Knight v. International Harvester Credit Corp.

• Decision Date: 13 January 1982
• Docket Number: No. C-329,C-329
• Citation: 627 S.W.2d 382,25 Tex. Sup. Ct. J. 135
• Parties: James KNIGHT, Petitioner, v. INTERNATIONAL HARVESTER CREDIT CORPORATION, et al., Respondents.
• Court: Texas Supreme Court

Page 382

627 S.W.2d 382

James KNIGHT, Petitioner, v. INTERNATIONAL HARVESTER CREDIT CORPORATION, et al., Respondents.

No. C-329.

Supreme Court of Texas.

Jan. 13, 1982.

Rehearing Denied Feb. 24, 1982.

Susman & McGowan, Franci N. Beck, Houston, McVicker & Evans, Wilson McVicker, Jr., Lufkin, for petitioner.

Thompson & Knight, Stephen F. Fink, Dallas, John Fleming, Lufkin, for respondents.

POPE, Justice.

James Knight filed suit against Etex International, Inc., hereafter referred to as Etex, and International Harvester Credit Corporation, hereafter referred to as IHCC. Knight purchased a used International dump truck from defendant Etex in March, 1978. He asserted violations of Chapter 7 ¹ and Chapter 14, ² Tex.Rev.Civ.Stat.Ann. art. 5069, Consumer Credit-Consumer Protection Act. Knight also alleged that the defendants violated § 17.46(b)12 of the Texas Deceptive Trade Practices-Consumer Protection Act. ³ The trial court granted a summary judgment in favor of both defendants, and the court of civil appeals affirmed that judgment. 613 S.W.2d 531 (Tex.Civ.App.-Beaumont 1981). We affirm that part of the summary judgment that Knight recover nothing on his claim under Chapter 14 of the Consumer Credit-Consumer Protection Act. We reverse the summary judgment that Knight take nothing on the other two claims.

Chapter 14 of the Consumer Credit Act

Knight alleged that the installment contract provided by Etex and IHCC violated various provisions of Chapter 14 of the Consumer Credit Act. The contract was signed and became effective on March 23, 1978, and suit was filed in the district court on October 24 of the same year. The Texas Legislature repealed Chapter 14 effective August 27, 1979. The question thus presented is whether the repeal terminated Knight's right to seek recovery under Chapter 14 when his suit was then pending. The courts below held that it did in the absence of a savings clause as to pending suits.

This court has frequently held that if a cause of action is based on a statute, the repeal or amendment of that statute without a savings clause for pending suits is given immediate effect. As stated in Dickson v. Navarro County Levee Improvement District No. 3, 135 Tex. 95, 99-100, 139 S.W.2d 257, 259 (1940):

It is almost universally recognized that if a statute giving a special remedy is repealed, without a saving clause in favor of pending suits, all suits must stop where the repeal finds them; and, if final relief has not been granted before the repeal goes into effect, it cannot be granted thereafter. A like general rule is that if a right to recover depends entirely upon a statute, its repeal deprives the court of jurisdiction over the subject matter.

This rule was restated in National Carloading Corp. v. Phoenix-El Paso Express, Inc., 142 Tex. 141, 152, 176 S.W.2d 564, 568 (1943):

(I)f final relief has not been granted before the repeal goes into effect it cannot be granted thereafter, even if a judgment has been entered and the cause is pending on appeal. The general rule is that when such law is repealed without a saving clause, it is considered, except as to transactions past and closed, as though it had never existed.

See also Ciminelli v. Ford Motor Credit Co., 612 S.W.2d 671, 672 (Tex.Civ.App.-Corpus Christi), rev'd on other grounds, 624 S.W.2d 903 (Tex.1981); Jim Walter Homes, Inc. v. Gibbens, 608 S.W.2d 706, 712-13 (Tex.Civ.App.-San Antonio 1980, writ ref'd n. r. e.); Ford Motor Credit Co. v. Zapata, 605 S.W.2d 362, 364 (Tex.Civ.App.-Beaumont 1980), rev'd on other grounds, 615 S.W.2d 198 (Tex.1981); Aetna Insurance Co. v. Richardelle, 528 S.W.2d 280, 284 (Tex.Civ.App.-Corpus Christi 1975, writ ref'd n. r. e.).

The cardinal rule to be observed in any case involving statutory interpretation is that a court must look to the intent of the legislature and must construe the statute so as to give effect to that intent. State v. Terrell, 588 S.W.2d 784, 786 (Tex.1979); Calvert v. Texas Pipe Line Co., 517 S.W.2d 777, 780 (Tex.1975). The legislature could have included a savings provision in favor of pending Chapter 14 suits had it intended that such suits be preserved. Absent such a clause, we cannot presume that the legislature intended to alter the general rule that a repeal terminates existing statutory causes of action.

Knight maintains that his Chapter 14 cause of action is preserved by the general savings provision of the Code Construction Act, Tex.Rev.Civ.Stat.Ann. art. 5429b-2 (Vernon Supp.1980-81). Section 3.11 of that Act provides:

(a) Except as provided in Subsection (b) of this section, the reenactment, revision amendment, or repeal of a statute does not affect

(1) the prior operation of the statute or any prior action taken under it;

(2) any validation, cure, right, privilege, obligation, or liability previously acquired, accrued, accorded, or incurred under it;

(3) any violation of the statute, or any penalty, forfeiture, or punishment incurred in respect to it, prior to the amendment or repeal ....

According to Knight, Chapter 14 is part of a "code" subject to these rules of construction.

It is true that the Texas Consumer Credit and Consumer Protection Act, of which Chapter 14 is a part, is commonly referred to as the "Texas Consumer Credit Code." In fact, the Declaration of Legislative Intent preceding that legislation refers to it as a "comprehensive code of legislation." Even if the Consumer Credit and Consumer Protection Act is properly called a "code," however, it is not the type code to which the Code Construction Act was intended to apply. Section 1.01 of the Construction Act states that the purpose of the Act is to provide "rules to aid in the construction of codes (and amendments to them) enacted pursuant to the state's continuing statutory revision program." Section 1.02 adds that the Act applies to "each code enacted by the 60th or a subsequent legislature as part of the state's continuing statutory revision program." The preceding statute, Tex.Rev.Civ.Stat.Ann. art. 5429b-1 (Vernon Supp.1980-81), created the Texas Legislative Council, and authorized the Council to "plan and execute the statutory revision program." We conclude, therefore, that the codes to which the Code Construction Act was intended to apply are those enacted pursuant to the state's continuing statutory revision program. Since the Consumer Credit "Code" is not such a code, the provisions of the Construction Act have no application to Chapter 14. See Zapata v. Ford Motor Credit Co., 615 S.W.2d 198 (Tex.1981).

It is important to note that Tex.Rev.Civ.Stat.Ann. art. 5069-50.01 specifically sets out rules of construction applicable to the Consumer Credit Act. The statute provides:

Unless specifically altered by this Act or unless the context requires otherwise, the provisions of Articles 10, 11, 12, 14, 22 and 23, Revised Civil Statutes of Texas, 1925, and of Acts, 50th Legislature 1947, Chapter 359, compiled as Texas Civil Statutes, Article 23a (Vernon's 1948) apply to this Act.

Noticeably absent from this list of provisions is article 5429b-2, the Code Construction Act, even though that Act was also enacted by the 60th Legislature. None of the provisions listed in article 5069-50.01 contain a general savings clause in favor of pending suits. Had the legislature intended that the savings clause in the Code Construction Act apply to the Consumer Credit Act, it could have so specified in article 5069-50.01. We cannot do by judicial construction what the legislature has apparently chosen not to do by statutory enactment. Consequently, the Code Construction Act does not apply to the repeal of Chapter 14, and Chapter 14 causes of action not reaching final judgment prior to the repeal are not preserved by the general savings clause of the Construction Act.

Chapter 7 of the Consumer Credit and Consumer Protection Act

Knight also complained that the installment contract he signed violated Chapter 7 of the Consumer Credit and Consumer Protection Act. Chapter 7 governs the sale of motor vehicles in retail installment transactions. One of the provisions of this chapter, article 5069-7.07(6), states that no retail installment contract shall "(p)rovide that the buyer agrees not to assert against the seller or holder of any claim or defense arising out of the sale." ⁴ The contract signed by Knight contained the following clause:

"Acceptance by purchaser: By acceptance of said property, purchaser hereby waives all claims for any delay in delivery and all claims for failure to deliver any property ordered."

Knight asserts that this waiver provision violated the prohibition in article 5069-7.07(6). The court of civil appeals found no violation and affirmed the summary judgment of the trial court. We reverse that part of the judgment.

The court of civil appeals held that the clause in Knight's contract did not violate article 5069-7.07(6) because the contract merely restated the "general law of sales"-that acceptance of goods terminates the buyer's claim for damages due to late delivery. The court apparently reasoned that the contract clause acted not as a waiver, but as notice to the buyer of the common law effect of his acceptance.

Prior to the adoption of the Uniform Commercial Code, it had been held that a buyer and seller could contract in writing that the damages occasioned by the seller's delay would be waived upon the buyer's acceptance of the goods. Southern Gas & Gasoline Engine Co. v. Richolson, 216 S.W. 158, 159-60 (Tex.Com.App., Sec. B, 1919, judgm't adopted). There was confusion in the law whether, absent a written contract, acceptance of late delivered goods amounted to a waiver of damages due to the delay. In one case, the damages for late delivery were held to be waived. Dallas Waste Mills v. Texas Cake & Linter Co., 204 S.W. 868, 870 (Tex.Civ.App.-Dallas 1912), rev'd on other grounds, 228 S.W. 118 (Tex.Com.App.1921, holding approved). Other cases held that damages caused by...