Skeen v. Slavik

• Decision Date: 15 August 1977
• Docket Number: No. 19243,19243
• Citation: 555 S.W.2d 516
• Parties: Clyde SKEEN, Appellant, v. E. R. SLAVIK et al., Appellees.
• Court: Texas Court of Appeals

Page 516

555 S.W.2d 516

Clyde SKEEN, Appellant, v. E. R. SLAVIK et al., Appellees.

No. 19243.

Court of Civil Appeals of Texas, Dallas.

Aug. 15, 1977.

Rehearing Denied Sept. 15, 1977.

G. Leroy Street, Kirk R. Williams, Geary, Stahl, Koons, Rohde & Spencer, Dallas, for appellant.

Gerald R. Coplin, Passman, Jones, Andrews, Coplin, Holley & Co., Dallas, for appellees.

AKIN, Justice.

E. R. Slavik and D. J. Slavik and Mobile Parks of America Corporation sued Clyde Skeen for payment of notes given by Skeen to plaintiffs, foreclosure on the property held as security for the debt, and attorneys' fees. Defendant contended at trial, as on this appeal, that the notes sued upon are usurious to such an extent that they are unenforceable under Tex.Rev.Civ.Stat.Ann. art. 5069-1.06(2) (Vernon 1971), as being twice the rates of interest allowed by Tex.Rev.Civ.Stat.Ann. art. 5069-1.02 (Vernon 1971) and art. 1302-2.09 (Vernon Supp.1976). The trial court ruled in favor of plaintiffs, and defendant appealed. We hold that the trial court erred in rendering judgment for plaintiffs because the series of transactions leading up to the notes and other obligations sued upon by plaintiffs did involve the imposition of usurious interest rates that were more than double the rate authorized by law. ¹ Accordingly, we render judgment for defendant and that plaintiffs shall take nothing, as mandated by article 5069-1.06(2).

The first transaction in the series was a guaranty by defendant Skeen of three promissory notes by Crescent General Corporation to plaintiff Mobile Dealers of America. Mobile had previously advanced to Crescent $325,000 and had taken three notes of Crescent, one for $250,000, another for $75,000, both bearing interest at nine percent, and a third note for $100,000, bearing no interest. Each of the three notes was payable in December 1971, except for one payment of $20,000 which was made in June 1971. In August 1971 the three notes were cancelled, and three new notes totaling $425,000 were issued by Crescent to Mobile, although no additional money was advanced by Mobile to Crescent. The new notes included one for $175,000 and another for $170,000, both bearing interest at nine percent, and a third for $80,000 bearing no interest. Since $20,000 had already been paid on the original $425,000 owed by Crescent to Mobile (of which only $305,000 represented funds actually advanced), the August transaction increased Crescent's ostensible indebtedness to Mobile by $20,000 without any money changing hands. These were the notes guaranteed by Skeen.

In September, Crescent paid off the $175,000 note, leaving an outstanding debt of $250,000 plus some interest. In December 1971 Crescent paid Mobile $50,000, reducing the outstanding balance to $200,000. The two remaining notes were then cancelled, and Crescent executed two new notes to Mobile in the amounts of $120,000 and $100,000, both bearing interest at nine percent, thus increasing the balance by $20,000 without any money changing hands from Mobile to Crescent. Plaintiff E. R. Slavik testified that the two $20,000 increases in indebtedness involved in the August and December renegotiations were fees charged by Mobile to Crescent for the service of extending the loans. Both of these notes were likewise guaranteed by Skeen.

In February of 1972 Skeen and the Slaviks entered into what they characterized as a "put and call" agreement, whereby the Slaviks paid Skeen $300,000 for stock in Crescent and also in International World Encyclopedia Corporation, subject to the Slaviks' right to demand repurchase of the stock by Skeen for $360,000. E. R. Slavik testified that this provided him and his brother with a $20,000 to $60,000 "margin" to compensate them for the risks they were taking by entering into this agreement.

In March 1973 the parties entered into a new agreement which plaintiffs contend was a settlement of all existing claims. The agreement expressly provided that Skeen and Crescent release Mobile and the Slaviks from all liability for any causes of action which may have accrued up to that date, including usury claims growing out of the loan transactions and "put and call" agreement outlined above. Under the settlement agreement Skeen paid $50,000 to the Slaviks and $5,000 to the Slaviks' attorney, and signed two notes, one for $310,000 payable to the Slaviks bearing seven and a quarter percent interest, and another for $235,950 payable to Mobile bearing interest at six and a quarter percent. No money was paid by the Slaviks or Mobile for these notes. Defendant argues that the $310,000 note was merely a continuation of the $360,000 obligation under the "put and call" agreement minus the $50,000 payment of March 5, 1973, and that the $235,950 note represented a continuation of the $220,000 obligation incurred by Crescent as a result of the negotiations of December 1971 with the addition of accrued interest. Skeen made some payments on these notes, but eventually defaulted, whereupon plaintiffs brought this suit for $204,550 alleged to be owed by Skeen to the Slaviks, plus interest accrued thereon, $173,825 alleged to be owed by Skeen to Mobile, plus interest accrued thereon, foreclosure on the collateral for these notes, and attorneys' fees.

On appeal, defendant contends that the original loan agreement, the extension fees, and the "put and call" arrangement were all usurious loan transactions and that the settlement and release agreement of March 1973 can have no effect upon the usury because that agreement carried forward the usurious obligations originally contracted for in March 1971 and February 1972. Defendant further contends that because he is not obligated to pay these usurious debts, foreclosure on the collateral based on his default was error, as was the trial court's award of attorneys' fees to plaintiffs. Defendant has not claimed any attorneys' fees, either in the trial court or in this court, nor has he claimed any penalty for the alleged usury other than by way of defense to the notes sued upon.

Plaintiffs contend that the existence of usury is a fact issue which was presumptively found by the trial judge in favor of plaintiffs and that, in the absence of findings of fact or conclusions of law, which were not requested by the defendant, the trial court's conclusion on the usury issue is a fact finding, binding upon this court on appeal. Plaintiffs further contend that in order successfully to assert the defense of usury, defendant has to satisfy a burden of proof to show that there was a scheme to charge usury in the absence of notes which on their face proved usury. Plaintiffs also assert that they could charge fees for loans apart from interest without violating usury laws and that the settlement and release agreement of March 1973 cleansed the transactions of any usury which may have existed in the earlier agreements, thereby denying defendant his usury defense to the notes issued as part of the settlement and release agreement.

We turn to plaintiffs' first contention that, in reviewing the trial court's judgment, we must presume findings in support of the judgment if supported by any evidence. It is true that, in the absence of a jury verdict or any express findings of fact and conclusions of law by the trial court, we must presume all fact findings in favor of the trial court's judgment; however, where the evidence establishes as a matter of law facts inconsistent with the judgment, the presumption cannot be effective, and we must overturn the trial court's judgment. Lockhart v. Garner, 156 Tex. 580, 298 S.W.2d 108, 110 (1957).

Additionally, plaintiffs argue that because the March 1973 notes do not call for usurious interest rates upon their faces, defendant must establish that there was a corrupt agreement or scheme to conceal the usury which was contemplated by plaintiffs, citing Moss v. Metropolitan Nat'l Bank, 533 S.W.2d 397 (Tex.Civ.App. Houston (1st Dist.) 1976, no writ); American Century Mortgage Investors v. Regional Center, Ltd., 529 S.W.2d 578 (Tex.Civ.App. Dallas 1975, writ ref'd n. r. e.); Wagner v. Austin Savings and Loan Ass'n, 525 S.W.2d 724 (Tex.Civ.App. Beaumont 1975, no writ). All of these cases are distinguishable on their facts. In the Moss case, the borrowers paid fixed sums to three parties other than the lender in addition to the ten percent interest paid to the lender on the loan. The court refused to find usury in that case because the borrowers stipulated that the payees of the fees were not agents of the lender and there was no showing of a scheme whereby the payments to third parties actually accrued to the lender's benefit. Moss v. Metropolitan Nat'l Bank, 533 S.W.2d at 399. In the American Century case, a corporation signed a note on behalf of an individual borrower and the note provided for interest in excess of the rate allowed for personal loans but within the rate allowed for corporate loans. This court refused to find usury in that transaction where there was no showing that the lender was aware...