Southwestern Inv. Co. v. Hockley County Seed & Delinting, Inc.

• Decision Date: 20 November 1974
• Docket Number: No. B--4810,B--4810
• Citation: Southwestern Inv. Co. v. Hockley County Seed & Delinting, Inc., 516 S.W.2d 136 (Tex. 1974)
• Parties: SOUTHWESTERN INVESTMENT COMPANY, Petitioner, v. HOCKLEY COUNTY SEED AND DELINTING, INC., et al., Respondents.
• Court: Texas Supreme Court

Page 136

516 S.W.2d 136

SOUTHWESTERN INVESTMENT COMPANY, Petitioner, v. HOCKLEY COUNTY SEED AND DELINTING, INC., et al., Respondents.

No. B--4810.

Supreme Court of Texas.

Nov. 20, 1974.

Rehearing Denied Dec. 18, 1974.

Clayton & Stubblefield, Cleo G. Clayton and Wesley G. Clayton, Amarillo, for petitioner.

Walters & Associates, Reid A. Rector, Lubbock, for respondents.

PER CURIAM.

The court of civil appeals has held that the lender is subject to statutory penalties for usury under Article 5073, Vernon's Ann.Tex.Civ.Stat., in a situation where the loan contract was usurious on its face and interest in excess of the legal limits was actually paid thereunder. 511 S.W.2d 724. The lender, upon being faced with an action for usury, reduced the final payment to a sum that resulted in bringing the amount of interest paid over the entire term of the loan within permissible limits. We are in agreement with the holding of the court of civil appeals, for to hold otherwise would allow the lender to circumvent the usury statutes. This is not to say that a contract cannot be purged of usury by a compromise and settlement whereby the old obligation is abandoned and a new and valid one given instead. See Commerce Trust Co. v. Ramp, 135 Tex. 84, 138 S.W.2d 531 (1940).

In the course of its opinion, the court...