# Crimmins v. Lowry

> Texas Supreme Court · May 29, 1985 · 28 Tex. Sup. Ct. J. 433

URL: https://www.frixlaw.com/law-library/cases/9653109

## Case

- **Full name:** Carl E. CRIMMINS, Petitioner v. James M. LOWRY, Respondent
- **Court:** Texas Supreme Court
- **Decided:** May 29, 1985
- **Citations:** 28 Tex. Sup. Ct. J. 433; 691 S.W.2d 582; 40 U.C.C. Rep. Serv. (West) 1779; 1985 Tex. LEXIS 858
- **Precedential status:** Published
- **Opinion:** Concurrence by Ray
- **Judges:** Campbell, Ray, Spears, Kil-Garlin
- **Cited by:** 70 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9653109

## How later opinions describe it (automated extraction)

- recognizing that, “upon payment or satisfaction, the co[-]maker assumes the rights of a transferee of the note” and “is subrogated to the rights of the creditor and may sue on the instrument and foreclose the collateral to the extent of his right of contribution”
- noting that “equity confers the right of subrogation” and the surety “can bring an action on the debt itself against his principal and foreclose on collateral given as security for the note”

## Opinion text

RAY, Justice,
concurring.
I concur with the result reached by the court in this cause. In fact, I agree with the rule announced in the court’s opinion on how Tex.Bus. & Comm.Code § 3.606(a)(2) (Vernon 1968) applies to comakers. However, I find it unfortunate that this cause must be decided on this basis.
Upon the oral presentation of this cause, Lowry raised for the first time the argument that Tex.Bus. & Comm.Code § 3.415 (Vernon 1968) allows a party who appears to be a co-maker to demonstrate that he is actually an accomodation party. Indeed, section 3.415(c) provides:
As against a holder in due course and without notice of the accomodation oral proof of the accomodation is not admissible to give the accomodation party the benefit of discharges dependent on his character as such. In other cases the accomodation character may be shown by oral proof (emphasis added).
Since Crimmins did not negotiate the note, he is not a holder in due course. Tex. & Bus.Comm.Code § 3.302 (Vernon 1968). Thus, section 3.415(c) provides Lowry with a mechanism to prove that he is not a co-maker, but only an accomodation party to the note. If he is an accomodation party, then Lowry will be entitled to the full discharge made available by the impairment of collateral defense in section 3.606(a)(2).
In determining whether a party is a comaker or an accomodation party, the threshold question is: did the party receive a direct benefit from the'execution of the instrument? See Dalton v. George B. Hatley Co., 634 S.W.2d 374, 378 (Tex.App.—Austin 1982, no writ); 2 R. Anderson, UNIFORM COMMERCIAL CODE § 3.415:9 (2d ed. 1971). If a party does not retain any benefit from the note’s execution, then that party is likely to be regarded as an accomo-dation party. Id. At oral argument, Lowry pointed out that upon the dissolution of the partnership, he did not keep any of the office equipment that secured the note. Also, Lowry called attention to the fact that he did not receive any of the proceeds of the sale of this equipment at the liquidation of McNeil’s bankruptcy. Thus, Lowry now makes a good argument that he is only- an accomodation party to the note.
The problem is that Lowry bears the burden of proving his status as an accomo-dation party. See Caldwell v. Stevenson, 567 S.W.2d 278, 280 (Tex.Civ.App.—Austin 1978, no writ); 4 W. Hawkland & L. Lawrence, U.C.C. SERIES § 3.415:03 (1984). At trial, however, Lowry did not request any findings of fact on this matter. Also, he did not present this argument before the court of appeals. Thus, he is precluded from raising this argument at this stage in the litigation. Consequently, I concur with the result reached by the court.
SPEARS and KILGARLIN, JJ., join in this concurring opinion.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9653109. Public record. Not legal advice.