Quinlan's Estate v. Smye

• Citation: 50 S.W. 1068
• Parties: QUINLAN'S ESTATE v. SMYE.<SMALL><SUP>1</SUP></SMALL>
• Decision Date: 12 April 1899
• Court: Court of Appeals of Texas

50 S.W. 1068

QUINLAN'S ESTATE v. SMYE.¹

Court of Civil Appeals of Texas.

April 12, 1899.

Error from district court, Bexar county; J. L. Camp, Judge.

Action by Mary Smye against the estate of Helen M. Quinlan. Judgment was rendered for plaintiff, and defendant brings error. Modified.

W. H. Huston and Geo. C. Altgelt, for plaintiff in error. J. A. Buckler, for defendant in error.

FLY, J.

Defendant in error sued plaintiff in error to recover on a promissory note, of date October 21, 1890, for the sum of $850, and interest at the rate of 8 per cent. per annum, and to foreclose a vendor's lien on "block H out of the original city lot 10, range 4, district 1, east of Alamo Plaza," in the city of San Antonio, Bexar county, Tex. There was no denial of any of the allegations in the petition, but usury was set up; and it was pleaded that there were payments of $68 and $25.50 on October 21, 1891, which were pleaded as payments on the principal of the note, and that double the amount of payments thereafter made, to the amount of $484.50, April 11, 1892, be allowed as a counterclaim against the note. Defendant in error pleaded two-years limitation to the foregoing amounts. The case was submitted to the court, and judgment was rendered for defendant in error for the sum of $673.50, with interest thereon from date of judgment,—being the amount of the original note, with interest at the rate of 8 per cent. per annum from the maturity of the note up to date of judgment, and crediting the plaintiff in error with all payments of interest made after maturity of the note, as of date of their payment, as in case of partial payments, and 10 per cent. attorney's fees on the amount found due at date of judgment; and in case of payments made two years prior to filing the suit, amounting to $102, credit for $204 was given plaintiff in error. Both parties excepted to the judgment, and it comes before this court as an agreed case.

On October 21, 1891, when the note became due, the maker paid $68, which was the amount of interest due on that date; and it was verbally agreed between them that, in consideration of interest at the rate of 12 per cent. per annum, payable quarterly, the time of payment should be extended,—no date being fixed. Plaintiff in error paid $25.50 on October 21, 1891, which represented the amount, in advance, of the first quarter's interest, at 12 per cent., and continued to pay the interest up to October 21, 1896; the same being paid quarterly in advance, except in two instances, when the payments were for six months in advance.

The only description of the land upon which a foreclosure of the lien was sought, introduced in evidence, was one contained in the promissory note, which did not state that it was situated in the city of San Antonio, Bexar county, Tex.; but this additional item of description was entered in the judgment, which appellant contends was error. It was alleged in the petition that the land was situated in the city of San Antonio, Bexar county, Tex.; and, there being no denial of the allegations of the petition, they were admitted to be true. Wellborn v. Carr, 1 Tex. 463. There was only one issue made by the pleadings, and that was in regard to usury.

It is provided in article 16, § 11, of the state constitution, that "all contracts for a greater rate of interest than ten per cent. per annum shall be deemed usurious, and the first legislature after this amendment is adopted shall provide appropriate pains and penalties to prevent the same." This section was declared adopted September 22, 1891. In 1892 laws were passed prescribing the pains and penalties to prevent and punish usury, as required by the constitution. Rev. St. arts. 3104, 3106. The verbal contract in regard to the interest was made after the constitutional amendment of 1891 had been declared adopted, but prior to the enactment of laws by the legislature. It has been, however, held by the supreme court that a provision against usury "is prohibitory in its nature, and self-executing, so far as to render all contracts of the kind denounced immediately illegal; and it left to the legislature the only remaining duty of saying what penalties should be imposed upon offenders against this clause of the constitution." Watson v. Aiken, 55 Tex. 536; Hemphill v. Watson, 60 Tex. 679. We will therefore discuss the matter as though articles 3104 and 3106 were in operation at the time the contract of October 21, 1891, was made. In article 3104 it is provided: "All written contracts whatsoever, which may in any way, directly or indirectly, violate the preceding article by stipulating for a greater rate of interest than ten per cent. per annum, shall be, void and of no effect for the amount or value of the interest only; but the principal sum of money or value of the contract may be received and recovered." This is the only statute which declares a contract for a greater rate of interest than 10 per cent. void, and it clearly appears by its terms that it has no reference to any but written contracts; and in the whole of title 59, which is devoted to interest, there is no prohibition of usury in oral...