J. Homer Garza and Arturo Salomon v. C. Paul Evans

Opinion issued May 24, 2012.

In The

Court of

Appeals

For The

First District

of Texas

————————————

NO. 01-11-00666-CV

———————————

J. Homer Garza and arturo salomon , Appellants

V.

c. Paul

Evans , Appellee

On Appeal from the 133rd Judicial District Court

Harris County, Texas

Trial Court Case No. 2008-47756

MEMORANDUM OPINION

Appellants,

J. Homer Garza and Arturo Salomon, bring this appeal challenging the trial

court’s judgment, entered after a bench trial, in favor of appellee, C. Paul

Evans, in Evans’s suit in intervention [1] for breach of a guaranty

agreement. In three issues, Garza and

Salomon contend that the trial court erred in enforcing the guaranty agreement.

We affirm.

Background

In their original petition, Garza and Salomon asserted

against TBA Construction, L.L.C. (“TBA Construction”) and its owners Mark

Adkinson, Mary Adkinson, and Thomas Dunn their claims for breach of contract,

fraud, fraudulent inducement, unfair competition, and violation of a

non-competition agreement. Evans filed a

suit in intervention against Garza, Salomon, TBA Construction, and Mark

Adkinson, alleging that TBA Construction had defaulted on a promissory note in

the amount of $200,000 and Garza, Salomon, and Adkinson had defaulted on their

guaranty of payment under the promissory note.

Specifically, Evans alleged that TBA Construction had delivered him a

promissory note; Garza, Salomon, and Adkinson individually guaranteed the note

later the same year; TBA Construction defaulted on the note; and Adkinson,

Garza, and Salomon had refused to pay the amount due on the note as provided in

the guaranty agreement.

The trial court entered a default

judgment on Evans’s claim against TBA Construction in the amount of $235.195.26. At the beginning of trial, Garza and Salomon

non-suited their claims against TBA Construction.

Evans

testified that in March 2006, he discussed with Dunn the possibility of loaning

money to TBA Construction in order to “fund the company,” and he and Dunn

eventually agreed that Evans would loan TBA Construction $200,000. Evans received a promissory note from TBA

Construction, signed by Evans and Dunn, which provided for semi-annual

repayments of interest beginning in September 15, 2006 and the total amount

coming due on March 15, 2011.

In October 2006, Evans spoke with

Mark Adkinson, who informed him that “the company had been purchased by another

firm.” Adkinson asked if Evans “could

wait for 90 days” before receiving total repayment of the note, to which Evans

consented. “[A]t some point” later,

Evans received a document entitled, “Specific Guaranty Agreement,” signed by Garza,

Salomon, and Adkinson, which provided,

FOR VALUE received, the undersigned, whether one or

more, hereinafter “Undersigned” or “Guarantor,” jointly, severally, and

unconditionally guarantee the full and punctual payment when due of the

following described indebtedness of $200,000, “Borrower,” whether one or more,

to C. PAUL EVANS, “Lending Party”:

One certain promissory note in the original

principal amount of $200,000.00, dated March 15, 2006, executed by Borrower and

payable to the order of Lending Party . . . together with all renewals and

extensions thereof, even though represented by new instruments and/or occurring

after the death of any Borrower or Undersigned, together with all interest,

attorney fees and/or court costs for which Borrower may become liable in

connection therewith. . . .

The Undersigned waive notice of acceptance of this

guaranty and of any liability to which it applies or may apply, and waive

presentment and demand for payment thereof, notice of dishonor or nonpayment

thereof, collection or instigation of suit or any other action by Lending Party

in collection thereof including any notice of default in payment thereof or

other notice to, or demand of payment therefor on, any party.

Evans

received a payment of interest in September 2006 and a second payment of

interest on March 13, 2007, but he received no further payment installments. On February 8, 2008, Evans sent Garza,

Salomon, and Adkinson a “Notice of Default and Right to Cure Default” and requested

payment of the amount due “under the Specific Guaranty Agreement,” but he

received no response. At the time of

trial, Evans calculated that $235,713 remained due on the note.

On

cross-examination, Evans explained that he first knew of the guaranty when he

received it “[s]ometime after the guaranty was signed.” He did not exchange anything in return for

the guaranty, loan any more money to the company, or change the terms of the

loan.

Dunn

testified that he and Adkinson started TBA Construction in 2001. Dunn contacted Evans about making a loan to

TBA Construction because Evans was “a close friend . . . and he knew that [TBA

Construction was] having some financial issues.” Even after Evans’s loan, however, TBA

Construction was “still struggling,” so Dunn approached Adkinson about

“shut[ting] the companies down” and repaying their outstanding debts to Evans

and TBA Construction’s equipment suppliers.

Dunn and Adkinson also discussed the possibility of selling the company

to Garza and Salomon. Dunn explained

that, when they met with Garza and Salomon, repaying the loan to Evans was “the

single most important item to be dealt with,” and he refused to sell the

company without Evans’s consent and a “guarantee of payment” to Evans. Garza, Salomon, and Adkinson then signed the

“Specific Guaranty Agreement,” which was incorporated into the “Agreement of

Sale of Company Assets” (“Agreement of Sale”), making Garza and Salomon general

partners in TBA Construction along with Adkinson. The Agreement of Sale included the following

provision,

For and in consideration of

the transfer of the businesses’ assets of the Companies, the Buyers agree to

guarantee full payment to Paul Evans in the sum of $200,000.00 . . . .

Under Article III of the

Agreement of Sale, entitled “Conditions Precedent to Obligation of Parties to

Close,” the contract provided,

3.01 The obligations of the

Sellers (“The Companies and their Owners”) under this Agreement shall be

subject to the receipt by Sellers of the following documents, all of which

shall be fully executed:

1. An Agreement executed by Mark D. Adkinson, J.

Homer Garza, and Arturo Salomon guaranteeing full payment of a note in the sum

of $200,000.00 to Paul Evan[s] in Addendum “H”, attached hereto and made part

of this Agreement by incorporation.

Dunn explained that the

existence of the guaranty agreement “was the only way [he] was going to sign”

the Agreement of Sale. Dunn did not

receive “anything out of the transaction” other than the guaranty for Evans.

Adkinson testified that he was a vice president and

director of TBA Construction. He first

discussed a potential sale of TBA Construction with Garza, his corporate

attorney, in October 2006. Because Dunn

would not consent to selling the company unless he was “sure [Evans] got paid,”

Garza “indicated for [Adkinson] . . . to tell [Evans] that he would be paid.” Adkinson contacted Evans to inform him of the

potential sale and to ensure repayment of the loan, and Evans replied that he

would “go along with the deal.”

Adkinson, Garza, and Salomon formed a new company, AGS

Investments, Ltd. (“AGS Investments”), through which it acquired and then

operated TBA Construction. AGS

Investments continued to work on TBA Construction’s ongoing projects and

received payment from their customers.

Adkinson eventually “departed from the company” because he did not “get

along” with Garza and was not “satisfied with what [he was] getting paid.”

Salomon testified that after acquiring TBA Construction, he

wired large sums of money to the company.

He was not involved in negotiating the Agreement of Sale, did not “read

all the details” of the Agreement of Sale, and “relied” on Garza for everything

“because he was taking care of the agreement.”

Salomon considered himself only an investor in the project, and his

understanding of the acquisition was that he, Garza, and Adkinson would “buy

the assets, the machines and the things, everything clear so we can work with

that.” However, shortly after the

acquisition, “everything was foreclosed [on] and taken away” because Salomon

was not aware that “there were liens on everything.”

Garza testified that Adkinson first approached him about

obtaining “some assistance” with TBA Construction’s “financial condition.” After agreeing to acquire TBA Construction’s

assets, Garza explained that “most” of the Agreement of Sale was drafted “at

Mr. Adkinson’s and Mr. Dunn’s office.”

Garza then identified several deposits made to bank accounts set up by

Adkinson, Salomon, and Garza from projects inherited from TBA

Construction. Garza also identified

several payments from those bank accounts to debts that were owed by TBA

Construction.

On cross-examination, Garza explained that at first he

would not sign a guaranty agreement for the $200,000 note to Evans. However, Dunn explained that “there was

$361,000 estimated profits on five contracts that [TBA Construction] had” and

the note could be paid from those profits.

Garza stated that he had never spoken to Evans prior to signing the

guaranty agreement and did not receive any benefit from Evans, but rather the

agreement “was between [Dunn] and ourselves.”

Garza did receive a call from Evans in March 2007, when Evans told Garza

that “[h]e had received an interest payment” and “he wanted to know why [they]

were not paying him the whole amount.”

Garza responded that he was “looking at rescinding the contract because

the equipment” was not free of all liens and he and Salomon “had not gotten [their]

contractors assigned.” He explained that

any payments he had received were due to “new business” and he received “[n]o

money at all” from the alleged $361,000 in estimated profits from TBA

Construction’s ongoing projects.

The trial court entered a final judgment that Evans is

entitled to recover from Garza, Salomon, and Adkinson, jointly and severally,

in the amount of $257,261.06. In its

findings of fact, the court found that “[a]s part of the consideration given

for the assets of the businesses . . . Garza, Salomon and Adkinson,

individually, agreed to jointly, severally and unconditionally guaranty full

and punctual payment when due of the promissory note owed by TBA Construction

to Evans” and “Evans is the lawful owner and holder of the promissory note and

guaranty.” The court also found that

“[t]here was consideration for the guaranty” because “the primary obligor on

the debt guaranteed, TBA Construction” and “the promisors, Garza, Salomon, and

Adkinson, received benefit.” Under its

conclusions of law, the trial court found that enforcement of the guaranty was

not barred by a failure or lack of consideration.

Standard of Review

In an appeal of

a judgment rendered after a bench trial, the trial court’s findings of fact

have the same weight as a jury’s verdict, and we review the legal sufficiency

of the evidence used to support them just as we would review a jury’s findings.

Catalina v. Blasdel , 881 S.W.2d 295,

297 (Tex. 1994); Daniel v. Falcon Interest Realty Corp. , 190 S.W.3d

177, 184 (Tex. App.—Houston [1st Dist.] 2005, no pet.). In conducting a legal-sufficiency review of

the evidence, a court must consider all of the evidence in the light most

favorable to the verdict and indulge every reasonable inference that would

support it. City of Keller v. Wilson , 168 S.W.3d

802, 822 (Tex. 2005). The

term “inference” means,

In the law of evidence, a truth or

proposition drawn from another which is supposed or admitted to be true. A

process of reasoning by which a fact or proposition sought to be established is

deduced as a logical consequence from other facts, or a state of facts, already

proved. . . .

Marshall Field Stores, Inc. v. Gardiner ,

859 S.W.2d 391, 400 (Tex. App.—Houston [1st Dist.] 1993, writ dism’d w.o.j.)

(citing Black’s Law Dictionary

700 (5th ed. 1979)). For a fact-finder

to infer a fact, “it must be able to deduce that fact as a logical consequence

from other proven facts.” Id .

In determining whether legally sufficient evidence supports

the finding under review, we must consider evidence favorable to the finding if

a reasonable fact-finder could consider it, and disregard evidence contrary to

the finding unless a reasonable fact-finder could not disregard it. City of

Keller , 168 S.W.3d at 827 ; Brown v. Brown , 236 S.W.3d

343, 348 (Tex. App.—Houston [1st Dist.] 2007, no pet.).

We review a

trial court’s conclusions of law de novo ,

and we will uphold the conclusions if the judgment can be sustained on any

legal theory supported by the evidence. BMC

Software Belgium, N.V. v. Marchand ,

83 S.W.3d 789, 794 (Tex. 2002); In re Moers , 104 S.W.3d

609, 611 (Tex. App.—Houston [1st Dist.] 2003, no pet.). Although a trial court’s

conclusions of law may not be challenged for factual sufficiency, we may review

the legal conclusions drawn from the facts to determine whether the conclusions

are correct. BMC Software Belgium,

N.V. ,

83 S.W.3d at 794 . If we determine that a

conclusion of law is erroneous, but the trial court nevertheless rendered the

proper judgment, the error does not require reversal. Id. ; Vaughn v. DAP Fin. Servs. , 982 S.W.2d

1, 6 (Tex. App.—Houston [1st Dist.] 1997, no pet.). Finally, we note that the trial court acts as

fact-finder in a bench trial and is the sole judge of the credibility of

witnesses. See Murff v. Murff , 615 S.W.2d

696, 700 (Tex. 1981); HTS Servs., Inc. v. Hallwood Realty Partners, L.P. , 190 S.W.3d

108, 111 (Tex. App.—Houston [1st Dist.] 2005, no pet.).

Breach of Guaranty Agreement

In their first issue, Garza

and Salomon argue that the trial court “erred in finding Evans was entitled to

enforce the guaranty agreement because there was no meeting of the minds to

create a valid guaranty agreement.” In

their second issue, Garza and Salomon argue that “Evans was not the lawful

owner and holder of the guaranty and is, therefore, not entitled to enforce the

guaranty.” In their third issue, Garza

and Salomon assert that “[t]here was no consideration for the guaranty.”

Meeting of the Minds

Garza

and Salomon first argue that “there was no meeting of the minds to create a

valid guaranty agreement” because “Evans (the creditor) was not even aware of

the existence of the guaranty until sometime after Garza, Salomon, and Adkinson

(the guarantors) entered into the guaranty with TBA Construction (the primary

debtor).” Thus, according to Garza and

Salomon, “Evans is not entitled to enforce the guaranty.”

The Texas Business and Commerce Code

provides:

(a) A promise or

agreement described in Subsection (b) of this section is not enforceable unless

the promise or agreement, or a memorandum of it, is

(1) in writing; and

(2) signed by the

person to be charged with the promise or agreement or by someone lawfully

authorized to sign for him.

Tex. Bus. & Com. Code Ann.

§ 26.01(a) (Vernon 2009). Subsection (b)

applies to “a promise by one person to answer for the debt, default, or

miscarriage of another person.” Id. § 26.01 (b)(2). The statute requires “a written memorandum

which is complete within itself in every material detail, and which contains

all of the essential elements of the agreement, so that the contract can be

ascertained from the writings without resorting to oral testimony.” Cohen v. McCutchin , 565 S.W.2d

230, 232 (Tex. 1978). The essential terms of a guaranty agreement are (1)

the parties involved, (2) a manifestation of intent to guaranty the obligation,

and (3) a description of the obligation being guaranteed. Material P’Ships, Inc. v. Ventura , 102 S.W.3d 252, 261 (Tex.

App.—Houston [14th Dist.] 2003, pet. denied); Park Creek Assocs., Ltd. v. Walker , 754 S.W.2d

426, 429 (Tex. App.—Dallas 1988, writ denied).

Separate instruments or contracts executed at the same time, for the

same purpose, and in the course of the same transaction are to be considered as

one instrument and are to be read and construed together. Jones

v. Kelley , 614 S.W.2d 95, 98 (Tex. 1981); North v. Lawrence , 841 S.W.2d 540, 542 (Tex. App.—Houston [1st

Dist.] 1992, no writ).

Here, the “Specific Guaranty

Agreement” provides, in pertinent part,

[T]he

undersigned, whether one or more, hereinafter “Undersigned” or “Guarantor,”

jointly, severally, and unconditionally guarantee the full and punctual payment

when due of the following described indebtedness of $200,000.00, “Borrower,”

whether one or more, to C. Paul Evans, “Lending Party”:

One

certain promissory note in the original principal amount of $200,000.00, dated

March 15, 2006, executed by Borrower and payable to the order of Lending Party

. . . .

Adkinson,

Garza, and Salomon each signed the guaranty agreement next to the designation,

“Guarantor.” They thus clearly indicated

an intent to guaranty the underlying promissory note in the guaranty agreement,

which described the obligation being guaranteed and identified Evans as the

“Lending Party” and Adkinson, Garza, and Salomon as “Guarantors.” Although the guaranty agreement does not

specifically name TBA Construction as “Borrower,” it does specifically

reference the March 15, 2006 promissory note in the amount of $200,000.00,

which is signed by “TBA Construction, Inc.” as “Debtor.” Furthermore, we construe the guaranty

agreement together with the Agreement of Sale, which was executed on the same

date as the guaranty agreement and incorporates the guaranty agreement. See

Jones , 614 S.W.2d at 98 . The

Agreement of Sale includes the following provision, under a section entitled,

“Conditions Precedent to Obligation of Parties to Close”:

The

obligations of the Sellers (“The Companies and their Owners”) under this

Agreement shall be subject to the receipt by Sellers of the following

documents, all of which shall be fully executed:

1.

An agreement executed by Mark D. Adkinson, J. Homer Garza and Arturo

Salomon guaranteeing fully payment of a note in the sum of $200,000.00 to Paul

Evan[s] in Addendum “H,” attached hereto and made part of this Agreement by

incorporation.

Thus,

the promissory note itself, which identified TBA Construction as the primary

debtor, was incorporated into the Agreement of Sale along with the guaranty

agreement. Construed together, these

documents demonstrate the essential terms of a guaranty agreement. See Material

P’ships , 102 S.W.3d at 261 .

Garza and Salomon nevertheless argue

that Evans was required to prove a “meeting of the minds” with respect to Evans

because “to have a valid guaranty, there must be a clear demonstration of a

meeting of the minds of all three essential parties to the agreement.” In support of this proposition, Garza and

Salomon rely on Sacks v. Haden , 266

S.W.3d 447 (Tex. 2008) and Copeland v.

Alsobrook , 3 S.W.3d 598 (Tex App.—San Antonio 1999, pet. denied). In Sacks ,

the Texas Supreme Court considered whether there was a “meeting of the minds”

in the execution of an attorney’s fee agreement where the parties had an oral

agreement regarding the “maximum fee” that could be charged. Sacks ,

266 S.W.3d at 448–50. Sacks did not address the “meeting of

the minds” for a guaranty agreement.

Likewise, in Copeland , the San

Antonio Court of Appeals addressed the issue of whether there was a “meeting of

the minds” regarding an oral contract for the parties to “work together to obtain

the proceeds” of a decedent’s life insurance policy. Copeland ,

3 S.W.3d at 603–04. Copeland similarly does not involve the “meeting of the minds” for

a guaranty agreement, and Garza and Salomon fail to cite any authority

requiring a plaintiff to show a “meeting of the minds” between all three

parties to a guaranty agreement.

Accordingly, we hold that the trial court did not err in concluding that

Evans was not precluded from enforcing the guaranty agreement on the ground

that he did not show a “meeting of the minds.”

We overrule Garza and Salomon’s first

issue.

Status

as Owner and Holder of the Guaranty

In their second issue, Garza and

Salomon argue that the trial court erred in concluding that Evans was the

“lawful owner and holder of the promissory note and guaranty” because “he did

not know of the guaranty until long after Garza, Salomon, and Adkinson signed

it” and “there is no evidence establishing that Evans ever received the

original of the guaranty.”

To recover against a guarantor of a note,

the plaintiff must show (1) the existence of the note and guaranty, (2) the

debtor signed the guaranty, (3) the plaintiff legally owns or holds the

guaranty, and (4) a certain balance remains due and owing. Vaughn ,

982 S.W.2d at 4 .

Here, Evans testified that he received

the originals of both the guaranty and the promissory note although, at trial,

he could only produce copies of the documents.

The guaranty was signed by Garza, Salomon, and Adkinson, and Evans

testified that he was the owner of the rights under the guaranty. Furthermore, the plain language of the

guaranty gives Evans the right to collect under the guaranty, stating that the

undersigned “unconditionally guarantee the full and punctual payment when due”

under the promissory note “to C. PAUL EVANS, ‘Lending Party,’” the “Lending

Party may, at his option . . . extend the time of payment,” and “[p]ayments of

all amounts hereunder shall be made to C. Paul Evans.” The guaranty agreement further states,

This

Agreement is for the benefit of Lending Party, and for such other persons as

may from time to time become or be the holders of any indebtedness

guaranteed. This Agreement shall be

transferrable and negotiable, with the same force and effect and to the same

extent as such indebtedness may be transferrable, it being understood that upon

the assignment of transfer by Lending Party of any indebtedness guaranteed, the

legal holder of such indebtedness shall have all of the rights granted to Lending Party under this guaranty.

(Emphasis

added). Thus, the guaranty agreement

itself grants Evans rights as the owner and holder of the guaranty.

Garza and Salomon argue that, despite

the above language, without producing an original of the guaranty agreement,

“Evans cannot establish an unbroken chain of title for the guaranty.” In support of this proposition, Garza and

Salomon rely on Ashcraft v. Lookadoo ,

952 S.W.2d 907 (Tex. App.—Dallas 1997, pet. denied). In Ashcraft ,

the plaintiff purchased a promissory note from a company that had been placed

in receivership. Id. at 911 . The plaintiff argued

that, despite the fact that the purchase agreement included only the promissory

note, he nevertheless also acquired an underlying guaranty because “the

assignment of a note automatically operates as an assignment of any separate

guaranties that secure the note.” Id. at 911 . The Dallas Court of Appeals held that the

plain language of the purchase agreement included only the promissory note and,

therefore, the plaintiff did not acquire the underlying guaranty through his

purchase. Id. at 912–13. The court

further held that, although the plaintiff eventually obtained a copy of the

guaranty, he did not establish that he obtained a copy from the guaranty’s

owners or he was assigned the rights under the guaranty by the guaranty’s

owners. Id. at 913 .

Here, by contrast, the terms of the guaranty agreement grant

the rights under the agreement to Evans, and there is no evidence that Evans

transferred or assigned the rights under the guaranty. Furthermore, Evans testified that he received

the original of the guaranty, he was the owner and holder of the guaranty, and the

copy he produced at trial was a true and accurate copy of the original. This testimony was sufficient to prove his

status as the legal owner and holder of the guaranty. See

Zarges v. Bevan , 652 S.W.2d 368, 369 (Tex. 1983) (holding that photocopy of

note, together with affidavit stating that copy was “true and correct” copy of

original, was sufficient to show status as owner and holder of note in summary

judgment); Life Ins. Co. of Va. v. Gar-Dal, Inc. , 570

S.W.2d 378, 381 (Tex. 1978) (holding that copy of note and affidavit that

plaintiff was “sole owner and holder” of note was sufficient to prove that

plaintiff “was the owner, holder, and in possession of the note”); Vaughn , 982 S.W.2d at 5 (citing Hanks v. NCNB Tex. Nat’l Bank , 815

S.W.2d 763, 765 (Tex. App.—Eastland 1991, no writ)) (holding that where bank

officer stated copies of note and guaranty were “true and genuine” and

“confirmed that the bank was the legal holder and owner” and “sole party to

enforce” the note and guaranty, evidence was sufficient “to prove legal holder

and ownership status”)). Accordingly, we

hold that the trial could have reasonably concluded that Evans is the “lawful

owner and holder” of the guaranty.

We overrule Garza and Salomon’s second

issue.

Consideration

In their third issue, Garza and

Salomon argue that because “there was no consideration for the guaranty,” Evans

should not be “allowed to recover under the guaranty.” Garza and Salomon assert that “as a matter of

law, there was no consideration for the guaranty” and “TBA Construction did not

receive an additional benefit from the signing of the guaranty.” They further assert that “whether Garza,

Salomon, and Adkinson received a benefit from signing the guaranty is not a

factor when determining whether there is consideration to establish a valid

guaranty.”

Like any contract, a guaranty

agreement must be supported by consideration. Hargis v. Radio Corp. of Am.,

Elec. Components , 539 S.W.2d 230, 232 (Tex. Civ. App.—Austin 1976, no

writ). Consideration “consists of either

a benefit to the promisor or a detriment to the promisee.” Ventura ,

102 S.W.3d at 262 . “The detriment must

induce the making of the promise, and the promise must induce the incurring of

the detriment.” Roark v. Stallworth

Oil & Gas, Inc. , 813 S.W.2d 492, 496 (Tex. 1991) (citations omitted). Consideration for a guaranty agreement is

usually either the sufferance of a detriment by the creditor or a benefit

conferred on the primary debtor. Hargis , 539 S.W.2d at 232 .

When, as in the present case, the parties enter into a

guaranty independent of the transaction that initially caused an obligation,

consideration independent of the obligation must support the guaranty. Gooch v. Am. Sling Co., Inc. , 902 S.W.2d

181, 185 (Tex. App.—Fort Worth 1995, no writ). The consideration need not pass to the

guarantor; consideration is sufficient if the primary debtor receives some

benefit. Beltran v. Groos Bank, N.A. , 755 S.W.2d

944, 948 (Tex. App.—San Antonio 1988, no writ); see Smith v. Christley , 755 S.W.2d

525, 532 (Tex. App.—Houston [14th Dist.] 1988, writ denied), disapproved on

other grounds by Van Allen v. Blackledge ,

35 S.W.3d 61 , 65 n.3 (Tex. App.—Houston [14th Dist.] 2000, pet. denied). Consideration may be given either by the

promisee or by some other person to either the promisor or some other

person. Frazer v. Tex. Farm Bureau Mut. Inc. Co. , 4 S.W.3d 819, 824 (Tex.

App.—Houston [1st Dist.] 1999, no pet.); Hovas

v. O’Brien , 654 S.W.2d 801 , 802–03 (Tex. App.—Houston [14th Dist.] 1983,

writ ref’d n.r.e.).

Garza and Salomon first assert that “there was no

consideration distinct from that of the primary debt.” However, the Agreement of Sale, which was

executed at the same time as the guaranty agreement and incorporated the

guaranty agreement, stated,

For and in

consideration of the transfer of the businesses’ assets of the Companies,

the Buyers agree to guarantee full payment to [Evans] in the sum of $200,000.00

. . . .

(Emphasis

added.) Thus, by the plain terms of the

Agreement of Sale, Garza and Salomon received TBA Construction’s assets as

consideration in return for their individual guaranties of Evans’s note. The execution of the guaranty agreement was

listed as a “condition precedent” to closing the sale, and the buyers were required

to deliver the guaranty agreement to the sellers on the closing date. D espite Garza and Salomon’s

assertion that they received no “consideration distinct

from the promise to pay the primary debt,” the Agreement of Sale unambiguously

states that the purchase of TBA Construction was consummated in consideration

for the guaranty agreement. Garza and

Salomon, the promisors under the guaranty agreement, received a benefit from

signing the guaranty and that benefit induced the signing of the guaranty. See

Roark , 813 S.W.2d at 496 . Accordingly,

we hold that the trial court could have reasonably concluded that Garza,

Salomon, and Adkinson received a benefit from the guaranty agreement.

Garza and Salomon further argue that

whether they received a benefit from signing the guaranty is “not a factor when

determining whether there is consideration to establish a valid guaranty”

because “it is not necessary that any consideration pass directly to the

guarantor.” While “[c]onsideration for

guaranty agreements usually consists

of a detriment to the creditor or a benefit conferred on the primary debtor,”

this does not preclude consideration consisting of a benefit conferred on the

guarantor. Cf. Hargis , 539 S.W. at 231 (emphasis added). Consideration may consist of “either a

benefit to the promisor or a detriment to the promisee.” Ventura ,

102 S.W.3d at 262 . As promisors, the

benefit conferred to Garza, Salomon, and Adkinson was sufficient to support a

finding that enforcement of the guaranty was not barred by failure or lack of

consideration. See Universal Metals & Machinery v. Bohart , 539 S.W.2d 874 ,

877–88 (Tex. 1976) (holding that corporate owners, as individual guarantors of

corporation’s debt, received consideration for guaranty where debtors continued

to provide corporation machinery); Simpson

v. MBank Dallas, N.A. , 724 S.W.2d 102, 107 (Tex. App.—Dallas 1987, writ

ref’d n.r.e.) (holding that guarantor received benefit, and thus consideration,

where creditor acquiesced to sale of company to guarantors); see also Frazer , 4 S.W.3d at 824

(“Consideration may be given by either the promisee or by some other person to

either the promisor or some other person.”).

Although the benefit conferred on

Garza, Salomon, and Adkinson is sufficient to support a finding of

consideration, there is also evidence that TBA Construction, as primary

debtors, received a benefit. As part of

the Agreement of Sale, TBA Construction received a “[c]ash injection of

$285,000.00 by [Salomon].” And, as

stated above, the guaranty agreement was a “condition precedent” to

consummating the Agreement of Sale and was incorporated therein. Accordingly, we hold that the trial court did

not err in concluding that TBA Construction received a benefit from the

guaranty agreement and enforcement of the guaranty was not barred by failure or

lack of consideration.

We overrule Garza and Salomon’s third

issue.

Conclusion

We

affirm the judgment of the trial court.

Terry Jennings

Justice

Panel

consists of Justices Jennings, Massengale, and Huddle.

[1] See

Tex. R. Civ. P. 60.