McPherson Enterprises, Inc. v. Producers Co-op. Marketing Ass'n, Inc.
| Decision Date | 25 March 1992 |
| Docket Number | No. 3-91-213-CV,3-91-213-CV |
| Citation | 827 S.W.2d 94 |
| Parties | McPHERSON ENTERPRISES, INC., doing business as Bandera Feed & Garden, Appellant, v. PRODUCERS COOPERATIVE MARKETING ASSOCIATION, INC., Appellee. |
| Court | Texas Court of Appeals |
Henry W. Christopher, Jr., Johnson & Christopher, Inc., San Antonio, for appellant.
Marion J. Borchers, Law Offices of Marion J. Borchers, New Braunfels, for appellee.
Before POWERS, JONES, SMITH, JJ.
A grain and feed cooperative sued the owners of a feed store for a delinquent debt. The owners defended that the debt was a corporate debt and, thus, they were not personally liable. The owners also counterclaimed that the cooperative had charged a usurious rate of interest on the debt. The trial court rendered a take-nothing judgment against both parties. We affirm the trial court's judgment.
In 1986 appellant McPherson Enterprises, Inc., owned by Ronnie and Suzanne McPherson, purchased Bandera Feed and Garden Supply. As part of the purchase, McPherson Enterprises assumed Bandera Feed's debt to Producers Cooperative Marketing Association, Inc. (Producers). Producers is an agricultural cooperative that manufactures and distributes grain feed in the central Texas area.
In 1988 McPherson Enterprises ran into financial difficulties and sold its feed supply business to pay creditors. Although McPherson Enterprises owed Producers $41,470, no sales proceeds were paid to the cooperative. To satisfy the corporate debt of McPherson Enterprises, Ronnie and Suzanne McPherson agreed to transfer to Producers a personal note receivable worth $31,654. The McPhersons testified that they used personal assets to satisfy this corporate indebtedness with the understanding that the note would be accepted as payment-in-full. However, Producers contended Bandera Feed still owed $9816, the balance due after crediting the account ($41,470 - $31,654 = $9816).
After receiving the note, Producers failed to credit the Bandera Feed account for its value. When Bandera Feed failed to pay the outstanding balance of $9816, Producers brought suit against Ronnie and Suzanne McPherson individually, claiming that they were doing business as Bandera Feed and thus were responsible for the debt. Ronnie and Suzanne McPherson defended the suit on the grounds that they were not personally responsible for the corporate debts of McPherson Enterprises, d/b/a Bandera Feed. In addition, Bandera Feed counterclaimed that by sending the incorrect invoices, Producers had effectively charged a usurious rate of interest on the debt. Producers responded that it used an automated billing system and the employee charged with handling billings was unfamiliar with accounting practices and did not understand the billing program.
The jury found that McPherson Enterprises, not Ronnie and Suzanne McPherson, was responsible for Bandera Feed's debt to Producers. It also found that Producers had not agreed to accept as full payment the personal note offered by Ronnie and Suzanne. The trial court rendered a take-nothing judgment against both sides. McPherson Enterprises has brought this appeal reasserting its usury claim against Producers. Ronnie and Suzanne McPherson are not parties to this appeal.
McPherson Enterprises as appellant and Producers as cross-appellant have challenged the legal sufficiency of the evidence to support the trial court's judgment. In deciding a no evidence point, we must consider only the evidence and inferences tending to support the finding of the trier of fact and disregard all evidence and inferences to the contrary. Alm v. Aluminum Co. of Am., 717 S.W.2d 588, 593 (Tex.1986); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965); see also Michol O'Connor, Appealing Jury Findings, 12 Hous.L.Rev. 65, 80-81 (1974).
McPherson Enterprises asserts two points of error: (1) Producers charged a usurious rate of interest in excess of the legal limit of eighteen percent without evidence of accidental and bona fide error, and (2) Bandera Feed was entitled to attorney's fees. Producers asserts four points of error on cross-appeal, three complaining that the trial court erred in absolving Ronnie and Suzanne McPherson of personal liability, and one claiming Producers is entitled to attorney's fees.
The essence of McPherson Enterprises's appeal is that Producers committed usury by charging interest on $41,470 when the actual debt was only $9816. For the one-month period from February 28, 1989 to March 28, 1989, Producers mailed Bandera Feed a bill for the principal amount of $41,470 plus $622 in interest. McPherson Enterprises argues that the maximum amount of interest allowed by law 1 for that time period on a debt of $9816 was $136. McPherson Enterprises contends that by charging $622 in interest on a balance of $9816, Producers charged $487 more than the legal maximum. Producers responds that the interest charged was not usurious or, alternatively, if the interest rate was usurious it was defensible as a bona fide mistake due to the ignorance of its accounting personnel.
Usury is defined as "interest in excess of the amount allowed by law." Tex.Rev.Civ.Stat.Ann. art. 5069-1.01(d) (1987). Interest is defined as "compensation allowed by law for the use or forbearance or detention of money." Id. at 5069-1.01(a).
We have reviewed the cases McPherson Enterprises cites in support of its usury claim but find them unpersuasive. While all involve usury issues, not one contain facts or legal issues relevant to the case at hand. In fact, the reasoning of Steves Sash & Door Co. v. Ceco Corp., 751 S.W.2d 473 (Tex.1988), cited by McPherson Enterprises, supports our holding that Producers's actions were not usurious:
Interest and principal are synergistic words which imply one another, and by necessity, principal must be that amount, which is used, forborne, or detained, and upon which the interest is charged.
Id. at 475 (emphasis added).
The operative word in this passage is "synergistic." As applied to our facts, the $622 in interest cannot be divorced from the principal balance of $41,470 and applied to the actual balance of $9816 in order to derive a higher "rate" of interest. The interest complained of here was clearly a function of Producers's use of the incorrect principal amount.
If the interest and principal are not viewed as synergistic, the rate of interest charged on any unliquidated debt would be subject to claims of usury. The following...
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