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MEMORANDUM OPINION
No. 04-07-00747-CV
Juan Jose SILLER and Perfecta G. Siller,
Appellants
v.
LPP MORTGAGE LTD.,
Appellee
From the 81st Judicial District Court, La Salle County, Texas
Trial Court No. 02-04-00019-CVL
Honorable Fred Shannon, Judge Presiding
Opinion by: Rebecca Simmons, Justice
Sitting: Karen Angelini, Justice
Sandee Bryan Marion, Justice
Rebecca Simmons, Justice
Delivered and Filed: December 10, 2008
REVERSED AND REMANDED
Juan Jose Siller and Perfecta G. Siller appeal the trial court’s order granting summary
judgment in favor of LPP Mortgage Ltd. in a lawsuit in which Juan and Perfecta assert numerous
claims against LPP arising from a dispute over the title to certain real property. Because the
summary judgment evidence raised a genuine issue of material fact with regard to the ownership of
the property, we reverse the trial court’s order and remand the cause to the trial court for further
proceedings.
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BACKGROUND
In 1967, a 520 acre tract of land in Cotulla, Texas (the “Property”) was conveyed by a deed
to Abel Siller, Santiago Siller, Mario Siller, and Jose M. Siller, Jr., who were brothers. The brothers
used the acreage for farming.
In 1981, the SBA entered into a loan agreement which listed the borrower as “Abel, Mario
& Santiago Siller” and was signed by Abel, Mario and Santiago. The note that was signed to
evidence the loan listed the borrower as Siller Brothers Farms. The note was signed on behalf of
Siller Brothers Farms by Mario, Santiago, Abel, and their wives. The signatures of Mario, Santiago
and Abel indicated they were signing in their capacities as individuals and partners. A Deed of Trust
listing Siller Brothers Farms as grantor also was signed granting a lien against the Property to secure
the note. The Deed of Trust was signed by Mario, Santiago, and Abel in their capacities as
individuals and partners. Notably absent from the SBA loan agreement, promissory note and Deed
of Trust was the signature of Jose M. Siller, Jr. Four months after the SBA loan was made, Mario
Siller, Santiago Siller, and Abel Siller filed a certificate of partnership for Siller Brothers Farm with
the Texas Secretary of State.
The SBA subsequently assigned the note to LPP. Jose died in July of 2001. Following a
default by the borrowers, LPP foreclosed on the Property in August of 2001. In April of 2002, Jose’s
wife, Perfecta, and son, Juan, sued LPP asserting title to a 1/4 interest in the Property. After the
parties filed competing motions for summary judgment, the trial court granted summary judgment
in favor of LPP.
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STANDARD OF REVIEW
Juan and Perfecta filed a hybrid motion requesting both a traditional and no evidence
summary judgment, while LPP filed a motion requesting a traditional summary judgment. We
review both traditional and no evidence summary judgments de novo. Joe v. Two Thirty Nine Joint
Venture, 145 S.W.3d 150, 156 (Tex. 2004). We consider the evidence in the light most favorable
to the non-movant and indulge all reasonable inferences and resolve any doubts in the non-movant’s
favor. Id. at 157. We will affirm a traditional summary judgment only if the movant established
there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law
on a ground expressly set forth in the motion. Id. We will affirm a no-evidence summary judgment
only if the non-movant failed to produce more than a scintilla of probative evidence raising a genuine
issue of material fact on a challenged element of the cause of action. Ford Motor Co. v. Ridgway,
135 S.W.3d 598, 600 (Tex. 2004).
DISCUSSION
In order to grant summary judgment in favor of LPP, the trial court necessarily concluded that
the evidence established as a matter of law that the Property was purchased in 1967 by a partnership
in which the four brothers were partners, and, as a result, the four brothers, as partners, held title on
behalf of the partnership. Juan and Perfecta challenge this conclusion on several grounds.
A. Res Judicata and Collateral Estoppel
Juan and Perfecta initially challenge the trial court’s conclusion by asserting that LPP’s
contention that the partnership was the owner of the property is barred by the principles of res
judicata and collateral estoppel. Juan and Perfecta base this challenge on a condemnation award paid
to the four brothers individually in 1991 for a portion of the Property acquired to build a road.
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Res judicata, also known as claim preclusion, prevents the relitigation of a finally-adjudicated
claim and related matters that should have been litigated in a prior suit. State & County Mut. Fire
Ins. Co. v. Miller, 52 S.W.3d 693, 696 (Tex. 2001). When parties are co-parties rather than opposing
parties, res judicata only acts as a bar to a co-party’s claim in a subsequent action if the co-parties
had “issues drawn between them” in the first action. Id. (quoting Getty Oil Co. v. Ins. Co. of N. Am.,
845 S.W.2d 794, 800 (Tex. 1992)). For purposes of res judicata, co-parties have issues drawn
between them and become adverse only when one co-party files a cross-action against a second co-
party. Id. In this case, the SBA, LPP’s predecessor-in-interest, and the Sillers were co-parties in the
condemnation proceeding based on the interests they held in the Property – the Sillers as owners and
the SBA as a lienholder. Because no cross-action was filed between the Sillers and the SBA, no
issues were drawn between them, and res judicata does not apply to bar LPP’s claim that the
partnership owned the Property. See id.
The doctrine of collateral estoppel bars relitigation of fact issues that were fully and fairly
litigated and that were essential to the prior judgment. Id. The issue decided in the prior action must
be identical to the issue in the pending action. Id. at 696-97. Because the issue of the ownership of
the Property was not fully and fairly litigated in the condemnation proceeding, collateral estoppel
does not preclude LPP’s claim regarding the ownership of the Property in the underlying lawsuit.
See id.
B. Ownership of the Property
In order for LPP to have prevailed on its traditional summary judgment, the evidence had to
conclusively establish as a matter of law that the Property was owned by the partnership at the time
it was purchased in 1967. If the Property was purchased by the individuals, any oral transfer to the
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partnership would be barred by the statute of frauds. See Pappas v. Gounaris, 311 S.W.2d 644, 646-
47 (Tex. 1958). Moreover, Perfecta would not have any community property interest in the Property
if it was purchased by the partnership. Marshall v. Marshall, 735 S.W.2d 587, 594 (Tex.
App.—Dallas 1987, writ ref’d n.r.e.) (noting partnership property is owned by partnership itself and
not by individual partners and such property is neither community nor separate property of the
individual partners); see also Lifshutz v. Lifshutz, 199 S.W.3d 9, 27 (Tex. App.—San Antonio 2006,
pet. denied).
Whether land taken in the name of one or more partners is partnership property depends on
the parties’ intent and the understanding and design under which they acted. Logan v. Logan, 156
S.W.2d 507, 512 (Tex. 1941). An implied agreement that property will be owned by a partnership
may be established by “the general purposes of the parties, the nature of their business, and the
manner in which they have dealt with the property in question.” Id. Mere use of property in the
operation of a partnership does not make it an asset of the partnership. Littleton v. Littleton, 341
S.W.2d 484, 489 (Tex. Civ. App.—Houston 1960, writ ref’d n.r.e.). Instead, whether property used
in a partnership’s operation is owned by the partnership is a question of intent. King v. Evans, 791
S.W.2d 531, 533 (Tex. App.—San Antonio 1990, writ denied).
In its brief, LPP relies on the following summary judgment evidence as conclusively
establishing that the Property was owned by a partnership of the four brothers: (1) admissions by
Santiago and Abel that the Property was partnership property; (2) partnership tax records listing the
four brothers as partners and the Property as a partnership asset; (3) property taxes assessed against
the partnership as record owner of the Property; (4) evidence that the partnership did not pay rent to
the four brothers for the use of the Property; and (5) reporting of the condemnation award as
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partnership income. Although the evidence relied on by LPP does support the contention that the
Property was owned by the partnership, in our review of a summary judgment, we must consider the
evidence in the light most favorable to the non-movant and indulge all reasonable inferences and
resolve any doubts in the non-movant’s favor. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d
at 156. Applying this standard to the evidence presented, we must consider Abel’s deposition
testimony that the partnership was not formed until after the Property was purchased since two of
the brothers were in Vietnam fighting in the army at the time of purchase and one brother, Mario,
did not return until two years later.
The manner in which the SBA loan was documented also raises fact issues as to whether the
Property was owned by a partnership of all four brothers or whether the SBA only obtained a lien
as to the interests in the Property owned by Abel, Santiago, and Mario. The original loan agreement
listed the borrower as Abel, Santiago, and Mario, and the loan agreement was signed by the three
brothers in their individual capacities. The Deed of Trust was signed by the three brothers both as
partners and in their individual capacities. A title opinion obtained at the time of the loan listed the
owner of the Property as the four brothers. The record contains an affidavit signed by Abel,
Santiago, and Mario stating: (1) the Property was owned by the four brothers individually; (2) Abel,
Santiago, and Mario only intended to encumber their interest in the Property as security for the SBA
loan; and (3) Abel, Santiago, and Mario did not intend to encumber Jose’s interest in the Property,
and no one had authority to encumber Jose’s interest. Santiago testified in his deposition that to his
knowledge, Jose was unaware of the SBA loan. At the time of the loan from the SBA, Abel,
Santiago, and Mario signed a document entitled “Certificate as to Partners” certifying that they were
all of the partners of Siller Brothers Farms.
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Finally, the record contains a memo to the senior loan committee at the time LPP was
undertaking to foreclose the loan stating that the borrower is a general partnership established in
1985 and noting that if LPP was the successful bidder, LPP would jointly own the Property with Jose
based on a title opinion in the file showing that the four brothers owned the Property.
Because the foregoing evidence raises a genuine issue of material fact with regard to whether:
(1) the Property was purchased and owned by the four brothers individually; and (2) the Deed of
Trust encumbered Jose’s interest in the Property, the trial court erred in granting summary judgment
in favor of LPP. See Miller v. Gann, No. 01-86-00905-CV, 1988 WL 3984, at *4 (Tex.
App.—Houston [1st Dist.] Jan. 21, 1988, writ denied) (reversing summary judgment where evidence
of ownership by partnership, including partnership’s use of property, sworn statements by partners,
partnership’s income tax returns, and partnership’s payment of property taxes, conflicted with
evidence of individual ownership - primarily deed records) (not designated for publication). The
fact issue regarding ownership of the Property also precludes summary judgment as to whether the
foreclosure notice was proper and whether Juan and Perfecta are entitled to a partition of the
Property.
CONCLUSION
The trial court’s judgment is reversed, and the cause is remanded to the trial court for further
proceedings.
Rebecca Simmons, Justice
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