This is a usury case. Appellant as plaintiff filed suit against appellee as defendant in the District Court of El Paso County, 41st Judicial District, seeking to recover from defendant under the provisions of Article 5073, Vernon’s Ann.Civ.St. the sum of $510.28 alleged to be double the amount of usurious interest paid by him to defendant. Defendant answered by general denial. Trial was to the court without a jury. The court rendered judgment that plaintiff take nothing against defendant and that all costs be paid by plaintiff. No findings of fact or conclusions, of law were requested but the court incorporated the following findings and conclusions in the judgment: “* * * the court is of the opinion and finds that the amount of the loan here involved was in excess of $1,000.00, and that therefore Article No. 4764c of the Texas Civil Statutes and the regulations promulgated thereunder by the Texas Board of Insurance Commissioners are inapplicable to this loan made by Defendant to Plaintiff, and Defendant was not limited in the amount of credit insurance and the charges therefor*? which it could require Plaintiff to furnish as a condition of the making of this loan, and the Court further finds that plaintiff derived certain benefits from said credit insurance, which was issued him, and therefore the charges for such credit insurance was not a subterfuge for the collection of additional interest. The Court further finds that the interest and service charge paid Defendant by Plaintiff were within the legal limits as prescribed by law, and that therefore no usurious interest was paid Defendant by Plaintiff, and Plaintiff is entitled to recover nothing on this suit against Defendant.” These findings and conclusions are the basis for appellant’s points of error on which this appeal is predicated.
There is no substantial controversy as to the facts in this case. On February 11, 1949, plaintiff, a taxi operator in the city of El Paso, borrowed a sum of money from defendant which was a limited partnership engaged in the business of lending money, with an office at No. 313 Mills Street in the city of El Paso. The amount of cash received by plaintiff from defendant was $1,000. As security for the loan plaintiff executed and delivered to defendant an automobile chattel mortgage on a Pontiac four-door sedan automobile owned by plaintiff. As further security for the loan defendant required that plaintiff procure collision insurance on the automobile and “credit” life, health, *817 and accident insurance with plaintiff as the insured. The plaintiff agreed that the defendant should procure the collision insurance from Mrs. Yonkman, with whom plaintiff had theretofore carried insurance and defendant did procure such insurance from the Yonkman Agency and paid such agency the sum of $158.30 therefor. (There may be some question whether this amount was $158.30 or $158.40, but this is immaterial). Later, five dollars of this amount was refunded to plaintiff by defendant, Mrs. Yonkman having quoted defendant a rate excessive to this extent; also a “credit” life, health and accident insurance policy, No. 1600-7 with plaintiff as the insured was issued by the Home Life and Accident Insurance Company, which had its principal place of business in Dallas, Texas. This policy was written and issued by Alice C. Young-berg, the authorized agent of this insurance company. Mrs. Youngberg is the wife of R. P. Youngberg, the manager of defendant, and she was employed by defendant as an office manager on a salary. The premium for this policy was ■composed of two items, one of $36.55, for life insurance, and one of $112.33 for health and accident insurance. The face value of the policy was for $1413.44, which was the amount of the note plaintiff signed evidencing the loan. This sum was arrived at by adding the $1,000 cash paid by defendant to plaintiff, the $158.30 paid by defendant to the Yonkman Agency for collision insurance on the automobile, the $36.55 charged as the premium for life insurance and the $112.33 charged as the premium for health and accident insurance, $96.26 'charged as interest, and a charge of $10 for defendant’s services and expense incurred in drawing and having filed and recorded instruments in connection with the loan. In the event of plaintiff’s death during the period of the loan the policy paid the balance of the loan to defendant and paid to. the estate of plaintiff the difference between the face value of the policy (the amount of the loan) and such balance thereof. In the event of sickness or accident incapacitating plaintiff, in accordance with the terms of the policy it paid defendant the monthly installments due on the note, which were fixed at $94.23 per month for a period of fifteen months, when the note matured. Alice C. Youngberg retained seventy-five per cent of the premiums charged for the “credit” life, health and accident insurance as her commission as agent of the Home Life & Accident Insurance Company for selling and issuing the policy, and paid this sum, in the amount of $111.66, to defendant. Plaintiff paid defendant the full amount of thq* loan note. The interest which he alleged to be usurious is composed of the following items: The $96.26 charged as interest, the amounts charged as premiums for the “credit” life, health and accident insurance policy, i. e., $36.55 for credit life insurance and $112.33 for credit health and accident insurance, and the $10.00 designated as a service charge, totaling $255.14.
Appellant concedes, and properly so, that the money borrowed from appellee includes the $158.30 which was paid by appellee to the Yonkman Agency for collision insurance on the automobile on appellant’s instructions. Hirshfeld v. Howard, Tex.Civ.App.,
As a necessary sequence he further concedes that the court’s finding that the ■amount of the loan here involved was in excess of $1,000 is correct. The amount of the loan is claimed by appellant to be $1158.30, i. e., the $1,000 cash paid by defendant to him and the $158.30 paid by defendant on his instructions to the Yonk-man Agency for collision insurance on the automobile.
Appellant, nevertheless, contends that the court erred in concluding that Article 4764c, V.A.C.S. and the regulations promulgated thereunder by the Texas Board of Insurance Commissioners are inapplicable to this loan. A mere reading of the Statute and regulations should be sufficient to demonstrate the fallacy of this contention. The Statute, Art. 4764c, V.A.C.S. is a codification of Chapter 81
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■of the General and Special Laws of the 51st Legislature, Regular Session 1949, pages 132 et seq. In the Acts the Chapter is entitled “Credit Life Insurance— Credit Health and Accident Insurance”, and in the codification “Credit life insurance and credit health and accident insurance”. In Section 1, subd. B(l) of the Act and Codification “Credit Life Insurance” and “Credit Health and Accident Insurance” is defined as “Personal insurance in which the insured are borrowers of sums of money not exceeding One Thousand ($1,000.00) Dollars from lenders who retain an interest in the insurance as security to the loan, and any other personal insurance written in connection with or as part of
such
loan transaction.” (Emphasis ours.) The Statute having ■defined the kind of insurance which it regulates in unambiguous language, there is no room for judicial construction as to the kind of insurance regulated thereby. In determining the legislative intent and purpose in enacting a statute we are not concerned with the usual or customary meaning of words when the Legislature has itself defined their meaning in unambiguous language. Hurt v. Cooper,
Appellant next earnestly insists that if the Statute and regulations of the Board are inapplicable to the loan here involved, then appellee violated the regulations of the Board in effect prior to and subsequent to the effective date of the Statute, and violated the statute because both the regulations and the statute impliedly'prohibited the writing of “credit” insurance on this type of loan, and the court’s conclusion that defendant was not limited in the amount of credit insurance and the charges therefor which it could require plaintiff to furnish as a condition of the making of this loan is erroneous (second point). The Statute became effective April 18, 1949, more than two months after the loan here involved was made. January 5, 1949, the Board of Insurance Commissioners promulgated ■regulations effective February 1, 1949, in which it is recited: “This regulation is directed to and covers all types of insurers, their agents and employees, engaged in the business of writing or soliciting credit insurance, including all insurance agents who are also engaged in the business of making loans in their individual capacity or as agent, officer or employee of any person, corporation, partnership or association engaged in the loan business.” Paragraph 3 of this Order of the Board is: “Credit insurance, for the purposes of this Order is personal insurance in which the insureds are borrowers of sums of money not exceeding $1000.00 from lenders who retain an interest in the insurance as security to the loan, and any other personal insurance written in connection with or as a part of such loan transaction. Credit insurance may be life 'insurance or health and accident insurance or both. No policy of credit insurance shall hereafter be solicited, written or delivered in this State, unless it shall comply with the following rules and regulations.” Appellant’s contention, boldly stated, is that by this order the Board in effect outlawed all insurance theretofore falling within the category of “Credit” insurance as that term was generally understood except such “credit” insurance as falls within the definition of the regulations promulgated by the Board. Apart from the fact that there is nothing in the regulations which justifies such an assumption of legislative power by the
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Board, in our opinion, any attempt by the Board to exercise such power would have been of at least doubtful validity. Personal insurance by general acceptation properly conprehended by the term “credit” insurance had theretofore been sanctioned by Legislative fiat. Texas Finance & Thrift Ass’n v. State, Tex.Civ.App.,
Appellant’s third and fourth points complain of the court’s findings that plaintiff derived certain benefits from the “credit” insurance which was issued to him and that the charges therefor were not a subterfuge for the collection of additional interest, and that the interest and service charge paid defendant by plaintiff were within the legal limits prescribed by law and no usurious interest was paid defendant by plaintiff. The reasoning by which appellant approaches these points is circuitous. He first asserts that if “credit” insurance on loans in excess of $1000 is not within the purview of the statute, Art. 4764c, and is not controlled by the regulations promulgated by the Board, then such transactions must necessarily be governed by the general laws of this State dealing with usury. He then assumes that such transactions are illegal because not covered by statute and regulations and that therefore they are mere subterfuge to exact usurious interest. What we have said disposes of the assumption that such transactions are impliedly prohibited by the statute or regulations, and therefore illegal. The question still remains whether under the general laws of this State dealing with usury such transactions are in substance a mere subterfuge to exact usurious interest.
“Interest” is defined by our statute as “compensation allowed by law or fixed by the parties to a contract for the use or forbearance or detention of money”. Art. 5069, V.A.C.S.
“Conventional interest” is “interest which is agreed upon and fixed by the parties to a written contract, not to exceed ten per cent per annum”, and “usury” is “interest in excess of the amount allowed by law”. Id.
It is well settled that if the amount paid by the borrower to the lender in excess of legal interest is as compensation for the use, forbearance or detention. See Parks, Adm’r v. Lubbock,
Admittedly a lender may without violating the usury law make an extra charge for any distinctly separate and additional consideration other than the simple lending of money. Greever v. Persky,
There is no • suggestion that the $10 service charge was exhorbitant or excessive as compensation to appellee for the services actually performed by it in making necessary investigation, preparing instruments required to create the chattel mortgage lien, effect the transfer of title to the automobile and in recording such instruments. The court’s finding that the charges were not a subterfuge for the collection of additional interest negatives any such inference; such charges are legitimate. Nevels v. Harris,
However, the finding that the interest paid defendant by plaintiff was within the limits prescribed by law we have concluded cannot be sustained under the undisputed facts in this case. It appears beyond issue that in arriving at the amount of the note there was included a charge for interest of $96.26. That interest may be reserved in advance at the highest conventional rate has been authoritatively adjudicated in this state. Bothwell v. Farmers & Merchants State Bank & Trust Co. of Rusk,
It is equally well settled that interest in addition to the highest conventional rate may not be charged on such unearned interest reserved in advance. Id. Appellant evidently knew of this decision and attempted to conform to it by providing in the note that on failure to make any payment when due the holder at his option might mature the note as to all interest then earned. By what process appellee arrived at the figure of $96.26 as interest reserved in advance we do not know. We do know that interest computed at the highest conventional rate of 10% on the face of the note less the $96.26 reserved in advance as interest will not total this amount. Applying the monthly payments of $94.23 specified in the note on the dates when such payments become due under the terms of the note, first to the payment of interest then earned and then to the payment of the principal, the following shows the computation of 10% interest for the IS months period specified in the note to be $89.11.
Amount of Loan: (Face of note less $96.26 included as interest — monthly payments as provided in note $94.23) $1317.18
Therefore, the $89.11 was the maximum interest that appellee could legally charge for use, forbearance or detention of the money loaned, and the sum of $96.26 admittedly charged as interest exceeded this maximum by $7.15; therefore the charge of $96.26 was usurious and plaintiff under the statute is entitled to recover from the defendant double this sum.
It is therefore ordered that the judgment of the trial court be reversed and judgment is here rendered that plaintiff do have and recover judgment in the sum of $192.52, with legal interest at the rate of 6% per annum thereon from date of judgment. All costs will be taxed against the defendant (appellee).
Reversed and rendered.