                  IN THE UNITED STATES COURT OF APPEALS

                          FOR THE FIFTH CIRCUIT

                   ____________________________________
                               No. 90-2654
                   ____________________________________

BANK ONE, TEXAS, N.A. and FEDERAL
DEPOSIT INSURANCE CORPORATION AS
RECEIVER FOR MBANK HOUSTON, N.A.,

Plaintiffs-Third Party Defendants-Appellants,

         versus

SUZAN E. TAYLOR d/b/a
EXPLORATION SERVICES,

Defendant-Third Party Plaintiff-Appellee,

           versus

WORTH OPERATING, INC., ET AL.,

Third Party Defendants.
________________________________________________________________
        Appeal from the United States District Court for
                  the Southern District of Texas
_________________________________________________________________
                     (August 18, 1992)

Before REYNALDO G. GARZA and GARWOOD, Circuit Judges, and MAHON,
District Judge.*

MAHON, District Judge:

     This appeal arises out of a lawsuit commenced by MBank

Greens Parkway, N.A., predecessor of MBank Houston, N.A., (MBank)

to recover on three unpaid promissory notes executed by Ms. Suzan

Taylor d/b/a Exploration Services (Taylor).       A jury trial

resulted in a verdict of $9.6 million in favor of Taylor based

upon her assertion of various lender liability claims against

MBank.   For the reasons stated below, we conclude that the

____________________________
*    District Judge of the Northern District of Texas, sitting by
designation.
punitive damage award is unsustainable, but find there is

sufficient evidence to support the remainder of the jury's

verdict.

                  I.   FACTS AND PROCEEDINGS BELOW

     The dispute which brought about the present litigation arose

in 1984.   Taylor at the time was the sole owner of a company

called Exploration Services, a business which provided geological

and geophysical consulting services for oil and gas companies.

In October 1984, Taylor entered into an agreement with C.I. Oil,

Inc. (CI) in which she acquired an interest in a petroleum

drilling prospect in Louisiana known as the Comite Prospect.    In

accordance with their agreement, Taylor deposited $300,000 into

two money market checking accounts at MBank to pay CI for an

interest in the prospect.   The agreement provided that once CI

turned over Taylor's interest in the prospect and furnished

Taylor the well log showing the well had been drilled to the

specified depth, Taylor would authorize MBank to release the

$300,000 to CI.   CI had no agreement with MBank nor was it a

signatory on either account.

      Though Taylor had originally instructed MBank to pay the

deposited funds to CI, she changed those instructions when it

appeared that CI could not or would not transfer all of the

interest to her in accordance with their agreement.   On

November 20, 1984, Taylor wrote MBank instructing it to disburse

$220,000 of these funds to CI and $80,000 to Sequoia Resources


                                  1
"in accordance with the . . . [a]greement by and between

Exploration Services and C.I. Oil, Inc. and only upon written

authorization of Suzan E. Taylor."   The following day, CI and

Sequoia agreed to this disbursement arrangement.

     On December 17, 1984, CI produced the well log described in

the agreement and made written demand upon MBank for the

$220,000, informing the bank that CI would hold MBank liable for

any disbursement of those funds in a "manner contrary to the

distribution instructions of Taylor's letter of November 20."

Because Taylor and CI continued to dispute the amount of lease

interest to be conveyed under their agreement, Taylor refused to

provide MBank written authorization for the release of the

$220,000 to CI.   MBank therefore immediately froze the accounts

and demanded that Taylor settle her dispute with CI.   Despite

Taylor's repeated requests for MBank to release her funds, MBank

continued the freeze on Taylor's accounts for almost four months,

insisting that CI and Taylor resolve their differences.    During

this period, Taylor lost the opportunity to participate in both

the Comite Prospect and another prospect called Santa Paula.

     When Taylor made another written demand for the funds on

March 7, 1985, MBank filed a state court interpleader action

against Taylor and CI.   Taylor and CI eventually reached a

settlement and gave consistent instructions to MBank as to the

disposition of the account balances on April 12, 1985.    MBank,

however, refused to dismiss the state interpleader action or

permit Taylor to have access to the funds until she signed a


                                 2
release absolving MBank from all liability.   On April 16, 1985,

MBank, Taylor and CI reached a final settlement of the

interpleader action in which MBank agreed to absorb its

attorney's fees in return for Taylor's agreement to release MBank

from any liability.   The interpleader action was later dismissed

on May 8, 1985, on MBank's motion for nonsuit.    The next day

Taylor received a letter from MBank demanding that all four of

her outstanding loans be paid in full within five days1 even

though the two secured loans were not past due.    Six days later,

MBank repossessed Taylor's Jaguar automobile and commenced

admiralty proceedings in federal court to repossess Taylor's

yacht which was later seized and sold at public auction.

     MBank then initiated the present litigation in state court

to recover the indebtedness on the two unsecured loans and

recover the deficiency on the note secured by the Jaguar

automobile.   Taylor filed a counterclaim against MBank contending

that the release executed by Taylor in settlement of MBank's

interpleader action was procured by fraud and economic duress and

was invalid for want of consideration.   In addition, Taylor

claimed that because MBank had tortiously frozen her accounts,

she lost the opportunity to participate in the Comite and Santa

Paula prospects causing her to suffer damages in excess of $28


     1
      Taylor had executed the following promissory notes in favor
of MBank: (1) an unsecured loan in the face amount of $90,000;
(2) an unsecured loan in the face amount of $50,000; (3) a loan
in the face amount of $29,062.81, secured by a 1984 Jaguar
automobile; and (4) a loan in the face amount of $106,651.96,
secured by a Sea Ray yacht.

                                 3
million.   Taylor also asserted that MBank wrongfully accelerated

the car and yacht loans and had conspired with her former

business partner, Worth Energy Corporation, to her detriment.

     The trial of this case lasted seven weeks and produced over

5000 pages of transcript and several volumes of exhibits.   At the

conclusion, the jury found MBank liable for engaging in false,

misleading and deceptive practices in violation of the Texas

Deceptive Trade Practices--Consumer Protection Act (DTPA), Tex.

Bus. & Com. Code Ann. §§ 17.41-17.826 (Vernon 1987).   The jury

also found MBank had tortiously interfered with Taylor's business

dealings, conspired to harm Taylor's business, and failed to act

in good faith in connection with the "Comite" accounts as well as

the car and yacht loans.   The jury found that, while there was no

evidence of fraud in the execution of the settlement agreement,

MBank did coerce Taylor through economic duress to sign the

release and failed to give valid consideration for the release

agreement.

     Based upon the jury's answers to the special issues, the

district judge entered final judgment against MBank.   In the

judgment, the court deducted from the jury award the past due

principal and accrued interest on two unsecured notes Taylor

concededly owed.   In addition, the court entered a take-nothing

judgment on MBank's claim for the deficiency on the third note

secured by Taylor's Jaguar and denied MBank's claim for

attorney's fees and expenses in connection with the two unsecured

loans.   The trial court later denied MBank's motion for judgment


                                 4
notwithstanding the verdict, and final judgment was entered in

the amount of $9,639,841.65.2

     MBank thereafter filed post-judgment motions for new trial

and to modify, correct, or reform the judgment.     Before the state

trial court could rule on MBank's motions, MBank was declared

insolvent, and the Federal Deposit Insurance Corporation (FDIC)

was appointed its receiver.     The FDIC, as receiver of MBank,

filed a plea in intervention in the state court action and

adopted MBank's then current pleadings, including its motion for

new trial and motion to modify, correct, or reform the judgment.

Following its intervention, the FDIC removed the action to

federal district court.   The FDIC and Bank One, Texas, N.A.,

(Bank One), successor-in-interest to MBank, then filed memorandum

briefs in support of MBank's previously filed motions for new

trial and to alter or amend the judgment.     The district court

denied the motions, and the FDIC and Bank One appealed the

judgment to this court.   In this appeal, FDIC, as receiver of

MBank, is the proper party to defend against Taylor's

counterclaims, while Bank One, successor-in-interest to MBank, is

the party entitled to pursue collection on the notes on which

MBank originally brought suit.




     2
      Worth Energy Corporation, Taylor's former business partner
and its principal officers Aaron W. Hees and Jim W. Howard were
held jointly and severally liable with MBank for approximately
$2.4 million of the damages, but did not join in this appeal.

                                   5
                      II.   STANDARD OF REVIEW

     In the present appeal, the FDIC broadly contends there was

insufficient evidence presented at trial to support the jury's

findings that Taylor executed the settlement agreement under

duress, that the settlement agreement lacked valid consideration,

and that MBank committed deceptive practices in freezing Taylor's

accounts.   We consider the various insufficiency points cited by

appellants as an appeal from the trial court's denial of MBank's

motion for judgment notwithstanding the verdict and apply the

same standards as that of the district court.    Melear v. Spears,

862 F.2d 1177, 1182 (5th Cir. 1989); Granberry v. O'Barr, 866

F.2d 112, 113 (5th Cir. 1988).3   We are guided in this task by

the overriding "principle that 'it is the function of the jury as

the traditional finder of fact, and not the Court, to weigh

conflicting evidence . . . .'"    Treadaway v. Societe Anonyme

Louis-Dreyfus, 894 F.2d 161, 164 (5th Cir. 1990) (quoting Boeing

Co. v. Shipman, 411 F.2d 365, 375 (5th Cir. 1969) (en banc)).

"Weighing conflicting evidence and the inferences to be drawn

from that evidence, and determining the relative credibility of

the witnesses, are the province of the jury, and its decision

must be accepted if the record contains any competent and

substantial evidence tending fairly to support the verdict."

     3
      This action was removed post-judgment from the state court
to the federal district court. Accordingly, the scope of our
review in this appeal is governed by federal, rather than state
law, standards. Pagan v. Shoney's Inc., 931 F.2d 334, 337 (5th
Cir. 1991); Garner v. Santoro, 865 F.2d 629, 642 (5th Cir. 1989);
see also Granny Goose Foods, Inc. v. Brotherhood of Teamsters,
415 U.S. 423, 437 (1974).

                                  6
Gibraltar Sav. v. LDBrinkman Corp., 860 F.2d 1275, 1297 (5th Cir.

1988) (citing Dartez v. Fibreboard Corp., 765 F.2d 456 (5th Cir.

1985), cert. denied, 490 U.S. 1091 (1989)).     We have defined

substantial evidence as "'evidence of such quality and weight

that reasonable and fair-minded men in the exercise of impartial

judgment might reach different conclusions.'"     Transoil (Jersey)

Ltd. v. Belcher Oil Co., 950 F.2d 1115, 1118 (5th Cir. 1992)

(citing Boeing, 411 F.2d at 374-75).   In reviewing a denial of a

motion for judgment notwithstanding the verdict, the appellate

court is bound to consider all of the evidence and all reasonable

inferences in the light most favorable to the prevailing party,

Rideau v. Parkem Indus. Servs., Inc., 917 F.2d 892 (5th Cir.

1990), and the jury verdict must be upheld unless "the facts and

inferences point so strongly in favor of one party that the Court

believes that reasonable men could not arrive at a contrary

verdict."   Boeing, 411 F.2d at 374.   Having set out the

applicable standard of review, we now turn to the appellants'

contentions raised in this appeal.

                         III.   THE RELEASE

     At the outset, the FDIC maintains the jury erred in setting

aside the release because there is overwhelming evidence that the

release agreement was supported by valuable consideration.    We

disagree.   Having carefully reviewed the record before us, we

hold there was substantial evidence to support the jury's

determination that the release was void for lack of

consideration.


                                  7
     In Texas, a release is treated as a type of contract,

Jackson v. Fontaine's Clinics, Inc., 499 S.W.2d 87, 92 (Tex.

1973), and like any other contract, must be supported by valuable

consideration.    Victoria Bank & Trust Co. v. Brady, 779 S.W.2d

893, 903 (Tex. App.--Corpus Christi 1989), modified, 811 S.W.2d

931 (Tex. 1991); Tobbon v. State Farm Mut. Auto. Ins. Co., 616

S.W.2d 243, 245 (Tex. Civ. App.--San Antonio 1981, writ ref'd

n.r.e.).    Consideration for a release "can consist of [either] a

benefit to the promisor or a loss or detriment to the promisee."

Garcia v. Villarreal, 478 S.W.2d 830, 832 (Tex. Civ. App.--Corpus

Christi 1971, no writ); see also Buddy L, Inc. v. General Trailer

Co., 672 S.W.2d 541, 547 (Tex. App.--Dallas 1984, writ ref'd

n.r.e.).    If it is determined that a release was executed without

valuable consideration, it may be invalidated.    Victoria Bank,

779 S.W.2d at 903; McClellan v. Boehmer, 700 S.W.2d 687, 693

(Tex. App.--Corpus Christi 1985, no writ).

      As stated previously, Taylor signed a release in 1985 in

which she agreed to absolve MBank from any and all claims or

causes of action she might have for its handling of the subject

accounts.   In return, MBank agreed to forego its right to seek

its attorney's fees in the interpleader action.   The question

whether the release was supported by consideration was submitted

as a jury issue, and the jury specifically found that MBank

failed to give valid consideration for the release.   The FDIC

argues on appeal that this factual finding was not supported by

substantial evidence because MBank's agreement to absorb its


                                  8
attorney's fees provided ample consideration for the release.

Taylor, on the other hand, contends that the release was

completely lacking in valid consideration and must be set aside

because MBank filed an improper interpleader and therefore

forfeited any right to recover its attorney's fees.

     Under Texas law, MBank was entitled to an award of

attorney's fees in the interpleader action only if MBank proved

it was "a disinterested stakeholder who ha[d] reasonable doubts

as to the party entitled to the funds or property in [its]

possession, and who in good faith . . ." filed an interpleader

action against the claimants.   United States v. Ray Thomas Gravel

Co., 380 S.W.2d 576, 580 (Tex. 1964); Foreman v. Graham, 693

S.W.2d 774, 778 (Tex. App.--Fort Worth 1985, writ ref'd n.r.e.).

In order to bring an interpleader under Rule 43,4 a stakeholder

is not required to be wholly disinterested in the suit.    Rather,

it "need only show that it is or may be exposed to double or


     4
      Rule 43 of the Texas Rules of Civil Procedure governs the
procedure for initiating an interpleader action in state court.
Rule 43 provides as follows:
     Persons having claims against the plaintiff may be
     joined as defendants and required to interplead when
     their claims are such that the plaintiff is or may be
     exposed to double or multiple liability. It is not
     ground for objection to the joinder that the claims of
     the several claimants or the titles on which their
     claims depend do not have a common origin or are not
     identical but are adverse to and independent of one
     another, or that the plaintiff avers that he is not
     liable in whole or in part to any or all of the
     claimants. A defendant exposed to similar liability
     may obtain such interpleader by way of cross-claim or
     counterclaim. The provisions of this rule supplement
     and do not in any way limit the joinder of parties
     permitted in any other rules.

                                9
multiple liability as a result of conflicting claims justifying a

reasonable doubt as to which claimant is entitled to the funds."

Sears Sav. & Profit Sharing Fund v. Stubbs, 734 S.W.2d 76, 79

(Tex. App.--Austin 1987, no writ) (citing Davis   v. East Texas

Sav. & Loan Assoc., 163 Tex. 361, 354 S.W.2d 926 (1962)); Downing

v. Laws, 419 S.W.2d 217 (Tex. Civ. App.--Austin 1967, writ ref'd

n.r.e.).   While the stakeholder's interest in the suit is

irrelevant for purposes of commencing an action under Rule 43, in

order to be entitled to an award for attorney's fees, a

stakeholder must be disinterested as to the outcome of the

controversy.   See Ray Thomas Gravel Co., 380 S.W.2d at 580;

Foreman, 693 S.W.2d at 778; Brown v. Getty Reserve Oil, Inc., 626

S.W.2d 810, 815 (Tex. App.--Amarillo 1981, writ dism'd).

     Texas courts have articulated a number of specific

requirements for properly instituting an interpleader action.     A

petitioner must plead and prove that:   (1) he is either subject

to, or has reasonable grounds to anticipate, rival claims to the

same fund or property;5 (2) he has filed the interpleader without

unreasonable delay;6 and (3) he has made an unconditional tender


     5
      Great American Reserve Ins. Co. v. Sanders, 525 S.W.2d 956,
958 (Tex. 1975); Ray Thomas Gravel Co., 380 S.W.2d at 580; Davis,
354 S.W.2d at 930; Sears Sav. & Profit Sharing Fund, 734 S.W.2d
at 79.
     6
      Sears Sav. & Profit Sharing Fund, 734 S.W.2d at 79;
National Life & Accident Ins. Co. v. Thompson, 153 S.W.2d 322,
323 (Tex. Civ. App.--Waco 1941, writ ref'd); see also Great
American Reserve Ins. Co. v. Sanders, 525 S.W.2d at 959; see
generally 1 Roy W. McDonald & Frank W. Elliott, Texas Civil
Practice in District and County Courts §§ 3.40, 3.42 (4th ed.
1991); 47 Tex. Jur. 3rd Interpleader § 5 (1986).

                                10
of the fund into the court.7   If a disinterested stakeholder

fails to meet any one of these three prerequisites for filing an

interpleader, he is not entitled to an award of attorney's fees.

The FDIC insists that MBank met all three requirements and

therefore was justified in filing the interpleader.   In deciding

this issue, we first review the deposit agreement between Taylor

and MBank to determine whether MBank had reasonable doubts as to

which party was entitled to the funds.

     In November 1984, MBank opened two commercial checking

accounts for Taylor.   The standard deposit agreement, which

Taylor signed when MBank opened the accounts, provided in

pertinent part:

     The Deposit with MBank Greens Parkway, National
     Association, Houston, Texas ("Bank") of any check,
     draft, or other instrument ("Item") or cash shall
     constitute a contract ("Contract"), between Bank and
     the person, firm, association or corporation
     ("Depositor", whether one or more) to whom credit for
     such item and/or cash is given by this Bank. The terms
     of such Contract are as follows:

     1. Other than as provided by the terms of this
     Contract, the Bank acts only as agent for Depositor.
     (emphasis added).

In a separate deposit agreement executed in connection with the

opening of the two accounts, it was agreed that:

     All funds at any time on deposit in the aforementioned
     account shall be subject to withdrawal by . . . Suzan
     E. Taylor . . . .


     7
      Sears Sav. & Profit Sharing Fund, 734 S.W.2d at 79; Cockrum
v. Cal-Zona Corp., 373 S.W.2d 572, 574-75 (Tex. Civ. App.--Dallas
1963, no writ); Bennett v. Smead, 180 S.W.2d 663, 663-64 (Tex.
Civ. App.--Texarkana 1944, no writ); see generally McDonald &
Elliott supra note 6, § 3.42.

                                11
     Bank is authorized to honor any and all such withdrawals
     whether or not they are payable to the order of the person
     signing, or countersigning, the same, or payable to Bank or
     Bank's order, and whether or not such withdrawals are
presented for cash or for credit to the personal account of the
person presenting the same, and Bank need make no inquiries
concerning any such withdrawal.

The terms and conditions of the deposit agreements do not refer

to a third party agreement, nor do they furnish the bank with any

special instructions on how the funds should be applied.     Nowhere

is it mentioned that Taylor is restricted from withdrawing any or

all of the account funds on deposit at any time.    In addition, CI

was not a signatory on the account and had no control over the

account funds on deposit.   Though Taylor maintained the accounts

in the names "'Comite' Escrow Account III" and "'Comite' Escrow

Account IV,"   the law is clear that a mere deposit of earnest

money into a bank account is not sufficient to create an escrow

contract or create escrow liabilities.     Cowman v. Allen

Monuments, Inc., 500 S.W.2d 223, 225-26 (Tex. Civ. App.--

Texarkana 1973, no writ.); cf. La Sara Grain Co. v. First Nat'l

Bank of Mercedes, 673 S.W.2d 558, 564 (Tex. 1984)    (deposit

creates implied agreement that bank will disburse funds only at

the direction of depositor).   Faced with its own deposit

agreements, MBank could not reasonably have concluded that these

accounts were anything other than commercial checking accounts in

which CI had no valid claim or interest.

     The FDIC argues that MBank could have reasonable doubts

because the agreement executed by Taylor and CI prohibited the

bank from releasing the funds contrary to the terms of their


                                12
agreement.   This agreement, however, was a contract only between

CI and Taylor.   MBank was neither a party to the contract, nor

does the evidence show that MBank expressly or impliedly

consented to act as the escrow agent for the parties.

Furthermore, there is nothing in the record to suggest that MBank

and CI ever entered into any agreement regarding the disposition

of the account funds.   Absent such an agreement, it is elemental

contract law that MBank owed no contractual duty to CI and

therefore was not required to recognize CI's putative claim.8

     The fundamental basis of the relationship between a bank and

its customer is the bank's agreement to pay out the customer's

money in accordance with his order.   In view of the unequivocal

terms of the deposit agreement, the jury could reasonably have

concluded that MBank did not harbor reasonable doubts as to which

party was entitled to the funds and thus did not meet the first

requirement for instituting a proper interpleader.

     Even if MBank had reasonable doubts, it wholly failed to

meet either of the remaining requirements for initiating a proper

action in interpleader.   MBank was required to file the

interpleader action without unreasonable delay.   The record in

this action indicates that MBank first received a written demand


     8
      Further, under Texas law a bank is not required to
recognize the claim of a third party to any deposit unless it is
served with process in a lawsuit filed by such third party. See
Tex. Rev. Civ. Stat. Ann. art. 342-704 (Vernon Supp. 1991).
Here, CI merely threatened suit and never instituted a civil
action against MBank. Therefore, even if CI had a valid claim
against the account, MBank was not required to recognize such a
third party claim until suit was filed.

                                13
for the funds on December 18, 1984.   In the demand letter, CI

made clear that it would hold MBank liable for any disbursement

of those funds in a manner inconsistent with the parties'

agreement.   Despite CI's threatened legal action, MBank failed to

take any action until March 7, 1985, when Taylor threatened to

sue MBank for wrongful withholding of funds.   In the meantime,

MBank kept the funds on deposit and delayed the filing of the

interpleader for almost 12 weeks in the belief that it could

offset the account to reduce Taylor's debt.    Instead of acting as

a "disinterested stakeholder," MBank, for its own financial

interests, continued to hold the funds in Taylor's frozen account

for almost three months before commencing the interpleader

action.   We believe the jury was entitled to conclude that even

if MBank had reasonable doubts as to which party was entitled to

the funds, it failed to promptly initiate an action in

interpleader and, in so doing, failed to "exercise[] that degree

of diligence and impartiality which the law requires in order to

secure for itself the benefits conferred upon a mere stakeholder

under a proper bill of interpleader."    National Life & Accident

Ins. Co. v. Thompson, 153 S.W.2d at 323-24; see also Sears Sav. &

Profit Sharing Fund, 743 S.W.2d at 79.

     To fulfill the final requirement for filing a proper

interpleader action, the stakeholder also must tender the funds

into the court.   Under Texas procedure, "[i]f the . . . fund is

not actually paid into the registry of the court, it must be

tendered and the tender, in order to be valid, must be


                                14
unconditional."    Cockrum v. Cal-Zona Corp., 373 S.W.2d at 574;

Bennett v. Smead, 180 S.W.2d at 664; see also Security Nat'l Bank

of Lubbock v. Washington Loan & Finance Corp., 570 S.W.2d 40, 43

n.4 (Tex. Civ. App.--Dallas 1978, writ dism'd).   Here, the

account funds were neither paid into the registry of the court

nor unconditionally tendered.   Instead, MBank kept the funds on

deposit and sought to exercise a purported right of offset.   Even

after consistent instructions were given by Taylor and CI as to

the distribution of the funds, MBank refused to make an

unconditional tender, asserting an additional claim for its

attorney's fees.

     Thus, even under the most generous reading of the record,

there is little, if any, evidence that shows MBank met even one

of the three essential requirements for filing a proper

interpleader action, let alone that it acted as an innocent

disinterested stakeholder in the interpleader action.   Moreover,

by wrongfully withholding the funds until Taylor signed a

complete release of all claims against it, MBank also failed to

exercise good faith in the settlement of the interpleader.    See

Bentley v. Grewing, 613 S.W.2d 49, 52 (Tex. Civ. App.--Fort Worth

1981, writ ref'd n.r.e.).   For the reasons stated, we find no

grounds upon which MBank could assert a valid claim for

attorney's fees.

     The FDIC maintains that MBank's forbearance of its claim for

attorney's fees in the interpleader action is sufficient




                                 15
consideration to support the release agreement.9    In support of

this argument, the FDIC relies upon a long-standing rule of

contracts which states that forbearance to enforce a claim or

right is ample consideration to support a contract even though it

ultimately appears the claim is without merit.     See Kennard v.

McCray, 648 S.W.2d 743, 745-46 (Tex. App.--Tyler 1983, writ ref'd

n.r.e.); Iden v. Ackerman, 280 S.W.2d 643, 646-47, (Tex. Civ.

App.--Eastland 1955, writ ref'd); Russell v. Lemons, 205 S.W.2d

629, 632 (Tex. Civ. App.--Amarillo 1947, writ ref'd n.r.e);

Cleburne State Bank v. Ezell, 78 S.W.2d 297, 299 (Tex. Civ. App.-

-Waco 1934, writ dism'd) (citing Hunter v. Lanius, 82 Tex. 677,

18 S.W. 201 (1892)).   The FDIC, however, fails to recognize an

important exception to this principle.   Forbearance is not

sufficient consideration unless the party asserts the claim in

good faith and has reasonable grounds in believing that he had

such a right.   Stewart v. Friona State Bank, 278 S.W.2d 425, 433

(Tex. Civ. App.--Amarillo 1955, writ ref'd n.r.e); Cleburne State

Bank, 78 S.W.2d at 299; Wells v. Timms, 275 S.W. 468, 471 (Tex.

Civ. App.--Fort Worth 1925, writ dism'd) (citing Von Bradenstein

v. Ebensberger, 71 Tex. 267, 9 S.W. 153 (1888); see 14 Tex. Jur.


     9
      In its reply brief, the FDIC raises for the first time the
argument that Taylor benefitted from the release because MBank
waived its right to offset the accounts and Taylor obtained an
increased share of the Comite prospect from CI. Absent manifest
injustice, "this court will not consider arguments belatedly
raised after appellees have filed their brief." Najarro v. First
Federal Savings and Loan Ass'n of Nacogdoches, Texas, 918 F.2d
513, 516 (5th Cir. 1990). We find no manifest injustice by
declining to address appellants' arguments on these points.


                                16
3rd Contracts § 120 (1981); Restatement (Second) of Contracts §

74(1) (1979).   See generally 3 Samuel Williston and Richard A.

Lord A Treatise on the Law of Contracts § 7:45 (4th ed. 1992); 1

Arthur L. Corbin, Corbin on Contracts § 140 (1963).10

     10
          Texas intermediate appellate court opinions have
employed a wide variety of language, some of it inconsistent and
much of it dicta, to describe the correct standard in this
respect. For example, in Cleburne State Bank v. Ezell, 78 S.W.2d
297, 299 (Tex. Civ. App.--Waco 1934, writ dism'd), the opinion
initially states that the forbearance is sufficient consideration
"provided he in good faith and upon reasonable grounds believed
that he had such a right," but then, in upholding the jury
verdict in favor of the settlement, speaks only of good faith:
"Whether or not there was an honest assertion of a right to
recover against Ezell and whether or not the officials of the
bank in good faith believed that Ezell was liable to the bank on
the claim asserted were questions of fact to be determined by the
jury." In both Wells v. Timms, 275 S.W. 468, 471 (Tex. Civ.
App.--Fort Worth 1925, writ dism'd), which sustained the
settlement, and Stewart v. Friona State Bank, 278 S.W.2d 425,
432-33 (Tex. Civ. App.--Amarillo 1955, writ ref'd n.r.e.), which
did not, there is language indicating that both reasonable
grounds and good faith are required, but in neither case does the
conjunctive appear to have been material to the decision. Thus,
in Stewart the majority notes that "[t]here is no evidence in
this record of a bona fide dispute of any nature." Id. at 432.
In Wells the court relied in part on a passage from a text
stating, with apparent inconsistency, that "'. . . it is not
necessary in a suit on a promise given in consideration of a
forbearance from suit that it should appear that there was . . .
a fair and reasonable ground of success in the threatened suit. .
. . It is only essential that the claim be doubtful either in law
or equity and asserted in good faith.'" Id. at 471 (quoting Vol.
1 Elliott on Contracts at 407).
     In Iden v. Ackerman, 280 S.W.2d 643, 646 (Tex. Civ. App.--
Eastland 1955, writ ref'd), the court quotes with approval the
following language from 15 C.J.S. Compromise and Settlement § 11
p. 732, viz:
          To support a compromise it is not essential that the
     question in controversy be in fact doubtful in legal
     contemplation. It is sufficient that there be an actual
     controversy between the parties of which the issue fairly
     may be considered by both parties as doubtful and that, at
     the time of the compromise they in good faith so consider
     it.
     See also Goodwin v. Texas Employers' Ins. Ass'n, 73 S.W.2d
660, 663 (Tex. Civ. App.--El Paso 1934, writ dism'd) ("The fact

                                17
          Whether MBank honestly believed it had a right to its

attorney's fees and whether the officials at the bank believed in

good faith that Taylor was liable to the bank on its claim were

questions of fact to be determined by the jury.    Cleburne State

Bank, 78 S.W.2d at 299.   The record contains considerable

evidence bearing on this issue.    First, the evidence clearly

shows that MBank was not subject to, nor had reasonable grounds

to anticipate, rival claims to the account fund.    Under the

unambiguous terms of the deposit agreements, MBank owed a

contractual duty only to its depositor, Suzan Taylor, not to CI.

Second, MBank unreasonably delayed filing the interpleader action

in order to secure its own interest in the account proceeds.



that it subsequently developed that the nature, character and
extent of plaintiff's injury and the liability of the defendant
was not in fact doubtful does not invalidate the settlement nor
present any ground for setting the contract aside."); 12 Tex.
Jur. 3rd Compromise and Settlement, § 6 at 269-270. In Murtagh
v. University Computing Company, 490 F.2d 810, 815 (5th Cir.
1974), we stated, applying Texas law, that "[t]he existence of an
antecedent bona fide dispute between the parties concerning the
subject matter of a subsequent settlement agreement is sufficient
legal consideration for creation of an enforceable agreement."
The Texas Supreme Court last spoke authoritatively to this issue
in Hunter v. Lanius, 82 Tex. 677, 18 S.W. 201 (1892). In that
case, the court held that ". . . a note is supported by a
sufficient consideration, if executed to secure the abandonment
of a suit brought to enforce a doubtful right, or in compromise
of a disputed claim made in good faith, though it ultimately
appears that the claim is without merit." Id. at 205. Although
the Texas courts have enunciated divergent opinions on this
issue, we need not decide the controlling standard because there
is sufficient evidence to support the findings that the bank had
neither reasonable grounds to believe its claim was proper nor
good faith in pursuing it, and all authorities agree that in such
a situation there is no consideration.




                                  18
Third, MBank failed to make an unconditional tender of the funds

into the registry of the court and held the funds on deposit so

it could exercise an assumed right of offset.     Finally, MBank

failed to make a good faith settlement of the interpleader after

it received consistent instructions from the claimants.     In light

of the foregoing, it is hard to imagine how MBank could have had

a reasonable belief in the validity of its claim for attorney's

fees.     Indeed, MBank's own lawyers testified that they advised

the bank of their concern the court would be "hard-pressed" to

allow the interpleader action to continue once consistent

instructions were received from Taylor and CI.

     As demonstrated above, substantial evidence indicates that

when the release was executed MBank's claim for attorney's fees

was neither doubtful nor asserted in good faith.     Bearing in mind

that all reasonable inferences from the evidence must be resolved

in favor of the jury's verdict, we are satisfied there is

substantial evidence from which the jury could conclude that

MBank knew or should have known that it was not entitled to an

award of attorney's fees from the interpleader action and did not

assert such a claim in good faith.     We therefore accept the

jury's conclusion that the release was void for lack of

consideration.11

     11
      Because a release agreement may be declared invalid on any
one of several grounds, we need not reach the issue of whether
the release was executed under duress. Victoria Bank & Trust Co.
v. Brady, 779 S.W.2d at 903.
     We also observe that appellants have not asserted on appeal
(and apparently the bank did not assert at trial) that the
dismissal judgment in the interpleader suit had a res judicata or

                                  19
                      IV.   THE ACCOUNT FREEZE

     The FDIC contends that even if the release was not

enforceable, the "judgment . . . should be reversed because the

escrow account freeze was legally justified."     (Appellants' Br.

at 34).   In its argument, the FDIC broadly asserts that the

freezing of the account was fully justified under the

circumstances because the funds were deposited in an "escrow

account" and were only to be disbursed in accordance with the

agreement between Taylor and CI.      The FDIC, however, raises this

point of error without challenging any specific factual finding

in the jury's verdict or indicating which of the various issues

submitted was not supported by the evidence.     It is established

law that matters which have not been adequately briefed are

precluded from consideration on appeal.      In re HECI Exploration

Co., Inc., 862 F.2d 513, 525 (5th Cir. 1988); Morrison v. City of

Baton Rouge, 761 F.2d 242, 244 (5th Cir. 1985).     The FDIC's

failure to specify precisely which jury finding was in error,

would, in effect, require this court to consider whether the

verdict taken as a whole was supported by substantial evidence.

Because such a review would be limitless, we consider the FDIC's

arguments on these issues waived and decline to address them.



collateral estoppel effect. See, e.g., Rhoades v. Prudential
Leasing Corporation, 413 S.W.2d 404, 407 (Tex. Civ. App.--Austin,
1967, no writ history) (". . . a judgment of dismissal entered by
agreement of the parties in pursuance of a compromise, or
settlement of a controversy, becomes a judgment on the merits").
Thus, we have no occasion to, and do not, pass on the effect of
the judgment of dismissal in the interpleader suit.


                                 20
See Franceski v. Plaquemines Parish School Bd., 772 F.2d 197, 199

n.1 (5th Cir. 1985); In re Texas Mortgage Services Corp., 761

F.2d 1068, 1073-74 (5th Cir. 1985); Kemlon Products & Development

Co. v. United States, 646 F.2d 223, 224 (5th Cir.), cert. denied,

454 U.S. 863 (1981).

     Even if we were to assume that the FDIC's argument was

sufficiently briefed, the evidence is quite clear that MBank had

no right to freeze Taylor's accounts.   Taylor opened two

commercial checking accounts with MBank.   Under the terms and

conditions of the deposit agreements, MBank and Taylor agreed

that the bank would be the agent for Taylor only and would "honor

any and all withdrawals" from the accounts by the authorized

signatory, Suzan Taylor.   Thus, MBank was bound to obey the

orders of Taylor under the express terms of their contract.

Moreover, under Texas law, Taylor's deposit of funds with Mbank

created an implied agreement that the bank would disburse those

funds only in accordance with Taylor's instructions.   La Sara

Grain Co. v. First Nat'l Bank of Mercedes, 673 S.W.2d 558, 564

(Tex. 1984), citing Mesquite State Bank v. Professional Invest.

Co., 488 S.W.2d 73, 75 (Tex. 1972).   Considering the entire

record of this case, particularly the initial deposit agreements

which created both accounts, we are of the opinion that no

"escrow account" existed and that MBank, in freezing Taylor's

accounts, failed to comply with the express terms of the deposit

contracts in wanton disregard of Taylor's rights.




                                21
     In its next point of appeal, the FDIC argues there is

insufficient evidence to support the jury's finding that the

account freeze was a "producing cause" of Taylor's damages under

the DTPA.12     Section 17.50 of the DTPA authorizes consumers to

hold sellers liable for actual damages where "a false,

misleading, or deceptive act or practice" is "a producing cause"

of those damages.13     In Pope v. Rollins Protective Services Co.,

this court noted that:

     One of the primary reasons for the enactment of the
     DTPA was to provide consumers with a remedy for
     deceptive trade practices without the burdens of proof
     and numerous defenses encountered in a common law fraud
     or breach of warranty action.14

   Emphasizing the broad remedial purposes of the DTPA, Section

17.44 provides:

     This subchapter shall be liberally construed and
     applied to promote its underlying purposes, which are
     to protect consumers against false, misleading, and
     deceptive business practices, unconscionable actions,
     and breaches of warranty and to provide efficient and
     economical procedures to secure such protection.

     There is no dispute that Taylor was required to prove that

MBank's action in freezing the accounts was a producing cause of

her damages.     The jury was instructed that "'producing cause'

     12
      In Texas, when a depositor pays service fees and the bank
in return agrees to honor the checks of its depositor, the
depositor is a "consumer" of banking "services" within the
purview of the DTPA. Farmers & Merchants State Bank of Krum v.
Ferguson, 605 S.W.2d 320, 324 (Tex. Civ. App.--Fort Worth 1980),
modified, 617 S.W.2d 918 (Tex. 1981). The FDIC does not dispute
the applicability of the DTPA to this transaction.
     13
          Tex. Bus. & Com. Code Ann. § 17.50(a)(1).
     14
      703 F.2d 197 (5th Cir. 1983); see also Smith v. Baldwin,
611 S.W.2d 611, 616 (Tex. 1980).

                                   22
means an efficient, exciting or contributing cause, which, in a

natural and continuous sequence produced the damage or harm

complained of, if any."   While the FDIC does not challenge this

jury instruction, it does contend there is insufficient evidence

to support the jury's finding that MBank's actions were a

producing cause of Taylor's damages.   According to the FDIC, the

account freeze did not cause Taylor to lose the opportunity to

participate in the Comite and Santa Paula prospects since (1)

payment for both prospects did not come due until after the

freeze was lifted, and (2) Taylor had substantial assets which

could reasonably have been used to pay for or obtain financing

for the prospects during the freeze.

     Shortly before drilling activities began on the Comite

prospect, MBank froze Taylor's accounts.   The accounts remained

frozen from December 18, 1984 until April 16, 1985.    According to

the drilling contract, payment was due as soon as the well was

drilled to a certain depth, not on the completion of a successful

producing well.   Thus, when it became apparent that Taylor could

not resolve her dispute with MBank and obtain the needed funds in

time to pay for the drilling, Taylor suspended drilling

operations.   The FDIC argues that even if Taylor was required to

cease drilling operations, she could have obtained extensions or

paid delay rentals to keep the Comite lease alive.    This

argument, however, ignores the undisputed fact that Taylor never

intended to assume more than a 25% working interest in the Comite

venture and that by the time MBank released the funds, the


                                23
opportunity to develop this prospect with the same working

interest did not exist.   Even if Taylor had wanted to continue to

develop the prospect after the bank released her money, she would

have been required to take a full 100% working interest in the

prospect--a share that would have cost far more than the amount

of funds she had on deposit at MBank.

     Taylor also lost the opportunity to participate in the Santa

Paula Prospect because of MBank's wrongful actions.   Though

Taylor briefly acquired the Santa Paula lease by assignment in

February of 1985, she essentially lost the opportunity to invest

in the prospect when MBank repeatedly refused payment on a

$100,000 check intended to pay for her share of the lease.     By

the time MBank released the funds in April 1985, Taylor no longer

had a co-investor to develop the Santa Paula property and

therefore could not participate in the prospect with the same

working interest.   Based upon the evidence adduced at trial, the

jury could reasonably have concluded that the account freeze was

a producing cause of Taylor's loss in the Comite and Santa Paula

Prospects.

     The FDIC also maintains that the loss of the prospects could

easily have been avoided had Taylor used her own assets,

including her personal jewelry, geophysical data and cash, to

either pay for or finance the drilling prospects during the

freeze.   This argument raises a damage question involving the

doctrine of avoidable consequences.   The doctrine of avoidable

consequences is a fundamental rule of damages which requires the


                                24
injured party to take advantage of reasonable opportunities to

minimize his damages and avoid or prevent loss.     Gladden v.

Roach, 864 F.2d 1196, 1200 (5th Cir.), cert. denied, 491 U.S. 907

(1989); Ford Motor Co. v. Dallas Power & Light Co., 499 F.2d 400,

414-15 (5th Cir. 1974); City of San Antonio v. Guidry, 801 S.W.2d

142, 151 (Tex. App.--San Antonio 1990, no writ).    Texas courts

have applied this rule for losses arising in actions in tort and

breach of contract, as well as DTPA.    Pinson v. Red Arrow Freight

Lines, Inc., 801 S.W.2d 14, 15 (Tex. App.--Austin 1990, no writ);

Pulaski Bank & Trust Co. v. Texas American Bank, 759 S.W.2d 723,

735 (Tex. App.--Dallas 1988, writ denied); see also Ford Motor

Co., 499 F.2d at 415 n.27.    Under the doctrine of avoidable

consequences, an injured party with an otherwise valid cause of

action who fails to mitigate his damages may not recover those

damages shown to have resulted from his failure to use reasonable

efforts to avoid or prevent the loss.     Ford Motor Co., 499 F.2d

at 415; see Pinson, 801 S.W.2d at 15; Alexander & Alexander of

Texas, Inc. v. Bacchus Industries, Inc., 754 S.W.2d 252, 253

(Tex. App.--El Paso 1988, writ denied).

     Although an injured party is required to use reasonable

diligence to minimize his losses, he is not required to "make

unreasonable personal outlays of money," Halliburton Oil Well

Cementing Co. v. Millican, 171 F.2d 426, 430 (5th Cir. 1948), or

to "sacrifice a substantial right of his own."     Fidelity &

Deposit Co. of Maryland v. Stool, 607 S.W.2d 17, 25 (Tex. Civ.

App.--Tyler 1980, no writ).    Rather, an injured party is required


                                 25
to incur "only slight expense and reasonable effort" in

mitigating his damages.   City of San Antonio, 801 S.W.2d at 151

(quoting Pulaski Bank & Trust Co., 759 S.W.2d at 735).     One who

claims a failure to mitigate damages has the burden to prove not

only lack of diligence on the part of injured party, but also the

amount by which damages were increased by such failure to

mitigate.   Lakeway Land Co. v. Kizer, 796 S.W.2d 820, 824 (Tex.

App.--Austin 1990, writ denied); Geotech Energy Corp. v. Gulf

States Telecommunications & Info. Sys., Inc., 788 S.W.2d 386, 390

(Tex. App.--Houston [14th Dist.] 1990, no writ); Cocke v. White,

697 S.W.2d 739, 744 (Tex. App.--Corpus Christi 1985, writ ref'd

n.r.e.).

     We conclude that MBank's proof failed to meet these

requirements.   The FDIC asserts that Taylor had substantial sums

readily available to maintain these prospects.   The undisputed

testimony at trial, however, makes clear that a substantial

portion of Taylor's money was already committed to pay for her

company's payroll of some fifty employees, office space and

general business expenses.   In addition, during the period of

time the Comite drilling operation was shut down because of the

account freeze, Taylor was required to pay sizable day rates to

the drilling contractor while the rig was on standby.    As for the

FDIC's contention that Taylor could sell her jewelry or cars to

fund the drilling prospects, we find this completely without

merit.   In taking reasonable efforts to minimize her losses,

Taylor was not obligated to sell or encumber her own personal


                                26
property in order to maintain these drilling prospects during the

freeze.   Halliburton, 171 F.2d 426, 430; Pulaski Bank & Trust

Co., 759 S.W.2d at 735; Fidelity & Deposit Co., 607 S.W.2d 17,

25.   Because MBank offered no evidence that Taylor failed to make

reasonable efforts to minimize her losses and because MBank

failed to prove the amount by which damages were increased, the

trial court properly refused to instruct the jury on this issue.

      The FDIC also challenges the jury instructions because the

state trial court refused to submit to the jury MBank's defensive

issues relating to the release, including ratification, waiver,

estoppel, and accord and satisfaction.   A trial court has broad

discretion in composing a charge for the jury so long as the

instructions are fundamentally accurate and not misleading.

Landrum v. Goddard, 921 F.2d 61, 62 (5th Cir. 1991) (citing Gates

v. Northwest Ins. Co., 881 F.2d 215 (5th Cir. 1989)), cert.

denied, 494 U.S. 1017 (1990).   "The instructions need not be

perfect in every respect provided that the charge in general

correctly instructs the jury, and any injury resulting from the

erroneous instruction is harmless."   Rogers v. Eagle Offshore

Drilling Servs., Inc., 764 F.2d 300, 303 (5th Cir. 1985).     In the

present appeal, the FDIC has not cited, nor do we find, evidence

in the record to justify the requested instructions.   Even if we

were to assume MBank presented sufficient evidence to warrant the

requested instructions, we conclude that the jury instructions

taken as a whole correctly instructed the jury on controlling law

and were fundamentally accurate and not misleading.    Migerobe,


                                27
Inc. v. Certina USA, Inc., 924 F.2d 1330, 1335 (5th Cir. 1991);

Landrum, 921 F.2d at 62.

                      V.   THE "DEMAND" PROVISIONS

       MBank was also found liable for its failure to act in good

faith when it accelerated the Jaguar and yacht loans.     It is

undisputed that immediately after the interpleader action was

settled, MBank demanded full payment on all four of Taylor's

outstanding loans even though she was current on both the Jaguar

and yacht notes.     At trial, MBank offered no evidence that Taylor

was in default of any provision of these two loan agreements or

that her payments on the secured loans were delinquent or past

due.    Instead, MBank argued unsuccessfully that because these

promissory notes were demand notes, that it could demand payment

at any time with or without reason.

       The FDIC, on appeal, raises a similar contention and urges

us to reverse the damage award on the basis the trial court

erroneously submitted an instruction on "good faith."15    In

       15
        This instruction provided as follows:
       Special Issue No. 7
            Do you find from a preponderance of the evidence
       that MBank failed to act in good faith in connection
       with its banking transactions with Taylor?

            Answer "yes" or "no" to (a) and (b):

            (a)   Comite accounts: Yes
            (b)   Acceleration of the Jaguar and boat loans:    Yes

            You are instructed that "good faith" means honesty in
       fact in the conduct or transaction concerned. The test
       for good faith is the actual belief of the party in
       question and not the reasonableness of that belief.
       You are also instructed that in order to find that
       MBank breached a duty to act in good faith you must

                                   28
support of this argument, the FDIC relies upon the good faith

provisions of the Tex. Bus. & Com. Code Ann. § 1.208 (Vernon

1968), as interpreted by the Official Comment to that section.

Section 1.208, which governs the application of the "good faith"

requirement to acceleration clauses, states that a term providing

that one party may accelerate payment at will or when he deems

himself insecure "shall be construed to mean that he shall have

the power to do so only if he in good faith believes that the

prospect of payment or performance is impaired."   The Official

Comment to section 1.208 notes the following exception:

     Obviously this section has no application to demand
     instruments or obligations whose very nature permits
     call at any time with or without reason.

     We begin, therefore, with an examination of the loan

documents to determine whether they clearly gave MBank complete

discretion to demand payment at any time with or without cause.

Taylor executed two promissory notes in favor of MBank for the

purchase of a Jaguar automobile and a Sea Ray yacht.   Except for

the installment payment amounts and maturity date, the two

promissory notes contain virtually identical provisions.     Each

note contains a monthly payment schedule, an acceleration clause

and a demand clause.   The demand clause states that "this

obligation is, as an alternative to the above-recited payment

schedule, due and payable on demand."   A similar demand provision

is recited on the reverse side of the note.   The notes also


     find that the failure or failures to act in good faith,
     if any, were the natural, probable and foreseeable
     consequences of MBank's actions.

                                29
contain an acceleration clause.    Under the acceleration clause,

the bank is entitled, at its option, to accelerate the unpaid

principal balance and accrued interest "if default occurs in the

punctual payment of any installment of principal or interest,

. . . or upon the occurrence of a default under the terms of any

and all agreements or instruments securing . . . the

indebtedness, or if at any time the [bank] . . . deems itself

insecure."   In addition to the default provisions contained in

the acceleration clause, the bank's security agreements and

mortgage securing the debt list various "events of default" which

could result in the bank declaring the entire obligation

immediately due and payable.

     The FDIC argues that the demand feature permitted MBank to

demand payment at any time with or without reason.   The only

Texas case cited by the FDIC on this point is Conte v. Greater

Houston Bank, 641 S.W.2d 411 (Tex. App.--Houston [14th Dist.]

1982, writ ref'd n.r.e.).   In Conte, the court was faced with a

promissory note which provided that payment was due "ON DEMAND,

BUT IF NO DEMAND IS MADE:   principal and interest shall be due

and payable in monthly installments . . . ."    Id. at 412.   The

maker of the note argued that since the bank accepted monthly

installment payments without demanding payment before they were

due, the bank no longer retained the right to make a demand under

the demand clause.   The court rejected this argument stating that

"it was proper to construe the note 'payable, at the convenience

of the holder, either on demand or in installments . . . .'" Id.


                                  30
at 418, quoting C & Z, Inc. v. Oklahoma Tax Comm'n, 459 P.2d 601

(Okl. 1969).

     Despite some similarity between Conte and the present case,

there are important differences.     Unlike the present situation,

there is no indication that the note in Conte contained an

acceleration clause.   It also does not appear that the note was

accompanied by an underlying security agreement or included terms

which would modify the right of demand.    Here, in contrast, the

existence of explicit conditions of default in the acceleration

clause, as well as the related security agreements, shows a clear

intention that the note be payable on demand only in the event

Taylor failed to meet the installment obligations or the

obligations imposed by the security agreements.     In construing a

similar loan agreement, the court in Reid v. Key Bank of Southern

Maine, Inc., 821 F.2d 9, 14 (1st Cir. 1987) noted that:

     The presence of such conditions in both documents
     indicates that the agreement could not simply be
     terminated at the whim of the parties; rather, the
     right of termination was subjected to various
     limitations. The detailed enumeration of events that
     would "render" the note "payable on demand," or which
     would put Reid in "default," shows the qualified and
     relative nature of any "demand" provision.

     As applied to the facts of this case, we find the Reid

decision persuasive.   Demand instruments, by definition, are

payable on demand and are considered due immediately when

executed.   Leinen v. Buffington's Bayou City Service, Co., 824

S.W.2d 682, 684 (Tex. App.--Houston [14th Dist.] 1992, no writ);

Davis v. Dennis, 448 S.W.2d 495, 497 (Tex. Civ. App.--Tyler 1969,

no writ).   If a demand obligation was indeed intended, as

                                31
suggested by the FDIC, the conditions for acceleration stated in

MBank's agreements with Taylor would be meaningless.      The bank

could simply demand payment immediately regardless of whether any

of the specified default conditions occurred.      This does not

appear to be the reasonable intent and expectations of the

parties.    In fact, the former president of MBank, Ed Evans,

testified at trial that the bank could not simply demand payment

on an "unreasonable basis," but was obligated to consider, in

good faith, all the facts and circumstances before accelerating

the note.

     Based upon the testimony and our reading of the loan

documents, we determine that although these notes profess to be

demand instruments, a fair reading of the notes and related

security agreements demonstrates an intention that these

installment notes be payable on demand only in the event of

default.    This construction comports with the common expectation

that a promissory note with an installment feature and an

acceleration clause is a time obligation and that the bank does

not have the right to demand payment in absence of default.

      For the reasons stated, we find under the facts of this

case that the trial court's instruction on "good faith" was

proper.

                     VI.   THE YACHT FORECLOSURE

     The FDIC argues that the pendency of the maritime action in

federal court precluded recovery on Taylor's claim for bad faith

foreclosure because such a claim was a compulsory counterclaim


                                  32
under the Fed. R. Civ. P. Rule 13(a).    Taylor, however, plead

this counterclaim in both the federal and state court actions.

Because the state action was tried first, Taylor's counterclaim

was never adjudicated in the federal court action.    Therefore,

contrary to the FDIC's assertions, Taylor never waived this

claim, and it was properly considered in the state action.     See

Southern Constr. Co., Inc. v. Pickard, 371 U.S. 57, 60-61 (1962).

                       VII. PUNITIVE DAMAGES

     The district court awarded Taylor $5.2 million in punitive

damages and additional damages under section 17.50(b)(1) of the

DTPA.16   The FDIC maintains that because the FDIC is an

instrumentality of the United States, sovereign immunity requires

a reversal of that award.   Taylor does not dispute that the FDIC

is immune from suit, but argues that the FDIC, as the receiver of

MBank, should not be permitted to assert new defenses unique to

its status when it intervenes post-judgment.

     Before considering the merits of these arguments, we briefly

review the procedural posture in which this issue is presented to

us on appeal.   MBank raised the issue of punitive damages for the

first time in its motion for new trial and motion to modify,

correct, or reform the judgment filed within 30 days after

judgment was entered in state court.    These motions were later

adopted by the FDIC when it intervened in the state court action,

and presented to the district judge once the case was removed to


     16
      Treble damages under the DTPA are punitive in nature under
Texas law. Pace v. State, 650 S.W.2d 64, 65 (Tex. 1983).

                                 33
federal court.   Following removal, the state court motion to

modify, correct, or reform the judgment was reformed by the

parties to comply with the federal rules and was considered by

the district court as a Rule 59(e) motion to alter or amend

judgment.   The district court later denied both the Rule 59(e)

motion and the motion for new trial.     We emphasize the fact that

the FDIC raised the punitive damage issue in the district court

while that court still had under consideration the timely filed

motion for new trial and to alter or amend judgment filed by

MBank.    Because the motions were filed before the time for filing

a notice of appeal had expired, the issue was raised in the trial

court when there was no final unappealable judgment.17

     Turning to the merits of the case, the question we are asked

to decide is whether the FDIC, as a post-judgment intervenor, can

assert sovereign immunity as a defense for the first time in a

Rule 60(b) motion before the judgment in the district court

becomes final and unappealable.18     Sovereign immunity is a

     17
      A remarkably different situation would have been presented
had the FDIC filed its motions after the judgment had become
final and unappealable. See 12 U.S.C. § 1821(d)(13)(A) ("The
Corporation shall abide by any final unappealable judgment of any
court of competent jurisdiction which was rendered before the
appointment of the Corporation as conservator or receiver").
     18
      The FDIC's assertion of its immunity defense presented in
its motion to alter or amend judgment is properly treated as a
Rule 60(b) motion for relief from judgment since it was made more
than ten days after the entry of judgment. Laverspere v. Niagara
Mach. & Tool Works, Inc., 910 F.2d 167, 173 (5th Cir. 1990).
Such a motion is addressed to the sound discretion of the trial
court and will not be overturned unless there is a showing of an
abuse of that discretion. Williams v. Brown & Root, Inc., 828
F.2d 325, 328 (5th Cir. 1987); Seven Elves, Inc. v. Eskenazi, 635
F.2d 396, 402 (5th Cir. 1981).

                                 34
jurisdictional bar to those suits "that are prosecuted against

the United States."    Cohens v. Virginia, 19 U.S. (6 Wheat) 264,

412 (1821).    Even if the United States was not named as a party

in the original action, "'if the judgment sought would expend

itself upon the public treasury or domain, or interfere with

public administration,'. . . or if the effect of the judgment

would be 'to restrain the Government from acting, or to compel it

to act . . . ,'" the suit will be construed as one against the

United States requiring a waiver of sovereign immunity.    Dugan v.

Rank, 372 U.S. 609, 620 (1963) (quoting Larson v. Domestic &

Foreign Commerce Corp., 337 U.S. 682, 704 (1949); Land v. Dollar,

330 U.S. 731, 738 (1947)); Van Drasek v. Lehman, 762 F.2d 1065,

1069 (D.C. Cir. 1985); see also Alabama Rural Fire Ins. Co. v.

Naylor, 530 F.2d 1221, 1225 (5th Cir. 1976).    "A waiver of

sovereign immunity 'cannot be implied but must be unequivocally

expressed.'"    United States v. Mitchell, 445 U.S. at 538 (quoting

Unites States v. King, 395 U.S. 1, 4 (1969)).    Where no such

consent exists, sovereign immunity operates as a jurisdictional

bar.    United States v. Mitchell, 445 U.S. at 538; Stanley v.

Central Intelligence Agency, 639 F.2d 1146, 1156 (5th Cir. 1981).

       It is established law that agencies of the United States

cannot be held liable for punitive fines or assessments absent

express Congressional authorization.    Missouri Pac. R.R. v. Ault,

256 U.S. 554, 563-65 (1921); Commerce Federal Sav. Bank v.

Federal Deposit Ins. Corp., 872 F.2d 1240, 1247-48 (6th Cir.

1989); Olney Sav. & Loan Ass'n v. Trinity Banc Sav. Ass'n, 885


                                 35
F.2d 266, 273 (5th Cir. 1989); Painter v. Tennessee Valley

Authority, 476 F.2d 943, 944 (5th Cir. 1973).   Taylor does not

dispute that the FDIC is an instrumentality of the United States,

see Commerce Federal Sav. Bank v. Federal Deposit Ins. Corp., 872

F.2d at 1248, nor does she cite any express Congressional

authority permitting the imposition of punitive fines or

penalties against the FDIC.   She merely contends that the FDIC

cannot assert its sovereign immunity defense for the first time

when it intervenes after judgment.

     In support of her contention, Taylor relies on Olney Sav. &

Loan Ass'n v. Trinity Banc Sav. Ass'n, 885 F.2d 266 (5th Cir.

1989).   In Olney, Olney Savings sued Trinity Banc and its related

mortgage company seeking rescission of their agreement to finance

the purchase of certain townhouses.   The district court entered

judgment of rescission on the jury's finding of fraud.   Trinity

Banc and the mortgage company posted a supersedeas bond to stay

execution of the judgment and perfected their appeal.    While the

case was on appeal, FSLIC was appointed conservator of the

insolvent Trinity Banc.   Relying on Grubb v. Federal Deposit Ins.

Corp., 833 F.2d 222 (10th Cir. 1987), this court held that when

the bond was posted by Trinity Banc and the mortgage company, the

funds ceased to be assets of the insolvent institutions, and

therefore were not a part of the conservatorship estate.    Because

the bond was no longer an asset available to the FSLIC for

distribution, we said "its use as punitive damages does not tax

an agency of the United States nor offend sovereign immunity."


                                36
Olney, 885 F.2d at 274.   In this case, however, no supersedeas

bond was posted from which the punitive damage award could be

satisfied.   The punitive damages would therefore be drawn from

assets available for distribution by the receiver and would not

only "interfere with the public administration" of the assets of

the receivership estate, but would likely "expend itself on the

public treasury" by increasing the loss to the insurance fund.

Dugan, 372 U.S. at 620; Federal Deposit Ins. Corp. v. Claycomb,

945 F.2d 853, 861 (5th Cir. 1991).    Because Taylor has failed to

indicate how the punitive damage award could be secured without

affecting the receivership estate, we find the Olney decision

inapplicable to the present circumstances.

     We likewise reject Taylor's argument that sovereign immunity

cannot be raised by the FDIC post-judgment.    Sovereign immunity

is a jurisdictional prerequisite which may be asserted at any

stage of the proceedings, either by the parties or by the court

on its own motion.   See, e.g., United States v. Sherwood, 312

U.S. 584, 586-87 (1941); Ramey Constr. Co. v. Apache Tribe of

Mescalero Reserv., 673 F.2d 315, 318 (10th Cir. 1982); California

v. Quechan Tribe of Indians, 595 F.2d 1153, 1154 n.1 (9th Cir.

1979); 14 C. Wright, A. Miller & E. Cooper, Federal Practice and

Procedure § 3654, at 186-90 (1985).    Here, the FDIC asserted its

sovereign immunity defense in the district court before a final

unappealable judgment had been taken, and therefore properly

raised and preserved the question of sovereign immunity for the

court's consideration.    Inasmuch as the punitive damages would


                                 37
operate against the United States, and there being no express

Congressional waiver of sovereign immunity, we conclude that the

district court abused its discretion in denying the FDIC's motion

for relief from judgment on this issue.

                    VIII.   DUPLICATIVE DAMAGES

     Next, the FDIC complains that the judgment should be vacated

to remove duplicative damage awards for the loss of the drilling

prospects as well as the wrongful acceleration of the car and

yacht notes.   The jury answered seven special issues submitted on

actual damages.   In rendering its verdict, the jury found MBank

liable for (1) $350,000 in actual damages for each of the two

DTPA violations; (2) $300,000 in actual damages for the bank's

failure to act in good faith in reference to the Comite accounts;

(3) $75,000 in actual damages for the bank's failure to act in

good faith in accelerating the Jaguar and yacht loans; (4)

$1,000,000 in actual damages for tortiously interfering in the

business affairs of Taylor; (5) $10,000 in actual damages for

converting Taylor's personal property from the yacht; and (6)

$500,000 in actual damages for conspiracy.

     In its brief, the FDIC makes a generalized allegation that

these damage awards amount to a double recovery.   While we agree

that a party "cannot recover the same damages twice, even though

the recovery is based on two different theories," Atkinson v.

Anadarko Bank & Trust Co., 808 F.2d 438, 441 (5th Cir.), cert.

denied, 483 U.S. 1032 (1987), the FDIC fails to identify which of

the various damage awards involved amount to identical damage


                                 38
awards or even discuss the pertinent case law concerning this

issue.    Instead, the FDIC simply proclaims, without explanation,

that the "judgment for loss of the drilling prospects should be

limited to one award of $300,000 . . . ."     (Appellants' Br. at

41).    To decide whether the jury erroneously awarded double

damages would require us not only to speculate which damage award

the FDIC claims to be duplicative, but also to determine whether

the jury intended to make separate and distinct findings for each

act or omission and, if not, to elect the recovery which affords

the greater recovery.    We decline to address these points without

the benefit of full and complete briefing of the issues and

therefore consider the FDIC's duplicative damage argument waived.

In re HECI Exploration Co., Inc., 862 F.2d at 525; Morrison v.

City of Baton Rouge, 761 F.2d at 244.

                           IX.   NEW TRIAL

       The FDIC finally argues that the district court erred in

denying its motion for new trial, alleging that the jury verdict

was against the great weight of the evidence.     The decision

whether to grant or deny a motion for new trial is within the

sound discretion of the district court.      Treadaway v. Societe

Anonyme Louis-Dreyfus, 894 F.2d 161, 164 (5th Cir. 1990); Hansen

v. Johns-Manville Products Corp., 734 F.2d 1036, 1043 (5th Cir.

1984), cert. denied, 470 U.S. 1051 (1985).     As an appellate

court, we review the exercise of that discretion under an abuse

of discretion standard and will overturn a district court's

denial of a motion for new trial only if there is an "'absolute


                                  39
absence of evidence to support the jury's verdict.'"    Seidman v.

American Airlines, Inc., 923 F.2d 1134, 1140 (5th Cir. 1991)

(citing Cobb v. Rowan Companies, Inc., 919 F.2d 1089, 1090 (5th

Cir. 1991)).    As discussed in the preceding sections of our

opinion, the record clearly contains evidence to support the jury

verdict.    We therefore affirm the trial court's denial of the

plaintiff's motion for new trial.

                         X.   ATTORNEY'S FEES

     Bank One, successor-in-interest to MBank, claims it is

entitled to recover attorney's fees for MBank's collection of the

$90,000 and $50,000 notes which Taylor admitted she owed.    Under

Texas law, a party is permitted to recover attorney's fees only

if they are authorized by contract or by statute.    New Amsterdam

Casualty Co. v. Texas Indus., Inc., 414 S.W.2d 914, 915 (Tex.

1967); 4M Linen & Uniform Supply Co., Inc. v. W.P. Ballard & Co.,

Inc., 793 S.W.2d 320, 327 (Tex. App.--Houston [1st Dist.] 1990,

no writ).    In its petition, MBank did not plead that it was

entitled to recover attorney's fees under any Texas statute.

Rather, it relied on the contractual language of the promissory

notes as a basis for recovery.    At the conclusion of the trial,

the state court denied MBank's requested offset to the judgment

in the amount of $76,748.50, representing MBank's claim for

attorney's fees on the $90,000 and $50,000 notes.    Bank One

maintains that the state court's denial of the entirety of

MBank's attorney's fees was in error.    Taylor apparently concedes

this point, but argues that since the bank failed to check a box


                                  40
on the face of the $90,000 note allowing for the collection of

attorney's fees, Bank One's claim for attorney's fees should be

properly apportioned between the two notes.    We agree.

Ordinarily, where a case involves more than one claim, attorney's

fees can be awarded only for necessary legal expenses incurred in

connection with the claims for which recovery is authorized.

Ralston Oil and Gas Co. v. Gensco, Inc., 706 F.2d 685, 697 (5th

Cir. 1983); International Security Life Ins. Co. v. Finck, 496

S.W.2d 544, 546-47 (Tex. 1973).    We therefore remand this claim

to the trial court for hearing to determine the amount of

attorney's fees, if any, recoverable for services rendered to

collect the unpaid balance of the $50,000 promissory note.

                             CONCLUSION

     The jury correctly found that MBank did not give valid

consideration for the release.    MBank's claim for attorney's fees

for institution of the interpleader action was not made in good

faith, and MBank knew or should have known that the claim was

without foundation.    There is also ample evidence to support the

jury's determination that the account freeze was a producing

cause of Taylor's loss in the two drilling prospects.

     With respect to the two promissory notes, we hold that MBank

had the right to demand payment only if the bank believed in good

faith that the prospect of payment or performance was impaired.

Taylor, however, is not entitled to an award of punitive damages

because the FDIC, as an agency of the United States, is immune

from such damages.    We, therefore, AFFIRM the judgment of the


                                  41
district court to the extent it upheld the findings of the jury,

but REVERSE the judgment of the district court to the extent it

granted recovery against the FDIC for punitive damages.   We

REMAND to the district court for the limited purpose of issuing a

final judgment, including interest and costs, and, if proper,

attorney's fees consistent herewith.

     SO ORDERED.




                               42
