Windhorst v. Adcock Pipe and Supply
| Decision Date | 26 January 1977 |
| Docket Number | No. B-6424,B-6424 |
| Court | Texas Supreme Court |
| Parties | Delmar E. WINDHORST, Petitioner, v. ADCOCK PIPE AND SUPPLY, Respondent. |
Teveni, Mach & Clarke, Donald J. Mach, San Antonio, for petitioner.
Bradford F. Miller, San Antonio, for respondent.
In this case a retailer unilaterally has charged to its customer's open account a one and one-half percent per month "finance charge." The customer, who did not agree to pay and in fact has not paid any such charge, has sued for penalties under the usury laws, claiming that the charging alone of excessive interest constitutes usury. The trial court and the court of civil appeals have held for the retailer. 542 S.W.2d 222.
Article 5069-1.06 provides that any person who "contracts for, charges or receives" interest in excess of the amount authorized by law shall be liable for the penalties set forth in the article. 1 The court of civil appeals has held that "the 'charging' of interest in excess of the amount authorized is not actionable unless charged pursuant to agreement of the parties, or actually collected." 542 S.W.2d 222 at 224. Such a holding is contrary to the plain meaning of Article 5069-1.06. By describing the conditions precedent to recovery of penalties in the disjunctive, the Legislature made it clear that only one such condition need occur to trigger penalties; either a contract for, a charge of or receipt of usurious interest. See Wall v. East Texas Teachers Credit Union, 533 S.W.2d 918 (Tex.1976). Article 5069-1.02 provides: "A greater rate of interest than ten percent per annum unless otherwise authorized by law shall be deemed usurious." The transaction at issue here is not one of those exempted from the ten percent ceiling. 2 By unilaterally charging the one and one-half percent per month "finance charge", the retailer in this case charged more than ten percent per annum, and is, therefore, liable for penalties.
Pursuant to Texas Rule of Civil Procedure 483, we grant writ of error and, without hearing oral argument, reverse the judgments of the trial court and the court of civil appeals. The cause is remanded to the trial court for further proceedings consistent with this opinion.
1 References are to Texas Revised Civil Statutes Annotated. Article 5069-1.06 provides:
(1) Any person who contracts for, charges or receives interest which is greater than the amount authorized by this Subtitle, shall forfeit to the obligor twice the amount of interest contracted for, charged or received, and reasonable attorney fees fixed by the court provided that there...
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...law, it is not required that unlawful interest be agreed to or paid in order to violate the usury statute. Windhorst v. Adcock Pipe and Supply, 547 S.W.2d 260, 261 (Tex.1977) (creditor's unilateral placement of interest charge on account held usurious). "[T]he actionable conduct is that of ......
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