124 S.W.2d 842 | Tex. | 1939
This suit was instituted in the 48th District Court of Tarrant County, Texas, by L. Berry and some sixteen others to restrain the City of Fort Worth, its officers, and agents from enforcing an ordinance of such city, which will later be set forth in full. The district court granted a temporary injunction, but on final hearing same was dissolved, and all relief denied Berry et al. Berry et al. appealed to the Court of Civil Appeals at Fort Worth. Upon final hearing in that court the judgment of the district court was affirmed.
"Whereas, persons, firms and corporations are engaged in the business of lending money without security and are demanding and receiving exorbitant and unconscionable rates of interest, in violation of the State law, and such persons, firms and corporations so engaged in the business of lending money, in an attempt to obtain payment of the moneys so loaned, do wilfully and maliciously annoy the employers of their borrowers by continuous telephone calls to the annoyance and harassment of the employers and their employees in the ordinary course of business, and generally affects the public interest, all *602 of which requires strict supervision and inspection of such money-lending business; and
"Whereas, it is deemed expedient and in the interest of the public welfare to regulate and inspect such persons, firms and corporations engaged in the business of lending money without security; Now, therefore,
"Be it ordained by the City Council of the City of Fort Worth, Texas.
It appears from the record before us that the ordinance above set out has been duly passed by the City of Fort Worth; that if valid it is now in full force and effect, and that Berry et al. are in position to prosecute this suit. In other words, under the record before us, we are simply called upon to de-determine whether or not this ordinance is valid.
1 As we understand this record, the City of Fort Worth is what is commonly designated as a "Home Rule City," and operates as such under a charter. By express provisions of our constitutional and statutory laws, no ordinance of a city operating under a home rule charter can contain any provision inconsistent with our Constitution, or the general laws of this State. Section 5, Article XI, Texas Constitution; Article 1165, R. C. S. 1925; 30 Texas Jur., p. 301 et seq., and notes. Berry et al, contend that this ordinance violates the above constitutional and statutory provisions in many particulars. We think there is no escape from the conclusion that such is the case.
Section 1 of this ordinance makes it unlawful for any person, firm, or corporation to engage in the business of lending money to individuals without security within the corporate *606 limits of Fort Worth without first having obtained a license therefor, and displaying the same as in such ordinance provided. Section 2 compels every person, firm, or corporation "before opening, maintaining, and/or operating" the business above named to make application for a license upon a blank to be furnished by the City Secretary, and on a form to be prescribed by such officer. Among other things prescribed, it is required that in such application the applicant, whether a person, firm, or corporation, shall "designate, name, appoint, and maintain an agent in the City of Fort Worth upon whom service may be had in the event of any suit filed against such applicant in any action arising from a violation of this ordinance," etc. By the terms of Section 13 of this ordinance any person who violates any of its provisions is guilty of a penal offense, and is subject to a fine not to exceed $200.00. Each day of violation is made a separate offense.
2 By numerous statutory provisions our general laws cover every kind and character of service of process on every kind and character of defendant in every kind and character of civil action in the courts of this State. By the express provisions of Article 2050, R. C. S. 1925, in no case can a judgment be rendered against any defendant unless upon service, or acceptance of service, or waiver of process, or upon an appearance by the defendant as prescribed by the chapter in which such article appears, except where otherwise expressly provided by law. The provisions of this ordinance which attempt to compel persons, firms, and corporations engaging in the business of lending money without security to appoint and maintain an agent for the purpose of service are inconsistent with our numerous service or process statutes; and furthermore such provisions are absolutely antagonistic to Article 2050, supra.
3 Section 2 of this ordinance attempts to define and provide the way and manner by which service or process may be had on persons, firms, and corporations in civil actions arising out of the violation of the same. It is by the service of process, or by waiver, appearance, etc., that our courts obtain jurisdiction over the persons of defendants in civil actions. It certainly does not lie within the power or jurisdiction of a city government, home rule or otherwise, to define how the civil courts of this State shall obtain jurisdiction over the persons of defendants in civil actions instituted therein.
Our Constitution, Section 11 of Article XVI, reads as follows: *607
"Sec. 11. All contracts for a greater rate of interest than ten per centum per annum, shall be deemed usurious, and the first Legislature after this amendment is adopted, shall provide appropriate pains and penalties to prevent the same; but when no rate of interest is agreed upon, the rate shall not exceed six per centum per annum."
4 It is too plain to admit of discussion that under the above constitutional provision the power to provide pains and penalties for usury is lodged exclusively in the Legislature. It therefore does not lie within the power of a city government to provide pains and penalties in regard thereto. It must follow that the provisions of this ordinance which attempt to provide pains and penalties for usury violate the above constitutional provision.
Our statutes, Article 5073, R. C. S. 1925, provide that within two years after the time that a greater rate of interest than ten per cent, shall have been received or collected upon any contract, the person paying the same, or his legal representative, may by an action for debt recover double the amount of such interest from the person receiving the same. It is then provided that such action shall be instituted in any court of this State having jurisdiction thereof, etc. It is plain that the Legislature, by enacting Article 5073, has provided the pains and penalties for usury, and it does not lie within the power of a city government to directly, or indirectly, provide a different or additional penalty. Also, by the terms of this Article the Legislature has provided the remedy, and it does not lie within the power of a city government to provide a different remedy.
Section 10 of this ordinance makes it unlawful for any person engaged in the business of lending money without security in the City of Fort Worth to communicate with any person other than the borrower in an effort to collect any debt growing out of the business conducted by such licensee, which debt is made up in whole, or in part, or usurious interest. Under the express terms of Article 5071, R. C. S. 1925, the principal sum of money or value of the contract is made a legal and valid debt, even if such contract provides for usurious interest. If the principal debt is legal and valid, the holder has the same rights in regard thereto as the holder of any other valid debt. This is necessarily implied from the fact that the statute expressly makes the principal part of the debt valid. This ordinance attempts to impair such rights and render even the principal of said debt practically impossible of forced collection. This is true because the holder could not even employ an attorney to collect *608 such debt, or even sue thereon. If he did either, he would be compelled to communicate with a person other than the borrower in regard to the debt. Also, the lender could not employ an agent to present the debt to the borrower for collection. This must be true because the lender would have to communicate with such agent in regard to such debt in any effort he might make to collect the same.
Section 7 of this ordinance compels any person, firm, or corporation desiring to engage in the business of lending money without security to give a bond. Any person who is injured by the violation of the ordinance can sue on this bond. It follows that under the terms of this ordinance any person who pays usury can sue on the bond. As already shown, the general laws of this State have provided the remedy for those who pay usurious interest. It therefore does not lie within the power of a city to provide an additional or different remedy.
5 Section 15 of this ordinance stipulates, in effect, that if any part of it is invalid, such invalid portions shall not affect the balance. We give effect to this provision, and hold that the parts of this ordinance not hereinabove held invalid are valid.
It is ordered that the judgments of the Court of Civil Appeals and the District Court be both reversed, and this cause is remanded to the district court for further proceeding in accordance with this opinion.
Opinion delivered February 15, 1939.
Rehearing overruled March 29, 1939.