When a promissory note is lost or destroyed, it could be an immediate disaster for the person to whom the note is owed. That person can file a suit in order to recover on the claim and, if he or she is successful, recover from the owner of the promissory note.
Geiselman v. Cramer Financial Group, Inc., 965 S.W.2d 532 (Tex.Civ.App. — Houston [14th Dist.] 1997, no writ).
Facts & Procedural History Rule
Grover J. Geiselman, III, and Grover J. Geiselman, III, Family Partnership (Geiselman) drafted two unsecured promissory notes, both of which were dated July 1, 1988, and amounted to $40,000, to First RepublicBank Houston (Bank). The maturity date for the notes was July 1, 1993. After the bank’s failure, the Federal Deposit Insurance Corporation (FDIC) transferred the notes to Nationsbank on July 29, 1988. In 1991, NationsBank transferred the notes back to the FDIC, then in 1994 FDIC-Corporate transferred them to Cramer Financial Group, Inc (Cramer). In 1995, Cramer sued Gieselman on the photocopies of the notes (alleging that the original notes were lost, stolen, or inadvertently destroyed).
The trial court granted Cramer’s motion for summary judgment, which Gieselman appealed on five grounds including: issues regarding note ownership, inadequacy of Cramer’s affidavits, Cramer’s inability to prove ownership of the notes, and a fact issue brought forth by Geiselman regarding their limitations defense. The Court of Appeals reversed and remanded the case, holding that Cramer lacked evidence showing its ownership of the original notes prior to their loss or destruction, that the affidavits were insufficient, and genuine issues of material fact existed pertaining to Cramer’s ownership of the notes.
The Court stated that, to recover on a promissory note, the plaintiff must prove: (1) the note in question; (2) the party sued signed the note; (3) the plaintiff is the owner or holder of the note, and (4) a certain balance is due and owing on the note. In terms of the affidavits Cramer brought forth, the Court stated the first affidavit (from a FDIC employee) was not sufficient to support a summary judgment because it did not declare that the employee had personal knowledge because of her duties. For the second affidavit, the Court articulated that it was also inadequate because the testimony did not provide evidence showing personal knowledge that the promissory notes had been lost or destroyed. This second affidavit also did not provide evidence of how the FDIC became the legal owner of the promissory notes (such as personal familiarity with the notes at the failed bank or with their transfer to FDIC). The Court also stated that Geiselman’s affirmative defense of limitations did not stand here.
When must an appellee declare their concerns regarding defects to an appellant’s affidavit?
If an appellee wishes to object to an appellant’s affidavit as being conclusory, they must do so by the date summary judgment was rendered. If an appellee fails to respond to an appellant’s motion for summary judgment, then the appellee will be considered to have waived their claim regarding affidavit defects.
The Takeaway: Negotiable Instruments
Geiselman v. Cramer Financial Group, Inc. shows that, in order to recover on a claim for a lost or destroyed promissory note, a claimant must possess the promissory note prior to its loss or destruction.
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What makes a promissory note invalid in Texas?
There are a few things that can make a promissory note invalid in Texas. If the note was not properly executed, if it was altered without the borrower’s knowledge or consent, if it was obtained through fraud, duress, or coercion, or if the debt it represents has been discharged in bankruptcy, the note is invalid and cannot be enforced.
If you have a promissory note that you believe is invalid, you should contact an experienced attorney to discuss your options and determine whether you have a case.
What happens if a promissory note is lost?
A promissory note is a legal document that outlines the terms of a loan. If you have lost your promissory note, you may still be able to collect on the loan. However, you will need to prove that the loan existed and that you are the rightful owner of the promissory note.
If you have a copy of the promissory note, you may be able to file a claim with the court. However, if you do not have a copy of the promissory note, you may still be able to prove the existence of the loan by presenting other documentation, such as emails or text messages between you and the lender. You will also need to show that you have made efforts to locate the promissory note.
If you are successful in proving the existence of the loan, the court may order the lender to pay you the amount owed under the terms of the promissory note. If you are unable to prove the existence of the loan, you may still be able to collect on the loan if it is covered by another agreement, such as a security agreement.
What does a house deed look like? Legal description of a property
When you purchase a home, the deed is the legal document that outlines the terms of your ownership. The deed will list your name and address, as well as the name and address of the seller. It will also include a description of the property, including its size, boundaries, and any easements or rights of way that exist. The deed will be signed by both you and the seller, and notarized by a witness. Once it is signed and notarized, it becomes a legal document that can be used to transfer ownership of the property.
What is a warranty deed in Texas? Land Deeds
A warranty or warranties deed in Texas is a legal document that is used to transfer ownership of real property from one person to another. The deed includes a number of important provisions, including a warranty of title. This means that the seller is guaranteeing that they have the right to sell the property and that there are no outstanding claims or encumbrances against it. The deed also contains information about the property, such as its legal description and any restrictions on its use.
What is a special warranty deed in Texas?
When you purchase property in Texas, you will sign a deed that conveys ownership of the property to you. The type of deed you sign will determine the level of protection you have against claims from previous owners. A special warranty deed in Texas provides limited protection against such claims.
A special warranty or warranties deed conveys ownership of the property to you, but with some limitations. The seller of the property warrants that he or she holds clear title to the property and that there are no outstanding claims or liens against it. However, the seller does not warrant that the property is free of defects or encumbrances.
If you purchase a property with a special warranty deed, and it turns out that there are outstanding claims against the property, you may be able to recover your losses from the seller. However, if the problem is due to a defect in the property itself, you will not be able to recover your losses from the seller.
If you are considering purchasing a property in Texas, be sure to ask about the type of deed that will be used. A special warranty deed may provide some protection against claims from previous owners, but it does not provide the same level of protection as a general warranty deed.