Eckols v. Sabine Bank, 8575

• Decision Date: 18 February 1981
• Docket Number: No. 8575,8575
• Citation: 613 S.W.2d 762
• Parties: Joe ECKOLS, Appellant, v. SABINE BANK, Appellee.
• Court: Texas Court of Appeals

Page 762

613 S.W.2d 762

Joe ECKOLS, Appellant, v. SABINE BANK, Appellee.

No. 8575.

Court of Civil Appeals of Texas, Beaumont.

Feb. 18, 1981.

Rehearing Denied March 12, 1981.

Jon B. Burmeister, Port Arthur, for appellant.

Jerry L. Jamieson, Waco, James M. Black, Port Arthur, for appellee.

CLAYTON, Justice.

This case involves a question of usury. Appellant Joe Eckols, filed this suit against appellee, Sabine Bank, a state bank, alleging usury with respect to thirty-one different loans made by the Bank to him over an extended period of time. After the presentation of all the evidence and both parties had rested, the trial court withdrew the case from the jury and entered judgment for the Bank. The judgment recites there "was no issue of fact for submission to the jury, and the jury was, therefore, dismissed. The court further found that the Bank did not charge the Plaintiff more than it was entitled to charge for the expenses and interest in making the loans to the Plaintiff...."

The record shows that Eckols, a used car dealer, had dealt with the Bank for a number of years in arranging financing for various automobiles that he had sold as a wholesaler and retailer in his used car business. Typically, Eckols would borrow sufficient sums from the Bank to finance the purchase of a vehicle, sign the necessary promissory note and security agreement with respect to that vehicle, and would agree to pay an interest rate of ten (10) percent per annum during the time period in question. When Eckols sold the vehicle, he would pay the Bank all principal and interest that was due. The notes executed by Eckols were demand notes, as evidenced by the clear language of the "security agreement and note" signed by the debtor for each loan.

The Bank charged Eckols a flat sum of $25 (a charge of $15 was made on four notes) regardless of the time period the loan was outstanding and regardless of the amount of the principal involved. One of such notes for the sum of $450, executed on March 8, 1977, was paid on March 11, 1977, and a charge of $15 was made therefor. An accountant testified that, if this charge was considered as interest, the interest rate would be 405.55 percent. Another such note was for the sum of $1,300, executed on November 23, 1977, and paid six days later, and a charge of $25 was made therefor. The expert witness calculated this charge, if it was interest, would be at the rate of 116.98 percent. This witness's testimony shows that the principal amount of the notes involved herein was in the range of $450 to $4,600; most of these notes were paid within a matter of a few days to a few weeks and none longer than 21/2 months. This witness further testified that the effective interest rates, if this charge is interest, on the notes involved herein, ranged from 11.42 percent to 405.55 percent.

The sole question before this court is whether the $25 charge (in four notes a charge of $15) constitutes interest. If such sums are interest, then such charges would unquestionably be usurious, and appellant would be entitled to damages as provided by Tex.Rev.Civ.Stat.Ann. art. 5069-1.06 (1971).

The courts of this State have repeatedly held that it is error to instruct a verdict or withdraw the case from the jury, as in this case, when the evidence raises any fact issue. In passing upon the question of the trial court's authority to instruct a verdict, the evidence must be considered in the light most favorable to the party against whom the verdict is instructed. Where there is any conflicting evidence in the record of a probative nature, a determination of the issue is for the jury. Texas Employers Ins. Ass'n v. Page, 553 S.W.2d 98 (Tex.1977).

It is also settled law that usury, where not apparent from the face of the instrument, is a question of fact for the jury. Greever v. Persky, 140 Tex. 64, 165 S.W.2d 709 (Tex.1942); Griffin v. B. & W. Finance Company, 389 S.W.2d 350 (Tex.Civ.App. Tyler 1965, no writ); Sinclair v. Mack Trucks, Inc., 355 S.W.2d 563, 565 (Tex.Civ.App. Fort Worth 1962, writ ref'd n.r.e.). Whether a fee charged is interest or a service charge is also a question of fact for the jury. Kollman v. Hunnicutt, 385 S.W.2d 600 (Tex.Civ.App. Fort Worth 1964, no writ); Ware v. Wright, 266 S.W.2d 188, 190 (Tex.Civ.App. Dallas 1954, no writ). Likewise whether a fee is one for interest or for some other type of fee is a question of fact for the jury. Gonzales County Savings and Loan Association v. Freeman, 534 S.W.2d 903, 906 (Tex.1976).

Applying the appropriate standard of review to the record before us, we find ample...