law-sworn-account
A credit card debt is not a sworn account
Tully v. Citibank (South Dakota), N.A., 173 S.W.3d 212, 216, No. 06-05-00027-CV (Tex.App.- Texarkana
2005, no pet.)
First, Citibank cannot collect a credit card debt through a suit on a sworn account. A suit on a sworn
account is permitted only if the claim is "founded upon an open account or other claim for goods,
wares and merchandise, including any claim for a liquidated money demand based upon written
contract or founded on business dealings between the parties, or is for personal service rendered, or
labor done or labor or materials furnished . . . ." Tex. R. Civ. P. 185. "A sworn account applies only to
transactions between persons, in which there is a sale upon one side and a purchase upon the other,
whereby title to personal property passes from one to the other, and the relation of debtor and
creditor is thereby created by general course of dealing--it does not mean transactions between
parties resting upon special contract." Bird v. First Deposit Nat'l Bank, 994 S.W.2d 280, 282 (Tex.
App.—El Paso 1999, pet. denied). Because no title to personal property passes from the bank to the
cardholder, a credit card debt is not a sworn account as contemplated by Texas Rule of Civil
Procedure 185. Id. Citibank was not entitled to summary judgment based on its suit on a sworn
account theory.
Tully v. Citibank (South Dakota), N.A., 173 S.W.3d 212, 216, No. 06-05-00027-CV (Tex.App.- Texarkana
2005, no pet.)(a credit card debt is not a sworn account)
Houston: Sworn Account not appropriate for collection of credit card debt
In his fifth issue, Williams argues that the trial court erred in granting summary judgment on Unifund's claim for
a sworn account pursuant to Texas Rule of Civil Procedure 185. (1) Rule 185 is a procedural tool that limits
the evidence necessary to establish a prima facie right to recovery on certain types of accounts. (2) Tex. R.
Civ. P. 185. Rule 185 applies only "to transactions between persons, in which there is a sale upon one side
and a purchase upon the other, whereby title to personal property passes from one to the other, and the
relation of debtor and creditor is thereby created by general course of dealing. . . ." Meaders v. Biskamp, 316
S.W.2d 75, 78 (Tex. 1958) (emphasis in original); Bird v. First Deposit Nat'l Bank, 994 S.W.2d 280, 282 (Tex.
App.--El Paso 1999, pet. denied); Hou-Tex Printers, Inc. v. Marbach, 862 S.W.2d 188, 190 (Tex. App.--
Houston [14th Dist.] 1993, no writ). It does not apply to transactions between parties resting upon a special
contract. Meaders, 316 S.W.2d at 78; Bird, 994 S.W.2d at 282. A credit card issued by a financial institution is
a special contract that does not create the sort of debtor-creditor relationship to bring a claim within the scope
of Rule 185. See Bird, 994 S.W.2d at 282; see also Sherman Acquisition II LP v. Garcia, 229 S.W.3d 802, 807
(Tex. App.--Waco 2007, no pet.); Tully v. Citibank (South Dakota), N.A., 173 S.W.3d 212, 216 (Tex. App.--
Texarkana 2005, no pet.). The Bird court reasoned:
Williams v. Unifund CCR Partners Assignee of Citibank, — SW3d —, 2008 WL 339855, at *4 (Tex.App.—
Houston [1st Dist.] Feb. 7, 2008, no pet. h.)(Keyes) (Plaintiff failed to produce the Card Agreement or any
document that established the agreed terms, including the applicable interest rate or the method for
determining the applicability and amount of finance charges.)
We reach this conclusion because no title to personal property passes from the bank to the cardholder;
rather, the card evidences a line of credit extended by the bank which the cardholder may use to purchase
goods and services from a third party. And where the transaction in question is a cash advance, there is no
good or service involved at all, but a pure loan of money.
An unpaid bank credit card account, therefore, creates a cause of action for the bank's money or credit
advanced as a loan, but not for goods or services sold or delivered to the cardholder. Bird, 994 S.W.2d at
282. Therefore, Rule 185 is not available in a suit to recover credit card debt. The trial court erred to the
extent it granted summary judgment on Unifund's claim on a sworn account.
We sustain Williams's fifth issue and hold that Unifund is not entitled to summary judgment on a sworn account
under Rule 185. Although Unifund cannot prevail under Rule 185, it is important to remember that Rule 185 is
merely a procedural tool that is unavailable here under established law. Williams also argues that Unifund was
not entitled to summary judgment on its breach of contract theory. (3)