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Business, Banking and Contracts Click here for the full text of this decision FACTS:The McElhenies signed a $28,045.22 promissory note with Millennium Interests for a homestead. The mortgage required 360 monthly payments, and the couple also signed a deed of trust granting Millennium a vendor’s lien and a deed-of-trust lien on the property. A year later, in 1997, Millennium transferred the note and the liens to Aquaduct and Aquaduct appointed Gibraltar as its loan servicing agent, authorizing that company to collect the monthly installments on the note. In 1998, the McElhenies refinanced their mortgage with National Mortgage Link, renewing and extending their original note. They secured the renewed note with a lien in favor of National Mortgage Link. Upon closing, National Mortgage Link assigned the renewed note and the deed-of-trust lien to North American Mortgage Co. Upon noticing the lien Millennium assigned to Aquaduct, National Mortgage Link and North American paid Gibraltar the amount owing on the original note to take a first lien position. As National Mortgage Link’s representative, Old Republic Title Co. asked Gibraltar to execute and return to Old Republic a release of lien or transfer. Gibraltar ignored the request and deposited the payment into its Aquaduct account, though Gibraltar never paid those funds over the Aquaduct. Aquaduct filed suit to have its lien declared superior to North American’s, and North American filed a countersuit on the same claim. The trial court ordered Aquaduct to execute a release of the lien. HOLDING:Affirmed. The court first rules that Gibraltar had authority to collect the final payment on the McElhenie note. Noting that agency is a question of fact that can be proved by circumstantial evidence. Gibraltar was the servicing agent who sent the McElhenies a payment coupon book and a letter directing them to make payments to Gibraltar. Neither this letter, nor the agreement between Aquaduct said that final payments should be treated differently from monthly payments. Further, nothing in Texas Business and Commerce Code ��3.301 and 3.602 displaces the common-law agency principles at issue in this case. The court awarded North American attorneys’ fees of $16,000 in attorney’s fees from Aquaduct because North American prevailed on its request for declaratory judgment. The trial court awarded an additional $5,000 in favor of North American in the event of appeal to the court of appeals and $5,000 for appeal to the Texas Supreme Court, both only payable should North American prevail. The court did not abuse its discretion in this order, the court holds. Contrary to what Aquaduct asserts, this was not a case to declare title; it was a case to settle a dispute between two purported lien holders. The award is not inequitable or unjust, either. Even if Gibraltar was the real culpable party, the company was Aquaduct’s agent. OPINION:Seymore, J.; Yates, Hudson and Seymore, JJ.

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