CREDIT BUREAU OF LAREDO, INC., Appellant, v. The STATE of Texas, Appellee.
No. 15299.
Court of Civil Appeals of Texas, San Antonio.
Oct. 9, 1974.
Rehearing Denied Nov. 20, 1974.
KLINGEMAN, Justice.
In view of our overruling of appellant‘s contentions regarding the excluded evidence, as set out in points numbers nine and ten, and our disposition of appellant‘s point number two concerning the failure of appellant to raise a fact issue regarding the vital matter of causation, we do not deem it necessary to discuss the remaining points presented, including those relating to various defenses urged by appellee. Accordingly, the judgment of the trial court is affirmed.
Salmanson & Smith, Austin, for appellant.
John L. Hill, Atty. Gen., Joe Longley, Asst. Atty. Gen., Austin, Kathleen Durckel, Asst. Atty. Gen., Houston, for appellee.
Appellant, Credit Bureau of Laredo, Inc., appeals from an order of the trial court imposing penalties of $35,000 against it and Edward Miller, jointly and severally, pursuant to
On April 11, 1972, the State of Texas brought an action in the nature of quo warranto proceeding against Edward Miller, individually and d/b/a Credit Bureau of Laredo, Inc., seeking to enjoin certain deceptive practices under
The judgment recites that defendants Edward Miller, individually and as manager of Credit Bureau of Laredo, Inc., appeared by their attorney of record Francis Maher, and that such attorney announced to the court that the defendants would no longer oppose the actions of the State in the matter and agreed to the entry of judgment against them in such case. The judgment is approved as to form by Francis Maher, attorney for defendants, and also by Edward Miller.
On March 8, 1973, the State filed its petition for penalties and on the 23rd day of March, 1973, the court, sitting without a jury, entered its order for civil penalties against Credit Bureau of Laredo, Inc. and Edward Miller, jointly and severally, in the amount of $35,000.2
By its first point of error, appellant asserts that the trial court erred in imposing penalties on appellant because the injunction judgment is void for want of personal jurisdiction of appellant in such suit for injunction. Appellant Credit Bureau of Laredo, Inc.‘s basic contention in this regard is that it was not named as a party to the State‘s suit for injunction; no answer or appearance was made by it; and that no attorney appeared on its behalf or with its authorization; and such injunction proceeding was void as to it and had no effect on it. They then assert that the trial court erred in imposing penalties on it for violation of such injunction because the injunction did not apply to it, and it could not be in violation of such injunction.
Appellee asserts that the trial court correctly held that the appellant was bound by the injunction because it participated in the injunction as a real party.
Ordinarily, a party who is not a nominal party to an injunction proceeding is not bound by the terms of the injunction decree and cannot be convicted of contempt of court for violating the terms thereof. In the case now before us, if appellant is bound at all by the injunction proceeding, it must be on the basis of its participation in such proceeding.
Francis Maher, the attorney who signed the agreed judgment, testified that he had represented Credit Bureau of Laredo, Inc. for about 15 months, from approximately September of 1971 to November of 1972; that he was representing Credit Bureau of Laredo, Inc. when the permanent injunction here involved was entered and that he was acting as their legal representative; that he was paid by appellant for such representation; that he signed the judgment and represented to the court that he was acting as their legal representative. The president of Credit Bureau of Laredo, Inc. testified that he had actual knowledge that an injunction had been issued by the District Court of Webb County enjoining such corporation from deceptive practices. There is testimony that the court costs were paid by check of appellant.
A case closely in point on this issue is Ex parte Foster, 144 Tex. 65, 188 S.W.2d 382 (1945), a habeas corpus proceeding. Foster was committed to the custody of the Sheriff of Dallas County because he was adjudged to be in contempt of the 101st District Court for violating a permanent injunction issued by that court in Cause Number 79272-E, styled the Texas and Pacific Railroad Company v. Dallas County et al. Foster was not a party to that suit. The Supreme Court, in refusing to discharge relator and in upholding the judgment of contempt, stated: “We hold that
Under these authorities, we hold that the trial court correctly held that the Credit Bureau of Laredo, Inc. participated in the injunction proceeding as a real party and was bound by the injunction.3
Appellant‘s second point of error is that the trial court erred in imposing a civil penalty on appellant because the statute upon which the trial court based both his injunction and the penalty he imposed for its alleged violation did not apply to appellant or to the conduct of which the State complained. In view of our holding herein that appellant voluntarily entered into an agreed judgment prohibiting certain practices therein described4 and is bound by the
For the reasons above we do not deem it necessary to pass on appellant‘s contention that the Deceptive Trade Practices Act is unconstitutional.
Appellant has been found guilty of having knowingly violated the terms and prohibitions of the injunction by their use of seven enumerated forms and assessed civil penalties of $35,000. Appellant asserts vigorously that there are disputed fact issues as to whether they had knowingly violated the terms of the injunction,5 and that it was entitled to a jury trial on such disputed issues of fact.
Appellant is in the debt collection business. Delinquent accounts are referred to appellant by creditors such as the Mercy Hospital after they have exhausted their own attempts to collect the account. Prior to April 20, 1972, appellant mailed a series of form letters to the delinquent debtor in an apparent effort to intimidate him into paying the debt.
On March 9, 1973, appellant was served with a precept and directed to appear on March 22, 1973, to show cause why it should not be ordered to pay the State a civil penalty of not more than $10,000 for each and every violation of said injunction as provided in
It is true that a proceeding for violation of an injunction is in the nature of a con
None of the forms involved herein were the same as those subject to the agreed injunction. The contents and make-up of the prohibited forms were drastically changed after the injunction in an apparent attempt to comply with same. Although the trial court refused to consider such evidence, it is shown by appellant‘s bill of exception that shortly after the agreed injunction were entered, appellant employed Fred Nieman, Esq., to revise the forms so as to comply with the injunction. Mr. Nieman was the General Attorney of the Associated Creditors of Texas and, thus, recognized as a knowledgable person in this field of law. He had two consultations on the revision with the Assistant Attorney General then in charge of the section of that office which handled these matters. Obviously such officer is not authorized to give advisory opinions or bind the court by same, nevertheless, this evidence was properly admissible to show appellant‘s good faith.
Although appellant continued to attempt to collect the delinquent accounts by use of forms mailed to the debtors, significant revisions were made in the forms printed and mailed out after the injunction. The forms “Notice of Impending Execution,” “Certificate of Assignment” and “Notice to Appear” which were involved in the agreed injunction were deleted and are no longer used by appellant. All of appellant‘s forms are now printed on various colors of paper so that they do not give the appearance of being official documents. The “seal” was deleted from all of the forms as was the abbreviation “vs.” between the creditor‘s name and the debtor‘s name. All forms are distinctly marked in bold-faced type to show that they come from appellant and that payments should be made to it. All but one of the sixteen witnesses who testified regarding any of the forms, knew that appellant had mailed same. This is best illustrated by the fact that four of the seven forms in question were mailed to Mike Hales regarding his Mercy Hospital account, and he was not concerned enough to open the envelopes. The chief concern expressed by the other debtor-witnesses was their inability to pay the debt.
State recognized that appellant is lawfully engaged in the collection of delinquent accounts. In this connection it undoubtedly had the right to make demand for payment on behalf of the respective creditors and even to file suit in its own name where the debt was assigned to appellant. None of the forms involved threaten the debtor with any illegal penalty. For example, the two forms that refer to execution state that it can be had on non-exempt property.
Apparently, the forms had been found to be deceptive because all of them state that civil legal action can or will be taken if the debt is not paid. This is a legitimate right to be taken against a delinquent debtor who refuses to pay, but such
In view of the fact that all of the forms involved in the suit for penalties are different from those involved in the agreed injunction, we have concluded that serious issues of fact were raised as to whether the injunction has been knowingly violated by appellant, and if so, the amount of penalties that should be assessed. The judgment has become final as to Edward Miller, but the judgment is reversed as to appellant and is remanded to the trial court for a trial before a jury.
CADENA, Justice (concurring).
I concur in the result. However, I would base the holding that defendant is entitled to a jury trial solely on the fact that this is a civil suit for the recovery of statutory penalties rather than a criminal contempt proceeding. We would, by so limiting our holding, avoid the “difficult question whether a charge of” criminal contempt “requires . . . jury trial.” Shillitani v. United States, 384 U.S. 364, 365, 86 S.Ct. 1531, 1533, 16 L.Ed.2d 622, 624 (1966). I do not believe that either Cheff v. Schnackenberg, 384 U.S. 373, 86 S.Ct. 1523, 16 L.Ed.2d 629 (1966), decided on the same day as Shillatani, nor Duncan v. Louisiana, 391 U.S. 145, 88 S.Ct. 1444, 20 L.Ed.2d 491 (1968), gives a definitive answer to the constitutional question.