Stanford v. United States Inv. Corporation

• Decision Date: 16 April 1925
• Docket Number: (No. 175.)
• Citation: Stanford v. United States Inv. Corporation, 272 S.W. 568 (Tex. App. 1925)
• Parties: STANFORD et ux. v. UNITED STATES INV. CORPORATION, Limited.
• Court: Texas Court of Appeals

272 S.W. 568

STANFORD et ux. v. UNITED STATES INV. CORPORATION, Limited.

(No. 175.)

Court of Civil Appeals of Texas. Waco.

April 16, 1925.

Rehearing Denied May 14, 1925.

Appeal from District Court, McLennan County; James P. Alexander, Judge.

Action by E. R. Stanford and wife against the United States Investment Corporation, Limited. From judgment of dismissal, plaintiffs appeal. Affirmed.

Tirey & Tirey and G. W. Barcus, all of Waco, for appellants.

D. A. Kelley and Garrett & Sheehy, all of Waco, for appellee.

Statement of the Case.

STANFORD, J.

On January 8, 1912, M. W. Stanford and wife, Helen Stanford borrowed from appellee $4,500, for which amount they executed their note, secured by a lien on real estate due January 27, 1917. This note was renewed and extended later by the execution of another note, signed by M. W. Stanford and the appellants herein, E. R. Stanford and Helen Stanford, to mature January 1, 1922; said extension note bearing 7 per cent. interest from January 1, 1917, interest payable annually. M. W. Stanford died in January, 1921. This last note, and an interest note for $315, due on same date, January 1, 1922, were not paid on maturity, and appellee sued on both of said notes about September 13, 1922, and sought recovery on both of said notes, together with 10 per cent. interest on both from January 1, 1922, alleging said notes provided for 10 per cent. interest from maturity if not paid when due, also 10 per cent. attorney's fees.

Appellants alleged that D. A. Kelley, attorney for appellee, agreed with appellants that, if said notes and interest were paid off, he would reduce his attorney's fees to $225. Appellants finally completed arrangements with another loan company to pay off said indebtedness, by executing deed of trust on the same land, and having said deed of trust recorded, etc., and on May 28, 1923, paid off said indebtedness, the same being the $4,500 note and the $315 note, with 10 per cent. interest on both from their maturity, January 1, 1922, and $14.20 court costs, and $515.72 attorney's fees, and said cause then pending in the Seventy-Fourth district court was dismissed. Appellants then brought this suit in the Nineteenth district court, alleging the above facts, claiming they were required to pay more than was due on said indebtedness; that they did not owe attorney's fees; that the extension agreement did not provide for attorney's fees, and, if they did owe attorney's fees, it was only $225; that appellee had no right to collect 10 per cent. interest on the $4,500 note from January 1, 1922, and that said attorney's fees were being charged as a bonus, or as usury, or extra additional interest to that provided by law, etc.; that appellee required appellants to pay said sum before appellee would release the deed of trust lien and before appellee would dismiss the lawsuit which it had filed, and required appellants to pay same under threat that, if not paid, appellee would foreclose its deed of trust lien in the suit then pending in the Seventy-Fourth district court, etc.

The trial court sustained a general demurrer in this case to appellants' petition, and, appellants declining to amend, said cause was dismissed, from which judgment of dismissal this appeal is prosecuted.

Opinion.

If the court was in error in sustaining the general demurrer to appellants' petition, then the cause should be reversed; otherwise it should be affirmed. Was appellants' petition sufficient as against a general demurrer to show usurious interest was collected? There is no direct allegation that there was any usurious interest charged or collected. They do say that there was $225 collected as attorney's fees, and that they did not owe any attorney's fees, that the extension agreement did not provide for attorney's fees, but there is no allegation that the notes sued on did not so provide. They do say $225 was collected as a bonus, or usury, or extra interest, but they also say, in another part of said pleading, that appellee's attorney agreed to reduce the amount of attorney's fees of $225, and on the settlement refused to do so, etc. Appellants' petition was insufficient as a pleading to charge appellee with collecting usury, because: (1) It is not sworn to, as required by statute. See article 4983, Vernon's Sayles' Civil Statutes; Cassidy v. Scottish-American Mortgage Co., 27 Tex. Civ. App. 211, 64 S. W. 1030; First Nat. Bank v. Penman (Tex. Civ. App.) 47 S. W. 68. (2) It is insufficient, in that the petition is not sufficiently definite to charge usurious interest. Nocona Nat. Bank v. Bolton (Tex. Civ. App.) 143 S. W. 242; Western Bank & Trust Co. v. Ogden, 42 Tex. Civ. App. 465, 93 S. W. 1102. (3) Interest on past-due interest is not usury, and it is proper, if the note so provides, to include 10 per cent. attorney's fees on the amount of the principal and accrued interest. Miner v. Paris Exchange Bank, 53 Tex. 561; Crider v. San Antonion Loan Co., 89 Tex. 600, 35 S. W. 1047; Lewis v. Paschal, 37 Tex. 315; Geisberg v. Bldg. & Loan Ass'n (Tex. Civ. App.) 60 S. W. 478.

Appellants allege further that appellee knew that they were negotiating a new loan, and knew that this was the only way they could pay said debt, etc., and that appellee had agreed that, as soon as the new loan was obtained, it would accept, in full payment of all sums due it $4,500, with 7 per cent. interest from January 1, 1922, and $225, attorney's fees, and allege a breach of said agreement. But there is no allegation that this was the total amount due and no allegation of any consideration for such agreement. If same was made, if it was less than the amount due, such agreement was void for lack of consideration.

Appellants further plead that, if they should be mistaken as to the sum paid by them being usurious interest, in truth and in fact they paid to the defendant the sum of $732.21 more than was due on said notes, and that said sum was paid under protest, and it was paid because of the refusal of appellee to release said property unless said sum was paid; that they had to pay same to obtain a release of their property and to get said suit dismissed, and to prevent their property from being sold under execution or said deed of trust, etc. Were appellants required to pay more than was due? They allege they were sued September 13, 1922, on two notes — one for $4,500 and the other for $315—both due January 1, 1922, to recover the amount of said two notes, including 10 per cent. interest from maturity and 10 per cent. attorney's fees. There is no allegation that they did not owe said two notes, no allegation that said two notes did not bear 10 per cent. interest after maturity, no allegation that said two notes did not provide for 10 per cent. attorney's fees. They allege they paid, on May 28, 1923, $5,687.21 in settlement of said indebtedness, and said suit was dismissed. If these notes provided for 10 per cent. interest from maturity, and 10 per cent. attorney's fees, which is not denied, it is apparent they did not pay more than was due. The allegation of appellants that they paid $732.21 more than was due was simply a conclusion of the pleader, and, without the allegation of any facts as a basis for such conclusion, was insufficient as a pleading as against a general demurrer.

Appellants allege further that they paid said alleged overcharge, under protest, in order to get a release to their land, and in order to prevent a foreclosure of the...