*1 GEORGE A. FULLER COMPANY TEXAS, INC., Petitioner,
OF SERVICES, INC., Respondent.
CARPET
No. D-0791.
Supreme Court Texas.
Jan. Madole, Dallas, Jr., Hayes, Luke John C. D.C.,
Washington, petitioner. for Hager, Robert E. David M. Dal- las, respondent.
OPINION COOK, Justice. presents
This case pleading containing whether a a claim for usurious interest is may a document which purposes imposing usury penalties. We hold that a asserting a prejudgment claim for period for a when interest is due does not constitute a of usurious inter purposes est for of the Texas stat ute. Services,
Carpet Inc. was a sub-contrac- George tor of Company A. Fuller Texas, Inc. on a commercial construction project. pay After Fuller refused to Services, completed by Carpet Carpet work Services sued for breach of contract. original petition, Carpet pleaded Services prejudgment portion interest on a period the contract debt for a before debt was due. The contract between Car- pet provided pay- Fuller by payment ment Fuller was conditionedon of Fuller the owner. Under the con- Fuller, Carpet tract between Services and Carpet Services would not be entitled to payment or interest until after Fuller was paid by plead- the owner. period ed for interest for a commencing paid before owner Fuller part of the contract debt.
The trial court found that Servic- petition es’ constituted a usurious legal of interest in excess of rate twice period since it demanded interest for a be- *2 604 public serve the interest of ... and thus amounts claimed be- portion
fore a
of the
people of this State.
payable under the contract.
came due and
charged in an interest-free
Any interest
R.S.,
24,
23,1967,
Leg.,
60th
ch.
May
Act of
legal
of
rate
period is in excess of twice
1,
609. There is no
1967 Tex.Gen.Laws
§
alleged
legal
a
rate
legislative
zero.
in the statement of
indication
The
legislature
under Texas
laws.
intended that
purpose
of interest
improper
applied
pleadings.
just
claimed for an
laws be
interest was
Therefore,
the statute nor the
determined
neither
period. The trial court also
legislative intent mandates a
a
statement of
charge
the result of
was not
that
holding
pleadings can constitute a
that
error or accident. That
bona fide
charge of interest.
rendered
interest,
other
principal,
forfeit all
issue
never addressed the
This Court has
mini-
imposed
statutory
charges prejudgment in-
pleading usurious
whether
$2,000.
penalty
mum
charge.1
Danziger v.
terest can be a
300,
Ass’n, 732
Sav.
S.W.2d
San Jacinto
judg-
appeals reversed the
The court of
(Tex.1987) (Gonzalez, J., concurring)
305
that a
court and held
ment of the trial
(whether
can constitute a
pleadings alone
pleading
in
usurious interest
a
demand for
open ques-
is an
charge of usurious interest
802
charge of interest.
is not a usurious
tion);
Corp. Diamond
Geo
Petroscience
judgment of
343. We affirm the
S.W.2d
668,
(Tex.
Inc.,
668
physical,
684 S.W.2d
appeals.
the court of
1984) (left
appeals
ruling of court of
intact
5069-1.06(1), (2) of the Texas
Articles
charge
not a
of usurious
that a
is
“[a]ny
provide penalties for
Civil Statutes
grounds);
on other
interest and affirmed
for, charges or re-
contracts
person
Co.,
who
639
Tyra v. Bob Carroll Constr.
greater than a
interest which is”
690,
(Tex.1982)(assumed
ceives
691
S.W.2d
art.
lawful amount. Tex.Rev.Civ.Stat.Ann.
charge of interest and
pleading was a
1987).
5069-1.06(1), (2) (Vernon
key
The
error
a bona fide
found that
there was
penalties
usury).
of this case is
purposes
prevented
word for
which
improper
not an
contract
since there was
pleading can
question whether a
interest received.
for interest nor was
in
charge
addressed Moore
interest was
Bank, 527
209
S.W.2d
Sabine National
meaning of
interpreting the
When
1975,
ref’d
(Tex.Civ.App.
writ
—Austin
5069-1.06, we look first
‘charge’ in article
case,
n.r.e.).
appeals
In that
Article
language of the statute.
contained
Sa-
the statements
held that
constitutes
5069-1.06 does not state what
of intention to
Bank’s notice
bine National
application
of arti
charge of interest.
original petition, and its se-
repossess, clarified, however, by the
cle 5069-1.06 is
a usurious
affidavit constituted
questration
legislative intent that accom
declaration
5069-
meaning of articles
charge within the
leg
The declaration
panied the statute.
at 211. Subse-
and 5069-8.02.2 Id.
8.01
provides that:
islative intent
National
interpreting Sabine
quent cases
Legislature
filing plead-
merely
intent of the
held that
It
is the
Bank have
the statute on
interest constitutes
enacting
ing asserting
this revision
usurious
[of
See,
Butler v.
charge.
e.g.,
citizens of Texas
protect
a usurious
interest]
(Tex.
Co.,
169
practices
deceptive
Machinery
from
Holt
denied);
1987, writ
by unscrupulous App.
Antonio
being perpetrated
now
—San
708
Moore v.
Motor Credit
and vendors
both
White
operators, lenders
(Tex.App.
468
S.W.2d
consumer transactions
and credit
cash
—Dallas
apply to con-
and 5069-8.02
2. Articles 5069-8.01
faced with the
The court is
applies to
5069-1.06
sumer credit. Article
We do not
interest.
claims for
involving
lan-
The relevant
transaction
by pleadings
question presented
address the
guage
and 5069-8.02
of articles 5069-8.01
underly-
types
on
of interest based
claim other
5069-
of article
the relevant
same as
ing
that are usurious.
documents
1.06.
gave
n.r.e.);
though the creditor
Nationwide Finance
imposed
be
writ
ref’d
(Tex.Civ.
or demand
Corp. English,
no notice of
unilateral,
dism’d);
Gener
payment. Although a
App.
writ
—Amarillo
Uresti,
Acceptance Corp.
al Motors
by agreement,
it still must be
opposed
*3
1977,
660,
(Tex.Civ.App. Tyler
organization
663
the
S.W.2d
communicated outside
—
n.r.e.).
charge
making
charge
writ ref d
to
a
within
the
be
meaning
There-
the
of article 5069-1.06.
However,
facts,
National
Sabine
on the
disapprove Hagar
fore,
the extent
to
we
Bank from Fuller. Car-
distinguishable
‘charge’
the term
includes
that it holds that
pet
only pleaded
pre-
for usurious
an
unilaterally placing on an account
contrast,
In
Na-
interest.
Sabine
interest
other
amount due as
tional Bank sent
the debtor a notice of
charge
A
must be communicated to
action.
repossess in addition to the
intention to
need not
the debtor. The communication
pleadings. The Sabine National Bank
direct,
long
charge
as the
is ultimate-
be
as
not faced
the
court was
with
ly demanded from the debtor.
prejudgment
whether a demand for
inter-
a
pleadings
est in
alone is sufficient to be
Usury
designed
are
to correct
statutes
charge
appeals
of interest. The courts of
practices in consumer and commer-
Sabine National Bank
that have cited
for
transactions,
as a
cial credit
not to serve
proposition
pleading
charge
the
that a
is a
trap
unwary pleader
the
in a court
for
that,
of interest did not consider the
fact
Pleadings
give
par-
proceeding.
serve to
a
pleading,
to
inten-
addition
the
a notice of
Murray
ty
the issues at trial.
notice of
repossess
tion to
was sent
to
debtor.
Inc.,
(Tex.
Express,
A
O &
While I concur result the court If the court’s “communication” state- the law, today, join parts I in all then the reaches cannot of ment were settled court opinion. might defensibly of to that law for confining the court’s Instead refer illus- fact, though, question presented, purposes. only itself to the the In the court trative opinions addressing out the today published reaches on its own initiative to two issue bearing that holding decide an issue has no on the resolve it need In process, facts of this case. court not be communicated. See Williams Back, engrafts (Tex.Civ.App.— settled and overrules case law 1981, writ); Williams, judi- Hagar new onto statute. This is Austin no Nonetheless, at its at cial activism worst. 788. view, fervently rejects citing without that presented The issue in this case is any authority today. law stated the new straightforward: When an excessive claim solely overruling appears in The court’s of Williams v. interest pleading, Hagar does constitute will no that claim a Back v. Williams doubt Services, surprise Carpet usury within the statute? Our come as a no; Carpet today “[ujsury statutes are whose favor court rules. Ser- answer suggested never that those designed to correct consumer and vices has cases transactions, overruled, has it criticized commercial credit not to serve should be nor way.2 trap unwary pleader any for the in a them in The reason obvious: as a court reasoning Carpet proceeding.” At That de- cases are irrelevant. Under 605. both today reasoning, cides the case. Services’ which sentence, allegation, original emphasizing in the there was the one 1. It is worth no case outside of the petition. this context, judicial Carpet counsel argument Oral of David M. Counsel for argument: in oral noted Respondents, May 1991. any Carpet Services never once added amount account, any cases, excessive never billed Carpet fifty-one Services’ cites but brief 2. invoice, they anything in an never did among Hagar them. The v. Williams is not —no account, jour- general ledger, no no books once, cite Back but not to brief does Williams v. nals, letters; demand it; contrary, —no on criticize charged Services never once argument support case on relies on the usury case—the basis this sole legislative intent. basis and exclusive one —was falls outside adopts, the claim at issue here EARHART, it scope Appellant, of the statute whether James Otto Thus, even if communicated or not.3 was Hagar Back v. Williams Williams correct, case re- Texas, the outcome of this Appellee. are STATE fact, which mains the same. Given 70343. No. deny, reaching out to
the court does not the cases is inexcusable. overrule Texas, Appeals of of Criminal Court why countless reasons courts There are En Banc. deciding from issues not should refrain Sept. apparent the one most here
presented, but ruling “com- practical one. on the is a issue, acting in the
munication” the court is
dark, the benefit of an adversarial without considering
presentation, ruling. If the implications
manifold of its fully presented, con-
issue different were light. no doubt come to
siderations would *5 Back, instance, Williams
For problems real
court considered some of the communication: the creditor had mailed containing allegedly-usurious an
a notice debtor, had to the but debtor it. The court ruled that
not received usury
notice was a within the
statute, though com- it had not been at
municated to debtor. 624 S.W.2d summarily rejects
275. This court now approach, any consideration of competing interests involved.4 ruling
Today’s uninvited has no basis
either the or the intent of the statute; necessary nor is it
disposition of the case. I would affirm the I appeals; of the court of but deciding refrain from the “communi-
would actually presented.
cation” issue until it is fundamentally different. argument presented the transaction 3. legis- that the court had to do with communi- in nature means to this That difference charge: cation of a the word have intended lature couldn’t law, pleadings, litigation. "charge” apply as a matter of I believe that usury. cannot be a vehicle for argument Counsel of David M. Oral May Respondents, filing on behalf of a When I'm client, is funda- the nature of the transaction v. Ceco generally & Door Co. Steves Sash 4. mentally It is not a commercial (Tex.1988) (recog- different.... 476-77 a free contrac- transaction. It’s not rooted in is to nizing purpose statutes relationship. tual conduct, than to com- rather punish lender’s borrower). pensate the original petition a bill or in- is far from An thing. It’s not the same The nature voice.