Stedman v. Georgetown Sav. and Loan Ass'n, 18033

• Decision Date: 21 December 1978
• Docket Number: No. 18033,18033
• Parties: C. T. STEDMAN, Appellant, v. GEORGETOWN SAVINGS AND LOAN ASSOCIATION, Appellee.
• Court: Texas Court of Appeals

Page 415

575 S.W.2d 415

C. T. STEDMAN, Appellant, v. GEORGETOWN SAVINGS AND LOAN ASSOCIATION, Appellee.

No. 18033.

Court of Civil Appeals of Texas, Fort Worth.

Dec. 21, 1978.

Rehearing Denied Jan. 18, 1979.

McDonald, Sanders, Ginsburg, Phillips, Maddox & Newkirk and Sam J. Day and Carter L. Ferguson, Fort Worth, for appellant.

Clark, Thomas, Winters & Shapiro and Roy C. Snodgrass III, Austin, for appellee.

OPINION

HUGHES, Justice.

C. T. Stedman, plaintiff, sued Georgetown Savings and Loan Association, defendant, for usury, asking for penalties under Tex.Rev.Civ.Stat.Ann. art. 5069-1.06 (1971). Trial to the court resulted in judgment for defendant. "Findings of Fact and Conclusions of Law" were requested and filed, to which plaintiff objected. Additional and amended "Findings of Fact and Conclusions of Law" were requested by plaintiff and denied by the trial court. Plaintiff perfected appeal.

We affirm.

No material facts are in issue, but the parties disagree emphatically as to their legal import. It appears that plaintiff asked defendant for a $65,000.00 loan to build a Dairy Queen. Defendant denied the application stating that it preferred to make home loans rather than high risk restaurant loans. However, defendant later reconsidered and agreed to lend plaintiff $60,000.00 payable over a period of 15 years at 10% Interest per annum. The commitment was offered to plaintiff and he accepted.

The commitment, § 2, provided "-0- " loan fee to be paid in advance but stated in § 8 that defendant would "set aside and escrow the funds for the project and interest shall begin to accrue from that date." No percentage of interest was stated in § 8, but defendant charged and plaintiff paid 10% On $60,000.00 from 6-30-75 to the end of January, 1976. On February 2, 1976, the permanent loan was closed when plaintiff executed a note to defendant providing for 10% Per annum interest.

Trial court's findings of fact pertinent and in dispute are:

"(5) Upon the acceptance of the commitment by the Plaintiff, the Defendant set aside and reserved on its books the sum of $60,000.00.

"(7) Pursuant to the commitment, Plaintiff paid a fee at the rate of ten percent per annum from July 7, 1975 through the month of January, 1976, being a total of $2,883.31. The fee was paid by Plaintiff and accepted by Defendant in return for Defendant's issuing the commitment to make a loan in the future.

"(8) The commitment entitled the Plaintiff, at his sole option, to obtain the loan described therein from Defendant and the consideration for the option was payable whether or not the permanent loan was actually made.

"(9) The commitment did not bind Plaintiff to borrow the money from Defendant and he was free to try to arrange permanent financing on terms more favorable to him from other lending institutions.

"(12) At no point in time has Plaintiff paid or Defendant received any sums in excess of ten percent per annum computed on $60,000.00.

"(16) There existed two separate transactions under the facts of this case, a commitment and a subsequent loan, and the Defendant charged a separate fee as compensation for each transaction.

"(17) All the payments made under the commitment were made prior to the formal execution and funding of the permanent loan.

"(18) The ten percent per annum fee charged for the commitment was a yardstick used to express the changing price at which the Plaintiff's option to enter into a loan in the future could be exercised."

Although plaintiff has assigned twenty points of error in his brief, we are really concerned with one primary question: Was the money paid before the note was executed interest?

We hold the pre-note payments to be consideration from plaintiff to defendant for...