Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS: Michael Briscoe appeals from a judgment in favor of Goodmark Corporation, Richard C. Poe, and Dick Poe Motors, Inc. following a jury trial. Dick Poe is president and sole shareholder of Dick Poe Motors, Inc. (Poe Motors). In 1977, Michael Briscoe began working for Poe Motors as a salesperson and he was eventually promoted to sales manager and then general manager. In 1986, Poe Motors merged with Dick Poe Chrysler Plymouth, Inc., a separate corporation. As a result of the merger, Poe Motors became authorized to use the business name “Dick Poe Chrysler Plymouth, Inc.” In 1988, Poe became interested in purchasing a Honda franchise known as “El Paso Honda” franchise from Goodmark Corporation, and he began negotiations with Bill Deffebach and Fred Schneider. Deffebach, who had formerly served as Poe Motor’s attorney, and Schneider, an El Paso automobile dealer, sold the dealership to Poe for $500,000. Poe personally paid $125,000 down with the remaining $375,000 to be paid in three equal installments. Poe, who retained 45 percent ownership, then offered stock in Goodmark to Briscoe (43 percent), Dick Marston (10 percent), and Wiley James (2 percent). Briscoe, Marston, and James each signed notes payable to Poe for their percentage share of the $125,000 payment made by Poe. Briscoe signed a note payable to Poe for $53,750 (43 percent of $125,000). Although Briscoe made interest payments of $10,750, he did not pay the note when it became due. Goodmark, with Briscoe serving as president, did business as El Paso Honda. Poe Motors loaned money to Goodmark to satisfy its capital requirements and to make the scheduled payments to Deffebach and Schneider. All four Goodmark shareholders (Poe, Briscoe, Marston, and James) signed notes payable to Poe Motors for their proportionate share of the advances. Briscoe signed four notes payable to “Dick Poe Chrysler Plymouth, Inc.” for the advances. Briscoe did not pay any interest or principal on these notes. Poe Motors permitted its commission employees to borrow money against their unpaid salaries. While general manager of Poe Motors and between Aug. 26 and Oct. 28, 1994, Briscoe allegedly authorized eight salary advances to himself in the total amount of $40,000. He then resigned as general manager and did not return to work after Oct. 28, 1994. He did not resign from Goodmark and therefore continued to maintain control over the corporate records, including all five promissory notes. Goodmark and Poe initially filed suit on Dec. 12, 1994 to enjoin Briscoe from acting on behalf of Goodmark and from destroying any original corporate records. The plaintiffs amended their pleadings to add a cause of action by Poe seeking to recover on the unpaid promissory notes. Poe Motors later joined the suit as a plaintiff seeking to recover on the promissory notes payable to it and to recover the salary advances taken by Briscoe while an employee of Poe Motors. Briscoe filed several counterclaims, including usury. The trial court granted summary judgment on the usury counterclaim and the remaining claims were submitted to a jury. The trial court directed a verdict in favor of Poe Motors on the salary advances claim. The only issues submitted to the jury related to the promissory notes, affirmative defenses asserted by Briscoe (accord and satisfaction, waiver, and novation), and attorneys’ fees. The jury, rejecting Briscoe’s affirmative defenses, returned a verdict in favor of Poe and Poe Motors on the promissory notes. The trial court entered judgment based upon the jury’s verdict. HOLDING: Affirmed The probative evidence established that Poe and Poe Motors owned the five promissory notes. Further, the jury’s implied finding that Poe and Poe Motors owned the five promissory notes is not against the great weight and preponderance of the evidence. According to Poe, all five notes were maintained together with the corporate records of Goodmark. Briscoe, the president of the corporation, exercised control over those corporate records. The original notes were misplaced and Poe did not know their location. Poe and Poe Motors proved by more than a scintilla of evidence that the original notes were lost and the reason for their inability to produce them. Further, the jury’s implied findings in this regard are not contrary to the great weight and preponderance of the evidence. Briscoe did not introduce any evidence controverting the evidence regarding the terms of the notes. Consequently, the jury had before it probative evidence of the terms. Further, the jury’s implied finding is not contrary to the great weight and preponderance of the evidence. Briscoe’s claim that the evidence is legally and factually insufficient to support the judgment is without merit. Even assuming Briscoe is correct that the note does not provide a post-maturity interest rate, the trial court correctly assessed post-maturity interest at the pre-maturity rate. Briscoe cites three cases in support of his argument that the statutory rate of 6 percent should be applied here: Wall v. East Texas Teachers Credit Union, 533 S.W.2d 918 (Tex. 1976); General American Life Insurance Co. v. Hamor, 95 S.W.2d 975 (Tex.Civ.App. � Amarillo 1936, writ ref’d); and Deming Inv. Co. v. Clark, 89 S.W.2d 853 (Tex.Civ.App. � Waco 1935, no writ). In each of these cases, however, the statutory rate of 6 percent was applied because the pre-maturity rate was found to be usurious. In the instant case, the pre-maturity rate is not usurious and the cases are distinguishable. When a note specifies a rate of interest before maturity, but is silent about any rate after maturity, the pre-maturity rate is implied as the post-maturity rate as a matter of law. Petroscience Corporation v. Diamond Geophysical Inc., 684 S.W.2d 668 (Tex. 1984). This has long been the rule in Texas and the statutory pre-judgment interest scheme does not alter this rule. The court overrules the remaining points of error. OPINION: McClure, J.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.