Martinez v. Corpus Christi Area Teachers Credit Union

• Decision Date: 06 October 1988
• Docket Number: No. 13-87-473-CV,13-87-473-CV
• Parties: Rodolfo R. MARTINEZ and Olivia G. Martinez, Appellants, v. CORPUS CHRISTI AREA TEACHERS CREDIT UNION, Appellee.
• Court: Texas Court of Appeals

Page 946

758 S.W.2d 946

Rodolfo R. MARTINEZ and Olivia G. Martinez, Appellants, v. CORPUS CHRISTI AREA TEACHERS CREDIT UNION, Appellee.

No. 13-87-473-CV.

Court of Appeals of Texas Corpus Christi.

Oct. 6, 1988.

Rehearing Denied Nov. 3, 1988.

Nolan K. Read, Bonilla, Read, Bonilla & Berlanga, Inc., Corpus Christi, for appellants.

Victor M. Carrera, Edinburg, Frederick J. McCutchon, Wood, Boykin, Wolter & Keys, Michael B. Sheehan, Delaney & Sheehan, Corpus Christi, for appellee.

Before NYE, C.J., and KENNEDY and BENAVIDES, JJ.

OPINION

KENNEDY, Justice.

Rodolfo R. Martinez and Olivia G. Martinez, appellants, brought suit in district court seeking to recover statutory penalties on an allegedly usurious note, and alternatively, for damages grounded in tort and contract. Corpus Christi Area Teachers Credit Union, appellee, thereafter filed suit in a county court at law seeking a deficiency judgment after appellants defaulted on the above note. All causes were consolidated in the district court. After reviewing appellee's two motions for summary judgment, the district court granted all relief sought by appellee. We affirm.

On August 14, 1979, Rodolfo R. Martinez received a car loan from appellee for the amount of $9,259.39, of which $2,476.42 represented the unpaid balance on a trade-in vehicle previously financed by appellee, $6,765.00 represented the amount required to finance a 1979 Oldsmobile, and $17.10 represented other costs. Mr. Martinez paid $13,282.15 for the car. He later stopped making payments on the note, however, when a disputed charge for insurance coverage was added to the balance on the note. On April 1, 1980, the car was repossessed, and on July 12, 1980, sold for $6,600.00. Sometime during this period the vehicle was allegedly vandalized. Mr. Martinez contends the car had a reasonable cash market value of $11,000.00 in Nueces County, Texas at the time it was repossessed.

On August 31, 1981, Mr. Martinez and his wife, Olivia G. Martinez, entered into a loan payment agreement with appellee for $4,900.00, consolidating the above deficiency and his outstanding signature loan. This note called for "interest on the unpaid loan balance at the rate of .49315 percent per day, an ANNUAL PERCENTAGE RATE of 18%, both before and after maturity, payable in 11 installments of ONE HUNDRED and NO/100 Dollars and 1 installment of FOUR THOUSAND SIX HUNDRED FIFTY FOUR and 40/100 Dollars." Appellants thereafter defaulted on the payment of this note.

Appellants filed suit in district court against appellee on August 16, 1985, alleging that the August 31, 1981 note required them to pay a usurious rate of interest in the amount of .49315 percent per day. Appellants further alleged that appellee was both negligent and grossly negligent in the preparation of that note, and that the deficiency amount included in that note from the sale of the vehicle resulted from appellee's failure to exercise ordinary care in safekeeping the vehicle; from appellee's failure to exercise ordinary care in or to conduct a bona fide resale of the vehicle because the resale was neither timely, advertised, nor public; and from appellee's failure to secure a reasonable market value for the vehicle upon resale. Appellee filed suit in county court against appellants on October 15, 1985, alleging that appellants had defaulted in the payment of the August 31, 1981 note and that they were entitled to $4,323.11, plus interest, court costs and attorney's fees. All causes were consolidated in the district court. Appellee then filed two motions for summary judgment, one addressing appellants' causes of action and the other addressing its own cause of action. The district court granted both of appellee's motions for summary judgment in three orders; one order concerning appellants' causes, one order concerning appellee's cause, and a "Final Order" summarizing the relief granted under the other two orders.

When reviewing the granting of a motion for summary judgment, we must consider the summary judgment evidence in the light most favorable to the nonmovant and indulge every reasonable inference in its favor. Nixon v. Mr. Property Management, Inc., 690 S.W.2d 546, 548-49 (Tex.1985); Wilcox v. St. Mary's University, 531 S.W.2d 589, 592 (Tex.1975). The movant's burden is to show that no genuine issue of material fact exists, and that it is entitled to judgment as a matter of law. MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex.1986); Major Investments, Inc. v. De Castillo, 673 S.W.2d 276, 279 (Tex.App.--Corpus Christi 1984, writ ref'd n.r.e.).

By its fourth through seventh points of error, appellants contend that the trial court erred in holding that the August 31, 1981 note did not constitute a contract to collect a usurious rate of interest, because genuine issues of material fact existed on whether the parties contracted for a usurious rate of interest and on whether the note was usurious. However, appellants do not assert that appellee charged or received a usurious amount of interest. Appellants argue that since the note contracted for interest of .49315 percent per day which equates to an annual percentage rate of 179.999 percent, the note is usurious on its face, or, at the very least, presents a fact question regarding whether the parties contracted for a usurious rate of interest.

The essential elements of a usurious contract consist of a loan of money made with the understanding that the money loaned is to be returned, but which requires a greater rate of interest than allowed by law. Robinson v. Rudy, 666 S.W.2d 507, 509 (Tex.App.--Houston [1st Dist.] 1983, ref'd n.r.e.); Pansy Oil Co. v. Federal Oil Co., 91 S.W.2d 453, 455-56 (Tex.Civ.App.--Texarkana 1936, writ ref'd). Moreover, mere "contracting for" usurious interest is in violation of the usury statutes even though no usurious interest was actually collected. Cochran v. American Savings & Loan Assoc., 586 S.W.2d 849, 850 (Tex.1979); Windhorst v. Adcock Pipe & Supply Co., 547 S.W.2d 260, 261 (Tex.1977); Tex.Rev.Civ.Stat.Ann. art. 5069-1.06 (Vernon 1987).

The usury statutes, however, are penal in nature and are to be strictly construed. Texas Commerce Bank v. Goldring, 665 S.W.2d 103, 104 (Tex.1984); Tygrett v. University Gardens Home Assoc., 687 S.W.2d 481, 485 (Tex.App.--Dallas 1985, writ ref'd n.r.e.). The question of usury must be determined by a construction of all documents constituting the transaction, interpreted as a whole, and in light of the attending circumstances. Walker v. Temple Trust Co., 124 Tex. 575, 80 S.W.2d 935, 936 (Comm'n App.1935, opinion adopted); Woolard v. Texas Motors, Inc., 616 S.W.2d 706, 707 (Tex.Civ.App.--Fort Worth 1981, no writ). There is a presumption that the parties intended a nonusurious contract; when the contract by its terms, construed as a whole, is doubtful, or even susceptible to more than one reasonable construction, the court will adopt the construction which comports with legality. Smart v. Tower Land & Investment Co., 597 S.W.2d 333, 340-41 (Tex.1980); Ford Motor Credit Co. v. McDaniel, 613 S.W.2d 513, 518 (Tex.Civ.App.--Corpus Christi 1981, writ ref'd n.r.e.); see, e.g., Walker, 80 S.W.2d at 936-37; Tygrett, 687 S.W.2d at 485; Woolard, 616 S.W.2d at 707-708. Moreover, where the parties agree to a specific payment schedule, that schedule determines whether the rate of interest is usurious or not, regardless of the percentage stated on the face of the instrument. Ustick v. Jones, 112 S.W.2d 703, 706 (Tex. Comm'n App.1938, opinion adopted); Braniff Investment Co. v. Robertson, 124 Tex. 524, 81 S.W.2d 45, 47 (Comm'n App.1935, opinion adopted); Ashley v. Edwards, 626 S.W.2d 107, 111 (Tex.App.--Houston [14th Dist.] 1981, no writ).

The note in question is ambiguous on its face. It requires payment of both a usurious rate of interest (.49315 percent per day), and a nonusurious rate of interest (18 percent per annum). However, the specific payment schedule found on both the note and disclosure form, both signed by appellants on August 31, 1981, expressly state figures which would amount to an annual interest rate of slightly less than 18 percent per annum. Moreover, the disclosure form shows a total finance charge of $854.37 if the loan is paid according to the payment schedule above, a figure also representing an interest rate of slightly less than 18 percent per annum.

We hold that the August 31, 1981 note is not usurious as a matter of law and that no fact issue exists. Thus, the trial court properly granted appellee's motion for summary judgment based on appellee's counterclaim for declaratory relief. Tex.Civ.Prac. & Rem.Code Ann. § 37.004 (Vernon 1986). We overrule appellants' fourth through seventh points of error.

By its eighth through tenth points of error, appellants contend that summary judgment was improper because a fact issue exists on whether appellee committed an accidental and bona fide error when it prepared the August 31, 1981 note stating interest at .49315 percent per day. Specifically, appellants argue that since the district court found that the note was not usurious, the district court never reached the issue of accidental and bona fide error.

When a defendant moves for summary judgment based on an affirmative defense, the defendant must prove every element of that defense as a matter of law. Montgomery v. Kennedy, 669 S.W.2d 309, 310 (Tex.1984); O'Shea v. Coronado Transmission Co., 656 S.W.2d 557, 560 (Tex.App.--Corpus Christi 1983, writ ref'd n.r.e.). It is well established that when a defendant offers several alternative theories why a summary judgment should be granted, and the court grants the motion on more than one theory or fails to state the basis of granting the summary judgment, the trial court's action should be affirmed if any of the defendant's several theories are meritorious. Tijerina v. Wennermark, 700 S.W.2d 342, 347 (Tex.App.--San Antonio 1985, no writ); McCrea v. Cubilla Condominium Corp., 685...