Clanton v. Community Finance & Thrift Corp.

• Decision Date: 29 May 1953
• Docket Number: No. 3005,3005
• Citation: 262 S.W.2d 252
• Parties: CLANTON et ux. v. COMMUNITY FINANCE & THRIFT CORP.
• Court: Texas Court of Appeals

Page 252

262 S.W.2d 252

CLANTON et ux. v. COMMUNITY FINANCE & THRIFT CORP.

No. 3005.

Court of Civil Appeals of Texas, Eastland.

May 29, 1953.

Fritz, Goldberg & Alexander, Dallas, for appellant.

H. B. Houston and H. B. Houston, Jr., Dallas, for appellee.

COLLINGS, Justice.

Raymond Clanton and wife brought this suit on April 25, 1952 against Community Finance & Thrift Corporation, seeking to recover $1,130.50 as double damages for usury under Article 5073, Texas Revised Civil Statutes, and for temporary and permanent injunction. Defendant filed a general denial, plea of two year statute of limitations and cross action for an alleged balance due on a promissory note, foreclosure of a chattel mortgage and attorney's fees. Trial was before the court without a jury and judgment rendered in favor of defendant company for $65.73 and foreclosure of the chattel mortgage. Raymond Clanton and wife have appealed.

The Clanton's claim for double damages is based upon alleged excessive interest and other unjustifiable charges in connection with four notes made, executed and delivered by the Clantons to appellee, Community Finance & Thrift Corporation. The first note in the sum of $972 was dated November 18, 1947 and the second note dated June 2, 1948 was likewise in the sum of $972 and included the balance due on the first note. The note of June 2, 1948, was fully paid on January 3, 1950, leaving no unpaid balance on either account due the Community Finance & Thrift Corporation. Two other notes were thereafter executed by the Clantons and delivered to defendant corporation but there was no connection whatever between these latter notes and the first two above described. It was found by the court, as a matter of law, that recovery of penalty for usurious interest paid, or recovery of or credit for any overpayment of principal based upon the first two transactions were barred by limitation.

Appellant's cause of action for the recovery of the amount of usurious interest payments made on the loan transactions of November 18, 1947 and June 2, 1948, is one for money had and received. We cannot agree with the contention that their claim is not barred by the two year statute of limitation but is subject to the four year statute. Numerous cases in this State hold that a cause of action for money had and received is covered by Article 5526, Texas Revised Civil Statutes, a two year statute of limitation. The 1947 and 1948 notes were fully paid on January 3, 1950, more than two years before appellants brought this suit on April 25, 1952. The point is overruled. Causeway Inv. Co. v. Nass, 131 Tex. 12, 111 S.W.2d 703, rehearing denied 131 Tex. 12, 112 S.W.2d 712; Anders v. Johnson, Tex.Com.App., 288 S.W. 168; United States Fidelity & Guaranty Co. v. First Nat. Bank of El Paso, Tex.Civ.App., 93 S.W.2d 562; Settegast v. Harris County, Tex.Civ.App., 159 S.W.2d 543 (Writ Ref.); Jeff Davis County v. Davis, Tex.Civ.App., 192 S.W. 291.

In appellants' second point it is urged that the court erred in denying to appellants a credit against future principal of the single amount of usurious interest payments on the loan transaction of November 18, 1947 and June 2, 1948. No connection was shown between the notes of January 4, 1950 and January 11, 1951, which are the basis of the cross action filed by appellee and the transactions of 1947 and 1948 which are the basis of appellants' claim for usurious interest payments. The offset claimed by appellants is a distinct and independent cause of action rather than a defense against the demand asserted by appellee corporation. Under such circumstances appellee was entitled to avail itself of the two year statute of limitations as a defense against the usurious interest payments and charges pleaded by plaintiff as a set-off. In De Witt v. Kent County, Tex.Civ.App., 148 S.W.2d 213, 217 (Dismissed, judgment correct) it is stated:

'The rule of law is that where the defensive matter interposed by a defendant constitutes an independent cause of action and does not go to the foundation of the plaintiff's claim, it cannot operate as a reduction of the demand except by way of set-off or counterclaim and the plaintiff may avoid them under a proper plea of limitation. Where the subject matter of the defense is purely defensive in its nature, however, and operates merely as a negation of the demand asserted by the plaintiff, the statute of limitations does not apply. Nelson v. San Antonio Traction Co., 107 Tex. 180, 175 S.W. 434; Mason v. Peterson, Tex.Com.App., 250 S.W. 142.'

Appellants' second point is overruled.

On January 4, 1950, the Clantons executed and delivered to defendant corporation a third note, heretofore mentioned, which was in the sum of $612. It was made payable eighteen months after date with interest and attorney's fees after maturity, and secured by a chattel mortgage on their household goods and furniture. The Clantons at the same time contracted in writing with defendant corporation for the purchase of an investment certificate to be paid for in monthly installments of $34 each, containing the option to surrender the same and have the value represented by payments thereon applied on the note when it matured. In this contract there was no provision for the purchase of credit life insurance and no deduction of a premium therefor. There was a deduction of $12 for services claimed to have been rendered in appraisal of collateral, investigation of credit and preparation of papers.

On January 11, 1951, the Clantons executed and delivered to defendant corporation fourth note which was in the sum of $612. A contract similar to the preceding note was entered into for the purchase of an investment certificate and in addition, a $12 service charge and $18.36 premium for a credit life insurance policy were deducted from the proceeds of the loan. The court found that the Clantons were given no option to purchase such policy from...