Connell v. Rosales

• Decision Date: 26 September 1967
• Docket Number: No. 7830,7830
• Citation: 419 S.W.2d 673
• Parties: S. M. CONNELL, Individually and d/b/a City Guaranty Co. and d/b/a Safeway Finance Company, Appellant, v. Victor ROSALES and wife, Faustina Rosales, Appellees. . Texarkana
• Court: Texas Court of Appeals

Page 673

419 S.W.2d 673

S. M. CONNELL, Individually and d/b/a City Guaranty Co. and d/b/a Safeway Finance Company, Appellant, v. Victor ROSALES and wife, Faustina Rosales, Appellees.

No. 7830.

Court of Civil Appeals of Texas Texarkana.

Sept. 26, 1967.

Whitley R. Sessions, Sessions, Sessions & Ackels, Dallas, for appellants.

Fritz & Vinson, Dallas, for appellees.

FANNING, Justice.

Appellee Victor Rosales, on behalf of himself and his wife, Faustina Rosales, brought suit against several defendants for usury damages and for actual and exemplary damages resulting from unreasonable collection efforts.

All of the defendants except appellant Connell and his two offices, City and Safeway, were dismissed prior to trial, and none of said other defendants were brought back into the case by either party.

A jury in response to special issues found that appellant's companies were lenders rather than brokers, that plaintiff-appellee and his wife had paid appellant more money than they received, and that the appellant's agents, servants and employees had made unreasonable collection contacts upon appellee and his wife. $5,500.00 was awarded by the jury as compensation for mental and emotional pain and physical illnesses suffered by plaintiff-appellee and his wife. The jury further found that appellant's collectors were motivated by malice and awarded $4,000.00 as exemplary damages.

The jury further found that obligations to other parties were not the sole proximate cause of Victor and Faustina Rosales' mental suffering and physical illness.

The trial court rendered judgment for appellee, (and after remittitur of appellee of $76.00 usury double damages) awarding appellee Victor Rosales $188.00 usury damages, $3,000.00 actual damages and $2,000.00 exemplary damages and awarded on behalf of appellee's wife, Faustina Rosales, $80.00 usury damages, $2,500.00 actual damages and $2,000.00 exemplary damages. Appellant has appealed.

Under his first point appellant contends in effect that the trial court did not correctly compute the award of the usury penalty of $188.00 in favor of Victor Rosales and the usury penalty of $80,00 in favor of Faustina Rosales. In this connection appellant contends that the correct amounts of usury penalties to be awarded to Victor Rosales and Faustina Rosales were $136.00 and $40.00 respectively. We have examined the statement of facts and authorities cited by the parties in support of their respective contentions and we hold that the trial court did not err in awarding $188.00 to Victor Rosales and $80.00 to Faustina Rosales as double usury penalties. Appellant's first point is overruled.

Appellant's second and third points are as follows:

'POINT OF ERROR II.

'The trial court erred in awarding exemplary damages agaisnt Appellant when the evidence and the pleading of intentional and unreasonable acts or reckless disregard of Plaintiff's health in subjecting Plaintiff to emotional distress was insufficient to support an affirmative finding of malice agaisnt Appellant.

'POINT OF ERROR III.

'The Trial Court erred in imputing the acts of employees at City Guaranty Company and Safeway Finance Company to Appellant, the owner thereof, in the absence of proof or a jury finding that such acts complained of were authorized or ratified as alleged in Plaintiff's Petition paragraph 28.'

Appellee, in his pleadings, set out that the collectors making contacts upon appellee and his wife were in fact agents and employees of appellant and were acting within the scope of their employment, pleading in part as follows:

'From on or about July, 1958, until on or about December, 1959, every time Plaintiff was behind in the payment schedule established by Defendant, both before and after Plaintiff had repaid in full the principal borrowed, Defendant and Defendant's agents and employees in the period involved herein, whose names are well known to the Defendant, made the hereinafter described contacts on behalf of, in the employment of, and with the expressed and implied authority of the Defendant herein. Defendant ratified each of the acts alleged herein, which each of the Defendant's agents and employees committed, by various acts including accepting the retained benefits of such act after actual knowledge thereof, or after knowledge of facts sufficient to put Defendant reasonably on notice or inquiry thereof.'

Appellee further alleged in his pleading that the program of harassment engaged in by defendant-appellant 'was an integral part of Defendant's business. Without this harassment it would have been impossible for the Defendant to have collected so much usury from plaintiff or anyone else'.

In his pleading appellee set forth the names of agents of appellant dealing with and making collection efforts against him and his wife. He alleged them to be 'Doris White at City Guaranty; Woody Downs and Mrs. Wilson as Safeway'.

Appellee clearly alleged the complained of and detailed unreasonable collection contacts as acts of agents, servants and employees of appellant, which appellee alleged were authorized and ratified by appellant-defendant. We find such pleadings to be sufficient to support a finding of malice to be imputed agaisnt appellant Connell.

Defendant-appellant did not object to any of the special issues submitted by the court. In special issue No. 2, the trial court specifically asked whether 'City and/or Safeway, through their agents, servants and employees, in the period of time between July 7, 1958, and mid 1959 made unreasonable collection efforts upon Victor Rosales'. The court in special issue No. 6 further asked whether 'the collected efforts, if any you have found in answer to Special Issue No. 2, were motivated by malice'.

Likewise in special issue No. 8 the court inquired concerning the collection efforts of City and/or Safeway and their agents, servants and employees. An issue similar to No. 6, and premised upon No. 8, was submitted as special issue No. 12, wherein the court asked if the collection efforts in question were motivated by malice. In each of the four preceding special issues, the Court asked not whether the acts complained of were committed by Mr. Connell, the owner of City and Safeway, but whether the acts complained of were committed through the agents, servants and employees of City and/or Safeway. In each of the four incidents the jury found that through the agents, servants and employees of the defendants unreasonable collection efforts were committed, and that they were motivated by malice.

Appellant did not object to any of said issues or any portion of the court's charge, nor did he request any issues as to whether the agents, servants or employees of defendant-appellant were acting outside the scope of their authority, nor did he request any special issue or issues as to whether he had ratified the acts of his agents, servants and employees.

It was undisputed that appellant owned the two loan companies, City and Safeway.

We have carefully examined the Statement of Facts, and we think it clearly shows that the unreasonable collection efforts found by the jury were of such a nature as to constitute a 'gross indifference to the rights of others, as will amount to a wilful or wanton act'. The trial court also defined malice as 'ill will, bad or evil motive'. Appellant did not object to the court's definitions of malice. We think the jury's findings that the agents, servants and employees of the defendant committed the unreasonable acts complained of with malice are amply and sufficiently supported by the record in this case.

W. N. White testified that he had formerly worked for S. M. Connell, appellant herein, as manager of W. N. White Loan Broker, from 1958 through 1960. He testified that S. M. Connell also owned City Guaranty at 315 North Ervay and Safeway Finance Company at 317 North Ervay, and that W. N. White Loans operated at 321 North Ervay and that his wife, Mrs. White, managed City Guaranty during the period of time in question. Mr. White testified to the effect that the collection procedures were basically the same in the office he managed and in Connell's loan offices, except for a few minor differences. He testified that collection letters were followed by contacts by telephone, and Mr. White confirmed the testimony and allegations of plaintiff-appellee when he testified that the agents and employees were under no particular limitation as to the number of telephone calls which they were permitted to make to a man's job, that they would call every day if necessary, and if necessary they would talk to a man's supervisor concerning the employee's account. He further testified that even though they knew there were some companies who refused to give messages to the employees, nonetheless, appellant's offices would attempt to leave a telephone number for a delinquent customer they might have attempted to reach at the customer's place of employment. Mr. White further confirmed that he did know that some employers terminate their employees when these employees are contacted on the job. Mr. White further testified to the effect that there was no limitation on the number of cards and letters which the collectors were permitted to mail to a customer's home or even to his place of employment, and that if necessary to contact the customer, they would mail letters and cards to that customer's job, and in some instances special delivery letters, even though the customer instructed the loan company that he did not want any special delivery letters sent to his job, and that in some instances the loan companies would contact a customer, even if he told them he was sick. The daily telephone calls and collection letters and other harsh collection methods detailed by Rosales and his wife were clearly a part of the usual and customary loan company practice of appellant's companies to harass Rosales and his wife into capitulating to appellant's demands to pay usury.

The...