Sturgis Nat. Bank v. Smyth

• Decision Date: 23 January 1895
• Citation: Sturgis Nat. Bank v. Smyth, 30 S.W. 678, 9 Tex.Civ.App. 540 (Tex. App. 1895)
• Parties: STURGIS NAT. BANK v. SMYTH et al.
• Court: Texas Court of Appeals

30 S.W. 678

STURGIS NAT. BANK v. SMYTH et al.

Court of Civil Appeals of Texas.

January 23, 1895.

Appeal from district court, Hill county; J. M. Hall, Judge.

Action by the Sturgis National Bank against Jot J. Smyth and others on a promissory note. From a judgment rendered for itself, the plaintiff appeals. Reversed.

Rehearing denied.

McKinnon & Carlton, for appellant. West & Smith and L. B. Davis, for appellees.

FINLEY, J.

The verdict of the jury is for a less sum than plaintiff was entitled to, and this error will require a reversal of the judgment, and the remanding of the cause for another trial. We will not pass upon the several assignments of error, as such, in the opinion, but will indicate our views upon the points in the case sufficiently for the purposes of another trial.

The different phases of the defense set up to the 10 per cent. attorney's fees constitute no legal bar to a recovery upon that portion of the contract, and plaintiff's exceptions thereto should have been sustained. The contract, in express terms, provided for the payment of an additional sum of 10 per cent. for attorney's fees, if collected by law, or placed in the hands of an attorney for collection. The parties had the legal right to so contract, and upon the happening of the contingency upon which the stipulated attorney's fees were made to depend the obligation became absolute, and such additional sum became a part of the sum due. It would not affect the legality of the demand if it were true, as alleged by defendants, that the provision was inserted in the contract for the sole benefit of plaintiff, and not with any purpose of paying that amount for the service of an attorney. If the plaintiff could and did obtain the service of an attorney free, that fact would not relieve defendants of their obligation. For the general principles applying to this obligation, see the following authorities: Martin-Brown Co. v. Perrill, 77 Tex. 199, 13 S. W. 975; Stansell v. Cleveland, 64 Tex. 660; Simmons v. Terrell, 75 Tex. 275, 12 S. W. 854; Morrill v. Hoyt, 83 Tex. 59, 18 S. W. 424; Kendall v. Page, 83 Tex. 131, 18 S. W. 333. Also, Miner v. Bank, 53 Tex. 559; Durst v. Swift, 11 Tex. 273; Yetter v. Hudson, 57 Tex. 604; Eakin v. Scott, 70 Tex. 442, 7 S. W. 777. If the note sued upon was, as alleged, usurious, and was given as a renewal of another usurious obligation, and embraced usury in the principal sum, then the plaintiff was only entitled to recover that part of the principal sum which would be left after cutting out all the interest embraced in the note, and, in addition, 10 per cent. on the principal thus ascertained, less the payments made upon the note. Any payments which were made to be applied to this note should not be applied to extinguishing usurious interest, but to the lessening of the legal demand. Ware v. Bennett, 18 Tex. 807; Stanley v. Westrop, 16 Tex. 201; Mitchell v. Napier, 22 Tex. 120; Bank v. Wayburn, 81 Tex. 57, 16 S. W. 554; Miles v. Kelly (Tex. Civ. App.) 25 S. W. 724; Association v. Biering (Tex. Sup.) 25 S. W. 622. Payments made and directed to be applied to other notes should not be treated as payments upon the note sued on, unless they constituted a part of the same usurious contract, and were executed for the amounts of usurious interest. If they were executed alone for that purpose, such payments should be applied to the extinguishment of the legal demand. The fact that separate obligations were executed for the usurious demand would not render them legal obligations, nor justify the court in making other than a legal application of the payments. If the note sued on was given in renewal of another usurious note, and this illegal feature of the contract was contained in the new obligation, no interest whatever should be allowed upon the principal sum actually due under the original...