Rose v. O'Keefe

• Court: Texas Supreme Court
• Writing for the Court: Leddy
• Citation: Rose v. O'Keefe, 39 S.W.2d 877 (Tex. 1931)
• Decision Date: 10 June 1931
• Docket Number: No. 1263-5658.,1263-5658.
• Parties: ROSE v. O'KEEFE.

Page 877

39 S.W.2d 877

ROSE v. O'KEEFE.

No. 1263-5658.

Commission of Appeals of Texas, Section B.

June 10, 1931.

Error to Court of Civil Appeals of Sixth Supreme Judicial District.

Suit by R. W. O'Keefe against Pauline Rose, individually and as independent executrix under the will of I. E. Rose, deceased. A judgment for defendant was reversed and judgment rendered for plaintiff by the Court of Civil Appeals [23 S.W.(2d) 542], and defendant brings error.

Judgment of the Court of Civil Appeals reversed, and that of the district court affirmed.

Coke & Coke and Thomas G. Murnane, all of Dallas, for plaintiff in error.

Austin C. Hatchell, of Longview, and John Davis, of Dallas, for defendant in error.

LEDDY, J.

We adopt the following statement of the case made by the Court of Civil Appeals:

"Plaintiff in error R. W. O'Keefe owned property known as the `North Texas Building' situated in the city of Dallas. The property was incumbered by a valid lien thereon to secure indebtedness amounting to more than $110,000. November 23, 1925, O'Keefe borrowed $36,500 of I. E. Rose, deceased husband of defendant in error, Mrs. Pauline Rose. At the time he borrowed the $36,500, O'Keefe made a promissory note to said I. E. Rose for $40,000, payable three years from its date (said November 23), and stipulating for interest payable semiannually as it accrued at the rate of 8 per cent. per annum from its said date; and at the same time executed and delivered a deed conveying the property mentioned to a trustee to secure the payment of the note according to its tenor and legal effect. O'Keefe paid the $1,600 interest due on the note May 23, 1926, according to its terms, and the $1,600 interest thereon due November 23, 1926, and on April 6, 1927, in conformity to an agreement between him and defendant in error (said I. E. Rose having died October 7, 1926, and defendant in error being the sole devisee of his estate, valued at $400,000, and independent executrix of his will), conveyed said North Texas Building property to her; the consideration of such conveyance being the cancellation of the $40,000 note, on which additional interest amounting to $1,200 had accrued, the payment of about $4,000 taxes due on the property, the payment of $2,774.65 in cash on his (O'Keefe's) account, and the assumption by her of the payment of his said indebtedness of about $110,000 and $3,300 interest accrued thereon secured by said first lien on the property. This suit by O'Keefe against Mrs. Rose, as an individual and as executrix aforesaid was on the theory that the contract covering the $36,500 loan was usurious within the meaning of the statute (title 79, R. S. 1925 [articles 5069-5074]), and that he therefore was entitled to recover of Mrs. Rose double the amount of the interest he paid in performance thereof, or, if he was not entitled to recover double the amount of such interest, was entitled to recover back the sum he had paid as interest.

"Mrs. Rose's contention at the trial was that the contract covering the $36,500 loan, evidenced by the note and trust deed referred to was not usurious, and that O'Keefe had not paid to her and her deceased husband on account thereof interest in excess of the amount they were lawfully entitled to demand and receive of him. She contended, further, that, if the contract covering said loan was usurious, and if O'Keefe had paid usurious interest thereon, his claim on account thereof was satisfied in the transaction wherein he conveyed the building referred to to her, and further, that O'Keefe was estopped from claiming the liability he was asserting against her.

"It appeared from evidence heard at the trial that in the negotiations for the loan of $36,500 O'Keefe acted by his agent, J. W. Ryan, and the jury found that Rose acted by his agents, J. R. Eldridge and F. L. Payton. The jury found further, in response to an issue submitted to them, that `in executing the deed and in cancelling the note in April, 1927 (quoting), it was the intention of plaintiff R. W. O'Keefe that all the matters in controversy between the parties, including the usurious interest claim, if any, should be settled and satisfied by such transaction.' It was on the finding of the jury set out, it seems, that the court rendered judgment denying O'Keefe a recovery of anything and in Mrs. Rose's favor for costs."

The Court of Civil Appeals held that the submission of the issue as to whether O'Keefe's claim for usurious interest had been compromised and settled by the conveyance of the building to Mrs. Rose was not warranted by the pleadings or the evidence. Under this view it reversed the judgment of the trial court and rendered judgment in favor of O'Keefe against Mrs. Rose for $12,600, this sum being double the amount of the alleged usurious interest.

The fifth paragraph of the answer of plaintiff in error set forth in detail the transaction by which she purchased from defendant in error the building in consideration, among other things, of the cancellation of the $40,000 note executed by defendant in error. Then followed these averments: "These defendants further say that by virtue of the facts set forth in paragraph 5 herein they have fully paid and satisfied any and all claims pretended or otherwise that the said plaintiff may have against the said I. E. Rose and these defendants, and these defendants plead that accord and satisfaction has been had and taken place and that all claims of every kind arising out of said Forty Thousand Dollars ($40,000) insofar as the said Rose, deceased, and these defendants are concerned, have been fully satisfied and discharged; that no recovery can now be made of these defendants or any of them."

We think this pleading was clearly sufficient to present the issue as to whether the defendant in error's claim for usurious interest was settled by his conveyance of...