First Nat. Bank v. Ledbetter
| Decision Date | 26 February 1896 |
| Citation | 34 S.W. 1042 |
| Parties | FIRST NAT. BANK OF MASON v. LEDBETTER et al.<SMALL><SUP>1</SUP></SMALL> |
| Court | Texas Court of Appeals |
Appeal from district court, Mason county; W. M. Allison, Judge.
Action by the First National Bank of Mason against R. B. Ledbetter and others on a note. Judgment for defendants, and plaintiff appeals. Reversed.
M. Fulton, for appellant. Walter Anderson, for appellees.
The plaintiff, appellant, sued upon a note of $944.78, dated May 5, 1893, due 12 months thereafter, with 10 per cent. interest per annum from maturity, and 10 per cent. attorney's fees, and payable to the appellant bank. Defendants pleaded usury, alleging that the entire note was for interest growing out of a note for $6,000 that had been given the bank on December 5 1891, and setting forth the circumstances to be that said $6,000 note was payable eight months after its date, and provided for 10 per cent. interest from its maturity; that there was retained, as interest for said eight months, the sum of $880; that on or about December 31, 1892, a payment was made on said note of $850.50, so that, crediting said sums on the principal of the note, the debt remaining was $4,269.50; that, on the date of the note sued on, more than $700 was charged and demanded as interest which had accrued on said $6,000 note, and the note sued on was given therefor. Defendants also pleaded that, should it appear that this note was given for interest on said $6,000 note not accrued at the date it was given, but with reference to interest that was to accrue for one year thereafter, for this reason the note was usurious and void. By supplemental petition, it was alleged that the consideration of the note did not embrace usurious interest, but consisted of as follows: $149 credited on the principal of the $6,000 note then held by plaintiff; $558.50, being one year's interest on the said $6,000 note; and $94.40, interest for one year on the note sued on; and that the remainder was an amount due E. M. Reynolds for services rendered appellees. It was established by the testimony that the $6,000 note was made payable to the bank by mistake, and that E. M. Reynolds, the cashier of the bank, was the real lender, and that he remained the holder of the note until May 5, 1893, when the note sued on was given; that, immediately after the $6,000 note was given, it was transferred to Reynolds; that Reynolds retained the sum of $880, as he states, for interest, discount, and commission to himself for procuring the money. It is almost unnecessary to say that, upon this evidence, the note was usurious, and also that, it not being a loan by the bank, the act relating to national banks has no application to the case.
We dispose of the first assignment of error by saying that it is not necessary, in setting up usury, in order to defeat the collection of interest, or to have interest payments applied, that the party pleading it should offer to restore benefits received. The principles of rescission of contract do not apply. Upon the uncontradicted evidence the contract was usurious in its inception, and the law applies the two payments of $880 and $850.50 as credits on the principal of the $6,000, which would leave a debt of $4,269.50. This, therefore, was the sum due on May 5, 1893, when the note in question was given. The testimony...
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