*1 Stat., gives depositor period of one
year during duty which no
examine his statements and cancelled negligent failing and would not be forgeries. discover of Civil Court
Appeals opinion reported in 402 S.W.2d
276. Petitioner, STACKS, G.
v. al., Respondents.
EAST DALLAS CLINIC et
No. A-11267.
Supreme of Texas. Court
Nov. 1966.
Rehearing Jan. Denied *2 plaintiff for in the amount of
entered Appeals sitting The Court Civil $305.10. Tyler at reversed and remanded. S.W. 2d 558. here decision presented for question a bene- defendants
is whether the paid to them fit from the usurious ato they in turn and which not. they did person. hold third We against instituted The suit was phy- Clinic, partnership East Dallas Dallas Hos- and East above named sicians Inc., owns the hos- corporation that pital, these physicians. Since pital used one operated in effect as organizations two entity, they referred be hereinafter will opera- had an wife as the Clinic. Stack’s Hospital in Febru- Dallas tion at East was from the physician her ary The total was East Dallas Clinic. bill payable signed two notes Bank, Republic for to the National one bill, $325.00,due for the doctor’s the Clinic due the and the other for Benson, for Clinic’s monthly manager, credit told Stacks payments on would be the two notes months, for twelve and these were to be Fritz, deposited Twelve Turley, peti- & with the bank. times Dallas, Vinson for equals tioner. two cents of $652.92—within the amount owed. Abney Burleson, Conner, & Ernest Dal- signed las, two At the same time Stacks respondents. signed notes, two filled out also H. applications W. for credit addressed GREENHILL, Justice. Retail Dallas Credit Bailey and the (Joe) This is an action in which Marvin G. was the Managers Association. recover double con- the amount and had no seeks auditor of Association paid by except the Clinic him to nection whatsoever Clinic, defendants, Retail East Dallas Dun- Dallas Credit C. N. as set out below. can, Mahon, M.D., M.D., worked out a Managers R. D. H. had Walter Association Patton, Bank to M.D., M.D., Republic National Green, plan William T. with the Hospital, Inc., businesses East article Dallas Dallas enable debtors of various pay 5073.1 The debtor would The determination the case nec- their bills. essarily requires Bailey, as the Dallas a construction known stat- otherwise Association, Managers ute. Trial jury Article 1728 3. to a Retail Credit was § the debt. At the county court where the in the amount of loan instructed sign time, a note debtor would Judgment verdict in Stack’s favor. Revised Texas Civil Vernon’s Annotated art. Tex.Rev.Civ.Stat.Arm. All Statutes. to statutes herein are to references Republic payable original National Bank The Clinic took the two up they which would be endorsed the creditor notes on which were shown to be en dorsers, extent him. The and made to the bank for due application form and note were forwarded the balance owed thereon. The new note them, Bailey, together who checked and forwarded with the Bailey, them to the bank. The bank sent to who forwarded the note to *3 creditor, (debt) promptly amount of the note the bank as before. The bank to the re monthly payments and then collect mitted from to the Clinic. made Stacks $544.12 paid payments Bailey regular the debtor. bank five on the consolidated note 8, 1962, cent interest on until again the notes. when he fell be June hind. The bank then sent the note back to separate out made wife his Clinic, charged it with the balance Dallas Clinic the East one to two additional $362.74. Dallas East the other payments totaling to the bank after $45.34 Benson, the Clinic’s for $32.79. 8. The bank credited the ac Clinic’s June that these manager, told the Stackses credit only this, however, count with re $39.69 The interest were for interest. checks taining “late charge. as a collection” $5.65 due, total amount equalled percent of the ten The Clinic turned the note over to a Dallas usurious it was but we shall assume agency collection which collected the bal into account because it did not take ance from Stacks. This then suit was filed monthly which would reduce by Stacks to alleged recover the de- principal. The Clinic balance of the interest. ac- posited checks to its the two interest Article part: 5073 reads in Bailey two then wrote count. Clinic checks of its own for $32.50 years “Within two after the time that a to him the which were forwarded greater rate of interest than ten applica- together the two notes and shall have been upon received or collected “in- retained none of this tions. The Clinic any contract, person paying the same bank, terest.” sent the notes to the or legal representative may by an which forwarded checks in cashier’s action of debt recover double the amount $327.90, respectively, amount of $325.00 of such person, interest from the firm or Clinic. ** *” 2 corporation receiving the same. [Emphasis added.] monthly payments Stacks made two bank. Thereafter “Receiving” as in the statute means used proved large for “benefiting” paid. ments to be too from Com- handle; 583, asked Benson to reduce so he merce Trust 124 Tex. 80 Co. v. monthly payments. called Benson Deming S.W.2d 942 v. (1935); Inv. Co. reduced Giddens, him if the could be ask (Tex.Civ.App.1931, 41 260 S.W.2d so, charge extended, if what the dism’d). controlling writ These cases are doing The balance be for this. would here. one consolidated into
the two notes was case, Best noted and interest This Court and a renewal note for above, of action that a cause just wrote a cited charge of made. Stacks paid of interest payable to the Clinic for recover double check creating penal de- a statute This check was is derived from gave it to Benson. stat ty. not a suit in tort. Since posited in the bank account. Clinic’s this Court involving penalties, own check ute is one Clinic sent its be the statute in that case said that 1963, ways this case. Acts material was amended in 1963 in not considered 2. The statute Leg., p. 550, 205, § ch. 68th
845
interest. Where
payments were
language
“the
vance
construed and that
strictly
interest,
payment as
designate a
parties
given
the statute is not to be
a mere literal
B.
Adleson v.
F.
it will be.
original
then interest
construction.” In the Best
Co.,
80 S.W.2d
Dittmar
lender did collect
and forwarded
the interest
Lozano,
Tex.
Rosetti v.
(1935);
it to the then holder
the indebtedness.
Bill,
sense,
Hamilton v.
90 S.W.
(1902);
In
here,
the S.W.
it “received”
ref’d).
(Tex.Civ.App.1936, writ
Court,
2d 929
through
interest. This
speaking
stated,
Judge Smedley,
statute was
“This
that,
Further,
contends
even if
penalize
intended to
one who exacts and
pre-
interpretation
“benefit”
of article 5073
receives the benefit
usury,
every
not
one
Clinic,
recovery
a double
from the
vents
may
who
be connected with its collection.”
Appeals erred in not
the Court of Civil
cipal
SMITH,
Likewise,
of the notes.
STEAKLEY
Mrs.
dissenting.
POPE, JJ.,
testified that she knew the
two ad-
first
may by
debt
double
NORVELL,
(dissenting).
tive
an action of
recover
Justice
interest from the
the amount of such
This case
of Ar-
involves a construction
firm,
receiving the
son,
corporation
or
ticle
Ann.Tex.Stats. The
Vernon’s
same”.
petitioner,
Stacks,
bills
G.
owed
totaling
to East Dallas
undisputed
Here the
evidence
managed
and East
Dallas Clinic. He
clinic and
received the items
discharge
indebtedness in
this
a series
above mentioned.
involving
hospital,
transactions
give
Best,
in
refused
However
this court
clinic,
Republic
and one
National Bank
From the
meaning.
statute its literal
(Joe) Bailey,
“go
H.
W.
between”
report
appears that while
of the
negotiations
agreements
various
of the
had received
Commerce Trust Co.
parties. All
out
court’s
this is set
in the
accepted the
it had
from
opinion. In
principal of
addition to the
In-
Life
on behalf
of California State
debt,
money
over
in ex-
Stacks has
surance,
the note which
the holder of
per
princi-
cess of ten
annum of the
usury
claim.
basis
pal. This
excess amounted to $152.55
Trust
rejected
theory
that Commerce
judgment
the trial court rendered
for double
its
Company
joint tort-feasor
was a
amount, namely,
Among
Insurance
principal,
Life
California State
papers
numerous
and documents executed
principal
Company,
and held that where
request
was a
there
that Joe
or
agent
an
obligation,
holds usurious
him,
arrange
loan
but Stacks
liable
not
ployee
principal
*5
agree
pay Bailey
did not
to
certain
a sum
there-
agent and
by him as
ments received
money
in
to be
in se-
services
rendered
principal.
after transmitted to
curing a loan. He testified
he did not
that
with
anything
know that
“had
do
to
This court said:
money part”
the
the
How-
of
transactions.
error re-
plaintiff in
“It is true that
ever,
clinic
representing
Mr. Benson
the
the
payments in
ceived these interest
hospital
and
collected
the
testified that he
hands and
they
that
into its
sense
came
“charge”
a
in connection with the obtain-
passed
when it transmitted
from them
Stacks,
of
ing
proceeds
of a loan for
of
language
but the
principal,
them to its
hospital
pay
were
and
which
used to
mere literal
given
be
a
the statute
to
is not
gave
clinic bills owed
Stacks. Stacks
were,
any
then
If it
construction.
accepted and
Benson checks for
and
who
ployee
corporation
$32.50
corporation
deposited
hospital
and
to the credit of
respectively,
able to clinic and
in-
usurious
money paid
in settlement
later,
“charge”
paid another
be
belonging to would
terest notes
renewal
in
with a loan
connection
of the
sonally
double
liable for
negotiation.
so
interest
collected.”
respondent
The
that
court holds
Giddens,
Company v.
Deming Investment
liable
held
hospital
clinic and
cannot be
writ
(Tex.Civ.App.1931,
§47 as in- paid Bailey attempts apply the were to the court to items which When in the basis cases terest There is no principle of the Best and Giddens money us, difficulty present saying that the record for the one now before some paid rendered case was for services encountered. The rule the Best accepted, and re- one, act- this fact is namely, is a narrow that one Stacks. When it, dispute no es- spondents there is ing merely collecting as do not agent an in cape that Mr. Stacks from the conclusion forwarding on a note statutory limit paid more than the of the note liable has holder is not money. The penalty prescribed use of Article application case. rule stated has no to this adopted case plan financing in this The hospital clinic collected way agreement result of a three items, totaling clinic, the bank hospital between Bailey. and turned the same over to Joe Bailey received Bailey. appears that Joe pay agreed had never interest, received money that the bank can basis anything. I find no contractual hospital and money as interest and hospital clinic which would authorize the for the bills owed clinic received Bailey. money over Stacks’ paid process, Stacks. In money he ob- per annum for the some 19% support in this judgment To the court’s discharge From tained to his bills. the rule in Best be extended must standpoint there is a difference creditor’s any col- transaction wherein one unpaid one that between an bill and money it over lects from debtor and turns Bailey, paid. By with the bank joining no person to some is in to whom debtor certainly and clinic way legally obligated, ridding himself thus is, profit. “benefit”, advantage or an taint of the transac- “benefit” from (other fact tion. principal of the applicable to the than those substance, entity person or debt) When we look to this is what went to more than one happened: along well much Stacks went with a Too should not obscure situation. designed plan money. whereby he could obtain was here for the use *6 bills, loan, discharge his and clinic court in this I fear that the decision of the per but at a cost him of than ten more provide in effect an unfortunate case will accomplish In order to annum. time anti-usury Much in our laws. breach this, “go as a between” Joe attempts expended in ingenuity been has ployed. may He loan broker legitimate be a statutes, need and we to circumvent say, strange but no one in this lawsuit If bor- to be ever alert to this situation. pleaded money paid that he was or that the person in employ pay a is to rower brokerage charge, to him a legitimate loan, he is securing of a with the connection certainly agree Stacks did not He should also about it. entitled to know He brokerage him services. the rate of be entitled to know ultimately thought charges these advance required pay. over to were interest may that the East Dallas seems reverse respectfully dissent. I would I impression Appeals similar have been under a judgment of the Court of transmitted the trial court. judgment of the and affirm the Joe signed by Benson which means check POPE, SMITH, JJ., notation, Interest, bore STEAKLEY “Note spoke of join Mr. Benson in this dissent. G. Stacks $32.50”.