Gill v. Universal C. I. T. Credit Corp.

• Decision Date: 08 September 1955
• Docket Number: No. 6801,6801
• Citation: 282 S.W.2d 401
• Parties: Joe GILL, d/b/a Ace Auto Sales, Appellant, v. UNIVERSAL C. I. T. CREDIT CORPORATION, Appellee.
• Court: Texas Court of Appeals

Page 401

282 S.W.2d 401

Joe GILL, d/b/a Ace Auto Sales, Appellant, v. UNIVERSAL C. I. T. CREDIT CORPORATION, Appellee.

No. 6801.

Court of Civil Appeals of Texas, Texarkana.

Sept. 8, 1955.

Rehearing Denied Oct. 13, 1955.

Sidney Lee, Texarkana, for appellant.

Kennedy & Levee, C. M. Kennedy, Texarkana, B. F. Edwards, Clarksville, for appellee.

FANNING, Justice.

Universal C.I.T. Credit Corporation, an automobile finance company, sued Joe Gill d/b/a Ace Auto Sales, an automobile dealer, alleging breach of a written 'Retail Protection Agreement', alleging that under said contract Gill was obligated to purchase from it seven automobiles which it had repossessed from seven defaulting purchasers to whom Gill had sold said automobiles originally and from whom he had taken promissory notes secured by mortgages upon said automobiles, which notes and mortgages had been purchased by the finance company from Gill and duly assigned by Gill to the finance company. The finance company alleged Gill failed to re-purchase said automobiles as required by the terms of the contract, alleged that although due notice was given Gill of the public sales of said automobiles that he failed to appear at the sales, that the automobiles were sold for various respective amounts, each less than the indebtedness claimed by the finance company as being due, and the finance company sought recovery from Gill for these claimed deficiencies in the amount of $3,821.43, and in the alternative prayed for judgment in the amount of $5,365. The defendant Gill pleaded among other things that the seven automobiles were sold for cash prices and not on the time credit plan and that the seven notes were usurious, that the finance company demanded more than Gill claimed was due on said automobiles, and that the finance company did not offer to allow him credits against the various claimed indebtednesses against each car for items of insurance premium refunds and for credit reserves. Gill also pleaded that he offered to pay what he contended was then 'legally due' on the automobiles at the time they were tendered to him. Gill also pleaded that the 'Retail Protection Agreement' was not effective or valid because he had not been accepted as a dealer by the finance company, contending that an oral agreement to that effect was had between him and Teague, agent of the finance company. Gill prayed that plaintiff take nothing and alternatively prayed that the recovery sought by plaintiff should be reduced by the alleged usurious interest and by the insurance premium refunds and credit reserves.

The finance company, after denying generally and specially the allegations of defendant's pleading, pleaded among other things, to the effect that the notes and mortgages in question were not illegal or usurious, were not cash sales, but were sales under the time or credit plan, that Gill never paid anything on said indebtedness, never attended any of the sales of said automobiles, was liable under the 'Retail Protection Agreement', that Gill sold the notes and mortgages in question to it for a valuable consideration, and assigned them under a written warranty and that under the terms of said warranty Gill was estopped to contend that the notes and mortgages were illegal or usurious. Trial was to a jury but at the conclusion of the evidence, plaintiff finance company filed a written motion to the effect that under the undisputed evidence plaintiff was entitled to judgment for $2,806.30. The trial court withdrew the case from the jury and rendered judgment for $2,806.30. (This judgment gave Gill the benefit of the various insurance premium refunds and credit reserves on the automobiles in question but did not give Gill the benefit of the alleged usurious interest.) Joe Gill, d/b/a Ace Auto Sales has appealed.

Appellant's points 1 to 4, inclusive, read as follows:

'Point 1

'The trial court erred in withdrawing this case from the jury since there was conflicting evidence upon the material issue of whether appellant had offered to pay the sum due on each of the automobiles if appellee would deduct from such sums the illegal and usurious interest and the credit reserves which appellee had added thereon for the insurance premium refunds which appellee had already received or would receive thereafter.

'Point 2

'The trial court erred in withdrawing this case from the jury since there was conflicting evidence upon the material issue of whether appellee had refused to accept any lesser sum than the full amount of the unpaid balances of the promissory notes, such balance to include the usurious interest and credit reserves, which had been added, and the insurance refunds, which appellee had already received or would receive thereafter.

'Point 3

'The trial court erred in refusing to reduce the recovery prayed for by the amounts of the illegal and usurious interest which appellee charged the various makers of the notes, by the amounts of the insurance premium refunds which appellee had received, and by the amounts added to the notes as credit reserves.

'Point 4

'The trial court erred in withdrawing this case from the jury since there was conflicting evidence upon the material issue of whether the differences between the time and cash selling prices of the automobiles were charged by appellee as interest.'

The 'Retail Protection Agreement', notes and mortgages in question, and Dealer's assignment instrument, were on forms furnished appellant by appellee, and the notes and mortgages were filled out by appellant in accordance with appellee's rate charts furnished by appellee and appellee would not have purchased such notes unless they were filled out on appellee's forms in accordance with appellee's instructions.

The Wade contract (which is similar in form to the other contracts involved here) recites that the sum of $285 was paid in cash or trade-in (in this case it was a tradein) leaving a time balance of $820.50, payable in 15 successive monthly installments of $54.70. There is also this statement shown in the contract (which was duly signed by Wade and accepted by Gill), to-wit: 'Customer, having been quoted a time price and a lesser cash price, has elected to buy the car for the time price, which is the sum of the amounts shown above as 'Payable in cash or trade-in before delivery' and 'time balance',' The other contracts also contain this same provision and on their face show that the purchasers purchased said automobiles on the 'time price' rather than the cash price. With respect to the Wade transaction appellant in his brief argues and states as follows:

'The procedure adopted was that appellant added all appellee's charges, in accordance with appellee's instructions, to what appellant wanted for each of his automobiles. Thus, for the automobile sold to Wade, appellant got a cash price of $850. This was the basic figure as far as appellant was concerned. Everything else was determined by appellee and was done according to appellee's instructions. Now Wade traded another used automobile to appellant for an agreed price of $285, which was credited on the $850 cash price of the automobile he, Wade, was buying. This left the sum of $565 for appellee to finance. To this was added a $93 insurance premium, and this resulted in a total of $658, this being the amount appellee was out of pocket on this deal. Appellee then added to $658 a credit reserve for appellant of $35.62 and its own interest charge of $126.88, and the total was $820.50. The latter sum of $820.50 was the face amount of the note which Wade signed and which he was to pay in 15 monthly installments of $54.70 each.'

On Oct. 15, 1952, appellant Gill entered into a written 'Retail Protection Agreement' with appellee finance company, the material portions reading as follows:

'1. You propose to buy from us, on the basis stated in this agreement, paper acceptable to you covering new and used cars; * * *.

'2. We will purchase from you each repossessed or recovered car tendered at our place of business within 90 days after maturity of the earliest instalment still unpaid. The purchase price payable on demand shall be the unpaid balance due on the car, limited as stated in paragraph 3.'

(Paragraph 3 is not applicable as there were no converted or confiscated cars involved and no damages resulting from collision necessitating repossession of the motor vehicle in question)

'4. * * * Three times in each twelve-month period, if we are not then indebted to you, you will pay us our accumulated reserves in excess of 3% of the then aggregate unpaid balances on paper purchased from us. If you stop buying our paper, you may hold and apply all reserves until liquidation of all paper purchased from us is completed.'

(Paragraph 5 is not applicable as there were no prepayments by the makers of the time price sales paper)

(Paragaph 6 is not applicable)

'7. * * * If we are in default to you under this or any other agreement or obligation at the time of any repossession, cars may be tendered by registered mail notice sent to the last address shown by your records, instead of as provided in paragraphs 2 and 3 above; if we are not then doing business as a going concern, tender of repossessed cars is waived. In case we fail to purchase repossessed cars we will be responsible for any deficiency incurred by you in the resale of such repossessed cars at public or private sale held with or without notice, at which you may purchase.

'8. * * * No waiver or change of any part of this agreement shall be binding on you unless evidenced by writing signed by one of your officers.

'9. The purchase of paper by you from us shall constitute acceptance by you of this agreement, which shall cover all such purchases. This agreement shall inure to and bind our respective successors and assigns and any present and future company affiliated with you which may transact business hereunder.' (Emphasis ours)

Appellant Gill sold appellee finance company the...