34

        ISSUE NO. 5B. By Failing to Require Appellee to meet Its Burden of Proof.34

        ISSUE NO. 5C. By Granting a Summary Judgment in the Face of
        Fact Issues Supporting the Elements of Appellant’s Affirmative defenses. 35

CONCLUSION AND PRAYER FOR RELIEF. . . . . . . . . . . . . . . . . . . . . . . . . . . 35

CERTIFICATE OF SERVICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

CERTIFICATE OF COMPLIANCE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

APPENDIX - Filed Separately




                                                        v
                                           TABLE OF AUTHORITIES

A. TABLE OF CASES

1001 McKinney Ltd. v. Credit Suisse First Boston Mortg. Capital,
192 S.W.3d 20, 27 (Tex.App.–Houston [14th Dist.] 2005, pet. denied). . . . . . . . 32

Advance Components, Inc. v. Goodstein, 608 S.W.2d 737, 739
(Tex.App.–Dallas 1980, writ ref’d n.r.e.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Alejandro v. Bell, 84 S.W.3d 383, 388
(Tex.App.–Corpus Christi 2002, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Amedisys, Inc. v. Kingwood Home Health Care, LLC, 437 S.W.3d 507, 511
(Tex.2014). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 13

Austin Hardwoods Inc. v. Vanden Berqhe, 917 S.W.2d at 320, 325
(Tex.App.–El Paso 1995, writ denied). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Bastida v. Aznaran, 444 S.W.3d 98, 105 (Tex.App.–Dallas 2014, no pet.).. . . . . 14

Belew v. Rector, 202 S.W.3d 849, 854 n. 4 (Tex.App.–Eastland 2006, no pet.). . 20

Boerschig v. Southwestern Holdings, Inc., 322 S.W.3d 752, 762–63
(Tex.App.–El Paso 2010, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Bowen v. Briscoe, 453 S.W.2d 287, 289 (Tex.1970). . . . . . . . . . . . . . . . . . . . . . . 30

Braugh v. Corpus Christi Bank & Trust, 605 S.W.2d 691, 696
(Tex.Civ.App.–Corpus Christi 1980, writ ref’d n.r.e.). . . . . . . . . . . . . . . . . . . . . . 22

Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex.1984). . . . . . . . . . . . . . . . 25, 35

Bullock v. Kehoe, 678 S.W.2d 558, 559
(Tex.App.–Houston [14th Dist.] 1984, writ ref’d n.r.e.). . . . . . . . . . . . . . . . . . . . 28

Burges v. Mosley, 304 S.W.3d 623, 628 (Tex.App.–Tyler 2010, no pet.). . . . . . . 22

                                                           vi
Burns v. Gonzalez, 439 S.W.2d 128, 133
(Tex.Civ.App.–San Antonio 1969, writ ref’d n.r.e.).. . . . . . . . . . . . . . . . . . . . . . . 16

Canfield v. Bank One, Texas, N.A. 51 S.W.3d 828
(Tex.App. 6 Dist. 2001pet. denied).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Casso v. Brand, 776 S.W.2d 551, 556 (Tex.1989). . . . . . . . . . . . . . . . . . . . . . . . . 12

City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 n.5
(Tex.1979). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 12

Cont’l Dredging, Inc. v. De–Kaizered, Inc., 120 S .W.3d 380, 394–95
(Tex.App.–Texarkana 2003, pet. denied). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Diversicare Gen. Partner, Inc. v. Rubio, 185 S.W.3d 842, 846 (Tex.2005). . . . . 13

Dolcefino v. Randolph, 19 S.W.3d 906, 926-27
(Tex.App.–Houston [14th Dist.] 2000, pet. denied). . . . . . . . . . . . . . . . . . . . . . . . 14

Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex.1985). . 34

Eli Lilly & Co. v. Marshall, 829 S.W.2d 157, 158 (Tex.1992). . . . . . . . . . . . . . . 34

Federal Deposit Insurance Corp. v. Attayi, 745 S.W.2d 939, 944
(Tex.App.–Houston [1st Dist.] 1988, no writ). . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Food Mach. Corp. v. Moon, 165 S.W.2d 773, 775
(Tex.Civ.App.–Amarillo 1942, no writ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Gibbs v. General Motors Corp., 450 S.W.2d 827 (Tex.1970). . . . . . . . . . . . . . . . 11

Gooch v. Am. Sling Co., 902 S.W.2d 181, 185
(Tex.App.–Fort Worth 1995, no writ).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Goode v. Shoukfeh, 943 S.W.2d 441, 446 (Tex.1997). . . . . . . . . . . . . . . . . . . . . . 34

Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex.2007). . . . . . 13

                                                           vii
Hanks v. GAB Bus. Servs., Inc., 644 S.W.2d 707, 708 (Tex.1982). . . . . . . . . . . . 29

Harvey v. Harvey 40 S. W. 185 (Tex.Civ.App.1897). . . . . . . . . . . . . . . . . . . . . . 16

Haynes v. City of Beaumont, 35 S.W.3d 166, 178
(Tex.App.–Texarkana 2000, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Hays v. First State Bank of Dell City, Tex.Civ.App., 377 S.W.2d 210, 212
(Tex.App.–Amarillo, 1964 writ ref., n.r.e.).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Hiles v. Arnie & Co., P.C., 402 S.W.3d, 820, 832
(Tex.App.–Houston [14th Dist.], 2013, pet. denied). . . . . . . . . . . . . . . . . . . . . . . . 30

Hudspeth v. Investor Collection Serv. Ltd. P’ship, 985 S.W.2d 477, 479
(Tex.App.–San Antonio 1998, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

In re Kleven, 100 S.W.3d 643, 644
(Tex. App–Texarkana 2003 orig. proceeding). . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

In re Shredder Co., 225 S.W.3d 676, 679
(Tex. App–El Paso 2006 orig. proceeding).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

In re Weekley Homes, L.P., 180 S.W.3d 127, 133 (Tex.2005). . . . . . . . . . . . . . . . 23

Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471-72 (Tex.1991). . . . . . . . . . . . . 11

LeBlanc v. Lamar State College, 232 S.W.3d 294, 301
(Tex.App.–Beaumont 2007, no pet.).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32, 33

Lee v. McCormick, 647 S.W.2d 735, 738 (Tex.App.–Beaumont 1983, no writ). . 16

Limestone Prods. Distrib. v. McNamara, 71 S.W.3d 308, 311 (Tex.2002). . . . . . 11

McGraw v. Brown Realty Co., 195 S.W.3d 271, 276
(Tex.App.–Dallas 2006, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex.2006). . . . . . . . . . . . . . . 13

                                                     viii
Maykus v. Tex. Bank & Trust Co. of Dallas, 550 S.W.2d 396, 398
(Tex.Civ.App.–Dallas 1977, no writ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23
(Tex.2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 30

MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex.1986).. . . . . . . . . . . . . . . . . . . . . . . 12

Mustang Pipeline Co. v. Driver Pipeline Co., 134 S .W.3d 195, 196 & 199
(Tex.2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28, 30

Neely v. Wilson, 418 S.W.3d 52, 59-60 (Tex.2013). . . . . . . . . . . . . . . . . . 11, 12, 13

MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex.1986).. . . . . . . . . . . . . . . . . . . . . . . 12

Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985). . . . . . . 12, 15

Old Colony v. City of Quitman, 352 S.W.2d 452, 456 (Tex.1962). . . . . . . . . . . . 28

Park Place Hosp. v. Estate of Milo, 909 S.W.2d 508, 511 (Tex.1995). . . . . . . . . 11

Priest v. First Mortgage Company of Texas, Inc., 659 S.W.2d 869, 871
(Tex .Civ.App.–San Antonio 1983, writ ref’d n.r.e.). . . . . . . . . . . . . . . . . . . . . . . 22

Provident Life & Acc. Ins. v. Knott, 128 S.W.3d 211, 215 (Tex.2003). . . . . . 12, 35

Reliance Ins. Co. v. Dahlstrom Corp., 568 S.W.2d 733, 736
(Tex.Civ.App.–Eastland 1978, writ ref’d n.r.e.). . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Roark v. Stallworth Oil & Gas, Inc., 813 S.W.2d 492, 496 (Tex.1991).. . . . . . . . 20

Shah v. Moss, 67 S.W.3d 836, 842 (Tex.2001).. . . . . . . . . . . . . . . . . . . . . . . . . . . 11

State v. $90,235, 390 S.W.3d 289, 292 (Tex.2013). . . . . . . . . . . . . . . . . . . . . . . . 13

Steiner v. Jester, 25 S. W. 411, (Tex.1894). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16



                                                           ix
Swilley v. Hughes, 488 S.W.2d 64 (Tex.1972). . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Town N. Nat’l Bank v. Broaddus, 569 S.W.2d 489, 491 (Tex.1978). . . . . 16, 19, 20

Truestar Petroleum Corp. v. Eagle Oil & Gas Co., 323 S.W.3d 316, 319
(Tex.App.–Dallas 2010, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

United Concrete Pipe Corp.v. Spin-Line Co., 430 S.W.2d 360, 365
(Tex.1968). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

US Bank, N.A. v. Prestige Ford Garland Ltd. P’ship, 170 S.W.3d 272, 279
(Tex.App.–Dallas 2005, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Wal–Mart Stores, Inc. v. Gonzalez, 968 S.W.2d 934, 936 (Tex.1998). . . . . . . . . 32

Wesson v. Jefferson S&L Ass’n, 641 S.W.2d 903, 906 (Tex.1982). . . . . . . . . . . . 12

Wheeler v. White, 398 S.W.2d 93, 96–97 (Tex. 1965). . . . . . . . . . . . . . . . . . . . . . 23

Wilcox v. Hempstead, 992 S.W.2d 652, 656–57
(Tex.App.–Fort Worth 1999, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Willis v. Nucor Corp., 282 S.W.3d 536, 547 (Tex.1980). . . . . . . . . . . . . . . . . . . . 14

Wilson v. Skaggs, 10 Tex. 298, 1853 WL 4340 (Tex.1853). . . . . . . . . . . . . . . . . . 16

Wright v. Robert & St. John Motor Co., 58 S.W.2d 67, 69 (Tex.1933). . . . . . . . . 21

B. TABLE OF STATUTES

Tex.Bus. & Com. Code § 1.201(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Tex.Bus. & Com. Code § 1.201 (21).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Tex.Bus. & Com. Code § 1.202(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Tex.Bus. & Com. Code § 1.206. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

                                                             x
Tex.Bus. & Com. Code§ 3.302(a)(2)(iii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Tex.Bus. & Com. Code § 3.306. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16, 19

Tex.Bus. & Com. Code § 3.308. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 19

Tex.Bus. & Com. Code § 3.401(a). . . . . . . . . . . . . . . . . . . . . . . . . 10, 12, 19, 22, 27

Tex.Bus. & Com.C. § 3.605. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 29

Tex.R. Civ. P. 93(7).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Tex.R. Civ. P. 166a(f). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32, 33

                               ISSUES PRESENTED FOR REVIEW

Issue No. 1. Whether the trial court erred in granting a summary judgment because
the were disputed fact issues on elements of Appellee’s claim?

Issue No. 2. Alternatively, whether the trial court erred in granting a summary
judgment because Appellant raised disputed issues of material fact on elements of
Appellee’s claim?

Issue No. 3. Whether the trial court erred in granting a summary judgment because
Appellant submitted competent summary judgment proof to create issue of the
affirmative defenses pled by Appellant?

Issue No. 4. Whether the trial court erred in granting a summary judgment because
Appellee’s summary judgment proof was not competent summary judgment
evidence?

Issue No. 5. Whether the trial court erred in granting a summary judgment because
the trial court abused its discretion?

                       STATEMENT OF THE NATURE OF THE CASE

         This appeal arising out of a cross-claim (CR238) filed by Appellee against

                                                          xi
Appellant, who were both defendants in a suit brought by J. Randolph Light against

the predecessor of Appellee, Stillwater National Bank (“SNB”) for “lender abuse”

and breach of contract. The cross-claim involves the suit for collection under a

promissory note, the 2008 Note (CR215-217), allegedly executed by Appellant.

      What is ironic and inconsistent about the facts of the case is that Light sought

contribution from Appellant (CR1¶31-33) under a note dated the same date as the

2008 Note but not executed by Appellant (CR95), and alleged that he had paid

Appellant’s obligations to SNB (CR1¶32) and Appellee sought collection from

Appellant under the 2008 Note, allegedly paid by Light (CR1¶32).

      The Appellant denied the authenticity of his purported signature on the 2008

Note (CR242¶4.14) under which collection is sought. In addition, Appellant raised

affirmative defenses of holder in due course, failure of consideration, cancellation

under §3.401, Texas Business & Commerce Code, promissory estoppel, and

discharge of liability under §3.401, Texas Business & Commerce Code.

(CR242¶¶4.1-4.13)

      Appellee filed a Motion for Summary Judgment with summary judgment proof

(CR203),. Appellant filed objections to the summary judgment proof (CR245-254)

and a Response. (SCR2-422). Appellant also submitted competent controverting

summary judgment proof by way of affidavits of Appellant (SCR24-27), Larry Don

                                         xii
(CR29-61) and Robert H. Holmes (SCR63-215).

      The Trial Court granted Plaintiff’s motion for summary judgment without

ruling on Appellant’s objections to summary judgment submitted by the Appellee.

(CR634).

      Appellee’s summary judgment proof was not competent. (CR245-254) The

Trial Court abused its discretion in failing to rule on Appellant’s objections to

Appellee’s summary judgment proof.

      Moreover, the Trial Court erred in granting the summary judgment in the face

of sworn allegations of the authenticity of Appellant’s signature on the 2008 Note and

summary judgment proof supporting that allegation as well as supporting the other

affirmative defenses of Appellant.

                                INDEX OF ABBREVIATIONS

The record will be referred to herein as follows:

      Clerk’s Record.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CR ___

      Supplemental Clerk’s Record. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCR ___

By way of example, a reference to:
pages 14-17 of the Clerk’s Record will be cited as CR14-17.
pages 14-17 of the Supplemental Clerk’s Record will be cited as SCR14-17.




                                                     xiii
                            STATEMENT OF FACTS

A. UNDERLYING TRANSACTION

   The Stretford at the Cascades Limited Partnership (“Stretford”) was organized to

be the development and marketing entity for a 72 unit high rise condominium

residential building in Tyler, Texas (“Project”) in 2005. (CR56¶¶9; SCR29¶2) The

developer was Lawrence C. Don (“Don”), who arranged for the purchase and

financing for the Project; organized the group of investors in the Stretford; and

engaged Appellant’s engineering firm be a part of the team to develop and construct

the Project. (SCR29¶3)

   Tyler-Stretford General Partner, LLC (“Tyler-Stretford”) whose members were

Don, and J. Randolph Light, Jr. (“Light”) was organized to be the general partner of

the Stretford. (SCR29¶4) The primary investors in the Stretford were Light and Carl

Black (‘Black”). (SCR29¶4) Don and Light jointly requested Appellant be the tie-

breaking member of Tyler-Stretford management team, to which Appellant agreed.

However, Appellant’s role was limited to engineering and construction matters.

(SCR29¶9; SCR24¶6)

   Tyler-Stretford owned a 1.129% no profits or equity limited partnership in

Stretford. (SCR30¶¶7-9) Appellant held a 25% membership interest in the Tyler-

Stretford, giving him a .28225% no profits or equity interest in Stretford. (SCR30¶¶7-


                                          1
8) Appellant’s only financial interest in the Project was compensation for providing

engineering services through his engineering firm, Viewtech, Inc. (SCR24¶9;

SCR30¶9)

   Construction financing for the Project was arranged and funded with a loan from

Stillwater National Bank & Trust Company (“SNB”). (SCR25¶5; SCR29¶5) Capital

was invested by Light and Black, who were also guarantors, along with Don on the

notes to SNB. (SCR29¶5)

   In January 2008, it was realized additional funds were required to complete the

Project. Several budget estimates were generated for the cost of completion of the

Project, both by SNB’s advisors and by third-party’s engaged by Stretford. Interim

funds were required for the Project to continue while the budget analyses and

refinancing options were being reviewed, SNB agreed to provide short-term loans in

amounts matching cash contributions made by Stretford. Stretford agreed to provide

the additional capital. (SCR30¶¶11-12)

   During the first ten months of 2008, Stretford funded an additional $2,500,000,

in cash. (SCR30¶13) While dealing with the need for interim funds, Black, one of the

two Stretford principals who had provided personal guarantees for portions of

Stretford’s $20,956,000.00 debt to SNB, challenged the validity of his signature on

one of the guaranty agreements bearing his signature. (SCR30¶14)


                                         2
   As a result of Black’s disputing the validity of his signature on the guaranty

agreement, SNB changed courses, stating it could not make the short-term matching

loans directly to Stretford. (SCR30¶14-15) Without the additional loan funds

construction on the Project would be stopped for lack of funds. As an alternative,

SNB agreed to make short-term loans to Light, Don and Appellant, evidenced by

promissory notes executed by Light, Don and Appellant. SNB required no security

for the loans, no loan applications, no proof of credit worthiness and no financial

statement from the makers of these short term notes. (SCR30¶16)

   February 20, 2008, SNB made the first short-term loan, in the amount of

$1,200,000.00. (SCR30¶17; SRC 34) Two additional short-term loans, one March 28,

2008 in the amount of $500,000.00 (SCR30¶18; SRC38) and another July 7, 2008 in

the amount of $800,000.00 (SCR30¶18; SRC42) were made. (cumulatively “Short-

Term Notes”). Light, Don and Appellant executed the Short-Term Notes. (SCR34,

38, 42)

   SNB told Light, Don and Appellant the Short-Term Notes would be satisfied and

paid in full by consolidating and restructuring the Stretford loans, as soon as the

budget analyses and refinancing options were completed. (SCR24¶19; SCR31¶20)

March 28, 2008, SNB advised Appellant and Don it would not be necessary to renew

the Short-Term Notes because the debts would be paid from the proceeds of a new


                                         3
loan to the Stretford. (SCR26¶20; SCR31¶21)

   The Short-Term Notes were set up as “personal” loans to Light, Don and

Appellant; however, Light, Don and Appellant received neither directly nor indirectly

and did authorize the use of any proceeds advanced on the Short-Term Notes.

(SCR26¶23; SCR31¶24) Contrary to the affirmative statements of SNB to the

contrary, without authorization from Light, Don or Appellant, SNB solely controlled

the use and disbursement of all loan proceeds from the Short-Term Notes.

(SCR26¶¶24, 25; SCR31¶¶24, 25) Neither Light, Don nor Appellant received or had

use or benefit of the proceeds advanced under the Short-Term Notes. (SCR26¶¶24,

25; SCR31¶¶24, 25)

   SNB extended the due dates on the Short-Term Notes to September 31, 2008,

without Appellant’s or Don’s knowledge or approval. (SCR25¶18; SCR31¶19)

   In September 2008 Lissiak received a document titled Omnibus Agreement, an

agreement between negotiated between SNB and Light, apparently contemplated to

be an agreement between Stretford, Light, Lissiak and Don, and SNB detailing the

consolidation and restructuring of all debts related to the Project (“Omnibus

Agreement”). (CR365-401; 424-427) The Omnibus Agreement removed Appellant

and Don from any future management role of the Project. (CR365-401; 424-427)

Along with the Omnibus Agreement, Appellant received a debt instrument


                                         4
consolidating the Short-Term Notes into one new note in the amount of $2,500,000,

“effective” September 30, 2008 (“2008 Note”). (CR424-427) Appellant did not sign

the Omnibus Agreement or the 2008 Note, his name was struck from the Omnibus

Agreement in pen. (CR365-401; 424-427)

   While a likeness of Appellant’s signature appears on the 2008 Note, Appellant

does not recall signing that debt instrument and disputes the authenticity/genuineness

of his signature thereon in sworn pleadings. (SCR26¶26; SCR31¶27) While it is clear

Appellant did not execute the Omnibus Agreement, a document of equal date of the

2008 Note and related to the Omnibus Agreement, Appellant would not have

executed the 2008 Note when Appellant was no longer a participant in the Project.

(CR365-401, 424-427; 429-432)

   Appellant was unaware his name had been appended to the 2008 Note until Light

brought suit against Appellant and listed the 2008 Note in the petition as a note he

had discussions with SNB about. (SCR26¶¶26-28) Moreover, although Light

mentions the 2008 Note in the fact section of his Petition, (CR1-49), Light avers in

his petition, Light paid the 2008 Note and the Short-Term Notes, and was bring suit

against Appellant for contribution under the $2,500,000.00 note appended as Exhibit

“E” to Light’s petition which was executed by Light alone. (CR1-49) That note of

equal date did not reference Appellant or Don as makers and there were no blank


                                          5
spaces for Appellant or Don on the signatory page. (CR42-43) Neither Light nor SNB

ever sought collection from Appellant for liability under the Short-Term Notes or the

2008 Note. (CR 424-427; 429-432)

   In the lawsuit filed by Light on January 11, 2012 in the U.S. District Court,

Eastern District (Cause No. 4-11- CV-833), the predecessor of this lawsuit, Light

attached copies of correspondence from and to SNB wherein Light requested SNB’s

assistance with collections from Appellant on the Short-Term Notes; however, no

action was taken by SNB. (CR424-427; 429-432)

   SNB renewed and extended the 2008 Note numerous times without Appellant’s

knowledge, joinder, or approval, with “effective” dates of June 30, 2009, March 31,

2010, and July 31, 2010, executed only by Light as new debt instruments. (“Renewal

Notes”). (CR424-427; 429-432)

   SNB assigned eight debt instruments related to the Project to SWOO on or about

December 13, 2011, which did not include the Short-Term Notes. (CR103¶¶8-16)

   SWOO marked paid and delivered all debt instruments executed by Stretford

and/or Light, payable to SNB, assigned to SWOO, except the 2008 Note, which

included the Renewal Notes. (SCR65-76)

A. UNDERLYING LITIGATION

   February 20, 2012, Light and Stretford filed a First Amended Petition naming


                                          6
Starwood Capital Group, LLC as additional defendant and deleting Don. (CR-1)

   April 30, 2012, Light and Stretford filed a Second Amended Petition naming

SWOO as a defendant in place of Starwood, (CR54) stating:

   “On that same date, [Appellant], Don, and Light entered into a Promissory

   Note consolidating the two previous Notes wherein the three of them, jointly

   and severally, promised to pay SNB the principal sum of $2,500,000.00,

   together with interest (the “2.5 Note”). This 2.5 Note was executed in

   conjunction with a second amendment to the Omnibus Agreement pertaining

   to the Tyler Project. [Appellant] has wholly failed to meet his obligations under

   the 2.5 Note, leaving Light as the sole individual making payments. As such,

   Light is entitled to contributions from [Appellant] for the payments he has

   made on [Appellant]’s behalf pursuant to said Promissory Note.”

Light goes on in ¶¶ 17-19 to explain how he was forced to acquire Note 6721400

dated 9/30/08 in the amount of $2,500,000.00, allegedly executed by Light, Don, and

Appellant. (CR59¶¶17-19”). Then Light states:

   “The 2.5 Note purports to be a joint and several Note signed by Light, Don and

   [Appellant]. See Exhibit ‘E.’ By virtue of the payments made by Light on the

   2.5 Note in connection with the Tyler project, [Appellant] received valuable

   benefits equal to at least the amount of payments made by Light. . . . As a result


                                           7
   of [Appellant]’s breach of his contribution obligations . . . .”

(CR63,¶32) Light goes on to allege in the alternative:

   “ . . . . [Appellant] accepted Light’s assistance in meeting his obligations in

   connection with the Tyler Project Note, all while knowing he would have to

   repay the funds advanced. Light has provided such assistance, and made

   payments to date in the amount of not less than $2.5 million. . . .”

(CR64,¶35)

   May 21, 2012, SWOO filed counterclaims/cross actions (CR103) against Light

and Stretford on various debt obligations, suing Light and Appellant under the

“Principals Note” (CR106, ¶12) the 2008 Note. (CR109, ¶21)

   June 11, 2012, Suggestion of Don’s bankruptcy proceeding filed.

   January 15, 2013, Light Nonsuits Appellant. (CR156)

   January 28, 2013, Stretford Nonsuits SNB and SWOO. (CR163)

   January 29, 2013, SWOO Nonsuits Stretford. (CR164)

   September 12, 2013, Light Nonsuits SWOO. (CR174)

   September 12, 2013, SWOO Nonsuits Light. (CR175)

   November 15, 2013, Light Nonsuits SNB. (CR183)

   January 13, 2014, SWOO filed a Motion for Summary Judgment. (CR198)

   January 24, 2014, Appellant Answer to SWOO Crossclaim. (CR226)


                                           8
  February 7, 2014, SWOO’s Supplemental Crossclaim against Appellant. (CR233)

  February 10, 2014, Appellant Amended Answer to SWOO’s Supplemental

Crossclaim. (CR237)

                            SUMMARY OF ARGUMENT

  Appellant brings this appeal on the granting of the Appellee’s Motion for

Summary Judgment.

A. APPELLEE DID NOT MEET ITS BURDEN OF PROOF; THEREFORE, THE BURDEN
NEVER SHIFTED TO APPELLANT:

  1. Appellee was a holder in due course; and

  2. Appellant signed the 2008 Note.

B. ALTERNATIVELY, APPELLANT RAISED DISPUTED ISSUES OF MATERIAL FACT
ON ELEMENTS OF APPELLEE’S CLAIM, TO WIT:

  1. holder in due course status of Appellee;

  2. authenticity/genuineness of Appellant’s signature on the 2008 Note; and

  3. failure of consideration.

C. APPELLANT PLED AFFIRMATIVE DEFENSES, SUPPORTED BY COMPETENT
SUMMARY JUDGMENT PROOF, APPELLEE DID NOT SUBMIT COMPETENT SUMMARY
JUDGMENT PROOF TO DISPROVE AT LEAST ONE ELEMENT OF ALL AFFIRMATIVE
DEFENSES, TO WIT:

  1. holder in due course status of Appellee;

  2. authenticity/genuineness of Appellant’s signature on the 2008 Note;

  3. failure of consideration;

                                        9
   4. § 3.401, Texas Business & Commerce Code, cancellation of debt instrument;

   5. promissory estoppel;

   6. material alteration/cancellation by payment extension; and

   7. § 3.605, Texas Business & Commerce Code, discharge of liability.

D. APPELLEE’S SUMMARY JUDGMENT PROOF WAS NOT COMPETENT SUMMARY
JUDGMENT EVIDENCE.

   Appellee’s summary judgment was from affiants who were not knowledgeable

about the facts they were testifying about, there was no foundation in the affidavits

to show the affiants to have the knowledge of the facts to which they ere testifying.

Appallant filed proper objections which were first not ruled upon, then over-ruled as

a matter of law when the trial court denied the Appemmant’s Motion for New Trial.

E. THE TRIAL COURT ABUSED ITS DISCRETION.

   The trial court’s ruling in granting the summary judgment was arbitrary,

unreasonable, and without reference to guiding principles:

   1. The trial court failed to consider the objections to summary judgment proof

made by the Appellant.

   2. The trial court failed to require the Appellee to meet its burden of proof.

   3. By granting a summary judgment in the face of fact issues supporting the

elements of Appellant’s affirmative defenses.

                     ARGUMENTS AND AUTHORITIES

                                         10
A. STANDARD OF REVIEW.

   The purpose of the summary judgment procedure is to permit the trial court to

promptly dispose of cases involving unmeritorious claims or untenable defenses. City

of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 n.5 (Tex.1979).

However, a Court may not grant a properly contested summary judgment if there

exists any genuine issue of material fact. Swilley v. Hughes, 488 S.W.2d 64

(Tex.1972); Gibbs v. General Motors Corp., 450 S.W.2d 827 (Tex.1970).

   When a movant files a motion for summary judgment based on the summary

judgment evidence, the court can grant the motion only when the movant’s evidence,

as a matter of law, either proves all the elements of the movant’s claim or disproves

the facts of at least one element of each of the nonmovant’s claims or defenses. Park

Place Hosp. v. Estate of Milo, 909 S.W.2d 508, 511 (Tex.1995); Lear Siegler, Inc. v.

Perez, 819 S.W.2d 470, 471-72 (Tex.1991). Even if the nonmovant does not file a

response and the motion for summary judgment is uncontroverted, the movant must

still carry the burden of proof. Clear Creek, 589 S.W.2d at 678. When evaluating a

motion for summary judgment based on summary judgment proof, the trial court

must:

        Assume all the nonmovant’s proof is true. Limestone Prods. Distrib. v.

   McNamara, 71 S.W.3d 308, 311 (Tex.2002); Shah v. Moss, 67 S.W.3d 836, 842


                                         11
   (Tex.2001); M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23

   (Tex.2000); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985).

         Make every reasonable inference in favor of the nonmovant. Neely v. Wilson,

   418 S.W.3d 52, 59-60 (Tex.2013); Provident Life & Acc. Ins. v. Knott, 128 S.W.3d

   211, 215 (Tex.2003); M.D. Anderson, 28 S.W.3d at 23; Nixon, 690 S.W.2d at 548-

   49.

         Resolve doubts about the existence of a genuine issue of a material fact against

   the movant. Neely, 418 S.W.3d at 59-60; M.D. Anderson, 28 S.W.3d at 23; Nixon,

   690 S.W.2d at 548-49.

   When the plaintiff moves for summary judgment on its own cause of action, the

plaintiff must prove it is entitled to summary judgment by establishing each element

of its claim as a matter of law. MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex.1986).

If the plaintiff does not conclusively establish all the elements necessary to its cause

of action, summary judgment is improper. Wesson v. Jefferson S&L Ass’n, 641

S.W.2d 903, 906 (Tex.1982).

   When the movant does not meet its burden of proof, the burden does not shift to

the nonmovant and the summary judgment must be denied. Amedisys, Inc. v.

Kingwood Home Health Care, LLC, 437 S.W.3d 507, 511 (Tex.2014); M.D.

Anderson, 28 S.W.3d at 23; Clear Creek, 589 S.W.2d at 678. The burden shifts to the


                                            12
nonmovant only after the movant has established it is entitled to summary judgment

as a matter of law. Amedisys, Inc, 437 S.W.3d at 511; State v. $90,235, 390 S.W.3d

289, 292 (Tex.2013); Casso v. Brand, 776 S.W.2d 551, 556 (Tex.1989). At that point,

the nonmovant must produce summary judgment evidence to raise a fact issue.

Amedisys, 437 S.W.3d at 511.

   A motion for summary judgment is reviewed de novo. Neely, 418 S.W.3d at 59.

Furthermore, “[i]n reviewing a summary judgment, we consider all grounds presented

to the trial court and preserved on appeal in the interest of judicial economy.”

Diversicare Gen. Partner, Inc. v. Rubio, 185 S.W.3d 842, 846 (Tex.2005).

   In the de novo review of a trial court’s summary judgment, the appellate court

considers all the evidence in the light most favorable to the nonmovant, crediting

evidence favorable to the nonmovant if reasonable jurors could, and disregarding

contrary evidence unless reasonable jurors could not. Mack Trucks, Inc. v. Tamez, 206

S.W.3d 572, 582 (Tex.2006). The evidence raises a genuine issue of fact if reasonable

and fair-minded jurors could differ in their conclusions in light of all of the summary

judgment evidence. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755

(Tex.2007).

   In the context of a summary judgment, if a party does not get a ruling on an

objection to summary judgment proof or object to the court’s refusal to rule and have


                                          13
either the ruling, or the objection to the refusal to rule, included in the appellate

record, the objections are waived. Wilcox v. Hempstead, 992 S.W.2d 652, 656–57

(Tex.App.–Fort Worth 1999, no pet.). However, a trial court implicitly rules on

objections to summary judgment evidence where a party complained in his motion

for new trial of the trial court’s refusal to rule on his objections. Alejandro v. Bell, 84

S.W.3d 383, 388 (Tex.App.–Corpus Christi 2002, no pet.); Dolcefino v. Randolph,

19 S.W.3d 906, 926-27 (Tex.App.–Houston [14th Dist.] 2000, pet. denied).

   Defects in the substance of an affidavit or its attachments can be raised for the first

time on appeal. Willis v. Nucor Corp., 282 S.W.3d 536, 547 (Tex.1980). A conclusion

in an affidavit unsupported by evidence is a defect in substance and an objection in

the trial court is not required to preserve the complaint for appellate review. See id.

at 548. See also Bastida v. Aznaran, 444 S.W.3d 98, 105 (Tex.App.–Dallas 2014, no

pet.).

B. ISSUES PRESENTED FOR REVIEW

ISSUE NO. 1. THE TRIAL COURT ERRED IN GRANTING A SUMMARY JUDGMENT
BECAUSE THE WERE DISPUTED FACT ISSUES ON THE FOLLOWING ELEMENTS OF
APPELLEE’S CLAIM; THEREFORE, THE BURDEN NEVER SHIFTED TO APPELLANT:

   To prevail in a suit on a promissory note, a plaintiff must prove: (1) the note in

question; (2) the defendant signed the note; (3) the plaintiff was the legal owner or

holder of the note; and (4) a certain balance was due and owing on the note. Truestar


                                            14
Petroleum Corp. v. Eagle Oil & Gas Co., 323 S.W.3d 316, 319 (Tex.App.–Dallas

2010, no pet.); Hudspeth v. Investor Collection Serv. Ltd. P’ship, 985 S.W.2d 477,

479 (Tex.App.–San Antonio 1998, no pet.).

   ISSUE NO. 1A. HOLDER VS. HOLDER IN DUE COURSE.

      The holder of an instrument is a holder in due course if the holder takes the

   instrument: (1) for v–Dallas, 2008, pet. denied).

   A person has “notice of a fact” when he has knowledge of it. Id.; Tex. Bus. &

Com. Code § 1.202(a)(1).

   To be a holder in due course, one must take without notice that an instrument is

overdue. Tex. Bus. & Com. Code§ 3.302(a)(2)(iii).

   A “holder” is:

   (A) the person in possession of a negotiable instrument that is payable either to

   bearer or to an identified person that is the person in possession;

   (B) the person in possession of a negotiable tangible document of title if the goods

   are deliverable either to bearer or to the order of the person in possession; or

   (C) a person in control of a negotiable electronic document of title.

Tex. Bus. & Com. Code § 1.201 (21).

   Where a sworn pleading denies that a party is a holder in due course the burden

to prove the contrary is on the party claiming to be a holder in due course. Nixon, 690


                                          15
S.W.2d at 548; Lee v. McCormick, 647 S.W.2d 735, 738 (Tex.App.–Beaumont 1983,

no writ).

   It is undisputed, the 2008 Note was past due when SWOO acquired the 2008 Note;

therefore, SWOO is a holder, not a holder in due course.

   The defenses that can be asserted against a holder include all defenses of any party

which would be available in an action on a simple contract, including without

limitation, want or failure of consideration, non-performance of any condition

precedent, delivery for a special purpose, and payment or satisfaction to such holder

would be inconsistent with the terms of a restrictive endorsement. Tex. Bus. & Com.

Code § 3.306; Town N. Nat’l Bank v. Broaddus, 569 S.W.2d 489, 491 (Tex.1978).

   ISSUE NO. 1B. VALIDITY/AUTHENTICITY OF SIGNATURE. A Rule 93(7) verified

denial challenges the authenticity of the document and addresses the document’s

admissibility as an evidentiary issue. Tex.R. Civ. P. 93(7). A sufficient sworn denial

of the execution of a note, such as filed by Appellant in this case, imposes upon a

plaintiff seeking to enforce payment on the note, the burden of establishing its

execution by the defendant or by one authorized to bind him. Burns v. Gonzalez, 439

S.W.2d 128, 133 (Tex.Civ.App.–San Antonio 1969, writ ref’d n.r.e.); Wilson v.

Skaggs, 10 Tex. 298, 1853 WL 4340 (Tex.1853); Steiner v. Jester, 25 S. W. 411,

(Tex.1894); Harvey v. Harvey 40 S. W. 185 (Tex.Civ.App.1897).


                                          16
   The UCC has codified that law, stating:

   “In an action with respect to an instrument, the authenticity of, and authority

   to make, each signature on the instrument are admitted unless specifically

   denied in the pleadings. If the validity of a signature is denied in the pleadings,

   the burden of establishing validity is on the person claiming validity, but the

   signature is presumed to be authentic and authorized unless the action is to

   enforce the liability of the purported signer and the signer is dead or

   incompetent at the time of trial of the issue of validity of the signature.”

Tex. Bus. & Com. Code § 3.308 (a).

   Under the UCC, the “burden of establishing” a fact means the burden of

persuading the trier of fact that the existence of the fact is more probable than its

nonexistence. Tex. Bus. & Com. Code § 1.201 (8).

   The UCC defines “presumption” with respect to a fact, or that a fact is

“presumed,” to mean the trier of fact must find the existence of the fact unless and

until evidence is introduced that supports a finding of its nonexistence. Tex. Bus. &

Com. Code § 1.206.

   In salient part, the UCC Comment to § 3.308 states:

   “. . . . The purpose of the requirement of a specific denial in the pleadings is to

   give the plaintiff notice of the defendant’s claim of forgery or lack of authority


                                           17
as to the particular signature, and to afford the plaintiff an opportunity to

investigate and obtain evidence. . . . In the absence of such specific denial the

signature stands admitted, and is not in issue. . . . The question of the burden

of establishing the signature arises only when it has been put in issue by

specific denial. “Burden of establishing” is defined in Section 1-201. The

burden is on the party claiming under the signature, but the signature is

presumed to be authentic and authorized except as stated in the second

sentence of subsection (a). “Presumed” is defined in Section 1-201 and means

that until some evidence is introduced which would support a finding that the

signature is forged or unauthorized, the plaintiff is not required to prove that

it is valid. The presumption rests upon the fact that in ordinary experience

forged or unauthorized signatures are very uncommon, and normally any

evidence is within the control of, or more accessible to, the defendant. The

defendant is therefore required to make some sufficient showing of the grounds

for the denial before the plaintiff is required to introduce evidence. The

defendant's evidence need not be sufficient to require a directed verdict, but it

must be enough to support the denial by permitting a finding in the defendant's

favor. Until introduction of such evidence the presumption requires a finding

for the plaintiff. Once such evidence is introduced the burden of establishing


                                       18
   the signature by a preponderance of the total evidence is on the plaintiff. The

   presumption does not arise if the action is to enforce the obligation of a

   purported signer who has died or become incompetent before the evidence is

   required, and so is disabled from obtaining or introducing it. “Action” is

   defined in Section 1-201 and includes a claim asserted against the estate of a

   deceased or an incompetent.”

Tex. Bus. & Com. Code § 3.308 cmt. 1.

   A person is not liable on an instrument unless the person:

   (1) signed the instrument; or

   (2) is represented by an agent or representative who signed the instrument and the

   signature is binding on the represented person under Section 3.402.

Tex. Bus. & Com. Code § 3.401(a)

   Where the maker’s signature was forged, the maker cannot be liable since his valid

signature does not appear on the instrument. Canfield v. Bank One, Texas, N.A. 51

S.W.3d 828 (Tex.App. 6 Dist. 2001pet. denied).

   When the holder of the note is not the payee and not a holder in due course the

party holds the note subject to all defenses available in an action on a simple contract.

Broaddus, 569 S.W.2d at 491; Tex. Bus. & Com. Code § 3.306. Therefore, evidence

is admissible that tends to prove a defense to the action on the promissory note, such


                                           19
as failure of consideration, non-performance of a condition precedent, delivery for a

special purpose, fraud in the inducement, or other defenses which would be available

in an action on a simple contract. Broaddus, 569 S.W.2d at 491.

   As shown in the uncontroverted sworn summary judgment proof presented by

Appellant, Appellant disputed the authenticity of his signature on the Note under

sworn pleadings as well as sworn summary judgment proof.

   ISSUE NO. 1C. FAILURE OF CONSIDERATION.

      The affirmative defense of failure of consideration defeats a summary

   judgment if the nonmovant presents evidence he did not receive the consideration

   set forth in the agreement. McGraw v. Brown Realty Co., 195 S.W.3d 271, 276

   (Tex.App.–Dallas 2006, no pet.). A failure of consideration may be either partial

   or total. A total failure of consideration is grounds for cancellation or recission of

   the contract. Food Mach. Corp. v. Moon, 165 S.W.2d 773, 775

   (Tex.Civ.App.–Amarillo 1942, no writ).

   Consideration is a present exchange bargained for in return for a promise.”Roark

v. Stallworth Oil & Gas, Inc., 813 S.W.2d 492, 496 (Tex.1991). “It consists of either

a benefit to the promisor or a detriment to the promisee.” Id. Failure of consideration

is distinct from lack of consideration. Belew v. Rector, 202 S.W.3d 849, 854 n. 4

(Tex.App.–Eastland 2006, no pet.). Failure of consideration generally “occurs when,


                                           20
because of some supervening cause after an agreement is reached, the promised

performance fails.” US Bank, N.A. v. Prestige Ford Garland Ltd. P’ship, 170 S.W.3d

272, 279 (Tex.App.–Dallas 2005, no pet.).

   When parties reduce their agreement to writing, the “written contract presumes

that there was consideration given for its execution.”Gooch v. Am. Sling Co., 902

S.W.2d 181, 185 (Tex.App.–Fort Worth 1995, no writ) (citing Wright v. Robert & St.

John Motor Co., 58 S.W.2d 67, 69 (Tex.1933)).

   Appellant is not contesting consideration in the execution of the Short-Term

Notes, but the failure of consideration thereafter.

   Because there is a presumption the Short-Term Notes were supported by

consideration, the burden was on Appellant to show none was actually received, thus

there was a failure of consideration. Maykus v. Tex. Bank & Trust Co. of Dallas, 550

S.W.2d 396, 398 (Tex.Civ.App.–Dallas 1977, no writ). Appellant did this

(SCR26¶¶23-25; SCR31¶¶23-25)

   Appellant executed the Short-Term Notes in his individual capacity and SNB

agreed to advance Appellant and the other makers of those notes, in their individual

capacities, the amount of money specifically delineated in each note; however, SNB

did not do that. As shown in the uncontroverted summary judgment proof presented

by Appellant, Appellant received no consideration from advances on the Short-Term


                                          21
Notes. (SCR26¶¶23-25; SCR31¶¶23-25)

   Appellee presented no evidence to raise a disputed fact issue on the elements of

this affirmative defense. (CR203)

   There was a total failure of consideration in the Short-Term Notes because SNB

did not advance the funds to Appellant or as directed by Appellant after the Short-

Term Notes were executed - a supervening cause arising after the execution of the

Short-Term Notes. Burges v. Mosley, 304 S.W.3d 623, 628 (Tex.App.–Tyler 2010,

no pet.). Thus, the 2008 Note fails likewise.

      ISSUE NO. 1D. CANCELLATION OF NOTE.

      Tex.Bus. & Com.Code § 3.401(a) provides: “[n]o person is liable on an

   instrument unless his signature appears thereon.”

      An agreement to extend the time of payment of a negotiable instrument

   constitutes a new contract between the parties. Priest v. First Mortgage Company

   of Texas, Inc., 659 S.W.2d 869, 871 (Tex .Civ.App.–San Antonio 1983, writ ref’d

   n.r.e.). The execution of a renewal note is generally treated as a new contract,

   evidencing the existing debt. Priest, 659 S.W.2d at 871; Braugh v. Corpus Christi

   Bank & Trust, 605 S.W.2d 691, 696 (Tex.Civ.App.–Corpus Christi 1980, writ

   ref’d n.r.e.).

       It is clear from the record shown in the CSA, Light alone renewed and


                                         22
extended the 2008 Note at least three times; therefore, whether the Renewal Notes,

notes which Appellant undisputed did sign as a co-maker, extinguished the Short-

Term Notes and/or the 2008 Note, are disputed fact issues, questions of fact for

the jury. Hays v. First State Bank of Dell City, Tex.Civ.App., 377 S.W.2d 210,

(Tex.App.–Amarillo, 1964 writ ref., n.r.e.).

   Moreover, The Short-Term Notes were not transferred to SWOO and they no

longer exist - they were deemed to have been marked paid in full and returned to

Light in the CSA (SCR65); therefore, it is a disputed fact issue to whether the

2008 Note was extinguished by the terms of the Omnibus Agreement and/or the

Renewal Notes. Id.

   ISSUE NO. 1E. DOCTRINE OF ESTOPPEL

   Promissory estoppel is an equitable doctrine ordinarily used defensively to

prevent “a party from insisting upon [its] strict legal rights when it would be

unjust to allow [it] to enforce them.” Wheeler v. White, 398 S.W.2d 93, 96–97

(Tex. 1965); In re Weekley Homes, L.P., 180 S.W.3d 127, 133 (Tex.2005).

   SWOO is estopped by the acts of its predecessor, SNB, as SWOO is not a

holder-in-due-course. SNB promised Appellant and the other co-makers of the

Short-Term Notes that if Appellant and the co-makers would execute the Short-

Term Notes in their individual capacities, SNB would: (i) disburse the funds


                                      23
  advanced on the Short-Term Notes to the co-makers for their use on the Project

  as the co-makers deemed fit in their sole discretion, as set forth in the Short-Term

  Notes; and (ii) SNB would not seek payment from the co-makers, but would pay

  the Short-Term Notes by rolling the balances due on the Short-Term Notes into

  the refinancing of the Stretford debt. (SCR25-26¶¶19, 20; SCR25-26¶¶20, 21).

ISSUE NO. 2. ALTERNATIVELY, APPELLANT RAISED DISPUTED ISSUES                       OF
MATERIAL FACT ON ELEMENTS OF APPELLEE’S CLAIM.

  Legal arguments and disputed fact issues raised by Appellant on these issues are:

     ISSUE NO. 2A. HOLDER IN DUE COURSE.

     Legal arguments in §1A above.

     Fact issues raised:

     a. Appellant provided competent summary judgment evidence showing the

     2008 Note was past due when acquired by SWOO. (CR104-106¶¶8-16)

     b. Appellee had knowledge the 2008 Note was in default when acquired by

     SWOO. (CR104-106¶¶8-16)

     ISSUE NO. 2B. AUTHENTICITY/GENUINENESS OF SIGNATURE.

     Legal arguments in §1B above.

     Fact issues raised:

     a. Appellant did not execute the 2008 Note. (SCR26¶¶27, 28; SCR31¶¶27, 28)

     b. Appellant was no longer a partner, member or participant in the Stretford

                                         24
      Project when the 2008 Note was executed. (SCR181-216)

      c. Appellant did not execute the Omnibus Agreement. (SCR181-216)

      ISSUE NO. 2C. FAILURE OF CONSIDERATION.

      Legal arguments in § 1C above.

      Fact issues raised:

      a. Appellant did not receive any funds from advances under the Short-Term

      Notes. (SCR26¶¶24, 25; SCR31¶¶24, 25)

      b. Appellant did not receive any funds from advances under the 2008 Note.

      (SCR26¶¶24, 25; SCR31¶¶24, 25; CR365-401; 424-427)

ISSUE NO. 3. THE TRIAL COURT ERRED IN GRANTING A SUMMARY JUDGMENT
BECAUSE APPELLANT SUBMITTED COMPETENT SUMMARY JUDGMENT PROOF TO
CREATE ISSUES ON THE AFFIRMATIVE DEFENSES PLED BY APPELLANT.

   If the party opposing a summary judgment relies on an affirmative defense, he

must come forward with summary judgment proof sufficient to raise an issue of fact

on each element of the defense to avoid summary judgment. Brownlee v. Brownlee,

665 S.W.2d 111, 112 (Tex.1984). A defendant is not required to prove his affirmative

defense as a matter of law, he is only required to raise fact issue on each element of

the affirmative defense. Id. Appellant filed a response to the Motion identifying his

affirmative defenses, the law related thereto and provided competent summary-

judgment evidence raising a fact issue on each element of his affirmative defenses.


                                         25
(SCR1-216 Specifically those fact issues raised by Appellant are:

      ISSUE NO. 3A. APPELLEE WAS NOT A HOLDER IN DUE COURSE.

      Fact issues raised.

      Appellant raised the following fact issues:

      a. the 2008 Note was in default when acquired by SWOO. (CR104-106¶¶8-16)

      b. SWOO had knowledge that the 2008 Note was in default when acquired by

      SWOO. (CR104-106¶¶8-16)

     ISSUE NO. 3B. AUTHENTICITY/GENUINENESS OF APPELLANT’S SIGNATURE
   ON THE 2008 NOTE.

      Legal arguments in §1B above.

      Fact issues raised:

      a. Appellant did not execute the 2008 Note. (SCR26¶¶27, 28; SCR31¶¶27, 28)

      b. Appellant was no longer a participant in the Stretford Project when the 2008

      Note was executed. (SCR181-216)

      c. Appellant did not execute the Omnibus Agreement. (SCR181-216)

      ISSUE NO. 3C. FAILURE OF CONSIDERATION.

      Legal arguments in §1C above.

      Fact issues raised:

      a. Appellant received no funds or benefits from advances under the Short-Term

      Notes. (SCR26¶¶24, 25; SCR31¶¶24, 25)

                                         26
     b. Appellant received no funds or benefits from advances under the 2008 Note.

     (SCR26¶¶24, 25; SCR31¶¶24, 25; CR365-401; 424-427)

    ISSUE NO. 3D. § 3.401, TEXAS BUSINESS & COMMERCE CODE,
  CANCELLATION OF DEBT INSTRUMENT.

     Legal arguments in §1D above.

     Appellant raised the following fact issues:

     a. Appellant did not execute the Renewal Notes - three of them as shown in the

     second full paragraph of the renewal dated July 11, 2011. (SCR91@92 2nd

paragraph)

     b. Appellant was not consulted about the Renewal Notes - none of them.

     (SCR27¶30; SCR31¶19)

     c. The Short-Terms Notes were marked paid and returned to Light. (SCR65-

     167)

     ISSUE NO. 3E. PROMISSORY ESTOPPEL.

     Legal arguments in §1E above.

     Fact issues raised:

     a. Appellant was told by SNB the Short-Term Notes would be paid by new

     notes issued to the Stretford. (SCR25-27¶¶19, 20, 21; SCR31¶¶20, 21)

     b. Appellant relied on that representation. (SCR25-27¶¶19, 20, 21;

     SCR31¶¶20, 21)

                                       27
   c. Appellee reliance on the representations caused Appellant injury - Appellant

   raised the following fact issues: (SCR25-27¶¶19, 20, 21, 33; SCR31¶¶20, 21)

   ISSUE NO. 3F. MATERIAL ALTERATION/CANCELLATION                   BY   PAYMENT

EXTENSION.

   Whether the note is materially altered by a payment extension is a question of

law. Austin Hardwoods Inc. v. Vanden Berqhe, 917 S.W.2d 320, 325

(Tex.App.–El Paso 1995, writ denied); Federal Deposit Insurance Corp. v. Attayi,

745 S.W.2d 939, 944 (Tex.App.–Houston [1st Dist.] 1988, no writ).

   A material alteration of a contract between a creditor and principal debtor is

one that either injures or enhances the risk of injury to the guarantor/co-maker.

United Concrete Pipe Corp.v. Spin-Line Co., 430 S.W.2d 360, 365 (Tex.1968);

Attayi, 745 S.W.2d at 944. Material alteration is an affirmative defense. Bullock

v. Kehoe, 678 S.W.2d 558, 559 (Tex.App.–Houston [14th Dist.] 1984, writ ref’d

n.r.e.); Reliance Ins. Co. v. Dahlstrom Corp., 568 S.W.2d 733, 736

(Tex.Civ.App.–Eastland 1978, writ ref’d n.r.e.). The elements of the defense are

threefold: (1) a material alteration of the underlying contract; (2) made without a

guarantor’s/co-maker’s consent; (3) which is to his detriment (i.e., is prejudicial

to his interest). Old Colony v. City of Quitman, 352 S.W.2d 452, 456 (Tex.1962);

Austin Hardwoods, 917 S.W.2d at 326; Attayi, 745 S.W.2d at 944.


                                      28
   Fact issues raised:

   a. There was a material alteration in the Short-Term Notes by the extension of

   the due date. (SCR27¶¶18-21, 28-31; SCR31¶¶19-23)

   b. Appellant was not consulted about the renewal and extension of the Short-

   Term Notes or the 2008 Note or any of the Renewal Notes. (SCR27¶30;

   SCR31¶19)

   c. The various renewals were to Appellant’s detriment. (SCR26¶22; CR1;

   CR238)

   ISSUE NO. 3G. § 3.605, TEXAS BUSINESS & COMMERCE CODE, DISCHARGE
OF LIABILITY.

   Tex.Bus. & Com.C. § 3.605 sets forth the acts by a holder that discharge a

party to an instrument is intended to discharge a co-maker of note only to the

extent of his right of recourse against his fellow co-maker.

   When one party to a contract commits a material breach of contract, the other

party is discharged or excused from further performance. Mustang Pipeline Co.

v. Driver Pipeline Co., 134 S .W.3d 195, 196 (Tex.2004). The covenant breached

must be part of mutually dependent promises in order to excuse further

performance by the non-breaching party. Hanks v. GAB Bus. Servs., Inc., 644

S.W.2d 707, 708 (Tex.1982). Generally, the issue of whether a breach rises to the

level of a material breach that will render the contract unenforceable presents a

                                      29
dispute for resolution by the trier of fact. Hiles v. Arnie & Co., P.C.,

14–12–00088–CV, 2013 WL 2120658, *8 (Tex.App.–Houston [14th Dist.] Apr.

25, 2013, pet. filed) (citing Cont’l Dredging, Inc. v. De–Kaizered, Inc., 120

S.W.3d 380, 394–95 (Tex.App.–Texarkana 2003, pet. denied). 13.3. The

determination of whether a breach is a material breach of the contract necessarily

turns on the facts of each case. Advance Components, Inc. v. Goodstein, 608

S.W.2d 737, 739 (Tex.App.–Dallas 1980, writ ref’d n.r.e.) ( citing Bowen v.

Briscoe, 453 S.W.2d 287, 289 (Tex.1970)). Citing the Restatement (Second) of

Contracts, section 241 (1981), the Texas Supreme Court noted five circumstances

significant in determining whether a failure to perform is material: (a) the extent

to which the injured party will be deprived of the benefit which he reasonably

expected; (b) the extent to which the injured party can be adequately compensated

for the part of that benefit of which he will be deprived; (c) the extent to which the

party failing to perform or to offer to perform will suffer forfeiture; (d) the

likelihood the party failing to perform or to offer to perform will cure his failure,

taking account of the circumstances including any reasonable assurances; (e) the

extent to which the behavior of the party failing to perform or to offer to perform

comports with standards of good faith and fair dealing. Mustang Pipeline, 134

S.W.3d at 199.


                                        30
      Another factor relevant to assessing the materiality of the breach is the extent

   to which it reasonably appears to the injured party that delay may prevent or

   hinder him in making reasonable substitute arrangements. Id. (citing Restatement

   (Second) of Contracts § 242 (1981)).

      Fact issues raised:

      a. SNB and Light jointly breached the agreement the Short-Term Notes would

      be rolled into new debt of the Stretford. (SCR26¶¶20, 21, SCR31¶¶19, 20, 21)

      b. SNB and Light conspired to keep Appellant liable by the renewal of the

      Short-Term Notes into the 2008 Notes, instead of rolling that debt into new

      debt of the Stretford. (SCR83)

      c. Had SNB followed through with its agreement, Light would have sole

      liability under his guaranty agreements to SNB for all debts of the Stretford.

      (SCR65-167)

ISSUE NO. 4. THE TRIAL COURT ERRED IN GRANTING A SUMMARY JUDGMENT
BECAUSE APPELLEE’S SUMMARY JUDGMENT PROOF WAS NOT COMPETENT
SUMMARY JUDGMENT EVIDENCE.

   Competent summary judgment proof must be clear, positive, direct, credible, free

from contradiction, and susceptible of being readily controverted. Tex.R. Civ. P.

166a(c); Haynes v. City of Beaumont, 35 S.W.3d 166, 178 (Tex.App.–Texarkana

2000, no pet.). Conclusory statements in affidavits are not competent evidence to


                                          31
support a summary judgment. Id. A conclusory statement is one not providing the

underlying facts to support the statements. Id. Speculative evidence is not competent

summary judgment evidence. Wal–Mart Stores, Inc. v. Gonzalez, 968 S.W.2d 934,

936 (Tex.1998). Moreover, an to be competent summary judgment proof an affidavit

must be made on personal knowledge, and are conclusory as a matter of law if the

affiant fails to provide underlying facts supporting the affiant’s statements. Tex.R.

Civ. P. 166a(f); LeBlanc v. Lamar State College, 232 S.W.3d 294, 301

(Tex.App.–Beaumont 2007, no pet.) (citing 1001 McKinney Ltd. v. Credit Suisse

First Boston Mortg. Capital, 192 S.W.3d 20, 27 (Tex.App.–Houston [14th Dist.]

2005, pet. denied)).

   Appellee’s summary judgment evidence consists of four affidavits: Brent A Bates,

L. Read Mortimer, Anson Lang and Kyle A. Owens. (CR208-225)

   Bates, an employee of SNB, is merely a custodian of records, and not familiar with

the Stretford loan transactions other than in a custodial manner. The Affidavit of

Bates provides no underlying facts supporting the conclusions in his affidavit that

Appellant signed the 2008 Note, and he proffers no evidence on the issue of failure

of consideration. (CR219) The statements in Affidavit of Bates about Appellant’s

signature and liability are conclusory as a matter of law. Tex.R. Civ. P. 166a(f);

LeBlanc, 232 S.W.3d at 301.


                                         32
   Mortimer, an employee of SWOO, is merely a custodian of records, and not

familiar with the Stretford transactions at SNB in any manner. The Affidavit of

Mortimer provides no underlying facts to support the conclusion in his affidavit that

Appellant signed the 2008 Note, and he proffers no evidence on the issue of failure

of consideration. (CR208) The statements in Affidavit of Mortimer about Appellant’s

signature and liability are conclusory as a matter of law. Tex.R. Civ. P. 166a(f);

LeBlanc, 232 S.W.3d at 301.

   Lang, an employee of Situs Asset Management, is even more remote to the

Stretford transactions at SNB and his statements are hearsay and conclusions. The

Affidavit of Lang provides no underlying facts to support the conclusion in his

affidavit that Appellant signed the 2008 Note, and he proffers no evidence on the

issue of failure of consideration. (CR213) The statements in Affidavit of Mortimer

about Appellant’s signature and liability are conclusory as a matter of law. Tex.R.

Civ. P. 166a(f); LeBlanc, 232 S.W.3d at 301.

   Owens an attorney with Hunton & Williams only has knowledge about the

litigation, and offers no evidence on the issues of liability of the Appellant. (CR224)

ISSUE NO. 5. THE TRIAL COURT ERRED IN GRANTING A SUMMARY JUDGMENT
BECAUSE THE TRIAL COURT ABUSED ITS DISCRETION.

   A trial court abuses its discretion if its decision “is arbitrary, unreasonable, and

without reference to guiding principles.” Boerschig v. Southwestern Holdings, Inc.,

                                          33
322 S.W.3d 752, 762–63 (Tex.App.–El Paso 2010, no pet.); Goode v. Shoukfeh, 943

S.W.2d 441, 446 (Tex.1997); Downer v. Aquamarine Operators, Inc., 701 S.W.2d

238, 241–42 (Tex.1985). Specifically, the Trial Court abused its discretion in the

follow matters:

     ISSUE NO. 5A. BY FAILING TO RULE ON THE APPELLANT’S OBJECTIONS TO
   THE AFFIDAVIT OF BRENT A. BATES; OBJECTIONS TO THE AFFIDAVIT OF
   ANSON LANG; AND OBJECTIONS TO THE AFFIDAVIT OF READ MORTIMER.

      A trial court does not have the discretion to refuse to rule on objections filed.

   In re Shredder Co., 225 S.W.3d 676, 679 (Tex. App–El Paso 2006 orig.

   proceeding). The trial court must consider and rule on objections within a

   reasonable time. In re Kleven, 100 S.W.3d 643, 644 (Tex. App–Texarkana 2003

   orig. proceeding). It is error and abuse of discretion to refuse to rule on a pending

   objections. Eli Lilly & Co. v. Marshall, 829 S.W.2d 157, 158 (Tex. 1992).

   However, since the trial court implicitly ruled on the Objections by overruling the

   Motion for New Trial the Trial Court’s implicit overruling was an abuse of

   discretion not founded in reference to guiding principles.

      ISSUE NO. 5B. BY FAILING TO REQUIRE APPELLEE TO MEET HIS BURDEN
   OF PROOF.

      When a plaintiff fails to meet its burden of proof on its , thus the burden did not

   shift to Appellant. M. D. Anderson, 28 S.W.3d at 23; therefore, since SWOO was

   required to show there was no genuine issue of material fact and it was entitled to

                                          34
   judgment as a matter of law and did not, Rule 166a(c); Knott, 128 S.W.3d at 215-

   16, thus the Trial Court’s granting the summary judgment was an abuse of

   discretion not founded in reference to guiding principles.

      ISSUE NO. 5C. BY GRANTING A SUMMARY JUDGMENT IN THE FACE OF FACT
   ISSUE SUPPORTING THE ELEMENTS OF APPELLANT’S AFFIRMATIVE DEFENSES.

      Appellee pled affirmative defenses and provided summary judgment proof in

   support of his affirmative defenses, which evidence was not controverted by the

   Appellee as required by law; therefore, Appellee was not entitled to summary

   judgment, Brownlee, 665 S.W2d at 112, thus the Trial Court’s granting the

   summary judgment was an abuse of discretion not founded in reference to guiding

   principles.

                              CONCLUSION & PRAYER

   The Trial Court erred as set forth herein, Appellant respectfully request this

Honorable Court to:

  1. Reverse the Summary Judgment and render judgment in favor of Appellant that
Appellee take nothing.

   2. Alternatively, reverse the Summary Judgment and:
      a. remand this case for a new trial on all issues;
      b. remand the case to the Trial Court with instructions to conduct a jury trial
   on the disputed fact issues determined by this Honorable Court; or
      c. remand the case to the Trial Court with instructions to conduct a jury trial on
   the issues of misapplication of law by the Trial Court, as determined by this
   Honorable Court.


                                          35
                                              Respectfully submitted,
                                              THE HOLMES LAW FIRM, INC.

                                              By: /s/ Robert H. Holmes
                                                    Robert H. Holmes
                                              State Bar No. 09908400
                                              3401 Beverly Drive
                                              Dallas, Texas 75205
                                              Telephone: 214-384-3182
                                              email: rhholmes@swbell.net
                                              ATTORNEY FOR APPELLANT


             APPELLANT’S RULE 9.4 CERTIFICATE OF COMPLIANCE

   This brief complies with the type-volume limitations of Rule 9.4 because it
contains words 7,463, excluding the parts of the brief exempted by the rule.

                                              /s/ Robert H. Holmes
                                              Robert H. Holmes

                            CERTIFICATE OF SERVICE

   I hereby certify that a true and correct copy of the foregoing instrument has been
delivered to the attorney of record for, by electronic service using eFileTexas, on
April 27, 2015.

                                              /s/ Robert H. Holmes
                                              Robert H. Holmes




                                         36
                          NO. 12-14-00344-CV

                IN THE TWELFTH COURT OF APPEALS

                          AT TYLER, TEXAS


                        VICTOR LISSIAK, JR.,

                                Appellant

                                   V.

                          SW LOAN OO, L.P.,

                                Appellee

     On Appeal from the 7th Judicial District Court, Smith County, Texas
The Honorable Kyle Russell Presiding in Trial Court Case Number 12-0384-A



                APPENDIX TO APPELLANT’S BRIEF


                                        THE HOLMES LAW FIRM, INC.
                                        Robert H. Holmes
                                        SBN 09908400
                                        3401 Beverly Drive
                                        Dallas, Texas 75205
                                        Telephone: 214-384-3182
                                        Email: rhholmes@swbell.net

                                        ATTORNEYS FOR APPELLANT
                            INDEX TO APPENDIX

1. Order Granting Summary Judgment.

2. Amended Motion for New Trial.

3. Omnibus Agreement.

4. Settlement Agreement between Appellee and J. Randolph Light.

5. Tex. Bus. & Com. Code § 1.201 (8) & (21).

6. Tex. Bus. & Com. Code § 1.202(a)(1).

7. Tex. Bus. & Com. Code § 1.206.

8. Tex. Bus. & Com. Code§ 3.302(a)(2)(iii).

9. Tex. Bus. & Com. Code § 3.306

10. Tex. Bus. & Com. Code § 3.308

11. Tex. Bus. & Com. Code § 3.401(a)

12. Tex.Bus. & Com.C. § 3.605
EXHIBIT “1”
EXHIBIT “2”
EXHIBIT “3”
EXHIBIT “4”
or not asserted in the litigation styled J. Randolph Light, et al. v. Stillwater National Bank &

Trust Company, et al., Cause No. 12-0384-A in the 7th District Court of Smith County, Texas,

but excludes any claims arising out of the performance or nonperformance of the Final

Settlement Agreement providing for execution of this Mutual Release. This Mutual Release is

not effective unless and until it has been fully executed by the parties hereto. This Mutual

Release may be executed with one or more separate counterparts and by facsimile or pdf, each of

which, when so executed, shall together constitute and be one of the same instrument.

DATED:        ____________________
                                                    SW LOAN OO LP

                                                      BY SW LOAN OO GP, LLC
                                                      GENERAL PARTNER


                                            By:     _________________________________

                                            Name: _________________________________

                                            Its:    _________________________________



                                                    _________________________________
                                                    James Randolph Light, Jr.


                                                    _________________________________
                                                    Merrill Light


                                                    _________________________________
                                                    Paul Barringer Light


                                                    _________________________________
                                                    Thomas Gray Light




FORMAL SETTLEMENT AGREEMENT - Page 13 of 16
EXHIBIT “5”
V.T.C.A., Bus. & C. § 1.201                                                                       Page 1




                                    Effective: September 1, 2005

Vernon's Texas Statutes and Codes Annotated Currentness

  Business and Commerce Code (Refs & Annos)
    Title 1. Uniform Commercial Code (Refs & Annos)
          Chapter 1. General Provisions (Refs & Annos)
            Subchapter B. General Definitions and Principles of Interpretation (Refs & Annos)
                   § 1.201. General Definitions
(a) Unless the context otherwise requires, words or phrases defined in this section, or in the
additional definitions contained in other chapters of this title that apply to particular chapters or parts
thereof, have the meanings stated.

(b) Subject to definitions contained in other chapters of this title that apply to particular chapters or
parts thereof:

  (1) “Action,” in the sense of a judicial proceeding, includes recoupment, counterclaim, set-off, suit
  in equity, and any other proceeding in which rights are determined.

  (2) “Aggrieved party” means a party entitled to pursue a remedy.

  (3) “Agreement,” as distinguished from “contract,” means the bargain of the parties in fact, as
  found in their language or inferred from other circumstances, including course of performance,
  course of dealing, or usage of trade as provided in Section 1.303.

  (4) “Bank” means a person engaged in the business of banking and includes a savings bank,
  savings and loan association, credit union, and trust company.

  (5) “Bearer” means a person in control of a negotiable electronic document of title or a person in
  possession of a negotiable instrument, a negotiable tangible document of title, or a certificated
  security that is payable to bearer or indorsed in blank.

  (6) “Bill of lading” means a document of title evidencing the receipt of goods for shipment issued
  by a person engaged in the business of directly or indirectly transporting or forwarding goods. The
  term does not include a warehouse receipt.



                   © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
V.T.C.A., Bus. & C. § 1.201                                                                     Page 2



 (7) “Branch” includes a separately incorporated foreign branch of a bank.

 (8) “Burden of establishing” a fact means the burden of persuading the trier of fact that the
 existence of the fact is more probable than its nonexistence.

 (9) “Buyer in ordinary course of business” means a person that buys goods in good faith, without
 knowledge that the sale violates the rights of another person in the goods, and in the ordinary
 course from a person, other than a pawnbroker, in the business of selling goods of that kind. A
 person buys goods in the ordinary course if the sale to the person comports with the usual or
 customary practices in the kind of business in which the seller is engaged or with the seller's own
 usual or customary practices. A person that sells oil, gas, or other minerals at the wellhead or
 minehead is a person in the business of selling goods of that kind. A buyer in ordinary course of
 business may buy for cash, by exchange of other property, or on secured or unsecured credit, and
 may acquire goods or documents of title under a preexisting contract for sale. Only a buyer that
 takes possession of the goods or has a right to recover the goods from the seller under Chapter 2
 may be a buyer in ordinary course of business. “Buyer in ordinary course of business” does not
 include a person that acquires goods in a transfer in bulk or as security for or in total or partial
 satisfaction of a money debt.

 (10) “Conspicuous,” with reference to a term, means so written, displayed, or presented that a
 reasonable person against which it is to operate ought to have noticed it. Whether a term is
 “conspicuous” or not is a decision for the court. Conspicuous terms include the following:

   (A) a heading in capitals equal to or greater in size than the surrounding text, or in contrasting
   type, font, or color to the surrounding text of the same or lesser size; and

   (B) language in the body of a record or display in larger type than the surrounding text, or in
   contrasting type, font, or color to the surrounding text of the same size, or set off from
   surrounding text of the same size by symbols or other marks that call attention to the language.

 (11) “Consumer” means an individual who enters into a transaction primarily for personal, family,
 or household purposes.

 (12) “Contract,” as distinguished from “agreement,” means the total legal obligation that results
 from the parties' agreement as determined by this title as supplemented by any other applicable
 laws.

 (13) “Creditor” includes a general creditor, a secured creditor, a lien creditor and any representative
 of creditors, including an assignee for the benefit of creditors, a trustee in bankruptcy, a receiver
 in equity and an executor or administrator of an insolvent debtor's or assignor's estate.


                 © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
V.T.C.A., Bus. & C. § 1.201                                                                   Page 3



 (14) “Defendant” includes a person in the position of defendant in a counterclaim, cross-claim, or
 third-party claim.

 (15) “Delivery,” with respect to an electronic document of title, means voluntary transfer of
 control, and with respect to an instrument, a tangible document of title, or chattel paper, means
 voluntary transfer of possession.

 (16) “Document of title” means a record that in the regular course of business or financing is
 treated as adequately evidencing that the person in possession or control of the record is entitled
 to receive, control, hold, and dispose of the record and the goods the record covers, and purports
 to be issued by or addressed to a bailee and to cover goods in the bailee's possession which are
 either identified or are fungible portions of an identified mass. The term includes a bill of lading,
 transport document, dock warrant, dock receipt, warehouse receipt, and order for delivery of goods.
 An electronic document of title is evidenced by a record consisting of information stored in an
 electronic medium. A tangible document of title is evidenced by a record consisting of information
 that is inscribed on a tangible medium.

 (17) “Fault” means a default, breach, or wrongful act or omission.

 (18) “Fungible goods” means:

  (A) goods of which any unit, by nature or usage of trade, is the equivalent of any other like unit;
  or

  (B) goods that by agreement are treated as equivalent.

 (19) “Genuine” means free of forgery or counterfeiting.

 (20) “Good faith,” except as otherwise provided in Chapter 5, means honesty in fact and the
 observance of reasonable commercial standards of fair dealing.

 (21) “Holder” means:

  (A) the person in possession of a negotiable instrument that is payable either to bearer or to an
  identified person that is the person in possession;

  (B) the person in possession of a negotiable tangible document of title if the goods are
  deliverable either to bearer or to the order of the person in possession; or

  (C) a person in control of a negotiable electronic document of title.


                 © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
V.T.C.A., Bus. & C. § 1.201                                                                      Page 4



 (22) “Insolvency proceeding ” includes an assignment for the benefit of creditors or other
 proceeding intended to liquidate or rehabilitate the estate of the person involved.

 (23) “Insolvent” means:

   (A) having generally ceased to pay debts in the ordinary course of business other than as a result
   of a bona fide dispute;

   (B) being unable to pay debts as they become due; or

   (C) being insolvent within the meaning of the federal bankruptcy law.

 (24) “Money” means a medium of exchange currently authorized or adopted by a domestic or
 foreign government. The term includes a monetary unit of account established by an
 intergovernmental organization or by agreement between two or more countries.

 (25) “Organization” means a person other than an individual.

 (26) “Party,” as distinguished from “third party,” means a person that has engaged in a transaction
 or made an agreement subject to this title.

 (27) “Person” means an individual, corporation, business trust, estate, trust, partnership, limited
 liability company, association, joint venture, government, governmental subdivision, agency, or
 instrumentality, public corporation, or any other legal or commercial entity.

 (28) “Present value” means the amount as of a date certain of one or more sums payable in the
 future, discounted to the date certain by use of either an interest rate specified by the parties if that
 rate is not manifestly unreasonable at the time the transaction is entered into or, if an interest rate
 is not so specified, a commercially reasonable rate that takes into account the facts and
 circumstances at the time the transaction is entered into.

 (29) “Purchase” means taking by sale, lease, discount, negotiation, mortgage, pledge, lien, security
 interest, issue or reissue, gift, or any other voluntary transaction creating an interest in property.

 (30) “Purchaser” means a person that takes by purchase.

 (31) “Record” means information that is inscribed on a tangible medium or that is stored in an
 electronic or other medium and is retrievable in perceivable form.

 (32) “Remedy” means any remedial right to which an aggrieved party is entitled with or without
 resort to a tribunal.

                  © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
V.T.C.A., Bus. & C. § 1.201                                                                     Page 5




 (33) “Representative” means a person empowered to act for another, including an agent, an officer
 of a corporation or association, and a trustee, executor, or administrator of an estate.

 (34) “Right” includes remedy.

 (35) “Security interest” means an interest in personal property or fixtures which secures payment
 or performance of an obligation. “Security interest” includes any interest of a consignor and a
 buyer of accounts, chattel paper, a payment intangible, or a promissory note in a transaction that
 is subject to Chapter 9. “Security interest” does not include the special property interest of a buyer
 of goods on identification of those goods to a contract for sale under Section 2.401, but a buyer
 may also acquire a “security interest” by complying with Chapter 9. Except as otherwise provided
 in Section 2.505, the right of a seller or lessor of goods under Chapter 2 or 2A to retain or acquire
 possession of the goods is not a “security interest,” but a seller or lessor may also acquire a
 “security interest” by complying with Chapter 9. The retention or reservation of title by a seller of
 goods notwithstanding shipment or delivery to the buyer under Section 2.401 is limited in effect
 to a reservation of a “security interest.” Whether a transaction in the form of a lease creates a
 security interest is determined pursuant to Section 1.203.

 (36) “Send” in connection with a writing, record, or notice means:

   (A) to deposit in the mail or deliver for transmission by any other usual means of communication
   with postage or cost of transmission provided for and properly addressed and, in the case of an
   instrument, to an address specified thereon or otherwise agreed, or if there be none to any address
   reasonable under the circumstances; or

   (B) in any other way cause to be received any record or notice within the time at which it would
   have arrived if properly sent.

 (37) “Signed” includes using any symbol executed or adopted with present intention to adopt or
 accept a writing.

 (38) “State” means a State of the United States, the District of Columbia, Puerto Rico, the United
 States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United
 States.

 (39) “Surety” includes a guarantor or other secondary obligor.

 (40) “Term” means a portion of an agreement that relates to a particular matter.

 (41) “Unauthorized signature” means a signature made without actual, implied, or apparent

                 © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
V.T.C.A., Bus. & C. § 1.201                                                                 Page 6



 authority. The term includes a forgery.

 (42) “Warehouse receipt” means a document of title issued by a person engaged in the business
 of storing goods for hire.

 (43) “Writing” includes printing, typewriting, or any other intentional reduction to tangible form.
 “Written” has a corresponding meaning.

CREDIT(S)

Amended by Acts 2003, 78th Leg., ch. 542, § 1, eff. Sept. 1, 2003; Acts 2005, 79th Leg., ch. 122,
§ 2, eff. Sept. 1, 2005.


Current through the end of the 2013 Third Called Session of the 83rd Legislature

(C) 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.

END OF DOCUMENT




                 © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
EXHIBIT “6”
V.T.C.A., Bus. & C. § 1.202                                                                  Page 1




                                   Effective: September 1, 2003

Vernon's Texas Statutes and Codes Annotated Currentness

  Business and Commerce Code (Refs & Annos)
     Title 1. Uniform Commercial Code (Refs & Annos)
           Chapter 1. General Provisions (Refs & Annos)
             Subchapter B. General Definitions and Principles of Interpretation (Refs & Annos)
                   § 1.202. Notice; Knowledge
(a) Subject to Subsection (f), a person has “notice” of a fact if the person:

 (1) has actual knowledge of it;

 (2) has received a notice or notification of it; or

 (3) from all the facts and circumstances known to the person at the time in question, has reason to
 know that it exists.

(b) “Knowledge” means actual knowledge. “Knows” has a corresponding meaning.

(c) “Discover,” “learn,” or words of similar import refer to knowledge rather than to reason to know.

(d) A person “notifies” or “gives” a notice or notification to another person by taking such steps as
may be reasonably required to inform the other person in ordinary course, whether or not the other
person actually comes to know of it.

(e) Subject to Subsection (f), a person “receives” a notice or notification when:

 (1) it comes to that person's attention; or

 (2) it is duly delivered in a form reasonable under the circumstances at the place of business
 through which the contract was made or at another location held out by that person as the place for
 receipt of such communications.

(f) Notice, knowledge, or a notice or notification received by an organization is effective for a
particular transaction from the time it is brought to the attention of the individual conducting that

                  © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
V.T.C.A., Bus. & C. § 1.202                                                                     Page 2



transaction and, in any event, from the time it would have been brought to the individual's attention
if the organization had exercised due diligence. An organization exercises due diligence if it
maintains reasonable routines for communicating significant information to the person conducting
the transaction and there is reasonable compliance with the routines. Due diligence does not require
an individual acting for the organization to communicate information unless the communication is
part of the individual's regular duties or the individual has reason to know of the transaction and that
the transaction would be materially affected by the information.

CREDIT(S)

Amended by Acts 2003, 78th Leg., ch. 542, § 1, eff. Sept. 1, 2003.


Current through the end of the 2013 Third Called Session of the 83rd Legislature

(C) 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.

END OF DOCUMENT




                  © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
EXHIBIT “7”
V.T.C.A., Bus. & C. § 1.206                                                            Page 1




                                 Effective: September 1, 2003

Vernon's Texas Statutes and Codes Annotated Currentness

  Business and Commerce Code (Refs & Annos)
     Title 1. Uniform Commercial Code (Refs & Annos)
           Chapter 1. General Provisions (Refs & Annos)
             Subchapter B. General Definitions and Principles of Interpretation (Refs & Annos)
                   § 1.206. Presumptions
Whenever this title creates a “presumption” with respect to a fact, or provides that a fact is
“presumed,” the trier of fact must find the existence of the fact unless and until evidence is
introduced that supports a finding of its nonexistence.

CREDIT(S)

Amended by Acts 2003, 78th Leg., ch. 542, § 1, eff. Sept. 1, 2003.


Current through the end of the 2013 Third Called Session of the 83rd Legislature

(C) 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.

END OF DOCUMENT




                 © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
EXHIBIT “8”
V.T.C.A., Bus. & C. § 3.302                                                                   Page 1




                               Effective:[See Text Amendments]

Vernon's Texas Statutes and Codes Annotated Currentness

  Business and Commerce Code (Refs & Annos)
     Title 1. Uniform Commercial Code (Refs & Annos)
           Chapter 3. Negotiable Instruments (Refs & Annos)
             Subchapter C. Enforcement of Instruments
                   § 3.302. Holder in Due Course
(a) Subject to Subsection (c) and Section 3.106(d), “holder in due course” means the holder of an
instrument if:

 (1) the instrument when issued or negotiated to the holder does not bear such apparent evidence
 of forgery or alteration or is not otherwise so irregular or incomplete as to call into question its
 authenticity; and

 (2) the holder took the instrument:

   (A) for value;

   (B) in good faith;

   (C) without notice that the instrument is overdue or has been dishonored or that there is an
   uncured default with respect to payment of another instrument issued as part of the same series;

   (D) without notice that the instrument contains an unauthorized signature or has been altered;

   (E) without notice of any claim to the instrument described in Section 3.306; and

   (F) without notice that any party has a defense or claim in recoupment described in Section
   3.305(a).

(b) Notice of discharge of a party, other than discharge in an insolvency proceeding, is not notice of
a defense under Subsection (a), but discharge is effective against a person who became a holder in
due course with notice of the discharge. Public filing or recording of a document does not of itself
constitute notice of a defense, claim in recoupment, or claim to the instrument.

                  © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
V.T.C.A., Bus. & C. § 3.302                                                                    Page 2




(c) Except to the extent a transferor or predecessor in interest has rights as a holder in due course,
a person does not acquire rights of a holder in due course of an instrument taken:

 (1) by legal process or by purchase in an execution, bankruptcy, or creditor's sale or similar
 proceeding;

 (2) by purchase as part of a bulk transaction not in ordinary course of business of the transferor;
 or

 (3) as the successor in interest to an estate or other organization.

(d) If, under Section 3.303(a)(1), the promise of performance that is the consideration for an
instrument has been partially performed, the holder may assert rights as a holder in due course of the
instrument only to the fraction of the amount payable under the instrument equal to the value of the
partial performance divided by the value of the promised performance.

(e) If (i) the person entitled to enforce an instrument has only a security interest in the instrument,
and (ii) the person obliged to pay the instrument has a defense, claim in recoupment, or claim to the
instrument that may be asserted against the person who granted the security interest, the person
entitled to enforce the instrument may assert rights as a holder in due course only to an amount
payable under the instrument that, at the time of enforcement of the instrument, does not exceed the
amount of the unpaid obligation secured.

(f) To be effective, notice must be received at a time and in a manner that gives a reasonable
opportunity to act on it.

(g) This section is subject to any law limiting status as a holder in due course in particular classes
of transactions.

CREDIT(S)

Amended by Acts 1995, 74th Leg., ch. 921, § 1, eff. Jan. 1, 1996.


Current through the end of the 2013 Third Called Session of the 83rd Legislature

(C) 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.

END OF DOCUMENT


                  © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
V.T.C.A., Bus. & C. § 3.302                                               Page 3




               © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
EXHIBIT “9”
V.T.C.A., Bus. & C. § 3.306                                                                    Page 1




                                Effective:[See Text Amendments]

Vernon's Texas Statutes and Codes Annotated Currentness

  Business and Commerce Code (Refs & Annos)
     Title 1. Uniform Commercial Code (Refs & Annos)
           Chapter 3. Negotiable Instruments (Refs & Annos)
             Subchapter C. Enforcement of Instruments
                   § 3.306. Claims to an Instrument
A person taking an instrument, other than a person having rights of a holder in due course, is subject
to a claim of a property or possessory right in the instrument or its proceeds, including a claim to
rescind a negotiation and to recover the instrument or its proceeds. A person having rights of a holder
in due course takes free of the claim to the instrument.

CREDIT(S)

Amended by Acts 1995, 74th Leg., ch. 921, § 1, eff. Jan. 1, 1996.


Current through the end of the 2013 Third Called Session of the 83rd Legislature

(C) 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.

END OF DOCUMENT




                  © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
EXHIBIT “10”
V.T.C.A., Bus. & C. § 3.308                                                                     Page 1




                                Effective:[See Text Amendments]

Vernon's Texas Statutes and Codes Annotated Currentness

  Business and Commerce Code (Refs & Annos)
     Title 1. Uniform Commercial Code (Refs & Annos)
            Chapter 3. Negotiable Instruments (Refs & Annos)
              Subchapter C. Enforcement of Instruments
                    § 3.308. Proof of Signatures and Status as Holder in Due Course
(a) In an action with respect to an instrument, the authenticity of, and authority to make, each
signature on the instrument are admitted unless specifically denied in the pleadings. If the validity
of a signature is denied in the pleadings, the burden of establishing validity is on the person claiming
validity, but the signature is presumed to be authentic and authorized unless the action is to enforce
the liability of the purported signer and the signer is dead or incompetent at the time of trial of the
issue of validity of the signature. If an action to enforce the instrument is brought against a person
as the undisclosed principal of a person who signed the instrument as a party to the instrument, the
plaintiff has the burden of establishing that the defendant is liable on the instrument as a represented
person under Section 3.402(a).

(b) If the validity of signatures is admitted or proved and there is compliance with Subsection (a),
a plaintiff producing the instrument is entitled to payment if the plaintiff proves entitlement to
enforce the instrument under Section 3.301, unless the defendant proves a defense or claim in
recoupment. If a defense or claim in recoupment is proved, the right to payment of the plaintiff is
subject to the defense or claim, except to the extent the plaintiff proves that the plaintiff has rights
of a holder in due course that are not subject to the defense or claim.

CREDIT(S)

Added by Acts 1995, 74th Leg., ch. 921, § 1, eff. Jan. 1, 1996.


Current through the end of the 2013 Third Called Session of the 83rd Legislature

(C) 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.

END OF DOCUMENT

                  © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
V.T.C.A., Bus. & C. § 3.308                                               Page 2




               © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
EXHIBIT “11”
V.T.C.A., Bus. & C. § 3.401                                                              Page 1




                                 Effective:[See Text Amendments]

Vernon's Texas Statutes and Codes Annotated Currentness

  Business and Commerce Code (Refs & Annos)
     Title 1. Uniform Commercial Code (Refs & Annos)
           Chapter 3. Negotiable Instruments (Refs & Annos)
             Subchapter D. Liability of Parties
                   § 3.401. Signature
(a) A person is not liable on an instrument unless the person:

 (1) signed the instrument; or

 (2) is represented by an agent or representative who signed the instrument and the signature is
 binding on the represented person under Section 3.402.

(b) A signature may be made (i) manually or by means of a device or machine, and (ii) by the use
of any name, including a trade or assumed name, or by a word, mark, or symbol executed or adopted
by a person with present intention to authenticate a writing.

CREDIT(S)

Amended by Acts 1995, 74th Leg., ch. 921, § 1, eff. Jan. 1, 1996.


Current through the end of the 2013 Third Called Session of the 83rd Legislature

(C) 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.

END OF DOCUMENT




                 © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
EXHIBIT “12”
V.T.C.A., Bus. & C. § 3.605                                                                      Page 1




                                    Effective: September 1, 2007

Vernon's Texas Statutes and Codes Annotated Currentness

  Business and Commerce Code (Refs & Annos)
      Title 1. Uniform Commercial Code (Refs & Annos)
            Chapter 3. Negotiable Instruments (Refs & Annos)
              Subchapter F. Discharge and Payment
                    § 3.605. Discharge of Secondary Obligors
(a) If a person entitled to enforce an instrument releases the obligation of a principal obligor in whole
or in part, and another party to the instrument is a secondary obligor with respect to the obligation
of that principal obligor, the following rules apply:

  (1) Any obligations of the principal obligor to the secondary obligor with respect to any previous
  payment by the secondary obligor are not affected. Unless the terms of the release preserve the
  secondary obligor's recourse, the principal obligor is discharged, to the extent of the release, from
  any other duties to the secondary obligor under this chapter.

  (2) Unless the terms of the release provide that the person entitled to enforce the instrument retains
  the right to enforce the instrument against the secondary obligor, the secondary obligor is
  discharged to the same extent as the principal obligor from any unperformed portion of its
  obligation on the instrument. If the instrument is a check and the obligation of the secondary
  obligor is based on an indorsement of the check, the secondary obligor is discharged without
  regard to the language or circumstances of the discharge or other release.

  (3) If the secondary obligor is not discharged under Subdivision (2), the secondary obligor is
  discharged to the extent of the value of the consideration for the release, and to the extent that the
  release would otherwise cause the secondary obligor a loss.

(b) If a person entitled to enforce an instrument grants a principal obligor an extension of the time
at which one or more payments are due on the instrument and another party to the instrument is a
secondary obligor with respect to the obligation of that principal obligor, the following rules apply:

  (1) Any obligations of the principal obligor to the secondary obligor with respect to any previous
  payment by the secondary obligor are not affected. Unless the terms of the extension preserve the
  secondary obligor's recourse, the extension correspondingly extends the time for performance of

                  © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
V.T.C.A., Bus. & C. § 3.605                                                                        Page 2



  any other duties owed to the secondary obligor by the principal obligor under this chapter.

  (2) The secondary obligor is discharged to the extent that the extension would otherwise cause the
  secondary obligor a loss.

  (3) To the extent that the secondary obligor is not discharged under Subdivision (2), the secondary
  obligor may perform its obligations to a person entitled to enforce the instrument as if the time for
  payment had not been extended or, unless the terms of the extension provide that the person
  entitled to enforce the instrument retains the right to enforce the instrument against the secondary
  obligor as if the time for payment had not been extended, treat the time for performance of its
  obligations as having been extended correspondingly.

(c) If a person entitled to enforce an instrument agrees, with or without consideration, to a
modification of the obligation of a principal obligor other than a complete or partial release or an
extension of the due date and another party to the instrument is a secondary obligor with respect to
the obligation of that principal obligor, the following rules apply:

  (1) Any obligations of the principal obligor to the secondary obligor with respect to any previous
  payment by the secondary obligor are not affected. The modification correspondingly modifies any
  other duties owed to the secondary obligor by the principal obligor under this chapter.

  (2) The secondary obligor is discharged from any unperformed portion of its obligation to the
  extent that the modification would otherwise cause the secondary obligor a loss.

  (3) To the extent that the secondary obligor is not discharged under Subdivision (2), the secondary
  obligor may satisfy its obligation on the instrument as if the modification had not occurred, or treat
  its obligation on the instrument as having been modified correspondingly.

(d) If the obligation of a principal obligor is secured by an interest in collateral, another party to the
instrument is a secondary obligor with respect to that obligation, and a person entitled to enforce the
instrument impairs the value of the interest in collateral, the obligation of the secondary obligor is
discharged to the extent of the impairment. The value of an interest in collateral is impaired to the
extent the value of the interest is reduced to an amount less than the amount of the recourse of the
secondary obligor, or the reduction in value of the interest causes an increase in the amount by which
the amount of the recourse exceeds the value of the interest. For purposes of this subsection,
impairing the value of an interest in collateral includes failure to obtain or maintain perfection or
recordation of the interest in collateral, release of collateral without substitution of collateral of equal
value or equivalent reduction of the underlying obligation, failure to perform a duty to preserve the
value of collateral owed, under Chapter 9 or other law, to a debtor or other person secondarily liable,
and failure to comply with applicable law in disposing of or otherwise enforcing the interest in
collateral.

                   © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
V.T.C.A., Bus. & C. § 3.605                                                                     Page 3




(e) A secondary obligor is not discharged under Subsection (a)(3), (b), (c), or (d) unless the person
entitled to enforce the instrument knows that the person is a secondary obligor or has notice under
Section 3.419(c) that the instrument was signed for accommodation.

(f) A secondary obligor is not discharged under this section if the secondary obligor consents to the
event or conduct that is the basis of the discharge, or the instrument or a separate agreement of the
party provides for waiver of discharge under this section specifically or by general language
indicating that parties waive defenses based on suretyship or impairment of collateral. Unless the
circumstances indicate otherwise, consent by the principal obligor to an act that would lead to a
discharge under this section constitutes consent to that act by the secondary obligor if the secondary
obligor controls the principal obligor or deals with the person entitled to enforce the instrument on
behalf of the principal obligor.

(g) A release or extension preserves a secondary obligor's recourse if the terms of the release or
extension provide that:

 (1) the person entitled to enforce the instrument retains the right to enforce the instrument against
 the secondary obligor; and

 (2) the recourse of the secondary obligor continues as if the release or extension had not been
 granted.

(h) Except as otherwise provided in Subsection (i), a secondary obligor asserting discharge under
this section has the burden of persuasion both with respect to the occurrence of the acts alleged to
harm the secondary obligor and loss or prejudice caused by those acts.

(i) If the secondary obligor demonstrates prejudice caused by an impairment of its recourse, and the
circumstances of the case indicate that the amount of loss is not reasonably susceptible of calculation
or requires proof of facts that are not ascertainable, it is presumed that the act impairing recourse
caused a loss or impairment equal to the liability of the secondary obligor on the instrument. In that
event, the burden of persuasion as to any lesser amount of the loss is on the person entitled to enforce
the instrument.

CREDIT(S)

Amended by Acts 1995, 74th Leg., ch. 921, § 1, eff. Jan. 1, 1996; Acts 2005, 79th Leg., ch. 95, § 14,
eff. Sept. 1, 2005; Acts 2007, 80th Leg., ch. 427, § 3, eff. Sept. 1, 2007.


Current through the end of the 2013 Third Called Session of the 83rd Legislature

                  © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
V.T.C.A., Bus. & C. § 3.605                                               Page 4




(C) 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.

END OF DOCUMENT




               © 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.
