Burton v. Stayner

• Decision Date: 05 January 1916
• Docket Number: (No. 5565.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 182 S.W. 394
• Parties: BURTON et al. v. STAYNER.
• Court: Texas Court of Appeals

182 S.W. 394

BURTON et al. v. STAYNER.

(No. 5565.)^*

Court of Civil Appeals of Texas. San Antonio.

January 5, 1916.

Rehearing Denied February 2, 1916.

Appeal from District Court, Bexar County; W. F. Ezell, Judge.

Action by F. L. Stayner against E. O. Burton and another. From a judgment for plaintiff, defendants appeal. Affirmed.

A. J. Bell and R. L. Robertson, both of San Antonio, for appellants. John De Berry Wheeler, of Aransas Pass, and Gillette & Robertson, of San Antonio, for appellee.

CARL, J.

Appellee Stayner sued Burton & Danforth, and recovered a judgment for $5,000 as the principal of an investment made by said firm in what was known as the "Falfurrias Deal." This cause is based upon the following proposition, which was accepted by appellee:

"Burton & Danforth.

                     "San Antonio, Tex., April 18, 1910
                

"Mr. F. L. Stayner, Peoria, Ill.— Dear Stayner: We have invested for you $5,000.00 on the Aransas Pass account in the Falfurrias proposition on the guarantee of 50 per cent. profit according to the talk we had with Holmes. This will be in lieu of a contract and will cover the matter. I can make a separate agreement if you wish it. It is going pretty well now, and should be closed up this year.

                    "Yours sincerely, Burton & Danforth
                                                  "E. O. B."
                

This matter grew out of a prior deal whereby Burton & Danforth induced appellee to invest $5,000 in what was known as the Aransas Pass deal, whereby he received $10,000 profits on the investment. That first contract is as follows:

"Burton & Danforth hereby acknowledge receipt of $5,000.00 (five thousand dollars) from F. L. Stayner to be invested in the Aransas Pass townsite and farm lands in Aransas and San Patricio counties, Texas.

"It is mutually agreed that F. L. Stayner is to have his principal repaid and ten thousand dollars from the profits of the deal, which $15,000.00 is to be full payment for his interest in the deal.

"The proceeds of sales shall be applied as follows: First, to pay commission to agents and operating expenses; second, the land shall be paid out in full; third, the principal of $5,000 shall be returned to F. L. Stayner; and, fourth, the $10,000.00 profits shall be paid him.

"F. L. Stayner is to be agent in Illinois with a commission of 20 per cent. on sales made by him or his agents, payable in full on cash sales, and on installment sales $10.00 from first payment and $5.00 each from second and third payment."

When the Aransas Pass deal was closed, appellants paid Stayner the $5,000 invested, paid him $5,000 in stock in the Aransas Pass Channel & Dock Company, and then, by agreement, invested $5,000 of the profits in the Falfurrias deal, as indicated in the first instrument copied herein.

Appellants contended that: (1) The contract of 1908, whereby the $5,000 was originally obtained from Stayner, was usurious, and he could not recover any more than the principal, which he had already received; (2) that the agreement to invest $5,000 in the Falfurrias deal was void because they had no money belonging to Stayner except the usurious interest on the first deal, or Aransas Pass deal, and therefore any contract based on that as an investment was without consideration and void; and (3) if Stayner was entitled to recover said $5,000 in the Falfurrias deal, he was not entitled to a judgment for his money, but only to an interest in the property, because said property had not been closed out, but was still on hand.

Appellee denied the usury, and alleged that it was an investment he made under a guaranty of certain profits; that he ran the risk of losing his principal invested, and, no matter how much profits were made on the deal, he was limited in the profits he might receive. He further alleged that the Falfurrias deal had been closed and the land sold.

We shall first investigate as to whether the first contract was an usurious interest loan, or simply an investment; because it is immaterial whether the Falfurrias deal was usurious or not, for he only sued for the principal and made no effort to collect the 50 per cent. profit therein guaranteed him. And if the $5,000 therein invested was not usurious interest, but was legitimate capital, Stayner would have the right to collect the principal even under the usury...