Ashcraft v. Lookadoo

In Ashcraft v. Lookadoo, 952 S.W.2d 907 (Tex. App.--Dallas 1997, pet. denied), 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. In Ashcraft v. Lookadoo, the appellate court rejected the creditor's proposition that assignment of a note automatically assigns an underlying guaranty. See id. The court refused to imply a transfer of the guaranty and examined the facts to see if the assignee had established ownership. See id. at 913. The guaranty was not in the asset file that conveyed the note, and the assignee did not possess the guaranty, could not produce the original, or prove that the defendant had ever signed the original. See id. at 912-13. The copy of the guaranty was not specific to the note in question, and the assignee produced no evidence that the transferor of the note ever owned a valid guaranty capable of being assigned. See id. at 911-13. The appellate court found that those facts supported the trial court's finding that assignee failed to prove that he was the owner of the guaranty. See id. at 913-14.