Bexar Building & Loan Ass'n v. Robinson

• Decision Date: 17 June 1890
• Parties: BEXAR BUILDING & LOAN ASS'N v. ROBINSON.
• Court: Texas Supreme Court

Page 227

14 S.W. 227

BEXAR BUILDING & LOAN ASS'N v. ROBINSON.

Supreme Court of Texas.

June 17, 1890.

Commissioners' decision. Appeal from district court, Bexar county.

The appellee instituted this suit on the 15th day of August, 1887, against the appellant, to recover back from it the sum of $1,440, paid by her as interest on a contract alleged to be usurious, and also the further sum of $276 as interest on that sum. The petition states that she, joined by her husband, now dead, did on the 23d day of March, A. D. 1883, enter into a contract with the appellant, in form and under the device of a builder's contract, which contract was attached to, and made a part of, the petition. In this contract it is stipulated that the appellant shall erect a house for appellee for the sum of $4,800, with interest at 10 per cent. per annum on that sum, which amounts to $40 per month; that this monthly sum was paid for each and every month from the said 23d day of March, A. D. 1883, up to and including the 5th day of April, A. D. 1886; that said contract was not a builder's contract, but was a fraudulent device for evading the usury laws, and that the same was one for the loan of money; and that, under said contract, she received as a loan from the appellant only the sum of $3,292, upon which she paid interest at the rate of $40 per month, or at the rate of about 14½ per cent. per annum. The petition further alleges that the appellee, prior to the institution of the suit, and before the maturity of the contract, paid in addition to said sum of $1,440 as interest, the said sum of $2,202. The appellant filed a general demurrer to the petition, and excepted to it specially that the petition and the exhibit showed the contract to be a building contract, and showed a final settlement between the parties, and that it contained no allegations of fraud, deceit, or mistake to authorize the court to reopen said settlement. The demurrer and exceptions were overruled by the court. The appellant filed an answer admitting the execution of the contract attached to the petition, and alleging that the same was what it on its face purported to be, a contract for the building of a house for the sum of $4,800, and that it was such a contract as, under its charter and by-laws, it was permitted to make; that it fully complied with said contract, and that appellee accepted the building erected under said contract; that the appellee was a stockholder in the appellant association, and as such she had the right, on a final settlement, to have applied to said indebtedness of $4,800 the value of her shares of stock in the appellant association; that, on the 5th day of April, 1886, and long before the maturity of the indebtedness under the contract, the appellee made a full and final settlement with the appellant of all demands arising out of said contract; and that in said final settlement she was credited with the value of her shares of stock, including the profits which her said shares of stock had earned; and appellant therefore pleaded an accord and satisfaction; also the statute of limitations of two years to the recovery of $1,440 paid as interest. A trial by the court without a jury resulted in a judgment rendered for the appellee for $1,102.95, with interest from September 16, 1887.

Mason & Summerlin and P. H. Ward, for appellant. Tarleton & Keller, for appellee.

HOBBY, J., (after stating the facts as above.)

The controlling question in the case raised by the assignments of error is whether interest voluntarily paid upon an alleged usurious contract can be recovered after the contract has been executed, in the absence of a statute authorizing such recovery. The contract in this case, upon its face, is a building contract, providing by its terms for the erection of a building described, for appellee, in consideration of the sum of $4,800, to be paid by appellee at the maturity of certain stock owned by appellee in the building association. There are, no doubt, cases which deny the party paying usurious interest the right to maintain an action or suit for its recovery, upon the principle that the parties are equally in the wrong, and that the injury, if any, is the result of a voluntary act. Under the statute of Missouri regulating this subject, it was held that no provision was made by which the borrower could recover back money paid voluntarily as usurious interest. The opinion in the case is largely influenced by the peculiar statute of that state. It appears that where the answer in that state raises the issue as to usury, and the judgment finds it to be established, the interest is forfeited to the school fund; and to hold that a party can institute a suit to recover back such interest when voluntarily paid would have the effect to discourage such defense, as the recovery would, where he brings suit, inure to his benefit, but it would not where it is pleaded as a defense. Ransom v. Hays...