Anguiano v. Jim Walter Homes, Inc.

• Decision Date: 18 January 1978
• Docket Number: No. 15922,15922
• Citation: 561 S.W.2d 249
• Parties: Simon ANGUIANO and Elva Anguiano, Appellants, v. JIM WALTER HOMES, INC., Appellee.
• Court: Texas Court of Appeals

Page 249

561 S.W.2d 249

Simon ANGUIANO and Elva Anguiano, Appellants,

v. JIM WALTER HOMES, INC., Appellee.

No. 15922.

Court of Civil Appeals of Texas, San Antonio.

Jan. 18, 1978.

Rehearing Denied Feb. 15, 1978.

Barry Snell, San Antonio, Hector Gonzalez, Sinton, for appellants.

Morris Atlas, Gary R. Gurwitz, Atlas, Hall, Schwarz, Mills, Gurwitz & Bland, McAllen, M. K. Woodward, Austin, for appellee.

MURRAY, Justice.

This is an appeal from a summary judgment in an action for statutory penalties under the Texas Consumer Credit Code, Tex.Rev.Civ.Stat.Ann. art. 5069-6.01 et seq. (1971). This suit was brought by appellants, Simon Anguiano and wife, Elva Anguiano, against appellee, Jim Walter Homes, Inc. in which both sides moved for summary judgment. The trial court granted the summary judgment of appellee and overruled the summary judgment of appellants and appeal has been perfected to this Court.

On March 8, 1976, the appellants entered into a contract with appellee which provided that the appellee would build a new house on the appellants' unencumbered and unimproved property in Alice, Texas for the cash price of $13,910.00 plus a finance charge of $15,124.00 for a total of $29,034.00. The total amount was to be repaid in 180 monthly installments of $161.30 each and the contract disclosed that the annual percentage rate was 11.4 percent. To secure the payment of this debt, the appellee was given a first lien on the appellants' property. This financial arrangement is a "time price differential" and is not an "interest" transaction, and if the contract is a contract for the sale of goods or services, then it is governed by Chapter 6. If the negotiations between a buyer and a seller involve a bona fide quotation of both a cash price and a credit price, the transaction does not involve usury, even though the quoted credit price is such as to exceed the cash price plus lawful interest thereon. Lamb v. Ed Maher, Inc., 368 S.W.2d 255 (Tex.Civ.App. Dallas 1963, no writ); Rattan v. Commercial Credit Co., 131 S.W.2d 399 (Tex.Civ.App. Dallas 1939, writ ref'd). If the transaction is actually a device to evade the usury law, it is not saved by any attempted difference between a claimed "cash" price and a claimed "credit" price. Bradford v. Mack, 359 S.W.2d 936 (Tex.Civ.App. El Paso (1962, writ ref'd n. r. e.); 91 C.J.S. Usury § 18 (1955). In 1967, the Legislature enacted the Credit Code which preserved the time-price doctrine but which imposed various disclosure requirements and limitations when time-price differential was charged. Art. 5069-6.01 et seq. On the other hand, Chapter 1 of the Credit Code allows interest up to 10 percent per annum, and imposes no disclosure requirements nor prohibitions. Art. 5069-6.01 et seq. By the Credit Code, sellers are permitted to choose between interest up to 10 percent per annum, free of restrictions (Chapter 1); or to charge time-price differential at a much higher yield and be subject to closer regulations (Chapter 6).

By appellants' first point and appellee's first counterpoint the question is presented whether or not a contract to build a new home is governed by Chapter 6 of the Texas Credit Code.

Art. 5069-6.08 provides in part:

This Chapter shall apply exclusively to retail installment transactions as defined in Article 6.01 hereof.

Art. 5069-6.01(e) provides:

"Retail installment transaction" means any transaction in which a retail buyer purchases goods or services from a retail seller pursuant to a retail installment contract or a retail charge agreement, as defined in this Article, which provides for a time price differential, as defined in this Article, and under which the buyer agrees to pay the unpaid balance in one or more installments, together with a time price differential.

Art. 5069-6.01(a) provides:

"Goods" means all tangible personal property when purchased primarily for personal, family or household use and not for commercial or business use, including such property which is furnished or used at the time of sale or subsequently, in the modernization, rehabilitation, repair, alteration, improvement or construction of real property so as to become a part thereof whether or not severable therefrom.

Art. 5069-6.01(b) provides:

"Services" means work, labor, or services of any kind when purchased primarily for personal, family or household use and not for commercial or business use . . . .

The Mechanic's Lien Contract which was signed in conjunction with this transaction provides in part:

Builder agrees to build, construct, and complete above mentioned improvements within 180 days from this date in a good, substantial, workmanlike manner, and to furnish and provide all labor and material used in the construction and erection thereof.

Clearly, if a contract is one to furnish goods in the construction of a new home, it is within Chapter 6 of the Credit Code. Likewise, if a contract is to furnish services to construct a new home, it is within Chapter 6 of the Credit Code. We hold that a contract to provide both goods and services in the construction of a new home is within Chapter 6 of the Credit Code. Such a contract fits squarely within the definition of "retail installment transactions." Art. 5069-6.01(e). Appellee contends that the statute before us should be restricted in its application to work done on a pre-existing structure and not to the initial erection of the structure itself because of the rule of ejusdem generis. This rule is sometimes employed in the construction of ambiguous statutes and means that when a list of specific words is followed by some general terms the general terms are not to be construed in their broadest sense but are held to apply to things of the same kind of class as specifically mentioned. Black's Law Dictionary 608 (4th Ed. 1968). Art. 5069-6.01(a) defines "goods" as tangible personal property, including such property which is furnished in the "modernization, rehabilitation, repair, alteration, improvement or construction of real property so as to become a part thereof whether or not severable therefrom." The appellant resists the application of the rule of ejusdem generis because the words "improvement" and "construction" are no more general than the other enumerated words, i. e., "modernization," "rehabilitation," "repair," "alteration." Whatsoever may be the merits of this legal sparring we need not determine because the statute, as we read it, is plain, clear, and unambiguous, and hence, the aid of rules of construction is not helpful or required, and in fact, their use under such circumstances would be improper. Ex parte Roloff, 510 S.W.2d 913 (Tex.1974); Second Injury Fund v. Keaton, 162 Tex. 250, 345 S.W.2d 711 (1961); State Board of Insurance v. Betts, 158 Tex. 612, 315 S.W.2d 279 (1958). By this statute it is our opinion that the Legislature intended that Chapter 6 should apply to the initial erection of structures as well as preexisting structures. The language of the statute, framed entirely in the disjunctive, seems to admit of no other construction.

Appellee, in his reply no. 3, alleges that if Chapter 6 of Art. 5069 is applicable to the transaction involved in this suit, it is unconstitutional because the title to the Act does not comply with § 35, Art. III of the Texas Constitution. § 35 of Art. III provides:

No bill, . . . shall contain more than one subject, which shall be expressed in its title. But if any subject shall be embraced in an act, which shall not be expressed in the title, such act, which shall not be expressed in the title, such act shall be void only as to so much thereof, as shall not be so expressed.

The purpose of § 35 is to require that the bill give notice to both the Legislature and the general public of statutes they might wish to oppose and to prevent surprise and fraud. Beck v. Winegeart, 471 S.W.2d 422 (Tex.Civ.App. Amarillo 1971, no writ); Yeary v. Bond, 384 S.W.2d 376 (Tex.Civ.App. Amarillo 1964, writ ref'd n. r. e.) Appellee contends that the caption of Art. 5069 failed to give notice that the statute applied to the business in which the appellee is engaged. The caption of Art. 5069, H.B.No. 452, 60th Texas Legislature (1967) reads as follows:

An act rearranging, reorganizing, revising, and amending provisions of Title 79 'Interest' of the Revised Civil Statutes of Texas, 1925, and certain other laws relating to loans and lenders, and providing for additional legislation relating to loans and lenders in accordance with the provisions of Section II of Article XVI of the Constitution of Texas, which authorizes the Legislature to classify loans and lenders, license and regulates lenders, define interest and fix maximum rates of interest, and further defining and limiting the charges imposed by retail vendors of goods and services in credit sales, and providing for additional legislation to protect the public from deceptive and abusive trade practices in both cash and credit consumer transactions, so as to create a revised Title 79 to be known as Title 79, 'Interest-Consumer Credit-Consumer Protection,' . . . .

There is no merit in appellee's contention of unconstitutionality. As previously stated, a contract to provide both goods and services in the construction of a new home is within Chapter 6 of the Credit Code. The caption is clear in providing limitations to "charges imposed by retail vendors of goods and services in credit sales" and to the protection to the public from "deception and abusive trade practices" in "credit consumer transactions." Art. III, § 35 requires only that the title state the general subject and it need not explain the details. Robinson v. Hill, 507 S.W.2d 521 (Tex.1974). The caption of the act is not defective and does not violate Art. III of § 35.

Appellant contends that if Chapter 6 of the Texas Consumer Credit Code imposes requirements and prohibitions with regard to the building of new homes pursuant to contracts which provide for a time...