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First Valley Bank of Los Fresnos v. Martin8/9/2001
First Valley Bank of Los Fresnos, Northwest Bank of Texas, N.A., and Wells Fargo Bank (Texas), N.A., appellants, appeal from a money judgment in the amount of $18,089,095.00, in favor of Sam Martin based on a jury's findings of malicious prosecution and fraud. We reverse and render in part, modify in part, and affirm as modified.
In February of 1992, Martin borrowed approximately $20,000.00 from First Valley Bank of Los Fresnos (the bank) to help fund his campaign for sheriff of Cameron County. The bank took a security interest in cattle owned by Martin in Loma Alta, a large area of land between Brownsville and Port Isabel.
The parties dispute the number of cattle in which the bank held a security interest. A document titled, "Notice of Security Interest" describes the security interest as "75 Head of Cross-Bred Cattle." The note lists the security as " ll livestock now owned or hereafter acquired by debtor including but not limited to 75 head of crossbred cattle." Martin testified that at the time he obtained the loan, he had more than 200 head of cattle.
The security agreement contained a provision prohibiting Martin from selling or transferring the collateral without obtaining the written consent of the bank. The provision also required Martin to provide a detailed notice before selling any farm products constituting a portion of the collateral in the ordinary course of business.
Martin renewed the note several times between 1992 and 1994. In September of 1994, he combined the loan with a car loan for the aggregate amount of $31,209.99. The note was secured by an automobile and "All livestock now owned and hereafter acquired by debtor, wherever located including but not limited to seventy-five (75) head of crossbred cattle." The security agreement for this loan also provided that Martin could not sell or transfer the collateral without written consent of the bank.
Martin continued to renew the note periodically. In 1995, Martin sold fifty-eight head of cattle to Dr. Lynn Anderson. Martin testified that Gus Barrera, chairman of the board with the bank, helped him with the sale of the cattle. Martin did not notify the bank before selling the cattle nor did he obtain its written consent for the sale. Martin testified he was not aware he needed to notify anyone of the sale and that Barrera was with him at the sale, knew of the loan, and never questioned him about the sale. Moreover, at the time of the sale, Martin had approximately two hundred twenty head of cattle, leaving more than enough cattle for what he believed the security interest covered, namely, seventy-five head of cattle.
In 1996, Martin left Texas to manage several cattle ranches in New Mexico, Colorado, Florida, and Utah for a corporation. Martin's son, Gus Martin, stayed in Texas to take care of the cattle operation.
The note became due on September 5, 1996, but Martin failed to pay the note or renew the note as he had previously. In October of 1996, Gus Martin met with Markus Villanueva, Martin's loan officer, at the bank and paid the accrued interest on the loan pursuant to Martin's directions. Gus Martin testified Villanueva wanted to speak with Martin. Gus Martin informed Villanueva that his father could not make it, but would be back around the first of the year to renew the note.
Villanueva told Gus Martin that he was going to accelerate the note. However, Villanueva also told him that when his father came in to renew the note, the bank would return the interest rate to the level in the note. Martin told his son that he would return during the Christmas holidays to renew the note, and had his son pay $500 in principal in December
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