Cotton States Bldg. Co. v. Rawlins

• Decision Date: 24 April 1901
• Citation: 62 S.W. 805
• Parties: COTTON STATES BLDG. CO. v. RAWLINS et ux.
• Court: Texas Court of Appeals

62 S.W. 805

COTTON STATES BLDG. CO. v. RAWLINS et ux.

Court of Civil Appeals of Texas.

April 24, 1901.

Appeal from district court, Ellis county; J. E. Dillard, Judge.

Action by John J. B. Rawlins and wife against the Cotton States Building Company. From a judgment for plaintiffs, defendant appeals. Reversed.

Moore, Park & Birmingham, for appellant. T. H. Collier, for appellees.

FLY, J.

This suit was instituted by appellees against appellant to have a certain contract with appellant declared usurious, and to recover an excess of $267 paid to appellant, and to cancel a lien given by them to appellant on their homestead. The cause was tried by jury, and resulted in a verdict and judgment for appellees in the sum of $284.65, and a cancellation of a mechanic's lien on the property. On August 13, 1892, appellees, desiring to build a residence on their lot in the town of Ennis, applied for and obtained a loan of $1,000, and executed a contract with appellant, by which they agreed to pay the sum of $8.35 monthly for 72 months, and $7 a month on 20 shares of stock, for which they were compelled to subscribe in order to obtain the loan. Payments were made up to and including May, 1899, when $683.30 had been paid as interest, and $574 on shares, aggregating the sum of $1,257.30. In addition to this amount, a membership fee of $10 was paid by John J. B. Rawlins. The court instructed the jury as follows: "The parties to any written contract may agree to and stipulate for any rate of interest not exceeding ten per cent. per annum, but any contract, written or verbal, which stipulates for a greater rate of interest than ten per cent. per annum is void and of no effect for the amount or value of the interest only, but the principal sum of money or value of the contract may be received or recovered by suit. The jury are instructed if they believe and find, from a preponderance of the evidence, that on or about the 13th day of August, 1892, one J. R. Russell was the agent of the defendant company in the city of Ennis, and that plaintiff J. J. B. Rawlins applied to said Russell for a loan of one thousand dollars from defendant, and that he was informed by said agent that before he could secure said loan he would have to subscribe for twenty shares of stock in said company, each share representing one hundred dollars, and that the subscription for said stock was a mere matter of form, and that all moneys that he might pay upon said stock would be upon his loan of one thousand dollars, and that if he would subscribe for said stock he could obtain said loan; and if the jury further believe from a preponderance of the evidence that the secretary and general manager of the defendant company was informed that its said agent J. R. Russell made said representations (if he did) to J. J. B. Rawlins about the time the same was made; and if the jury further believe and find from the evidence that said J. J. B. Rawlins obtained a loan of one thousand dollars, bearing 10% interest per annum, payable in seventy-two months, and that at the time he obtained said loan he subscribed for twenty shares of stock in defendant company for the purpose of getting said loan, and not for the purpose of an investment, and that the officers of defendant company knew that plaintiff J. J. B. Rawlins regarded said entire transaction as a loan,—then you are further instructed that said parol contract became the contract which should govern the rights of the parties to the same; and if the jury further believe from the evidence that the amount to be paid upon said shares and interest upon said loan provided for a greater rate of interest upon said loan than 10% per annum, then you are instructed that said verbal contract would be usurious, and, if such are the facts in the case, the jury should so find and state in their verdict; and they should further find for plaintiff if they believe that plaintiff has paid the money he claims to have paid defendant for such sum of money, if any, in excess of the principal of said loan and six per cent. on the same, and that he is entitled to have the mortgage lien upon the land described in plaintiffs' petition canceled and annulled. The jury are further instructed if they find and believe from the evidence that when J. J. B. Rawlins obtained the loan of one thousand dollars he subscribed for twenty shares of stock in the defendant company as an investment, and was not informed by the defendant's agent J. R. Russell that the money paid upon said shares would be used to pay off and discharge said loan, then the defendant would be entitled to recover the amount of said loan, with interest upon the same since the 5th day of May, 1899, to the present time, at the rate of ten per cent. per annum, this amount to be credited with the withdrawal value of plaintiffs' stock, with present interest per annum upon the same calculated upon the average time of his payments, and to have his mortgage lien foreclosed upon the premises described in plaintiffs' petition to secure the payment of said loan to plaintiffs, and that they should also find for defendant its reasonable attorney's fees in this suit."

The charge is objected to because it instructed the jury that any contract, written or verbal, for interest in excess of 10 per cent. per annum, is void, because it does not conform to the pleadings and proof; because, before a written contract will be reformed so as to conform to prior verbal representations, it must be made to appear that such...